Crops, Irrigation, Livestock

Farm Family Transition & Stressors

The agricultural economy is no stranger to stress. Stress from difficult weather, stress from low commodity prices, production risks and many other reasons contribute to the stress for our farmers and ranchers. One of the constant pressures and stressors family operations deal with is the successful transition of the family business to the next generation.

Recently, Dr. Ron Hanson spoke at a Farmers & Ranchers College program on “Strategies for Family Farm Success in the Shark Tank.” Hanson has been working with farm families for over 40 years and reminded participants that money, wealth and property, especially land always put a family’s relationship to the test. His analogies to sharks indicate that some families have “predator sharks” that lurk parents’ property or belongings, waiting to make a move and take a “bite” into family wealth or estate. An effective management strategy is to put yourself in the shark tank and begin addressing difficult situations and questions that might arise from uncertainties in agriculture.

fish aquarium thailand royalty free
Photo by Public Domain Pictures on

In order for families to be successful in transitioning the family farm or ranch, contingency planning must occur. Contingency planning, sometimes referred to as business continuity plans simply account for planning for the unexpected. “Developing and then implementing a business management plan to overcome unexpected changes to the ownership structure and management leadership is crucial for the continued success of the operation” (Hanson, 2020). Contingency planning is not easy and can result in a lot of emotional stress and even conflict, but families that are willing to work through and plan this before a life-altering situation occur are more likely to ensure their farming or ranching legacy will continue for future generations.

Hanson reminded participants that some adult children in the family may already feel they are entitled  and that their parents’ estate is the children’s estate. Parents have the right to divide their estate as they wish and letting everyone involved know before they die can prevent huge family fights or court fights down the road. It is sad that family wealth can destroy family relationships and put an end to a family farm legacy. Transparency in estate planning is important for all involved.

Handling the stress and potential conflict upfront can reduce the stress, fights and issues that might occur when a tragedy, family illness or death occur. Dealing with large and unexpected events is stressful enough, so why not make a plan in advance so time and focus can be spent on the situation at hand? Hanson recommends farm and ranch families adopt five guidelines or planning steps to accomplish this process.

white laptop female hand note pen phone desk
  1. Adopt a vision. What is the vision for the future of the family farm/ranch? What is the legacy the parents wish to leave? This starts with the parents.
  2. Draft ideas into a plan. This is where the parents must sit down with family members and discuss expectations of each family members. A planning document must be put in writing.
  3. Organize planning resources. Families must work with an accountant, farm loan officer, estate or wealth planning specialist or an attorney. These people have the expertise and can assist the farm family implement the plan.
  4. Clarify family member assumptions. Arrange for a family meeting so all adult children are aware of the plan. Any existing jealousies and resentments should be resolved and feasible solutions found.
  5. Take control and set deadlines. Take action and get the planning process started. Break down the plan into stages so that the planning goals make the plan become a reality.

Family farming and ranching has many external stressors which cannot be controlled such as commodity prices and weather. Don’t let lack of planning create additional stressors in your life.

Crops, Livestock, Programming, Uncategorized

Passing the Farm to the Next Generation

At our final Farmers & Ranchers College program for the programming year, Dr. Ron Hanson from the University Of Nebraska – Lincoln Ag Economics Department spoke on the Importance of Family Farm Succession. This is never an easy task, yet essential for the farm to be passed on and able to financially operate. Most importantly, it is important to maintain relationships with family members and honor the wishes of the parents who intended for assets to be transferred a certain way.IMG_4969

Hanson had eleven challenges families face in order to being this process.

  1. First consider “Who is family” and is entitled to owning the farm. Are in-laws considered family? Usually excluding in-laws will backfire and cause hard feelings.
  2. It is difficult for parents to not play favorites with their adult kids. Parents should be fair and equitable, which is different than equal. Unfortunately, there are adult kids who are greedy and plan to retire on their parents’ assets, which is not an acceptable retirement plan. Parents should consider who has always taken care of them and which kids will care for them in end of life situations.
  3. Controlling parents need to give control of the farm/ranch to the adult kid who is farming. Serve as mentors and hand over responsibility to the future owner.
  4. Consider when farm ownership will happen. How will those changes occur?
  5. Think about if it is possible to keep the farm in the family. Are there kids who actually want to farm?
  6. Too often families don’t talk about the “what-ifs”. If a parent or adult kid were to tragically die tomorrow, are you prepared for that?
  7. If parents don’t agree on how to transfer assets, more than likely nothing will get done.
  8. Some children feel they are entitled. Children should RESPECT their parents and agree to their parents’ decision. Your parents don’t owe you anything.
  9. Greed has become a curse of family wealth and assets. Wealth can destroy family relationships and end a family legacy. No farm is worth losing family relationships!
  10. Families that don’t communicate openly about the parents plans are more likely to be unsuccessful with a succession plan. Parents must talk openly and honestly to all children – preferably at the same time. Parents should ask their children:
    1. Have we as parents done anything to make you not get along as a family when we are no longer here? If so, please tell me. Then apologize.
    2. Is there any reason you kids can’t get along as a family?
  11. Each family farm/ranch should have a vision. Family members should share this vision.

Family farm succession is time consuming, complicated and emotionally draining, but essential! After all, consider all of the hard work you have done to keep it going through rough economic times; why wouldn’t you put a plan together to protect it?

Programming, Uncategorized

Business Succession & Estate Planning Workshop

The Beginning Farmer and Rancher Network’s Farm Succession Series continues in March with a workshop locally offered in Geneva at the Fillmore County Fairgrounds from 10:00 a.m. – 3:00 p.m., March 2nd. The free workshop will cover business succession and estate planning for farm and ranch owners, families and beginning farmers and ranchers.

farmsuccession.pngTopics will include:

  • Stages of succession planning, contribution & compensation, balancing the interests of on-farm and off-farm heirs;
  • Importance of communication, setting goals, analyzing cash flow, and balancing intergenerational expectations and needs;
  • Beginning farmer loan and tax credit programs;
  • Use of trusts, wills, life estate deeds and business entities (such as the limited liability company) in family estate and business succession planning;

Lunch will be provided. To register (and for questions) call the Rural Response Hotline at 1-800-464-0258 or the Fillmore Extension Office in Geneva at 402-759-3712.

The program presenters are Dave Goeller, Deputy Director, Northeast Center for Risk Management Education, UNL & Joe Hawbaker, Agricultural Law attorney, with Hawbaker Law Office, Omaha.

This workshop is made possible by the Nebraska Network for Beginning Farmers & Ranchers, the Farm and Ranch Project of Legal Aid of Nebraska, National Institute of Food and Agriculture, the Nebraska Department of Agriculture’s Next Gen, Nebraska Farmers Union Foundation, University of Nebraska Extension Office Fillmore County.

Crops, Programming

Returning to the Farm

Each year UNL offers a workshop held over two weekends for students, beginning farmers, and established operations. This year the first weekend sessions are planned for Dec. 12 & 13th and the second are planned for Jan. 9 & 10th.

Bringing a young person into a farm/ranch operation presents challenges. FarmHowever, the business operation can accomplish numerous goals by helping the young person get a solid start in the operation, keeping the farm/ranch in the family, and ensuring a comfortable retirement for all involved.

Success does not come automatically; it requires effort. Blending a variety of talents and personalities into

one farming or ranching operation takes planning, communication, and management. The Returning to the Farm program is designed to assist families and operations in developing a financial plan and successful working arrangements that will meet the needs of multiple families.

During the program participants will:

  • Review financial feasibility, balance sheets and trend sheets
  • Identify estate planning issues
  • Develop a farm/ranch transition plan
  • Set both personal and professional goals
  • Look at the communication process between family members

Returning to the farm is sponsored by the University of Nebraska – Ag Economics Department. Presenters will include: Dave Aiken, Tina Barrett, Kate Brooks, Dave Goeller, Cheryl Griffith, Brad Lubben, Jay Parsons, Cory Walter and Roger Wilson.

For more information about this great program, go to Ag Econ website. I know there are local families who have particiapted and came back with great reviews on it. Let me know if you have any questions about this workshop.


Keeping Your Farm in the Family for the Next Generation

The final Farmers & Ranchers College program for the 2012-13 programming year will be held on March 14, 2013 starting at 6:00 p.m. with a meal and the program to follow. It will be held at Evening with Friends Restaurant in Milligan and will feature Dr. Ron Hanson, Neal E. Harlan Professor of Agribusiness, Ag Economics Dept., UNL. A description of Hanson’s program is provided below.Logo

The entire process for mapping out a succession plan to transfer the eventual ownership of a family farm from one generation (parents) to the next generation (their adult children) can be an overwhelming task for many families.  Where does this process even begin?  Who makes the final decisions?  Can you be fair to everyone involved?  What if there is not good communications within the family?  How do you keep emotions and personal jealousies from taking over and preventing good decision making?  These are the issues that confront any farm family in determining a succession plan which allows for this successful transfer of farm ownership.

Most farm families would agree that a succession plan needs to be implemented and that any “what if family issues” need to be discussed and eventually resolved.  But this seldom ever happens.  Often farm families never can get past the “family obstacles and personal fears” that can actually become road blocks which prevent a succession plan from being put in place to protect the family farm and to insure that their family farming legacy continues to the next generation.   These obstacles and fears will be identified and discussed with potential solutions so that farm families can move forward in their succession planning process.

This presentation will outline the necessary steps to implement as well as achieve a successful succession plan that hopefully avoids potential misunderstandings between various family members. This lack of clarity and failure to explain specifics by parents when communicating their wishes to their children is often a frequent cause of family conflict/disputes.  Ideas will be shared to work through these emotional and stressful issues in a positive manner.  Parents must embrace a vision for passing on their farm that is shared by all family members involved for this succession process to achieve a successful transition of ownership to their adult children and to insure the next generation of young farm producers.

The Farmers & Ranchers College was formed in January, 2000 with the purpose of providing high quality, dynamic, up to date educational workshops for area agricultural producers in south central Nebraska through a collaborative effort between business, industry and higher education leaders.  The Farmers and Ranchers College Committee consists of Fred Bruning of Bruning, Bryan Dohrman of Grafton, Sarah Miller of Carleton, Eric Milton of Milligan, Jim Donovan of Geneva, Bryce Kassik of Geneva, Gordy Nuss of Sutton, and Brandy VanDeWalle of Ohiowa.

For more information on the various Farmers & Ranchers College programs, please go to the Fillmore Co. Extension website  or call the Fillmore County Extension office at (402) 759-3712.