RENO, Nev. – The sociology of rural America is shifting as a generation retires and changes the farming landscape.
Tom Field, an agriculture professor with Colorado State University, says a large generation of asset rich farmers is preparing to pass on the land to a generation carrying considerable debt.
In an interview at the National Cattlemen’s Beef Association convention held in Reno Feb. 5-9, he said the situation is similar in Canada.
“You have an asset rich generation who remembers the Depression, fought in World War II and built up strong businesses,” he said. “They were relatively conservative in their business approaches, did a good job and acquired wealth.”
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Their children, on the other hand, hold record levels of debt with few assets to cover it.
“When that land is swapped to them and they are under increasing debt and increasing economic uncertainty, they will sell that land,” Field said.
Efforts are being made to preserve land through estate planning, farmland trusts and conservation easements, but much of it will be sold.
When that happens, he added, the land likely won’t be used for agriculture anymore.
Duane Lenz of Cattlefax said this change is having a major impact on the size of the U.S. cow herd because older people don’t want more cattle.
“As folks get older, they want to retire and they want to do something different,” he said.
“Obviously the kids have other careers and they are really not interested in moving back and taking over that operation.”
The land is sold to neighbours when family members refuse to take over, which results in more cows in fewer hands. More than half the herds have more than 100 cows and 5,500 operators in the United States have more than 500 cows.
As well, the number of beef cow operations has dropped from 1.2 million in 1980 to 800,000 in 2007.
“This is a trend that will continue over time so we will see more cows in fewer hands,” Lenz said.
Other structural changes continue.
About 75 percent of American cattle are fed in five states – Texas, Oklahoma, Nebraska, Kansas and Colorado. About 72 percent of all U.S. cattle are fed in 250 feedlots with more than 16,000 head capacity.
Cattle aren’t expected to move north to ethanol plants in Iowa because of environmental concerns in developing new feedlots. Although expansion has occurred in the Midwest, the number fed was so small that even if it doubles, it will only account for four percent of the national cattle-on-feed inventory.
“It is not going to be a big shift,” Lenz said.
Most of the large multinational packers continue operating in major feeding areas to take advantage of lower freight rates, he added.
