Owning or renting farmland in the U.S.

A guide to sustainable farming decisions

Farmers face a critical decision - owning or renting farmland. With 39% of U.S. farmland rented in 2022, this balance shapes the agricultural landscape. Rising land values and increasing operational costs make tenure decisions vital for sustainability.

The USDA identifies three tenure types - full owners (own all land operated), part owners (mix of owned and rented land), and tenants (exclusively rent).

Part owners operate over half of all farmland, averaging larger farm sizes. Full owners tend to manage smaller, consolidated operations, while tenants focus on cost-efficient, flexible farming.

Land tenure varies across regions. The Southwest and Northeast favour ownership due to higher land values and specialty crops. In the Midwest, rented land supports extensive row crop production.

High-value crops like fruits and nuts often require ownership due to long-term investments, while flexible crops like grain thrive on rented land.

Farm size consolidation continues, with part-owner farms growing 13% from 2017 to 2022. Rising costs affect renters disproportionately, as cash rents lag behind land value increases, creating financial stress during low-return years.

Young farmers rely heavily on renting due to financial barriers. Succession plans can smooth the transition to ownership, ensuring sustainability for family farms. Beginning farmers, averaging 47 years old, often have the capital to own land outright.

USDA programs further complicate tenure decisions. Renters contributing to active management can claim benefits, while crop-share leases require clear agreements. These programs are vital safety nets during challenging years.

Navigating the complexities of farmland ownership and rental options requires careful planning. By balancing costs, benefits, and long-term goals, farmers can ensure sustainable operations amidst evolving agricultural challenges.