It was an 80-acre farm that sat close to family ground in western Illinois. We were fantastically excited, but I remember telling my husband I thought I’d need a sick day to recover. I wasn’t kidding.

But a couple of years later, something magical happened. John emerged from the office one evening, balance sheet in hand. Land values were climbing by 10% and 20% a year at that point. Suddenly, buying $4,250-per-acre ground looked like the smartest thing we’d ever done.

Spoiler alert: It still does.

What any of us who buy land are doing is accumulating assets, and ultimately, wealth. We don’t like to talk about the W word in agriculture, but economically speaking, that’s what it is. Wealth is assets minus debts, which assumes we’re paying down our debt in agriculture.

Beyond agriculture

Economist Gray Kimbrough recently took a look at Federal Reserve data in an attempt to discover whether millennials hold more or less wealth at their age as compared to baby boomers at the same age. He found baby boomers (born between 1946 and 1964) collectively owned 21% of the nation’s wealth by the time they hit age 35, around 1990. Generation X (born between 1964 and 1980) owned 9% by they time they hit 35. Millennials (born between 1981 and 1996) won’t hit 35 on average until 2023, but today they own just 3.2% of the nation’s wealth.

It’s a tricky comparison to make as a percentage, because the baby boomer generation at its peak made up 26% of the U.S. population. But it offers an interesting question in agriculture: Do millennial farmers have a prayer of holding as much wealth at 35 as baby boomer farmers did at 35? Or even as Gen X farmers did at 35?

1. Millennials are largely footing their own college bills. Schnitkey graduated from Ohio State in ’82 without any college debt (as did I, from University of Illinois in 1998), in part because the state subsidized tuition at a rate of 80%. Now, that’s about 20%, and it’s not uncommon for students to graduate $100,000-plus in debt. Yikes.

2. Young, healthy people pay the health care bill. One of the tenets of the 2012 Obama health care policy was that there was one price and no one could be denied health insurance. Granted, health care is complicated, but in general, what that did was cause low-risk policyholders to subsidize high-risk policyholders. Low-risk policyholders tend to be younger.

3. There’s no such thing as a Social Security surplus anymore. Schnitkey says while Social Security taxes used to generate surpluses, now any surpluses have been used to fund general government. He predicts coming adjustments will disadvantage younger people.

4. Federal deficits kick costs down the road. When the government runs deficits, it increases debt, which raises interest costs in the future, which are kicked down to younger generations.

Back to agriculture

But is there a direct link to ag? We’ve said for decades that it’s harder for younger generations to begin farming. Today, I’d argue it’s harder yet. Decades ago, a young person could grow their farm by renting land.

Life spans are changing, too. Baby boomers’ parents didn’t live as long as boomers will. As strange as it is to point out, that means land won’t turn over as quickly to millennials as it did to boomers.

But back to the millennial farmer. Over the past couple of years, we’ve profiled young farmers in our Cultivating Master Farmers program. Virtually every one of them was born into well-established family farms — or they’ve seized on a tremendous opportunity from an extended family member. Those are terrific advantages, though not to be mistaken for easy. Still others are starting with fewer resources and even more limited reserves.

Like our young CMF friends, John and I joined a well-established family farm, but we did it in the late ’90s, during the days of loan deficiency payments and loan rates. Impeccable timing, no? John custom-sprayed for a lot of neighbors, expanded the cattle operation, started a livestock equipment business. I kept writing. We managed to buy a couple of farms that have blessedly only increased in value.

No matter whether it’s 1979 or 1999 or 2019, a young farmer’s still got to innovate, save money, take measured risk, pay down debt, look for sideline businesses.

Get good advice. And keep hustling. All is not lost.

Source: Holly Spangler, Prairie Farmer