Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: OH
Herd of Red Angus cattle in pasture Clifton Martin
LOOKING AHEAD: While visiting a Red Angus farm, Clifton Martin reflects on how farm transitions need to be planned out.

Farm succession needs eye on future

Buckeye Beef Brief: Red Angus farm visit spurs observations about succession planning.

A recent farm tour peeled back the layers and opened a window into the life of one farm family, their farming operation, and their triumphs and struggles. Driving in on the lane, I felt I had entered an average farm, though as many are a place of beauty and pride. A long farm lane took a sharp left and ended in the drive of a small older home.

Behind the home, off the right corner, were a few grain bins. Down the slope to the right was the main farm lot, with two smaller-sized farm buildings: one for equipment and the other for handling livestock. The buildings were older, painted white, unheated and showing a few signs of age. Pastures, corn and soybeans surrounded the farm lot across rolling hills. It was a cloudy day in October, 42 degrees F, with a slight wind. After two hours outside, I would soon agree that it was cold.

We met the farm family as soon as we arrived. The family consisted of two generations farming side by side. There were shared enterprises and independently managed enterprises, but I would really call this a classic father-son operation — the second and third generation. They benefit from the success of the first generation but are finding their own way today. The main enterprises that sustained the farm were grain crops and beef livestock.

We went off over a hill and were greeted on the other side by a herd of Red Angus grazing in a fresh paddock. It created the hillside view packed with animals that shows up in magazines. The idea was we would enjoy the view, and then have our question-and-answer session right there with the farm managers. But as soon as the animals heard the farmer’s voice, mooing and bellowing commenced. It was something to see in that hollow: being surrounded by all these bawling animals.

Hopefully, you recognize this farm as positively as I saw it. But ultimately, some lessons really stand out in my mind about this farm. It was in a good place; most of the assets were paid for, income was higher than expenses, they had a reputable brand, there were strong channels of communication, and they had access to multiple markets — among many other positive things, I am sure.

Solid operation still has challenges

So, what were the challenges? Ultimately, it came down to the question of how to transition the farm operation from one generation to the next, while continuing to allow both generations necessary ownership and income. Business structure, record keeping, property allocation and extended family relationships were all topics that were brought into focus by the current need, making this a true farm business succession case study.

Should tragedy or misfortune strike that farm today, it was questionable if enough pieces would be left for the farm to survive in a few years.  Legal risks threatened the ability of the next generation to own and manage the business, which highlighted this question: What does it take for a farm business to change hands from one generation to the next?

One concept we ag practitioners promote is the concept of an advisory team to support the farm business. Who can you rely on outside of yourself to give you sound advice to run a successful business and ensure it can weather a storm? At this farm, finding those trusted advisers was the next step. I continue to see that successful long-term farm businesses always have a team that is relied upon for sound guidance. These may be attorneys, tax preparers, accountants, marketers or other industry consultants.

Plan for future

Some of us have 10 animals on a few acres and some more spread across hundreds of acres. At the end of the day, are you thinking about the future of these assets? Are you ready for the day when you need to relinquish control? How will you do that? Who will ensure that you are on a path that the legal framework of our society will accept, and can you navigate that path without outside assistance?

We all agree that farms are important, and we need them in our communities, but we need to be intentional in steering these toward future sustainability.

Farm succession is forever. Or to put it in more common terms, change is inevitable. Managing risks requires relying on others, and in my short Extension career, I have learned that we all need to build community and work with people we can trust to navigate issues we struggle to understand.

You have a good thing going. Enjoy the reward, but have an eye on the future.

Martin is the Extension educator for ag and natural resources in the Muskingum County Ohio State University Extension office and a member of the OSU Extension Beef Team. See the Beef Team publishes weekly Ohio Beef Cattle Letter at u.osu.edu/beef.

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish