82% of Iowa Land Is Debt Free

[JimMeade]

From ISU land survey December 2018.

60% of land owners are 65 years of age (yoa) or greater, 1/3 is 75 yoa, 13% owned by women 80+

53% of Iowa land is rented out, mostly cash rent

34% owned by landlords with no farming experience, 23% by retired farmers no longer farming

29% owned by families primarily for family/sentimental reasons

Ownership is continuing to shift to trusts and corporations 

In 1982, 60% of land was owned free and clear.  In 2017 it is 82%.

Most of the land is owned long-term.

I got this from an ISU presentation.  You'll have to go to the ISU website for the backup.  The full report costs $5.

[BA Deere]

This is good that land is in tight hands and there won`t be forced sales like the 80`s. 

[smokeyjay]

My question then, why are the farm credit banks, along with the Federal Reserve reporting a rise in slow repayment rates?  Are they mostly operating loans?  Not entirely, if you read the reports.  Just asking.

[BA Deere]

I wonder how that 18% indebted land is distributed, like if a average Iowa farmer owns 300 acres does he or she have 54 acres that`s mortgaged?  Or is it cases of some are 100% debt free and others have 50% of their acres mortgaged?   When land was going for $14,000, banks would lend $4,000 of it, these $2 million farm sales, I always surmised that some of the $10,000 per acre they had to come up with came from borrowing operating expenses and applying that to the purchase.   Because farming basically threaded water up until 2009 and then you had 5 great years, that wasn`t enough time to build a legitimate war chest to be buying $14,000 farms like hotcakes.

[wrightcattle]

basically at 82% paid off , the loan balance works out in the $2000 to 3000 per acre range ( on 100% of it..say 20% of 10 to $14k per acre dirt ).

thats plenty high debt Truthfully.

also grant there's obviously plenty of paid for deals now with No debt too.

[k-289]

It's   NOT   the  1980's    again  -  so   -  next  topic  -    -    -

[BA Deere]

One way of looking at it is half the land is rented out and probably the half of land that`s owed by active farmers is where that debt is concentrated.  So, throw out the half that`s landlords and debt free, of the active farmers 36% of their land is mortgaged....probably historical norms? 

The $64 question is how deep is their debt, $500/acre or $4,000/acre?

[k-289]

Shinny  paint   -  ain't  cheap -   so  hi-ho  - hi-ho  to  the   $$$$  $tore   I  go  -    -     -

Most   1/4  sections  cost  less  than  today's  8  row  harvester  -    -   -

[sw363535]

Question is "What % of Iowa farmland is absentee ownership?  Or at least operated by a legal entity that differs from the operating entity.

Regardless of who ownes the entities?"

Investment property has little to do with farming finances , even if its dear ol mom.

[mervinjowett17]

Hmm, it’s really interesting. But understandable if most of the population there is pensioners. I’ve been craving to pay off my mortgage for several years, but I don’t see it happening in the next 10 years. It’s frustrating that I have to work a lot and still get nothing. I want my children to inherit a house and be able to achieve more in this life. I’m thinking of improving my plan with the help of the Equity Release Bristol online consultation. However, I am a little hesitant and would like to know if you guys had such an experience.