What to Do with Inherited Farmland

With onethird of the US’s farmers over the age of 65a lot of farmland will likely be changing hands throughout the next decade. In many cases, this farmland will be passed on to another member (or members) of the farmer’s family. Farmland is generally a very valuable asset. Not only is the land itself worth money, but it’s capable of generating on-going revenue should you continue to farm it. 

Sometimes, the people inheriting the land are already farming it when its officially passed to them. 

However, it’s becoming increasingly common that those inheriting farmland are not farmersThis can create a complex situation. Many people have sentimental attachment to inherited farmland, and they would prefer to keep it in the family.  

However, farming is hard work that requires knowledge and experience. Deciding to become a farmer simply because you inherited some land isn’t a realistic option. So, what can you do? 

First Things First 

If you’re inheriting farmland, the first thing you’ll need to do is to understand the full value, income potential, and general condition of the land. You’ll want to hire a certified appraiser to evaluate the full worth of the land. Your local USDA staff can help to examine the condition and general earning potential of the farm. 

Once you have a proper idea of your current situation, it’s time to start weighing your options. 

If the land has high real estate value, selling it can be a tempting option. In some ways, it’s the most straightforward choice. You don’t have to worry about on-going property taxes, responsibilities, management, etc 

However, there could be heavy taxes involved in the act of selling, depending on how much the land is worth and where it’s located. And of course, selling the land to an outside party means it will no longer be a part of your family. 

If the land is healthy and able to generate strong income, a better option might be to rent it outIn addition to earning money now, the land can grow in value moving forward. There are different ways to rent out land, including charging flat rental rates vs crop-share leasing and more.  

You could also hire a farm manager, who handles all farm related work while taking a portion of the earnings. 

Making the Most of Damaged or Marginal Farmland 

Sometimes, the land a person inherits isn’t in the best condition. Soil might be damaged, the location may no longer be ideal for farming, etc. This can make it both difficult to sell or rent out. In situations like these, you should strongly consider enrolling in the Conservation Reserve Program. 

CRP is a program operating under the USDA that provides ongoing rental payments based on market value in exchange for taking marginal farmland out of active production. In place of traditional crops, native vegetation such as grasses and forbs are planted. This not only protects and repairs the soil, but it provides habitat for wildlife and keeps local water clean. 

CRP contracts last between 10-15 years, with renewal options available once your contract expires. With CRP, landowners can receive on-going income without having to actively farm the land. Of course, you don’t have to enroll all of your land in CRP. A healthy portion can continue to be used for active farming, while underperforming acres can be enrolled in CRP. 

Either way, converting any amount of land to CRP does require a fair amount of effort and knowhow. That’s where we come in. 

FDCE offers full-service CRP solutions that includes buying CRP seed, planting the seed, applying herbicide, filing paperwork, and submitting reports to FSA. Not only do we handle virtually all of the work, but with CRP’s cost-share reimbursement, our services practically pay for themselves. 

We have helped countless inheritors convert their land into CRP establishment, which not only earns them on-going revenue, but helps improve our environment as well. Whether you’ve already inherited land, or you will be in the near future, contact us today and learn what FDCE can do for you.