When observing land auctions near his Corning, Iowa, farm, Ray Gaesser noticed a significant trend. Up to 25% of the land was being purchased by investors, while local buyers still dominated the bidding for smaller parcels. “The larger farms, investors tend to buy those,” he said. “It takes a lot of money to buy 500 acres at $12,000 an acre.” Gaesser, 71, and his wife Elaine have transitioned 88% of their 5,000-acre operation to their son Chris and his wife Shannon. The family rents about four-fifths of their farm that grows corn, soybeans, and rye.

Demographic Shift in Farmland Ownership

Gaesser's observations mirror a broader demographic shift in who owns and runs America's farms. Experts foresee a "gray wave" approaching the land market. Just like Gaesser, they are witnessing increased investor interest in a supply that remains tightly held by families and heirs. Urban encroachment has further tightened this supply.American Farmland Trust (AFT), a nonprofit dedicated to conserving farmland, predicts that 300 million acres of U.S. agricultural land will change hands in the next 20 years. This accounts for more than a third of the approximately 880 million acres of farm and ranch land in the lower 48 states. The group's analysis of the USDA's Census of Agriculture and the 2015 land tenure report shows that over 40% of farmland is owned by people over 65.From 2001 to 2016, the nation lost 11 million acres of farmland to urban sprawl, according to Sam Smidt, who leads land use research at AFT. The group expects 18.4 million acres to disappear by 2040. “Farmland loss isn’t rapid, but it’s continuous,” Smidt says. It's not limited to coastal areas with large population growth; even rural states with top-quality land, like Kansas and Iowa, are losing ground. “One of the reasons [farmland] gets converted is it’s easy to develop,” Smidt adds.