Higher expenses hurt new farmers, USDA census report says

The 2012 Census of Agriculture released its data in May, which gave information on the scope of American farming.

The sales of agricultural products reached a record high of $394.6 billion in 2012, which is about $200 billion more than the sales of 2002, according to the American Farm Bureau Federation

Farm expenses subsequently grew to $329 billion, a growth of 90 percent over the past decade, according to AFBF. In addition to expenses, the average market value of land is more than $1 million, 36 percent more than 2007.

Dave Forgey, Cass County Farm Bureau president, said the higher costs makes it tougher for a select group of farmers.

“It’s a real challenge to get beginning farmers in, unless they’ve got family or someone like that, that they can come back to and have a chance to get started,” Forgey said.

According to the census, there were 522,058 beginning farmers, defined as principal operators for 10 years or less. That’s 20 percent fewer than 2007.

Forgey didn’t have any children who wanted to come back to his dairy farm — Foerg and Forgey’s River-View Farm — so he handed it over to an employee, Scott Foerg, who operates almost all of it now.

“That gave him an opportunity that many young farmers wouldn’t have,” Forgey said.

In other cases, Forgey said families turn the farms over to family members. About 87 percent of farms in the country are “family farms,” which means they qualify as “farms by legal status for tax purposes” and are sole proprietorship, according to Census of Agriculture.

For those who aren’t taking over a family farm, the cost of land is the first thing that gets in the way, according to Forgey. He said about six or seven years ago, annual cash rent rates ran for more than $100 an acre, and now it’s about three times that.

“That has made it difficult for a young man to come up with even the capital to lease the land for a year’s time,” Forgey said.

He said those farmers need to lease the land from someone who is retiring or leaving farming and who already has land and equipment, which is very competitive, according to Forgey.

In addition to land, farming machinery and equipment are high, said Forgey. If a new farmer takes over an older farm, it helps if the equipment is up to date.

“Finding used machinery that’s suitable is a challenge,” Forgey said.

Forgey said sometimes retiring farmers haven’t kept up with the changing technology in agriculture. Their hand-me-down machines could hinder a new farmer.

“A new farmer may have to be content for a few years without that technology that some of the longer-term farmers can get,” Forgey said.