There was a time when many farm families were not sure they could keep the family farm business going another year. The focus was on how to "hang on," and not much about how to "pass it on" to the next generation.
Recently I was reminded of the 30th anniversary of the Farm Aid concert in Champaign, Ill., on September 22, 1985. Some of you will remember this event was organized by Willie Nelson, Neil Young and John Mellencamp to raise money to help family farmers struggling with high interest rates and low farm income.
The concert organizers claimed a crowd of 80,000 and proceeds of $9 million to help American farm families. They had the 30th concert in Chicago on September 19, 2015, and now claim to have raised more than $48 million for family farmers. The work continues.
In 1985 I moved to Minnesota for the first time. My how things have changed.
• Interest rates where high. The Fed Funds rate was 9%.
• Minnesota farmland prices averaged $686 per acre.
• Farm profits were low.
It's a tribute to the resilience for farm families and all of rural America that 30 years later, many farmers are doing well and have a successful farm business that will need to transition to a new generation.
It would have been hard to predict how the last 30 years have gone.
Imagine telling people in 1985 that 30 years from now:
• The Fed Funds rate will be 0% for almost 7 years.
• Iowa corn ground would sell for $15,000 an acre in places.
• Corn would sell for more than $8 a bushel.
It's a reminder that since we can't predict the future, we need to plan for it.
A comprehensive transition plan that addresses the financial goals of the exiting generation as well as the successor generation is critical to a successful change of leadership. A financial fiduciary who is focused exclusively on the client's goals is a great resource to put an effective and efficient game plan in place.
The opinions of Rich Dunn are not necessarily those of Farm Futures or the Penton Farm Progress Group.
If this blog has got you thinking about your own situation, get in touch with my office (email@example.com).