Who is Selling Land Now and In the Future?

Who is Selling Land Now and In the Future?
Photo Credit:AgView | Story Source: Farmers National Company

By:  Randy Dickhut, AFM Senior Vice President - Real Estate Operations - Farmers National Company

 

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 these type of 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.

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