is part of the 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.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Corn+Soybean Digest

Return Expectation by Generations

This past week I had the pleasure of being involved with my 8th Young Farmer/Rancher Executive Institute sponsored by Farm Credit Services of the Southwest.

Take the spiritual Red Rocks of Sedona, AZ, along with a learning environment with younger and older generations in attendance, and you get a charged exchange of ideas.

Don Jonovic, the highly reputed family business planner, and I facilitated the conference. One of the main points Jonovic stresses in family business succession is that both generations need to know each other’s return expectations. Thus, we asked each generation separately to give rate of return on assets expectations.

The younger generation expressed that numbers such as 15, 9.8, 10 and 8% would meet their expectations. When the same question was asked of the senior generation that ranged from 45 to 65 years of age, numbers such as 4-5%, 10% and meeting principal and interest payments were expressed. Some in the senior group indicated that it was okay to just breakeven if it fits lifestyle expectations.

Isn’t it interesting to note the generational differences? As one ages, you become more conservative and, in some cases, treading water is sufficient. The bottom line is that in your next family meeting ask this question, determine the differences, and develop strategies to meet each generation’s goals.

On a side note, the same question was asked of the lenders and the two PhD’s leading the group. The answer: 7% and 8%, respectively.

Side Notes

If you ever get a chance to go to this area of the country and see the Red Rocks and the Grand Canyon, you will not be disappointed – if only people would shut off their cell phones in the Canyon.

My friends’ horse from Sacketts Harbor, NY, won the Preakness. If I had only invested in the horse instead of cows!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

This online exclusive is brought to you by The Corn and Soybean Digest

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