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How can we support CLC practices on leased farmland?

How can we support CLC practices on leased farmland?. Green Lands Blue Waters Conference November 20-21, 2013 Joan Stockinger , Cooperative Development Services. Agenda. Context: Leasing in UMRB What is known about landowners? Who/what working in this area?

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How can we support CLC practices on leased farmland?

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  1. How can we support CLC practices on leased farmland? Green Lands Blue Waters Conference November 20-21, 2013 Joan Stockinger, Cooperative Development Services

  2. Agenda • Context: Leasing in UMRB • What is known about landowners? • Who/what working in this area? • Trends & opportunities identified • CDS/Stewardship Farmland Management Project • How you can help • Discussion / questions

  3. Context: Leasing in UMRB • Market large in acres & dollars

  4. Context: Leasing in UMRB • Market is fragmented in small parcels and difficult to reach

  5. Context: Leasing in UMRB • Market is largely “non-intermediated” • In Iowa (2012): • - Most land still rented direct between landowner and tenant • - 7% of leased acres are professionally managed by third party • - 75% cash lease; most one year; 40% still verbal

  6. Who is studying or working with non-operating landowners? • Research • Mike Duffy, ISU “Iowa Farmland Ownership Survey 2012” • J. Arbuckle ISU “Landowner and Operators Caring About the Land Survey 2010” • Land and rent value surveys (Steve Taff UMN, others) • Others?

  7. Who is studying or working with non-operating landowners? • In Field / Projects • AGREN “Absentee Landowners & Conservation: Marketing Conservation to Absentee Landowners” • Woman Food and Agriculture (WFAN) “Women Caring for the Land” programs for women landowners • Vilicus Capital (Matches social investors with organic farmers)

  8. Who is studying or working with non-operating landowners? • In-Field / Projects (con’t) • Solutions in the Land (Whole farm planning & market development for landowners) • Existing Farm Management Companies (Farmers National; Hertz; others) • New Initiative • CDS “Stewardship Farmland Management” project • Others?

  9. What is known about non-operating landowners? From 2012 Iowa Farmland Ownership Survey (Duffy): “Reasons for Owning the Land “ 50% current income ; 25% long term investment ; 25% sentimental “Importance of Various Tenant Characteristics” 92% tenant will be a good steward of the land; 25% tenant is a family member; 20% helping a young farmer getting started “Distribution of farmland by farming status of owner” 62% do not farm; 22% farm full time; 16% farm part time Gender Male 53% Women 47% Age 78% over age 55

  10. Trends in Farmland Ownership • Ownership moving from “WWII generation” to “baby boom generation” • Moving away from farm • Multiple owners complicate management • High commodity prices, land values and rents attracting outside investment • Changes in ownership increasing need for professional management • Professional farm management growing

  11. Opportunity to Influence Conservation Practices? • Changes in ownership appear to create new opportunity influencing conservation practices • Appears to be conservation focused segment of both investor and inheriting farmland owners • Evidence is anecdotal but widespread • What products/services needed to reach this segment? • Is there a market based approach?

  12. CDS Approach: Conservation focused farm management company(s) • Why this approach? • Farm management proven business model • Low penetration of farm management • No one providing “full service” conservation focused approach • Solutions are “parcel specific” • Changes in ownership create opening • Real value proposition in offering professional farmland management for stewardship

  13. What is the status of this work? Completed: Feasibility Study and Business Plan Vetting/refining Next: Recruiting candidates/sponsors Supporting launch of new fm firms/capacities Ongoing product development/refinement Creation of an association for support/network

  14. SFM Two-Tier Development Approach (Concept) T i e r 2 Stewardship Farmland Management Association (NFP) (Web presence; branding; hold mission/vision; professional standards; credentialing; leads/referrals; technical resources; best practices; networking; benchmarks; cross contracting; central admin services?; financing? ?) Affiliate/ Member (single firm – new FM) Affiliate/ Member (w multiple Locations) T i e r 1 Affiliate/ Member (existing FM co) Associate memberships Affiliate/ Member (dept in larger firm with related business

  15. Sample P&L w/3yr to break even

  16. Help needed… • Candidates - Identify individual or organizational candidates • (Professional; entrepreneurial; self-directed; both technical and people skills; problem solving and ongoing learning; passion for conservation & farming) • Opportunities to present this (small or large) or inform • Honest feedback; willing to be a “thinking partner” • Support/ideas for product development • -Model whole farm plans • -Model short term plans • -Model lease

  17. Thank you! Joan Stockinger Cooperative Development Services 400 Selby Ave St. Paul, MN 55102 651-209-8849 (ofc) 612-240-7760 (cell) jstockinger@cdsus.coop

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