The Continuing Evolution of Iowa Farmland Ownership and Tenure: Results from the 2022 Survey

By Chad Hart, Jingyi Tong, and Wendong Zhang

 

The Iowa Farmland Ownership and Tenure Survey is based on a random sample of 40-acre tracts of farmland, which have been chosen as statistically representative of all farmland and all landowners in Iowa. We interviewed landowners of these tracts via telephone and asked questions that ranged from demographic and financial information to ownership structure and farming/conservation practices. The results from the current survey are statistically representative of all farmland and all landowners in Iowa as of July 1, 2022. The following tables provide a brief snapshot of results from the 2022 survey and compare current results to those from previous surveys. The full results from the 2022 Iowa Farmland Ownership and Tenure Survey has been published as a CARD working paper at go.iastate.edu/E49TFI.

One of the trends shown throughout the life of the survey is the growth in leased farmland, especially via cash rental contracts (Lee et al. 2023), paired with a decline in landowner participation in the farming operation. Table 1 displays the comparison of farmland control between the 2017 and 2022 surveys. In 2017, the majority of Iowa farmland was leased to farmer operators, but the largest individual segment of Iowa farmland control was owner-operated farmland at 37%. In 2022, leasing continued growing in terms of land share, with 58% of Iowa farmland under some form of rental agreement, and the largest individual segment shifting to farmland under a fixed cash rent (42%). The 7% rise in fixed cash rent leasing is paired with a 5% decline in owner-operated land and a 2% decline in crop share leases.

Table 1. Distribution of Iowa Farmland by Control, 2017 and 2022
 20172022
Owner Controlled:47% 42% 
Owner operated  37% 32%
Custom farmed  2% 3%
Government programs and other uses  8% 8%
Leased:53% 58% 
Cash rent (fixed)  35% 42%
Cash rent (flexible)  9% 9%
Crop share  9% 7%
Other types of leases  <1% <1%
Total:100% 100%

The ownership structure of Iowa farmland continues to evolve as well. Table 2 shows the percentages of Iowa farmland under various ownership types. Throughout the 1980s, 1990s, and early 2000s, sole ownership or joint tenancy of the land were the dominant forms of ownership. However, the popularity of trusts for long-term land ownership can be seen in the data, as trusts held just 1% of Iowa’s farmland in 1982 and now hold 23%, challenging sole ownership as the second-largest ownership type in the state.

Table 2. Percentage of Farmland Owned by Ownership Type
 1982 1992 2002 2007 2012 2017 2022 
Sole owner 41% 38% 28% 29% 25% 22% 23% 
Joint tenancy 39% 38% 37% 35% 32% 28% 29% 
Tenancy in common 7% 7% 12% 10% 8% 8% 5% 
Partnership <1% 2% 2% 3% 3% 3% 2% 
Estates 4% 3% 4% 3% 3% 4% 2% 
Trusts 1% 5% 8% 10% 17% 20% 23% 
Corporations 8% 8% 7% 9% 7% 10% 6% 
LLC N/A N/A 1% 1% 5% 5% 9% 
Government/institution N/A N/A 1% 1% <1% N/A <1% 

The variations in finance arrangements of Iowa farmland in table 3 show a boom-and-bust of farmland financing statuses from the 1980s. In 2022, the percentage of debt-free land ownership continued its upward trend, with 84% of the land being held without any debt, the highest level since the 1980s. This represents a steady and significant increase from 1982, a year that marked the onset of the farm debt crisis, when only 62% of the land was held without debt, and 18% was under a contract. The proportion of land under mortgage further dipped to 14% in 2022 from 16% in 2017 due to higher commodity prices and recent government payments.

Table 3. Finance Method as Percentage of Farmland
 1982 1992 2002 2007 2012 2017 2022 
Free of debt 62% 70% 74% 75% 78% 82% 84% 
Under contract 18% 11% 4% 4% 3% 2% 2% 
Mortgaged 20% 19% 22% 21% 19% 16% 14% 

The decline in landowner involvement is in part due to the rise of non-residency of landowners. Table 4 shows that in the 1980s and 1990s, over 90% of Iowa farmland was held by full-time Iowa residents. Since 2000, that percentage dropped to roughly 80%. The 2022 survey shows another decline, to 75%, in the percentage of Iowa farmland owned by full-time Iowa residents.

Table 4. Percentage of Iowa Farmland Owned by Residency Status
 1982 1992 2002 2007 2012 2017 2022 
Full-time Iowa resident 94% 91% 81% 79% 80% 80% 75% 
Part-time or not an Iowa resident 6% 9% 19% 21% 20% 20% 25% 

The shift in residency, however, does not translate into a change in the distribution of Iowa farmland by landowner farming status, as indicated by table 5. Full-time farmers own 28% of Iowa farmland, which is 1% higher than in 2017 and 5% higher than in 2002. Landowners that do not farm currently hold 55% of Iowa farmland, 2% lower than in 2017, but on par with 2002. The longer term gains for full-time farmers have mainly come from the decline of ownership by part-time farmers. While part-time farmers now own 17% of Iowa farmland, up 1% from 2017, that percentage is down 4% from 20 years ago.

Table 5. Distribution of Iowa Farmland by Farming Status of Owner
 2002 2007 2012 2017 2022 
Full-time farmer 23% 21% 23% 27% 28% 
Part-time farmer 21% 19% 15% 16% 17% 
Do not farm 55% 60% 62% 57% 55% 

Finally, table 6 provides a comparative snapshot of the adoption of various conservation practices by Iowa farmland owners and on Iowa farmland in 2017 and 2022 based on newly added survey questions. Notably, the use of cover crops saw a slight increase over this period, from 5% of owners and 4% of acres in 2017 to 7% for both owners and acres in 2022. No-till farming saw a significant rise from 21% of owners and 27% of acres in 2017 to 29% and 30%, respectively, in 2022. New questions from the 2022 survey show that edge-of-field practices, such as saturated buffers, bioreactors, and nutrient removal wetlands, were only adopted on less than 1% of Iowa farmland. Among the practices newly inquired about, reduced tillage and grassed waterways are adopted at relatively higher rates. Specifically, reduced tillage was embraced by 36% of farmers and implemented on 40% of farmland, and grassed waterways were chosen by a considerable 62% of owners.

Table 6. Percentage of Iowa Farmers and Farmland Using Various Conservation Practices, 2017 and 2022
 2017 2022 
 Owners Acres Owners Acres 
No till 21% 27% 29% 30% 
Cover crops 5% 4% 7% 7% 
Buffer strips 3% 3% 3% 2% 
Saturated buffers NA NA <1% <1% 
Bioreactor NA NA <1% <1% 
Nutrient removal wetland NA NA <1% <1% 
Reduced tillage NA NA 36% 40% 
Grassed waterway NA NA 62% NA 

Farmland ownership within the state of Iowa continues to evolve. The ownership structure, tenancy, and transitions of farmland do respond to macroeconomic changes in federal and state policies and farm income trends. A significant number of owners have limited farming experience and live beyond Iowa's borders. A generation ago, the farming and ownership decisions were often in the same household. Today, the typical Iowa farm operator may be working with an out-of-state landowner and/or being guided by the directions of a land trust. Just as the production and conservation practices of a farm operation continue to change based on the latest science and technology, so too does the ownership and tenure status of Iowa farmland, adjusting to fit today’s legal and economic environment. 

The Iowa Farmland Ownership and Tenure Survey, started in the 1940s, was the first of its kind in the nation and is still the only consistent state-level analysis focusing on the ownership, tenure, and transitions of farmland (Sawadgo et al. 2021), as well as characteristics of landowners. Beginning in 1992, the survey has been conducted every five years as mandated by state law. The 2022 version of the survey was conducted from October 2022 to April 2023 and was sponsored by Iowa State University's College of Agriculture and Life Sciences, Iowa Nutrient Research Center, Leopold Center for Sustainable Agriculture, Department of Economics, Center for Agricultural and Rural Development, and Iowa State University Extension and Outreach.

References

Lee, J.Y, G. Durbahn, P.F. Orazem, and W. Zhang. 2023. “The Roles of Risk Preferences, Selection, and Uncertain Returns on Land Contracts.” Agricultural Economics 54(2): 220–233. https://doi.org/10.1111/agec.12770.&nbsp;

Sawadgo, W.P.M., W. Zhang, and A. Plastina. 2021. “What Drives Landowners’ Conservation Decisions? Evidence from Iowa.” Journal of Soil and Water Conservation 76(3): 211–221. doi: 10.2489/jswc.2021.00115. 

Suggested citation

Hart, C., J. Tong, and W. Zhang. 2023. "The Continuing Evolution of Iowa Farmland Ownership and Tenure: Results from the 2023 Survey." Agricultural Policy Review Spring 2023. Center for Agricultural and Rural Development, Iowa State University.