Transitioning to the Next Generation
Workshops and presentations on estate planning and transitioning operations to the next generation are popular among farmers and ranchers. The popularity is no doubt an indication of the transition facing Nebraska agriculture over the next 10-20 years. Figure 1 shows the number of Nebraska producers in 2012 (blue) and 2017 (orange) broken into seven age categories based on data from the USDA Census of Agriculture. The total number of producers in Nebraska increased from 2012 to 2017 from 74,786 to 77,097.
At the same time though, there was a marked shift in producer numbers within the age categories. Producers aged 55 years and older grew in number dramatically, while producers in younger age groups declined in number. The number of producers 55 years and over grew 22 percent and those below age 55 shrank 16 percent. As a result, the average age of Nebraska producers increased to 56.4 years from 54.3.
Census data from 2017 shows acreage in farms with young producers, those under age 35, comprise just 15 percent of total acres in the state. Moreover, young producers were full or part owners of just 12 percent of the state’s acres. Of producers who reported sales of agricultural products of more than $250,000, one definition of commercial farms, 57 percent are 55 years or older, and 24 percent are 65 years or older.
The numbers, then, indicate a significant number of Nebraska’s most productive farm and ranch operations will transition to new owners or operators in the next 10-20 years. According to the Veterans in Agriculture organization in Iowa, half of Iowa farmers do not have successors to their farm businesses. If the statistic is similar for Nebraska, it suggests a vast need to identify successors and develop transition plans for many of Nebraska’s operations. UNL’s Center for Agricultural Profitability has a wealth of information to assist producers with articles, podcasts, and recorded webinars at https://cap.unl.edu/succession. Moreover, the next webinar in Nebraska Farm Bureau’s Inside Profitability Series on Nov. 2 will focus on state and federal programs for beginning farmers. Register here.
A transition is on the horizon in agriculture. How it happens will be determined by the plans made today.
Figure 1. Nebraska Producers by Age Category, 2012 & 2017