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This post is a part of our Ag Pulse series. This series is a set of blogs posted about the results of research conducted by Ag Access amongst our 400,000+ member community of agricultural professionals and hobbyists.
The American agricultural landscape is on the cusp of a monumental shift. In the coming decade, a significant portion of our nation's farms will change hands, making succession planning not just a good idea, but an absolute necessity for the continued health and vitality of the industry. Our newest round of Ag Pulse research reveals that nearly 4 in 10 U.S. farmers anticipate transferring ownership of their operations within the next ten years. This isn't just a statistic; it's a call to action for farmers, their families, and the entire agricultural community.
Imagine almost half of all U.S. farms undergoing a leadership transition in just ten years. To put this in perspective, in the first eight months of 2024, only 2.5% of single-family homes in the U.S. changed hands. This rapid rate of anticipated farm ownership transfers underscores a critical period of change. Without robust succession plans, farms face potential operational disruptions, the loss of family legacy, and even the risk of land falling out of agricultural use entirely.
A Deep-Rooted Desire for Legacy
Despite the looming transitions, there's a powerful and consistent theme emerging from the data: American farmers are deeply committed to their family legacy and to ensuring their operations remain in agriculture. An overwhelming 87% of farmers plan for a family member to take over their farm. This dedication is further evidenced by farmers' strong opposition to selling their land to large companies (87% opposed), gifting it to a foundation (85% opposed), or selling to someone who would use the land for non-farming purposes (80% opposed).
The good news is that a significant number of farmers are actively engaged in planning. Almost half of farmers (48%) already have a succession plan in place, and another fifth (21%) are in the process of creating one. Only a small fraction (6%) haven't even begun to think about it.
When it comes to specific steps, identifying a successor and creating a will are the most commonly completed. However, there are still gaps. Notably, one-fifth (19%) of farmers do not even plan to create a contract with their successor – a crucial element for clear expectations and legal protection.
Interestingly, over half of farmers (56%) anticipate having multiple successors. And in a strong testament to their desire for continuity, 74% of these farmers want their farm to remain intact rather than being divided among heirs. This sentiment aligns with the broader desire for farms to continue operating as farms after ownership transfers, which is "very important" to 65% of farmers and "moderately important" to another 21%.
The Timing of Transition: Lifetime vs After Death
The research also sheds light on when farmers plan to transfer ownership. Almost half (44%) plan to do so during their lifetime, allowing them to move the transition along as quickly or slowly as they desire. Two-fifths (41%) anticipate transferring ownership after their death, while 15% are still unsure about the timing.
Retirement for many farmers doesn't mean a complete departure from the land. The majority (72%) plan to continue working on their farm in a different capacity, highlighting a desire to remain involved and contribute their experience. Beyond the farm, over half plan to travel (58%) and spend more time with family (57%).
Unpacking the Nuances: Who's Planning and Who's Not?
While the overall environment is important, a closer look at sub-groups shows important differences in planning progress and challenges.
Age and Generation
It's no surprise that older farmers are more likely to have completed more steps in the succession planning process. By age 70, over half of farmers have a will (81%), identified a successor (75%), and worked with an attorney (69%). However, a noteworthy 25% of farmers aged 70+ have not yet identified a successor, emphasizing the ongoing need for support even in later stages of farming careers.
Gen X farmers (ages 44-59) stand out as a particularly active cohort in planning. They are more likely than other generations to be in the process of creating a succession plan, and a significant 43% have already completed theirs. This generation is actively training successors, creating trusts, and establishing contracts – crucial steps for a smooth transition.
Farm Size Matters
Smaller farms, particularly those under 250 acres, face significant challenges in succession planning. These farmers are less likely to have a plan in place and often lag in critical steps like creating contracts, communicating plans to family, working with attorneys, or minimizing taxes on the transfer. A concerning finding is that those with small farms are also more likely to express uncertainty about ever being able to stop working on their farm. In contrast, larger farms (2,500+ acres) are more likely to have a plan in place.
Crops vs. Livestock
Farmers with livestock operations appear to be less advanced in their succession planning compared to those with only crops. Only 43% of livestock producers, whether they farm or not, have a plan in place, compared to 54% of crop-only farmers. Livestock producers, like smaller farmers, are also more likely to state, "I don't know if I can ever stop working on my farm" (40% vs. 26% for crop-only farmers). This suggests unique challenges for integrated operations that may require tailored support.
Regional Differences
Geographical variations also play a role in planning approaches. Farmers in the Northeast and West are more inclined towards lifetime transfers of ownership, allowing them to oversee the transition directly. Conversely, farmers in the Midwest and South are more likely to plan for ownership to change hands after their death. Switching gears, Midwestern farmers express a particularly strong opposition (92%) to selling their farm to a large company.
What Does This Mean for Your Business?
These findings offer crucial insights for any business operating within or supporting the agricultural sector. Understanding the dynamics of farm succession planning isn't just about demographic shifts; it's about anticipating changes in decision-making, purchasing power, and operational priorities. So, what should you do now?
Anticipate changing needs
With nearly 40% of U.S. farms expecting ownership transfer in the next decade, a significant portion of your current and future customer base will undergo fundamental changes. How will the needs, preferences, and challenges of these new owners differ from those they are replacing?
Connect with the Next Generation Now
Gen X farmers are actively engaged in planning and training their successors. This is a prime opportunity to build relationships with the next generation of farm operators before they assume full control. Understanding their evolving demands for technology, sustainability, and efficiency can position your business as a vital partner. What products, services, or information will resonate most with these emerging leaders?
Tailor Your Approach to Diverse Farm Types
Our research clearly shows variations in planning sophistication across different farm sizes and types (crops vs. livestock). A one-size-fits-all approach is often ineffective. Are your marketing efforts, product development, and support services sufficiently tailored to the unique challenges faced by your specific audience?
Identify Opportunities in Unplanned Transitions
While many farmers are planning, some aren't. And even among those planning, specific crucial steps are being missed. This highlights potential areas where new solutions, guidance, or even educational resources from external partners could be valuable.
Conduct additional custom Research
This initial study provides a robust foundation, but it also sparks many new questions tailored to your unique business. Beyond the insights we've shared, you might find yourself asking:
- How do family dynamics and the involvement of multiple successors influence equipment purchasing decisions?
- What financial service offerings (e.g., leasing, financing options, used equipment programs) are most appealing to farmers, and how do these preferences differ between those soon to pass on their farms versus those not expecting to?
- Small farms are lagging in succession planning. What other areas are they behind on, and where are the gaps we can fill for small-acreage, small-budget operations?
- Where are the pain points in transferring ownership and operation of your specific products or services for farmers?
Answering these questions requires a deeper dive, and that's where custom research comes in. Our team specializes in uncovering the nuanced insights that drive strategic business decisions. We can help you design and execute the research you need to get the right answers for your business, ensuring you're optimally positioned for the evolving landscape of agriculture.
Want to dive in deeper?
Check out our FULL Agricultural Land Succession Planning Research Report. This report has all of these key facts and more, plus visualizations and graphs that lay out the full breadth of this data from additional breakouts to understanding farmer perceptions of succession planning.
