The Future of Family Farms

1. The Future of Family Farms Paul Lasley Department of Sociology Iowa State University

2. What is a family farm? • Labor • Capital • Management • Residency • Dependency • Ownership of land

3. Farm dependentcommunities The Twin Pillars of Rural Culture Non farmcommunities

4. CommunitiesinTransition Changes in the State • Population mix • Industrial base • Occupational shifts • Lifestyle choices • Linkage to urban places

5. AgricultureinTransition Changesin Production Agriculture • Decline in farm numbers • Increased farm size • Contracts & integration • Dual agriculture

6. Non Farm Rural Communities Production Agriculture Conflicts at the Interface

7. Number of U.S. Farms

8. Bio-genetic & Managerial Industrial Petro-chemical

9. Rural, Urban and Farm Population in Iowa Millions

10. Trends in Post 1980s Farm Crisis • Quite similar to the post-Depression years of the 1930s • Many farm families are tired of economic hardship and are encouraging their children to look elsewhere • Young people that are selecting careers in 2000s are the products of the 1980s farm crisis. They grew up in a climate characterized by tough economic times and pessimism. Fig. 7

11. For farm youth born since 1980, what have been dominant messages? • Hard times, economic hardship • We can’t afford this • Limited opportunities • Get an education & find something else to do • There are better opportunities elsewhere • There is no future in family farms • Get big or get out • Good place to live, poor way to make a living • It’s a tough way to make a living Fig. 8

12. Literature A Thousand Acres Broken Heartland: TheRise of America’s Rural Ghettos Lone Tree Movies Country The River Places in the Heart Troublesome Creek Media Messages about farming in the post 1980s farm crisis Fig. 9

13. How this is reflected in national numbers <2525–3435–4445–5455–6465+Total 198262,336 293,810 443,420 505,412 536,402 399,596 2,240,976 % 2.8 13.1 19.8 22.6 23.9 17.8 2002 20,850 128,455 371,422 466,729 427,354 497,029 1,911,859 % 1.1 6.7 19.4 24.4 22.3 26.0 1982–2002Change-41,486 -165,355 -71,998 -38,683 -109,048 +97,433 -329,117 % Change -66.6 -56.3 -16.2 -7.6 -20.3+24.4-14.7

14. Who will be the future farmers in Iowa? <2525–3435–4445–5455–6465+Total 19822,852 17,458 21,282 21,744 25,287 16,557 105,180 % 2.7 16.6 20.2 20.7 24.0 15.7 2002 869 5,282 17,331 24,555 20,227 22,391 90,655 % 0.1 5.8 19.1 27.1 22.3 24.6 1982–2002Change-1,983 -12,176 -3,951 +2,811 +5,060 +5,837 -14,525 % Change -69 -70 -18+11 +25 +26-13.8

15. How many beginning farmers in Iowa? 2002 Census of Agriculture

16. Population Change and Demand for New Foods

17. Consumer Driven Agriculture Population projections 20022020 Hispanics 12.6% 18.0% Asians 3.9% 5.0% Whites 71.0% 64.0% Blacks 12.0% 13.0% • U.S. population stands at 281 million and by 2020 will grow to about 331-361 million (50-80 million).

18. Influence of consumer driven agriculture

19. Consumer Driven Agriculture • Demand for farm products will increase as population increases • Demographic shifts—shifts in food tastes and preferences • Increasing per capita income will reward quality

20. Consumer Driven Agriculture • Aging baby boomers, those born between 1946-64 will approach 54 million by 2020 • Market growth and potential for older population, less active, higher standard of living • More expensive cuts of meat, exotic vegetables, luxury food items, ready to eat, higher priced restaurants, etc.

21. Consumer Driven Agriculture • Per capita income growth is projected to be about 1% annually between 2000-2020, compared with 1.2% that occurred between 1988-98 • Key question is how much of this higher disposable income will be spent on food and what types of food will be demanded

22. Consumer Driven Agriculture Projections are: • More fruit, vegetables, fish, poultry, cheese, yogurt and prepared foods • More eating out—Dash board dining • More attention to diets, health and wellness

23. Why young people choose farming? • What values shape this career decision? • Freedom and independence • Be own boss • Family—good place to raise children • Being able to work outdoors • Living in the country • Family tradition • Enjoy working with nature

24. The social values vs. economic reality • Decision to farm must reflect both the social values of wanting to farm with the economic realities of the marketplace. • “Good place to live, if you don’t have to make your living from it.”

25. What is farming? • Farming is not about driving a tractor • Farming is increasingly about: • Reading the market • Financial management • Marketing • Producing for a market segment • Negotiation of contracts

26. What do farmers enjoy? • Crop and field work • Working with livestock • Purchasing equipment • Marketing • Exploring new idea • Record keeping/paperwork

27. Farm Activity Preferences

28. Desires about Succession(1996 Farm Poll, n=1,982) • 75%…would like farm to remain in family when they retire • 68%… if they had it to do over, they would still choose farming • 63%… would continue if suddenly became rich • 55%… would like to children to take over farm when they retire (21% were undecided and 24% replied “no”) • 30%… would recommend farming to a friend (24% were not sure, 46% said “no”)

29. What will happen to your farmwhen you retire?

30. 2004 Iowa Farm and Rural Life Poll (n=1,514) • 57% would not encourage young people to enter farming WHY? • 87%young people cannot afford to buy the equipment, land, crop inputs, etc • 73%farm profits too low • 73%there is too much risk • 65%land is not available • 20%requires too much manual labor • 15%young people not interested in living in country

31. Some observations • Age distribution of farming is probably not much different on farms than what exists on main street in many Iowa small communities. • We have evolved from a nation of self-employed to one of employees. The question of succession is broader than farming, it needs to raised in terms of other forms of small businesses…grocery stores, farm supply, banking, service stations, equipment dealers, furniture stores, etc.

32. Recognition that Entry into Farming is a Process not an event • Most studies of succession have focused on the legal, financial and public policy aspects • More attention should focus on the family processes • Too often in ignoring the role of the family, we have saved the farm and lost the family. • Small business succession, whether a farm or nonfarm enterprise is a family affair

33. What are the implications of unabated consolidation in business and industry? • Quality of products or service • Changes in the occupational structure • Attachment to place • Environmental consequences of consolidation • Vulnerabilities of consolidation • Changes in opportunity structure

34. Business Succession • Raises questions about what can or should be done to create opportunities for the next generation • Highly mobile, energetic, well-educated young people will migrate to areas to where there are better opportunities • Hence, it is critical that we think in terms of creating opportunities for future Iowans

35. Skills Needed to be Successful • Entrepreneurs • Risk Management • Complex interactions between farming and the environment • Marketing • Food safety and quality

36. Identifying Opportunities • Get an education • Farming is about acquiring and applying knowledge • Analytical and reasoning skills • Creative and critical thinking • “Farming in an information age”

37. Travel • See how others are farming • Travel abroad • Exchange programs • Explore the world on the Internet • Learn about other cultures • Learn another language • Ask Questions

38. Seek out a mentor • Someone who can share their stories of successes and failures • Learn about existing resources to assist you. • Beginning farmer loans • Beginning farmer programs

39. Thank you

40. Needs of Beginning Farmers • 95%… agreed that beginning farmer’s spouse need to have an off-farm job • 92%… agreed beginning farmer needs to have an off-farm job • 86%… agreed assistance from family or other farmers will be necessary • 68%… beginning farmers will be limited to sons and daughters of current farmers • 58%… beginning farmer should live on farm • 36%… beginning farmer should buy land

41. Why should society be concerned about the structure of local business? • Population retention and quality of life reflects opportunities • The life blood of many of Iowa’s 839 rural communities depends upon farming and rural population • The viability of social institutions depends upon opportunity structure

42. What do beginning farmers offer? • LABOR • MANAGEMENT SKILLS • TECHNICAL COMPETENCE

43. To be successful…you need to: Figure out how you you can become the low cost producer against everyone who is producing the same products as you. OR Figure out a niche where there is limited or no competition…where you offer a superior, highly differentiated product.

44. Consequences of these trends • Farm consolidation • Specialization in production • Movement from general farms producing a wide variety of crops and livestock to one or two commodities • Vulnerabilities of specialization • Fluctuations and increased risk

45. Secondary Consequences • Decline in farm numbers • Larger farms • More capitalization of existing farms • Aging of farm population • Fewer opportunities for beginning farmers • Technology enables farmers to continue farming longer

46. Consequences • Loss of farm population (out migration) • Rural neighborhoods vacant during the day, owing to larger numbers of part-time farms • Industrialization of livestock • Increase in rural nonfarm residences

47. Farm Plans in Next 5 years1999 Farm Poll (n=2,583) • 15% quit farming • 13% take son or other family member into farming operation • 12% quit raising cattle • 21% quit raising hogs

48. Of those planning to quit farming in the next 5 years, 53 % were retiring • Of those retiring…what will happen to your farm? • 59% family member will continue it • 60% farm will be rented to nonfamily • 21% farm will be sold

49. What are Farmers Predicting for the Next 10 years (1999-09)? • 99% likely that farm number will continue to decline • 95% low farm prices will put many out of business • 96% more reliance on off-farm income • 82% cost of living will prevent many from retiring at age 65

50. 18%… Contracting in farming will provide farmers with better incomes • 5%… more young people will enter farming