Pete, being a fellow Minnesotan, I don’t know of you see this down in your area but up here in the East Central part of the state the age of most of the farmers up here is by no means getting any younger. I’m a very young crop producer, just turned 30 this past April, started my crop farm from scratch when I was 15, and every meeting or coop dinner I go to I could easily be everyone’s grand child. Funny, but very much so the truth.
Up here in the last say 10 years there have been very few on farm auctions. There are still alot of guys farming a couple hundred acres, some dairies are still going, and a general mix of everyone still plugging away at what they have. And sure the big successful farms are getting bigger and renting more land, but even those guys are getting up there in age. Some have family to take over the operation and some do not.
With the average age of the American Farmer being what now, +/- 60 years old, at some point there will have to be a transition and with all the machinery in these seasoned boys hands what will the uptick in on farm auctions be? What’s the time frame in which selling starts to accelerate…5 years from now, 10? With all this new equipment in farmers hands what will the values be? And a large thought, will the younger generation be able to afford it? Or will there be a glut and softer prices will make the transition more affordable?
It’s going to be an interesting ride the next several years!
Great questions/comment…wise mind from east-central MN! You have correctly identified some interesting macro ag economic trends. Truths that I see:
- Avg. age of American farmer is indeed in that 60 yr old range
- LOT of new farm machinery was purchased 2008 - 2014
- During those heady good times back in late 2007 into early 2013, even into 2014…the no. of machinery auctions at that time actually was down 55% vs. the time period of 2000 - 2006
- The No. of machinery auctions began to increase mid summer '15 and has remained at this elevated level since…although it should be pointed out that this elevated level is in fact = to what I saw back in 2000 - 2006
The last trend I’ve been tracking has to do with used equipment values. From late 2007 into early 2013 used values were highest I’ve seen in my 27+ years tracking prices on all types of equipment sold throughout North America. When commodity prices fell spring '13…I wondered…if prices stay at these lower levels, how long will it take until older farmers start to decide to retire. My guess was 2 years. That sort of proved to be accurate as I mentioned, started to see no. of machinery auctions increase in summer of '15. You mentioned not seeing many on the farm local sales in your east-central MN area…this is true, some areas have lagged in terms of no. of auctions. In the case of east-central MN that could be somewhat due to the diversity of farm operations there. We saw bigger increase in no. of machinery auctions in big grain dominated areas, like north-central Iowa, central Illinois, etc. Also a factor here I think has been the strong growth of the ONLINE AUCTION market…so not as many local on site auctions, but growth in terms of the no. of online sales across the country.
Your question about the possible coming issue with transitioning of older farmers to new younger farm owners is a pressing matter, one that I think frankly needs more of our collective attention to. Ag lenders under increasing pressure from increased regulations that spun out of the Great Recession back in 2008-2010. More problematic (impossible?) for local ag lenders to “take a chance” on a younger farmer wanting to give it a go? Perhaps Washington will eventually see this as a need and bring forward programs to help get young farmers up & running?
But waiting on Washington to get anything done…folly.
The issue will need to be addressed locally and collectively. One angle I wonder about…possible crowd source funding (Go Fund Me type web sites) to help young farmers get into the biz and grow their operations. Perhaps a collective effort to pool funds from older farmers who want to “give back” + funds of $$ from other sectors. This is one reason why I think young farmers should begin to think about brand awareness for your operation…have a Facebook page/web site/logo/Instagram/drone video on your farm. Post regularly…TELL THE STORY OF YOUR FARM, what you are doing to push ahead and try to grow. To potential investors these more defined young farmer brands will be attractive.
Hats off to you for everything you’ve done to make a go in farming so far! I can tell from the way you think about things, consider the issues, look ahead, think LONG TERM, that you will be successful. Thanks for reaching out with your post. Please keep in touch 
Pete
I’m 54 and I look behind me and no one is coming, I have a huge concern when I retire there will be nobody there to buy me out. Everytime we get a downturn in the farm economy the young guys don’t make it, I’m afraid the day will come where used machinery in 10-15 years will be worthless. Just big guys and nobody else, either your running 5000 + acres or your out of the game but used machinery has only one way to go and that is down because the big guys only buy new.