A new report estimates 64 percent of Oregon’s farmland, nearly 10.5 million acres, could change hands in the next 20 years.
Farmers 55 and older, the ubiquitous Baby Boomers, control that much of Oregon ag land, according to the report. As they leave the profession over the next two decades, they are likely to sell or transfer land to family members, neighbors or other current farmers and ranchers, or to business entities that are “primarily focused on investment, finance, property management, and development.”
“How that land changes hands, who acquires it, and what they do with the land will impact Oregon for generations,” the report concludes.
The report, “The Future of Oregon’s Agricultural Land,” said the average age of Oregon farmers and ranchers is now 60, up from 55 in 2002.
The report was produced by Oregon State University’s Center for Small Farms & Community Food Systems in conjunction with Portland State University’s Planning Oregon/Institute for Metropolitan Studies, and with Rogue Farm Corps, a non-profit striving to train the next generation of farmers, particularly those who weren’t born to the farm or ranch.
Nellie McAdams, director of Rogue Farm Corps’ farm preservation program and one of the report’s co-authors, said bigger farms under fewer owners is a likely outcome of the coming ownership turnover. While farm size is not a problem by itself, she said, consolidation could result in fewer operators and less diversity in crop decisions and farming methods. With larger parcels, ownership becomes an even greater cost leap for beginning farmers, she said.
In addition to rising land costs, other hurdles for new farmers include the high cost of getting started, low income during a farm’s “formative years,” a lack of training opportunities for those without a farming background and “systemic barriers” that exclude “the growing pool of women and people of color who are eager to farm.”
The potential impact of older farmers letting go of land isn’t a new topic — the question of “Who are the next farmers?” is closely related — but the researchers took deeper dives than most into farmland transition.
To verify findings, the authors used USDA data, interviewed farmers, Realtors and others, and went through sales and property tax records.
From 2010 through 2015, 25 to 40 percent of farmland sales in Washington, Benton, Clackamas, and Polk counties were to business entities. Ten to 15 percent of farm sales in those counties involved out-of-state buyers.
Meanwhile, land prices are increasing. The average estimated market value of an acre of farmland with buildings in 2012 was $1,882, compared to $1,534 in 2002, according to the Census of Agriculture. “Realtors and land seekers are seeing much higher land prices, especially for irrigated land near urban areas and along transportation corridors,” the researchers concluded.
McAdams, of Rogue Farm Corps, said there’s evidence to suggest farmers themselves aren’t prepared for the turnover. Instead of being incorporated or formed as LLCs, 84 percent of Oregon farms are listed as sole proprietorships, the simplest and cheapest form of business organization. But it means the farm is tied to an individual, which can complicate succession, McAdams said.
The statistic “suggests that the vast majority of Oregon farmers may not have created thorough plans to smoothly transfer their businesses and assets to the next generation,” the report said.
The authors concluded that land-sharing models, farm conservation easements, working lands easements, and other creative leasing arrangements may lead to better outcomes both for retiring farmers and those looking for a foothold in the profession. Other programs could connect beginning farmers with experienced ones, allowing them to explore innovative land access arrangements, the researchers said. Nonprofit farm incubators also offer low-cost access to land, and enable beginning farmers to gain experience, they said.