Managing life on the farm
Farm managers can increase profit of suburban farmland awaiting development
Friday, April 11, 2014 7:00 AM
Mollie Aronowitz is new to the field of farm management, and for that reason, she has adopted a simple measure of success.
“Sometimes, when we’re leaning on the back of the pickup truck, I can talk shop for about three minutes before I say something dumb. I’m trying to increase those minutes. I’m still a little cautious,” said Aronowitz, who at age 30 has been kicking around farm country since September for Clive-based Peoples Co.
Farm management is nothing new to the state. There are at least a dozen companies that will help farmers make business decisions or, as is increasingly becoming the case, provide their services to heirs who live out of state. In Greater Des Moines, farm management also means drawing a profit from farmland that has become more valuable as development land because of recoveries in the housing and finance markets.
In other cases, that means managing land for conservation purposes. Most common is determining which fields need to have improved drainage or what local farmer would be the best person to do the hands-on work of cultivating and harvesting.
Peoples President Steve Bruere estimates that about 920 acres were converted to single-family lots last year in Greater Des Moines. Add to that figure the land used for multifamily projects or commercial developments, and it’s a not-so-wild guess that about 2,000 acres of farmland become development sites each year in the metro area.
Bruere labels that ground “transitional” farmland. Its management represents less than 5 percent of Peoples’ farm management business.
The numbers that really impressed Bruere when he decided to bring on Aronowitz, who he says is one of just two women in the farm management business in Iowa, is research showing that more than half of Iowa’s $260 billion in farmland is at least partially owned by women and between 20 and 30 percent is owned solely by women.
And ownership is transitioning to absentee owners. Most often, those owners grew up on a family-owned farm but moved on to other professions in other states. When their parents died, they wound up with an ownership stake in something that held sentimental value.
And Bruere’s business contacts seemed to be dominated by women.
“A couple of years ago when I was reviewing my closings to send out holiday gifts, I realized that almost every one my transactions involved a female,” he said. “Whether it was a transaction with a female attorney, trust officer, banker or an active farmer or a farm widow, there were always women involved in my transactions.”
About the same time, Bruere attended an annual farm real estate conference and was struck by how few women were among the
“In an industry dominated by men, women are many times the decision-maker. I started to notice groups like Women, Food and Agriculture emerge, and it became clear that this wasn’t a coincidence but a trend,” he said. “While many people talk about widow landowners, there are many more cases where women are part of the decision-making as part of family farming operations. Such is the case with my mom in my family farm. In fact, my mother has more input and control in the farming operation than my dad does, although he may not admit it.”
Aronowitz is the daughter of Bruere’s business partner at Peoples. The partner, Randy Luze, was a farmer, but the family lived in Cedar Falls.
“I don’t have a typical farm girl background,” Aronowitz said.
After graduating from Iowa State University with a degree in horticulture and a minor in public garden management, Aronowitz went to work for the Cedar Valley Arboretum & Botanic Gardens in Waterloo, where she managed 30 acres of gardens.
The gap between that job and her current one is wider than that between corn hybrids and wildflowers.
“With farm management, you only have to please the landowner, you don’t have to please the public or a board of directors, and you’re only growing one crop,” she said.
Aronowitz manages 60 farms totaling 60,000 acres. A fraction of that land is owned by investors, but the majority is owned by the heirs of deceased farmers. In some cases, one descendent might want to prove to siblings that continuing to own the farm is as simple as finding a good manager.
“It’s fun when you have a new owner who hasn’t been involved in the past, but now they want to be involved,” Aronowitz said. “You just kind of see a light bulb go off and know that they appreciate the farm that they have inherited.”
Part of Aronowitz’ job is finding someone to operate the farm, regardless of whether the owner lives on the property.
Peoples sets up a management agreement so that the landowner receives 35 percent of the income from the farm. In some cases, securing the profit is a simple matter of understanding how commodity prices drive land values and cash rents.
One example was a landowner who had a longtime relationship with a farmer who rented the farmland. The owner maintained the property; the operator farmed it. Problem was, the per-acre rent was stuck at $130, a number that was eclipsed several years ago for Iowa farm ground.
“Everyone knew that wasn’t a fair price,” Aronowitz said. “After a few telephone calls, we were able to get $275 an acre.”
Aronowitz has discovered that her gender helps facilitate conversation when meeting with a husband-and-wife team.
“I was a little surprised at how my role could facilitate that,” she said. “The conversation flows easier when we meet with the couple. When we engage the wives, there is a quicker sense of comfort.”
And engaging the wife could be what it’s all about.
“All you have to do is look at who is writing the checks,” Aronowitz said.
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