In August, the U.S.Department of Agriculture reported the average price of cropland in Ohio rose 8.6% from last year with an average price per acre at about $8,200. Some advocates say that’s making it increasingly hard for beginning farmers to enter the market.
Kyle and Dawn Heidlebaugh are fourth-generation corn and soy farmers in Finlay, Ohio. They own about 1,600 acres worth of farmland and will soon transition their farm to two of their daughters soon.
Though doing that right now is challenging, Dawn Heidlebaugh said, especially because many farm lenders won’t approve loans to beginning farmers with no collateral.
“Even now, if they were able to get some ground, whether it be rent ground or buy ground they would still have to have [their] dad's equipment,” Heidlebaugh said. “So I mean we would help them with whatever they need. It's just very hard for these kids to get into this industry.”
Adding to the pressure is increasing input prices with a projected decrease in farm revenue at the end of 2023, according to the USDA.
Dawn Heidlebaugh said seeing the same land the family bought just a few years ago keep rising in price is stressful.
“If it keeps going up 10%, that means next year, the same ground that we bought could be 10% more. Can you imagine buying that again? It just is outrageous.” Heidlebaugh said.
Elizabeth Long, an area manager at AG Resource Management — a specialty financing group with offices in Bellefontaine — said operating a farm is hard. But it’s even harder for beginning farmers looking to apply for a loan for land or equipment.
“The biggest question they're going to ask when they're looking at financing is what are the collateral? A traditional lender will look at a young farmer and say, well, you don't have equipment and you don't have real estate,” Long said.
Long said inflation and investors buying land for development is driving farmland prices higher. Because of those barriers, she’s seen more beginning farmers use creative approaches to enter into the market like growing wheat or hops and using their crop insurance as collateral.
The Heidlebaugh family is working with financial advisors to figure out how to best transition their farm but Dawn Heidlebaugh said it won’t be easy.
“We are a very small family business and it's all pretty much all hands on deck when it comes to farming,” Heidlebaugh said. “We've got four kids and we've got two that want a farm. So it's kind of rough to try to figure out how we're going to transition.”
Alejandro Figueroa is a corps member with Report for America, a national service program that places journalists into local newsrooms.
