Farmland-as-Commodity Trend Is Boxing Out Farmers
Increased farmland prices are preventing those who need land from buying it.
When Bill Gates became the largest private owner of American farmland, eyebrows lifted.
But Gates, despite some interests in food technology, was simply doing what wealthy investors have been doing, in increasing volume, for years: treating farmland as a commodity, a particularly rock-solid investment that can be flipped later for a profit. Jesse Newman at the Wall Street Journal has a first-hand look at what this trend is doing for actual farmers who’d like to farm on that land.
Although farmland acreage prices are down from their peak in 2013, in peak crop country, those prices are still increasing, even despite a global shutdown from the COVID-19 pandemic. In Iowa, finds a study by Iowa State University, an acre of cropland gained 1.7 percent in value just in 2020—and that’s with food systems massively disrupted.
Newman’s article talks to farmers and ranchers throughout the Midwestern Farm Belt, many of whom are fearful for their own stability. More recent studies find that Iowa’s farmland prices are up by 8 percent since September; in the valuable farmland surrounding Chicago, those prices are up by 6 percent, the highest in years.
The chief problem is a farmer’s inability to control, or often even own, their own land, which puts a tremendous amount of control in the hands of a person or entity that is not farming that land. These landlords, many of which are simply investors or investment groups, can raise rent prices to the point where farmers can’t make a profit, because the value of the land continues to increase. Farmland is considered one of the most stable, profitable investments in all of real estate, so owners feel comfortable raising prices for renters—or just holding on to land that isn’t being farmed at all.
This also means that it’s tremendously difficult for existing farmers to expand their businesses or for beginning farmers to get their feet in the door at all. About 54 percent of American cropland is rented, according to the USDA, and those renters are in a very precarious situation.
Follow us
Republish!
Republish our articles for free, online or in print, under a Creative Commons license.
Republish this article
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Want to republish a Modern Farmer story?
We are happy for Modern Farmer stories to be shared, and encourage you to republish our articles for your audience. When doing so, we ask that you follow these guidelines:
Please credit us and our writers
For the author byline, please use “Author Name, Modern Farmer.” At the top of our stories, if on the web, please include this text and link: “This story was originally published by Modern Farmer.”
Please make sure to include a link back to either our home page or the article URL.
At the bottom of the story, please include the following text:
“Modern Farmer is a nonprofit initiative dedicated to raising awareness and catalyzing action at the intersection of food, agriculture, and society. Read more at <link>Modern Farmer</link>.”
Use our widget
We’d like to be able to track our stories, so we ask that if you republish our content, you do so using our widget (located on the left hand side of the article). The HTML code has a built-in tracker that tells us the data and domain where the story was published, as well as view counts.
Check the image requirements
It’s your responsibility to confirm you're licensed to republish images in our articles. Some images, such as those from commercial providers, don't allow their images to be republished without permission or payment. Copyright terms are generally listed in the image caption and attribution. You are welcome to omit our images or substitute with your own. Charts and interactive graphics follow the same rules.
Don’t change too much. Or, ask us first.
Articles must be republished in their entirety. It’s okay to change references to time (“today” to “yesterday”) or location (“Iowa City, IA” to “here”). But please keep everything else the same.
If you feel strongly that a more material edit needs to be made, get in touch with us at [email protected]. We’re happy to discuss it with the original author, but we must have prior approval for changes before publication.
Special cases
-
Extracts. You may run the first few lines or paragraphs of the article and then say: “Read the full article at Modern Farmer” with a link back to the original article.
-
Quotes. You may quote authors provided you include a link back to the article URL.
-
Translations. These require writer approval. To inquire about translation of a Modern Farmer article, contact us at [email protected]
-
Signed consent / copyright release forms. These are not required, provided you are following these guidelines.
-
Print. Articles can be republished in print under these same rules, with the exception that you do not need to include the links.
Tag us
When sharing the story on social media, please tag us using the following: - Twitter (@ModFarm) - Facebook (@ModernFarmerMedia) - Instagram (@modfarm)
Use our content respectfully
Modern Farmer is a nonprofit and as such we share our content for free and in good faith in order to reach new audiences. Respectfully,
-
No selling ads against our stories. It’s okay to put our stories on pages with ads.
-
Don’t republish our material wholesale, or automatically; you need to select stories to be republished individually.
-
You have no rights to sell, license, syndicate, or otherwise represent yourself as the authorized owner of our material to any third parties. This means that you cannot actively publish or submit our work for syndication to third party platforms or apps like Apple News or Google News. We understand that publishers cannot fully control when certain third parties automatically summarize or crawl content from publishers’ own sites.
Keep in touch
We want to hear from you if you love Modern Farmer content, have a collaboration idea, or anything else to share. As a nonprofit outlet, we work in service of our community and are always open to comments, feedback, and ideas. Contact us at [email protected].Farmland-as-Commodity Trend Is Boxing Out Farmers
by Dan Nosowitz, Modern Farmer
March 31, 2021
Modern Farmer Weekly
Solutions Hub
Innovations, ideas and inspiration. Actionable solutions for a resilient food system.
ExploreShare With Us
We want to hear from Modern Farmer readers who have thoughtful commentary, actionable solutions, or helpful ideas to share.
Submit
How about an article about how much those investment landowners are willing to pay/invest to improve the quality of the soil; what their attitude is to cover crops, winter crops, carbon sequestration. If they support carbon capture with the work being done by the farmers, who gets the credits?
Land ownership is a two-edged sword for farmers. It has always taken a lot of capital to buy land, and owning too much land can prevent farmers from adequately capitalizing other parts of their operations. Small and new farmers in particular are pretty much shut out of land ownership unless they come into farming with existing capital. We are moving into a future where farmers will be CEO-level managers of businesses using assets owned by multinational companies. The age of the independent farmer entrepreneur is drawing to a close. While some might consider this sad, it is actually a long-overdue… Read more »