After a decade of burgeoning land values, it appears as though the price of land is leveling off. While the factors that led to such pricey acres across the state of Nebraska and the entire Midwest are varied, it’s also an interesting exercise to explore the demographics of the average land owner. Who owns Nebraska farmland? If prices continue to level off and perhaps even decrease, will this have an effect on those demographics?
The USDA conducts a land ownership survey every ten years that seeks to answer these types of questions. Due to budget cuts, the 2009 survey was postponed. However, looking at the previous survey’s findings sheds some light on who owns the bulk of Nebraska farmland.
There continue to be two main types of landowners, according to a research article by University of Nebraska-Lincoln Ag-Econ professor Bruce B. Johnson. The first are owner operators (farmers and ranchers) who operate at least some of the land they own, and the second are non-operator owners (landlords) who rent all of the land they own to others to farm.
Of these two groups, in Nebraska, the owner operators just barely edged out the landlords by a margin of 52.1 to 47.9 percent. In his study, Johnson also found that 15,000 of the owner operator class also rent out some of their owned land to others. As a result, nearly 55 percent of all agricultural land in Nebraska was being rented out by its owner at the time of the last USDA survey.
Another interesting discovery reveals that, despite edging out the landlord class in acreage, the type of land owned by landlords tends to be cropland—54 percent as contrasted to 45 percent—and thus higher in value. Conversely, over half of the owner operated base is pasture, compared to less than 42 percent of the landlord land. Consequently, landlords own relatively higher-valued land, and in total, held nearly 54 percent of the total value of agricultural real estate in Nebraska.
As far as leasing patterns, the last USDA survey found that, of the ground that was being rented, 41.9 percent were cash leases, 41.7 percent were share leases, and the remainder a cash/share combination. Over time, the trend has been a shift from share to cash leases, and even more to flexible lease agreements. While cash leases comprise the majority of pasture rental agreements, cropland rental agreements at the time of the survey were cropshare, 58 percent; cash, 41 percent; and other, 1 percent.
Finally, Johnson’s study found that the rental market was comprised of more than 63,000 landlords and 34,000 tenants. Of the landlords, there are those who rent out to others all of the land they own, as well as those owner-operators who also rent out (to others) at least some of the land they own. Of the tenants, some were full tenants who only operate land rented from others, while the rest it also includes part-owner operators who farm at least some rented agricultural land as well as land they own themselves. In short, both classes are wide-ranging and varied.
It will be interesting to see what the next survey finds in light of the high priced commodities and land values that characterized the last several years, and their subsequent leveling off.
Source Consulted: Johnson, Bruce B. “Agricultural Land Ownership and Tenure Patterns in Nebraska.” DigitalCommons@University of Nebraska – Lincoln. University of Nebraska-Lincoln Agricultural Economics. 01 Jan. 2003. Web. 03 Jun. 2015.