March 4, 2019
As land market observers nervously watch who is selling land to
glimpse the first hints of financially stressed sales by farmers, the actual
market has not generally seen a large or increasing number of financially
stressed sales yet. There are areas around the country where there are or
will be increased land sales due to specific commodities having low prices or
yields being especially stressed. But overall, most sellers of land are
individuals, families, and inheritors who, for various reasons, are deciding to
sell. There are also a small number of farmers and ranchers who sell some land
when they retire.
The agents at Farmers National Company are predominantly handling land sales
for non-operating landowners who have decided that now is the time to liquidate
the land asset. The seller(s) could have owned the land for some time, they
could have recently inherited it and want to divide cash instead of land, or
the seller could be a trust that has to liquidate at the death of a beneficiary.
Occasionally, an older individual wants to sell their land for one of two
reasons. One is to simplify the division of their estate as it is easier to
divide cash among multiple heirs. The other reason is to generate cash to pay
large medical or living expenses. The Company is also handling a few larger
financially caused sales.
In the future, the non-operating landowner will remain the predominate
seller of farmland for several reasons. As land passes down through the
generations, what once was owned by one or two family members will be owned by
an increasing number of people, maybe four, five or more siblings, aunts,
uncles, nieces, and nephews. For some, it is far easier to equitably divide the
cash than the land. Secondly, the generations inheriting the land are changing.
Baby boomers are inheriting the land from their World War II and Korean War
parents and this generation (I am one) is probably more business-like when it
comes to handling a farm and probably more demanding than their parents. Finally,
future generations who own land more than likely will have individuals who want
the cash instead of the land because they have little attachment to the legacy
or they need the cash to pay debts.
President - Real Estate Operations
to receive email updates.