Corn and soybean prices have reached record highs and farmland values continue to soar. But agriculture’s boom times are not creating opportunities for farmers or farm workers.
In fact, farmers, ranchers and other agricultural managers will experience the steepest decline of any employment category by 2020, according to the U.S. Bureau of Labor Statistics. A projected 96,000 jobs out of 1.2 million positions will be eliminated this decade, and overall employment — including farm laborers — is projected to drop 2.3 percent.
Economists say the job loss is part of a broader trend toward more automation with state-of-the-art tractors, combines and harvesting equipment and less labor on the nation’s farms.
“Capital being spent to purchase farm equipment and chemicals is reducing labor costs,” said Mike Duffy, Iowa State University Extension and Outreach economist. “When you’re able to save on labor, you don’t need as many people.
“We’re seeing some moves to try and counterbalance that with local niche farm marketing, but for the most part the larger farm operations continue to get bigger. They’re not getting larger because they’re more efficient, but rather because they can in today’s farm economy.”
Farmer debt is near its lowest point in 60 years of record-keeping. Almost three-fourths — 74 percent — of Iowa’s farmland is owned without debt, compared to the 62 percent of the state’s farmland that was debt free in 1982.
The number of U.S. farms, which fell by half in the 30 years leading up to 1986, dropped by 3.1 percent in the past 25 years, according to the U.S. Department of Agriculture. Roughly 25 percent have annual sales of less than $100,000 and typically are managed by farm owners, according to Duffy.
Many larger farms with absentee ownership are overseen by professional farm managers, according to Kirk Weih, vice president of Hertz Farm Management in Mount Vernon and a past president of the Denver, Colo.-based American Society of Farm Managers and Rural Appraisers.
“A little less than 40 percent of all farmland is rented or operated by someone other than who owns it,” said Weih, an accredited farm manager. “In the Midwest Corn Belt, that figure is about 50 percent.
“If you were to look at a plat book for Linn County or the state of Iowa, you would find that about 50 percent is farmed by someone other than the owner. It’s been in that same range for quite a long time.”
Weih said professional farm managers are managing more acres individually than they did 10 years ago.
“We’re able to do that because of technology and data being organized more efficiently,” he said. “Farm operators are transferring data to us through their yield monitors, global positioning systems or grid soil sampling.
“We’re able to apply fertilizer more efficiently. And with no till farming, operators need to make fewer trips across the field and that has allowed us to operate and manage more land.”
Duffy said effective farm managers need to possess multiple skills, regardless of how much land is involved.
“They have to know marketing, the physical aspects of farming equipment and the regulations surrounding the application and storage of farm chemicals,” Duffy said. “They also need to know how to deal with people and provide customer satisfaction.
“It’s not an occupation where you can just pick up someone off the street.”
Weih said Hertz Farm Management looks for farm management candidates who typically have a four-year college degree in an agricultural-related field and experience in areas such as lending, insurance, fertilizer or seed sales, or farm equipment sales.
“That person’s got to step in and within five or 10 years be an asset manager for 55 to 65 individual farms,” Weih said. “A typical farm manager in our company at the end of 10 years is managing 14,000 to 16,000 acres with a value of $90 million to $100 million.
“Those 55 to 65 individual farms probably have 40 to 50 operators, and that number of farms probably has over 70 to 80 family members who are non-operating absentee investor owners.”