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How to prepare the farm for the next generation

Finance First: Take time this summer to consider who will be leading the farm business and what steps you can take to position them for success.

Darren Frye, CEO

May 28, 2024

3 Min Read
Shaking hands by tractor
Getty Images/shotbydave

What’s the future of your farm going to look like in terms of the people involved? More specifically, what about the farm’s leadership? Who will be leading the operation in different aspects?

Farms could be in a number of different scenarios right now in terms of who is involved in future leadership and whether a leadership transition is taking place. Many farms have members of the next generation who have been working in the operation for years already, while others may just be getting started with their involvement.

Some farms may have someone other than a family member preparing to take over the operation who is is actively preparing and working with the farm’s current owner to lead the operation successfully.

And some farms may be in the situation where the current owners simply don’t know who will be leading the operation in the future. If that’s your operation, that can be a difficult scenario to be in. It certainly involves a lot of uncertainty. There could be uncertainty about whether a family member will return to the farm, or if they are ready to lead the farm.

Get clarity

Whatever the situation your operation has in terms of what the leadership and ownership will look like in the future, it requires being intentional. Having the right conversations with the people involved helps reduce uncertainty and bring greater clarity about the future.

First, the farm’s current owners and leaders need to be clear about what they want for the operation. Do they want it to continue beyond them? Or maybe they want to sell everything? Those are two very different decisions about the future that require very different actions right now.

If the farm’s current generation wants the operation to continue, they have different options to explore around who that will involve. Conversations can help determine the plans and goals of the potential future leader or leaders.

Training to lead

Then, it’s about getting a clear training plan in place for the farm’s future generation so they are capable and ready to lead the operation. This time of year can be a great opportunity for training the farm’s future leader in overseeing production and growing season operations.

It’s also a good time to expose them to the business and financial side of the operation. Make sure they are involved in meetings with your marketing advisor, banker, suppliers and any other advisors. The earlier that you can involve them in business meetings and decisions, the more comfortable they may become in that situation. Gradually, you can hand off parts of the meeting for them to handle on their own with you there for support and advice.

Farmers have found that getting some third-party perspective from our market advisors has helped ease their minds. The advisors help farmer clients with planning and execution around marketing decisions and help keep them up to speed on the current rapidly-changing grain market situation – and how it impacts their operation.

Get a free two-week trial of our marketing information service (MarketView Basic). Your free trial includes regular audio and video updates, technical analysis, recommendations and more. Learn more about our market advisor programs and offerings at www.waterstreetag.com.

Read more about:

Farm Succession

About the Author(s)

Darren Frye

CEO, Water Street Solutions

Darren Frye grew up on an innovative, integrated Illinois farm. He began trading commodities in 1982 and started his first business in 1987, specializing in fertilizer distribution and crop consulting. In 1994 he started a consulting business, Water Street Solutions to help Midwest farmers become more successful through financial analysis, crop insurance, marketing consulting and legacy planning. The mission of Finance First is to get you to look at spreadsheets and see opportunity, to see your business for what it can be, and to help you build your agricultural legacy.

Visit Water Street Solutions

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