Lothar Baumann and Grant Hilbert are both farmers, but that’s where their similarities end. Lothar Baumann represents the average farmer, whose median age has surpassed 58 years of age. For Lothar, farming is “where life begins.” Nowhere else can you be as close to the “pulse and heartbeat of life.”

On the other hand, Grant Hilbert is a representation of the new generation of farming. An Iowa native, for him, farming is “chasing the dream.” But, making this dream a reality is hard, especially for young farmers. In the Midwest, focused policies help make the difficult task of starting a farm a little more affordable. As farmers like Baumann begin to retire, it’s important for young, passionate farmers to take their place.

How desirable is farming for younger generations?

Younger people are more interested in farming than ever. 30% of all farmers are beginning farmers.  That means they have been farming for  10 years or less. Student membership in Future Farmers of America (FFA) is at an all time high, recently exceeding 1 million members, as interest in farming among young people grows. With many farmers nearing retirement, millions of farming acreage is expected to become available, but only to those that can afford it.

Farming is a tough industry to break into. But, why?

According to the 2022 National Young Farmer Survey, buying land is the biggest  challenge facing young farmers. In the United States, on average, an acre of farmland costs  $5,570. In the Midwest, the price of farmland per acre jumps as high as $9,800. But, this is just an average. Last year, a farm in Missouri broke records when it sold for $35,000 per acre. For Grant Hilbert, his central Iowa farms, totaling 250 acres (of which, not all the land is farmable), cost $1.8 million.

Land is just the first expense new farmers face. Machinery is expensive- a single, new row-crop tractor costs nearly $500,000. As farming equipment has become more specialized, each step in the farming process requires a different machine- from planting, to fertilizing to razing. There is also the cost of failing. New farmers cannot afford to have a bad year as they start out, as they have few funds to fall back on. In contrast, family farmers have greater support and less surprises. Without startup costs, such as land and machinery, family farmers take over an operational and familiar farming operation. As farming becomes more and more money-intensive, many new farmers are priced out from the beginning.

What programs support young farmers?

New financial programs to help incoming young farmers have taken vastly different approaches. Nationally, the USDA Farm Service Agency targets a portion of loan funding to beginning farmers, including down payment assistance. However, these funding options are limited and untargeted.

In Midwest states, the opposite is true: aggressive New Farmer Programs ensure beginning farmers can run a successful business, effectively lowering the median farmer age. In Iowa, the Iowa Finance Authority has a specialty branch called the Iowa Agricultural Development Division. Though there are many policies, the most important ones are the  Beginning Farmer Loan Program (BFLP) and the Beginning Farmer Tax Credit Program (BFTC).

The BFLP helps new farmers afford agricultural property, machinery, breeding livestock, or farm improvements. These loans are exempt from federal and state taxes, allowing lenders to give farmers interest rates that are 25% lower than usual. This is huge. Thanks to this down payment assistance, Grant was able to get the loan for his farm.

The BFTC gives tax credit incentives to landowners when they lease land or other physical property to beginning farmers. The tax credit ranges from 75 to 17% depending on the type of lease.

Why is it important to get younger farmers on the land?

Young farmers are the future of sustainable farming practices. 86% of young farmers identify their farming practices as regenerative, committing to fostering healthy soil and protecting ecosystems. 83% identify conservation and regenerative practices as a primary purpose of their farm’s existence.

Farming corporations care less about the environment. They are less willing to experiment with new, more sustainable farming methods, favoring a business-as-usual approach. Large corporations and investors that buy land are concerned with making money in order to improve their bottom line and make investors happy. Farmers who own the land view themselves as stewards: their goal is to future proof for continued use.

Looking forward..

As farmers begin to turn their land over to new hands, more young farmers have opportunities to buy farmland of their own. Midwest Beginning Farmer programs level the playing field, allowing new farmers to have the opportunity to start their own operations. As farmers like Baumann start to retire, they can be sure that their land will be cared for and cultivated by incoming farmers who share their love for farming.