The average age of a farm operator in the United States is 57 years, according to the U.S. Department of Agriculture’s latest census of agriculture. The majority of farm operators are between 45 and 64 years old, but the fastest growing group is those 65 years and older.
“Older farm couples may remember what it was like when the farm was handed to them initially– and in earlier times, maybe not much planning had gone into the transition,” said Gregg Hadley, a farm management specialist and assistant director for agriculture, natural resources for K-State Research and Extension.
“Today, a lot of farmers and ranchers are realizing, especially with the dollar amounts that farms and ranches are worth now, that there needs to be more of a business approach to passing on the family farm or ranch,” Hadley said.
Passing down the farm successfully requires thoughtful planning, and it’s never too early to begin the planning process. Hadley, and other experts from Kansas State University, will speak on this subject in detail at the upcoming Planning for Farm & Ranch Succession conference on Tuesday, March 3, 9:00 am – 4:30 pm at the KSU Ag Research Center in Hays.
Registration is $60 for the first family member and $40 per person for additional family members who register together. Registration for each person includes lunch and snacks. One set of succession materials will be available for each family group.
To register online and pay with a credit card, go to www.ksre.ksu.edu/kams. Online registration closes one week prior to the conference on February 25th. After that, registration will still be available by calling 1-800-432-8222. Walk-in registration is available, but space may be limited and meals are not guaranteed for those who register on-site.
While every farm or ranch situation is different, all should have a succession plan in place. Succession planning involves discussing the financial assets as well as establishing a business philosophy, management and workload transference plan, partnership details and succession feasibility.
Don’t wait to start talking about farm succession until the owner wants to retire.
“A good time to get serious about the planning process is when a son or daughter is considering coming back to the farm as a significant part of their professional career, but really it is something that you should start as soon as possible,” Hadley said. “You never know when the five Ds—unexpected death, disease, disability, disagreements or divorce—are going to disrupt the farm or ranch business.”
Learning how to communicate should be the first step in farm succession planning, followed by dealing with emotional roadblocks, and then developing a business plan, financial plan and estate plan. Detail is essential in making a smooth transition.
“When you disagree about a family business that could be worth millions of dollars, you need to carefully plan how you’re going to transfer the farm, the assets, the decision-making process and the responsibilities to the next generation,” Hadley said. “Often it is not the estate plan which contributes to the failure of farm succession,” he said. “In fact, 85 percent of the time by some research estimates, the failure has to do with family communication, relationships and business philosophy issues.”
Succession planning can be stressful, and it helps to have reliable information to aid in the planning process. Plan to attend the regional farm and ranch succession planning workshop on March 3 in Hays. Go to www.ksre.ksu.edu/kams for more information and to register by February 25th, or contact the Ellis County Extension Office at 785-628-9430.
Linda K. Beech is Ellis County Extension Agent for Family and Consumer Sciences.