I have recently taken over the entirety of our family farm crop operations, making me officially the sixth generation to do so on a farm that started in 1898. It would be my desire for my son, if he so chooses, to someday be the seventh generation.

Though my son is young, I’m starting transition planning now. Farm succession often gets put off way too late. I have personally witnessed progressive farm families only begin to seriously ponder their estate planning after the patriarch has a stroke and ends up in a hospital bed. It was as if they suddenly realized their father was not going to live forever. Siblings then were forced to decide how to split things up. This happens more often than you may think.

In another more personal example, my late father-in-law called his children into the office one random day a couple of years ago (along with me who sat quietly in the corner). He made a surprising announcement that he had transferred the bulk of the farming assets into a new holding company and made his three children the owners. He did sort of wait until the last minute, but he did get it done just in the nick of time. I say that because six months later he passed away unexpectedly.

Had he not done what he did when he did it, the tax liability would have been much higher. But perhaps even more importantly, he left blueprints behind with marching orders on how he wanted things managed upon his death. Had he not set up the estate plan, I would like to believe my wife and her brothers would have sorted it out without any friction. But why take that risk? Why leave the potential for conflict when it is completely unnecessary?

Farmers have to wear a lot of hats.

The latest USDA consensus shows that midsize operations represent nearly 30% of family farms, down from 57% 40 years ago. Consolidation is nothing new to the ag industry, but it does appear to be accelerating. Many things are out of our control:  government policy, Mother Nature, commodity prices, Brazilian expansion, to name a few.

But some things are within our control. Those are the things we should be focusing on.

This usually means selecting the right corn hybrid, managing equipment costs, and testing out the latest biological. While these are all important, I am convinced that if farmers want to slow the consolidation and keep farms in the family, they are going to have to go beyond that.

The farms still operating in the next 40 years will not necessarily be those that get the highest yields. They will be the ones that professionalize their management operations, adopt solid succession planning, initiate corporate governance, policies and procedures and, of course, prioritize risk management strategies.

Family businesses don’t have a great track record. I have read studies where only 30% of family businesses survive from the first generation to the second. While farming seems to do better when compared to most other industries, it is becoming hyper-competitive.

In my own little network of friends and family, I have seen enough farm transitions to convince me that we need help. I firmly believe that chance favors the prepared. By helping professionalize the family farm, we increase our odds and better prepare ourselves for the challenges that lie ahead.

The Family Farm Masterclass is a big step in that direction. Commstock Investments is bringing high profile speakers to Des Moines, IA, Feb. 21 – 22, to create a learning environment in which farmers and agribusiness leaders can take their management skills to the next level.

Sign up here: https://commstock.com/family-farm-master-class/