Planning for Farm/Ranch Transfer
by Kindra Gordon for Angus Productions
MITCHELL, Neb. (Nov. 30, 2011) — “Do you want to transfer your farm or ranch to the next generation as a viable business, or simply as a group of assets?” That was the question Dave Goeller posed to attendees at the Range Beef Cow Symposium XXII hosted Nov. 29-Dec. 1 in Mitchell, Neb.
Dave Goeller Goeller is deputy director of the North Central Risk Management Education Center through the Department of Agricultural Economics at the University of Nebraska-Lincoln (UNL). He is also involved in a Nebraska corn and soybean operation with his brother.
In answer to his question about transferring a business to the next generation, Goeller said the process begins with planning — and recognizing who makes the decisions. In jest, he said the decision-maker is often based on the golden rule — “the person who has the gold is going to make the rules.”
On a more serious note, Goeller added, “If you are that person, I want to speak to you today, because I have some opinions.”
Goeller then shared how the number of farm operators in Nebraska has steadily declined from 1982 to 2007. During that same time, the number of operators over the age of 65 has increased, while the number of ag producers under the age of 35 has decreased. This is a trend being seen in agriculture across the United States and around the world, Goeller stated.
He asked producers age 60 and older to spend time thinking about what will happen to their business in the future — and urged them to consider taking in the next generation.
Goeller noted that it is much more difficult due to costs for beginning producers to start on their own today.
He pointed out that without a succession plan, heirs will still inherit the assets, but it is unlikely someone will be able to successfully take over the business.
Goeller acknowledged that planning is often difficult because it is time-consuming, can be complicated and forces us to face our own mortality. But Goeller emphasized that it is important to make time to plan so those succession plans can be put in place.
He shared that there are several helpful tools available for this process, including life insurance, partnerships, LLCs and shared appreciation agreements. He also discussed determining “fair” arrangements for on-farm and off-farm heirs, but noted that contributions and compensation may not always be equal.
In closing, Goeller encouraged farmers and ranchers to tap resources such as himself to facilitate the succession planning process.
To see Goeller's PowerPoint presentation, click here.
The biennial Range Beef Cow Symposium was hosted Nov. 29-Dec. 1 at the Mitchell Events Center, Mitchell, Neb., by the cooperative extension and animal science departments of the University of Nebraska-Lincoln, South Dakota State University, Colorado State University and the University of Wyoming. Comprehensive coverage of the event is provided online at www.rangebeefcow.com, an event coverage site provided by Angus Productions Inc. (API), publisher of the Angus Journal and the Angus Beef Bulletin.
Editor’s Note: API's coverage of the event is made available for distribution to all media via an agreement with the Range Beef Cow Symposium Committee and API. Headquartered in Saint Joseph, Mo., API publishes the Angus Journal, the Angus Beef Bulletin, the Angus Beef Bulletin EXTRA, and the Angus e-List, as well as providing online coverage of events and topics pertinent to cattlemen through the API Virtual Library. For questions about this site, or to notifiy us of broken links, click here.