1. Welcome to ANR at Noon, August 28, 2015 State of the Farm: Iowa Trends During the 2000s David J. Peters, Ph.D. Associate Professor of Sociology Extension Rural Sociologist

2. Data and Definitions Data sources … Agricultural Resource Management Survey (ERS) Census of Agriculture (NASS) What is a farm? $1,000 or more of agricultural products produced and intended for sale. Majority of farm is owned by the operator and individuals related to the operator. Residence Farms Under $350k in GCFI & non-farm occupation. Family held. Intermediate Farms Under $350K GCFI & farm occupation Commercial Farms $350k or more in GCFI Old definition from 15 years ago. USDA updated typology in 2013.

3. Most farms are residence/recreation operations Of 88,500 farms in Iowa … 38,700 (44%) are residence farms, declining over time. 26,400 (30%) are intermediate farms, declining over time. 23,400 (26%) are commercial farms, growing over past decade. True farms number between 23k-50k.

4. Most farms are residence/recreation operations Commercial farm breakouts … Most are mid-size farming about 800 acres. About 7,000 large farms (1,400 ac/farm). Few “corporate” farms. Very few “mega” farms (2,500 ac/farm). Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner.

5. Most acres farmed by commercial operations Of 31.5 million acres of farmland in Iowa … 66% in commercial farms (893 ac/farm), grew 42% 21% in intermediate farms (252 ac/farm), fell -44% 12% in residence farms (101 ac/farm), fell -43% 66% of land farmed by 23k farmers.

6. Most acres farmed by commercial operations Commercial farm breakouts … 6,700 large farms operate about as many acres (89%) as ALL 65,100 residence and intermediate farms combined. Mid-Size and Large farms typical of “true” farms in Iowa. Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner.

7. Majority of ag production from commercial farms Of $35.785 billion in agricultural production in Iowa … 81% from commercial farms, grew 231% past decade 13% from intermediate farms, grew 37% 6% from residence farms, grew 75% 81% of prod from only 23k farmers.

8. Majority of ag production from commercial farms Commercial farm breakouts … 1.6 times 14,000 mid-size farms generate 1.6 times the production as ALL 65,100 residence and intermediate farms combined. 2.0 times 6,700 large farms generate 2.0 times the production as ALL 65,100 residence and intermediate farms combined. Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner.

9. Commercial farms are highly profitable Commercial NCFI $410,650/farm, grew by 130% last decade. Intermediate NCFI $28,516/farm, grew by 8% (farmer primary occupation!) Residence NCFI $12,515/farm, grew by 102% (non-farmer occupation!) Iowa only has 23k “true” farms, in the conventional sense.

10. Commercial farms are highly profitable Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner. Commercial farm breakouts … 330 very large farm generate about as much NFCI (92%) as ALL 65,100 residence and intermediate farms combined. 4.0 times 6,700 large farm generate 4.0 times as much NFCI as ALL 65,100 residence and intermediate farms combined.

11. Off-farm income for residence/intermediate farms Percent off-farm income for farm households … 90% for residence farm-HHs. Stable over time. 75% for intermediate farm-HHs. Growing over time. 19% for commercial farm-HHs. Declining over time. Iowa only has 23k “true” farms, in the conventional sense.

12. Off-farm income for residence/intermediate farms 65,100 marginal “farm” operations … Residence farms only 10% from farming. Intermediate farms only 25% from farming. 23,000 economically viable farm operations … Mid-size farms 70% from farming. Large farms 85% from farming. Very large suppressed. Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner.

13. Production specialty mixed crops cattle Residence & intermediate farms specialize in mixed crops and cattle. corn/beans Mid-Sized farms specialize in corn/beans, some livestock. corn/beanshogs and cattle Large farms also specialize in corn/beans, but also in hogs and cattle.

14. Farm debt is low and falling Farm debt has fallen for all types of farms over the past 10 years. Commercial farms are most leveraged (~13%), but not near debt max (~30%). Non-commercial farms are least leveraged (~6%), but near ½ of debt max (~45%).

15. Farm debt is low and falling Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner. Commercial farm breakouts … Mid-size farms most vulnerable – higher debt-equity & higher leveraged. Very large farms vulnerable – very high debt-equity, but low leverage. Large and non-family farms OK.

16. Commercial farms youngest; intermediate farms oldest Commercial farmers younger … 19% under 45 yrs & 15% over 65 yrs. Intermediate farmers older … 9% under 45 yrs & 32% over 65 yrs. Residence owners are mixed … 15% under 45 yrs & 28% over 65 yrs.

17. Commercial farms youngest; intermediate farms oldest Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner. Commercial farm breakouts … All commercial farms are younger than residence/intermediate. Very large and large farms tend to have younger operators.

18. Commercial & residence farmers best educated Residence farmers educated due to professional off-farm work. Commercial farmers educated due to high-resource/SES farms and complexity of modern ag. Similar to residence owners. Intermediate farmers less educated due to limited-resource/ SES farms. Of special concern to ANR programs.

19. Commercial & residence farmers best educated Residence Farm. Residence Farm = Under $350,000 GCFI & non-farm occp. Intermediate Farm. Intermediate Farm = Under $350,000 GCFI & farm occp. Mid-Size Farm Mid-Size Farm = $350,000-$999,999 GCFI Large Farm Large Farm = $1,000,000-$4,999,999 GCFI Very Large Farm Very Large Farm = $5,000,000 or more GCFI Non-Family Farms Non-Family Farms = Any farm not operated by owner. Commercial farm breakouts … Mid-size and large farmers just as educated as residence farmers. Very large farms tend to be highly educated.

20. Synopsis – Duality of Iowa Agriculture Small-Farm Agriculture … Many farms, but small impact … 74% of farms, declining numbers over past decade. Only 33% of farmland, declining acreages (100-250 ac/farm). Only 20% of production value, but growing. Poorer farms, but lots of non-farm incomes … Intermediate – $28,500 NFCI, $71,400 HH income, 75% non-farm. Residence – $12,500 NFCI, $130,200 HH income, 90% non-farm. Low debt (6% debt-equity), but ½ of debt capacity. Mixed crop & cattle specialty farms … Intermediate – 42% corn/beans, 31% other crops, 16% cattle. Residence – 42% other crops, 30% corn/beans, 17% cattle. Majority are full-owners, making sole management decisions.

21. Synopsis – Duality of Iowa Agriculture Small-Farm Agriculture … Intermediate farmers older and less educated … 13% have college degree (vs 28% for residence). 80% over age 55 (vs 62% for residence). Only 9% under age 45 (vs 15% for residence). ANR programs targeting this group likely to have more participants, but smaller and less effective impact on agriculture and environment. Also will require more diverse programming with mixed crops. Requires parallel programs for … Intermediate farms (farm occup, low income, off-farm work, older, less educated) Residence farms (non-farm occup, high income, highly educated, other crops).

22. Synopsis – Duality of Iowa Agriculture Commercial Agriculture … Fewer farms, but large impact … Only 26% of farms, growing numbers. 66% of farmland, growing acreages. 80% of production value, growing value. Mostly larger family farms, fewer mega or corporate farms … 24% of farms (vs 3% for very-large/non-family). 700-1,400 ac/farm (vs 300-2,400 ac/farm for non-family/very-large). 69% of production value (vs 12% for very-large/non-family). Profitable but polarized … Mid-Sized – $218,700 NFCI, $212,000 HH income, 30% non-farm. Large – $735,700 NFCI, $592,900 HH income, 14% non-farm. Very Large – $3.463 mil NFCI, $2.770 mil HH income. Non-Family – $203,200 NFCI.

23. Synopsis – Duality of Iowa Agriculture Commercial Agriculture … Mid-Sized farms are specialized in corn/beans … 68% corn/beans, 9% other crops. Some hogs. Large farms are specialized in livestock … 58% corn/beans, 18% hogs, 13% cattle. Some other grains. Majority are part-owners, meaning shared management decisions (out-of-state!). The larger the farm, the younger & educated the farmer … Under age 45 – 19% mid-size, 23% large, 34% very-large. College grads – 26% mid-size, 30% large, 62% very-large.

24. Synopsis – Duality of Iowa Agriculture Commercial Agriculture … ANR programs targeting this group likely to have fewer participants, but larger and more effective impact on agriculture and environment. Programs can be more targeted and sophisticated because commercial farmers & farms tend to be … Younger and college educated. High-resource, to implement programs on-farm (high NFCI & HH income). Farm-focused, farming is primary occup and livelihood. Conventional commodities consistent with current programs.

25. Synopsis – Duality of Iowa Agriculture The Janus-Face of Land Grant Universities … Commercial-Farm Focus (Hamiltonian Vision) … Assist those who farm most of the land and produce most of the commodities. National benefits (food supply/safety, trade, etc). Why do wealthy (some very so) & educated farmers need LGU support? Small-Farm Focus (Jeffersonian Vision) … Assist those who farm with limited resources (land, income, educ, age, race). Farmer/local benefits (higher incomes and QOL for farms and communities). Why do non-farmers (hobbyists) need LGU support? The data support both visions for the LGU. Decisions should be based on tradition, reason, and conscience. Key Question: How do you define a farmer?

26. Thank you for joining us today We invite your feedback and suggestions for future ANR @ Noon webinars: John Lawrence – jdlaw@iastate.edujdlaw@iastate.edu Chris Mondak- cmondak@iastate.educmondak@iastate.edu Next date: September 25 Water Quality Programming: Updates from Jamie Benning