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: East
Corn+Soybean Digest

Consolidating Farms Can Bring Opportunity for Growers

The 2008 Rural Life survey conducted by Iowa State University indicates that in the next five years 43% of Iowa farmers plan to retire, and only 56% had a successor identified.

This means there will be many opportunities for growth of existing operations — if done correctly. As I've indicated before, growth should not be an objective, but a result of doing things right. When sharing this with farmers this winter it's amazing how many have come to me and said, “I've never had to ask for additional land, the opportunities have always come to me.” That is growing as a result of doing things right.

The best example for growth I've seen lately is a process developed by Carson & Barron Farms, Rowley, IA. Chris Barron and T.J. Matthiesen have assembled a great team focused not only on what needs to be done, but how to do it. They gave me permission to share their model.

This past summer they met with their neighbor Keith, a longtime friend who farms 1,000 acres. Keith is about five years from retirement but wants the option to farm as long as he wants.

The deal the two parties worked out is Carson & Barron Farms would farm Keith's land for a fee, and in return Keith would provide labor to Carson & Barron for an offset of part of the fees. The value to Carson & Barron Farms is having the wisdom of Keith for years to come as a partner.

REALLY, IT'S A win-win for both: Carson & Barron makes better use of their newer equipment and has growth in acres, while Keith gets newer technology on his farm. Quite a sweet deal.

But it gets better. Keith trades most of his equipment — less small items like mowers, etc. — for two items of about equal value, so he has fewer tax consequences. Then Keith leases those new items back to Carson & Barron Farms on a lease-purchase arrangement.

What just happened is Keith just had a “farm sale” with fewer tax consequences, no sales commission and no hassle, while gaining use of newer technology.

To make it just a little sweeter, the two parties will buy inputs together and sell grain in larger quantities. All totaled, the result is about a $60-85/acre value to Keith.

One final sweetener: Keith has just done most of his operational estate planning. If something bad happens to Keith, many of the important decisions have already been made. Where else could you find a better disability alternative?

Carson & Barron Farms have already had a number of other farmers interested in joining their team.

All sounds great, right? Not so. This will only work if there is complete trust, common vision and shared goals among all parties. If these basic elements are not there, all the legal agreements in the world will not make it work.

For example, if Keith says, “Yes I'm in, but my land needs to be planted first and harvested first,” it won't work. For additional help and ideas call Chris Barron or Keith at 319-533-5703.

You can track your profitability at by scrolling down to GrainBridge.

Moe Russell is president of Russell Consulting Group, Panora, IA. Russell provides risk management advice to clients in 34 states and Canada. For more risk management tips, check his Web site ( or call toll-free 877-333-6135.

Hide 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.