My son has one more year at Purdue University. He badly wants to come home and farm. I know 240 acres will be up for cash rent this fall. Can I bid more than normal to increase our base to bring him home? Are there other alternatives?
The Profit Planners panel includes David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue Extension educator, Putnam County, Ind.; Jim Luzar, landowner and retired Purdue University educator, Greencastle, Ind.; and Steve Myers, farm manager, Busey Ag Resources, LeRoy, Ill.
Erickson: Adding more acres with less margin doesn’t get you closer to your goal of gainful employment for your son. You and your son could meet with the landowner and explain your desire to begin this new phase in your farming careers. Let him or her know they would be helping a new young farmer get a start in the business.
Look for other opportunities such as custom work and part-time employment off the farm as ways to add income. I know it’s hard to get started, but extra effort in building relationships with people may help in the long run.
Evans: Working your son into your operation by paying unreasonable amounts for cash rent will not help your operation. Rather, seek to expand using what has already been successful economically. Your son may need to come in gradually while working an off-farm job. Consider your other children so you don’t cause family issues. It’s important to help kids by working with them and allowing them to have skin in the game.
Meanwhile, stay aggressive seeking good opportunities. Your son should also be engaged in these activities. Don’t rush into things, as you’ll find you’ve cornered yourself and your son with bad decisions based on emotion. What is your son’s degree? Are there areas where he can add value to your existing farm through data evaluation, research or marketing?
Luzar: First and foremost, what are your goals? Is the farm business income pie currently big enough to cut a slice for your son? What does your business plan suggest regarding future projections? Can your son secure off-farm employment as your make a transition?
Succession planning takes time and effort. Land-grant universities have great resources to help you and your family take inventory and plan for the future.
“Subsidized” farm activity is often more harmful than helpful. (That might be the case if you pay too much for cash rent.) Keep costs and returns reflecting market conditions, and avoid distorting your business model just to bring your son back. Good communication, financial analysis and objective decision-making all make succession planning a less-demanding activity.
Myers: There are many alternatives, and if you don’t already have room for him, I would suggest that your son work off the farm in agriculture to start his career. This will allow him to learn his craft, being able someday to bring those experiences back home. These options may be local or farther away, but it will make him more valuable to himself and your farm in the future.
Now, to bid higher is different than to make a bid that isn’t profitable. That decision on the 240 acres needs to stand on its own as a business decision.