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More farmers planning to retire or not grow their operation in the next five years

Ag producers were asked to project their farm’s annual growth rate over the next five years in the latest Purdue University/CME Group Ag Economy Barometer.

Purdue Ag Economist Jim Mintert says “In 2022, 39 percent of the producers said they had no plans to grow over the next five years and 14 percent said they plan to retire in the next five years. So, that’s 53 percent in the no growth or exit/retire category.”

Mintert says the percentage of farmers who plan to exit or retire or not grow their operation has been increasing. In 2016, the first year the survey poised the question, 33 percent of farmers said they planned to exit farming or had no plans to increase their operation’s size.

The percentage of producers who think their operation’s annual growth rate will range from five to 10 percent has been drifting lower as well. In 2016, three out of 10 producers said their operation was in this category. In 2022, 19 percent of respondents expect that growth rate. The number of producers indicating their farm is in the slow growth category, less than 5 percent annual growth, is mostly unchanged.

Mintert says there could be a few reasons for the slowed growth.

“I suspect some of the farmers that say they have no plans to grow might be looking at the environment today and saying it might be tough to expand,” he says. “Farmland prices are really high and cash rental rates are very high. Those are impediments to expansion, and it makes it difficult for some of those folks to see a path to expansion.”

He says it also speaks to the demographics of the production sector.

“With respect to people exiting and it suggests for young farmers maybe there are some opportunities out there with that many people looking to slow down or exit and retire over the next five years,” he says.

The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.

Audio: Jim Mintert