Entry barriers challenge beginning farmers
An ag lender says farmland access is one of the main barriers facing young and beginning farmers.
Matt Smith with CBI Bank and Trust in Muscatine, Iowa says they are navigating record high farmland prices. “It’s a real challenge for the younger producers who want to get into farming and want to build that land base,” he said. “They need access to capital and equity to help offset the rising cost of farm ownership.”
He tells Brownfield interest rates are another concern. “In the last 12 months, long-term rates on farm real estate have gone up a full 3 percentage points,” Smith said. “If you think in terms of $10,000 an acre, the increase in interest rates is an additional $300 per acre per year.”
Smith says an increase in outside bidders for available farmland is adding to the uncertainty.