THE 2012 CENSUS OF AGRICULTURE counted 2.1 million farms in the U.S., with 97 percent being considered family-owned operations. While that designation could be any number of configurations of family members, siblings, and extended kin, the one that packs the most important punch is the multigenerational family farming business. We count the number of farming generations in our families with great pride, and the thought of our children and grandchildren inheriting the farm and filling our boots on the farm or ranch is a sustaining one. While there are few statistics to rely on that tell us the exact nature of the American family farm, we can glean a few facts from the stats we do have.
A LOOK AT MULTIGENERATIONAL FAMILY FARMING BUSINESSES
Small family farms — those with gross cash farm income (GCFI) of less than $350,000 a year — account for 88 percent of all the farms in the U.S. According to the 2012 Ag Census, small family farms are most likely to engage in beef production and 32 percent of these farms reported that over half of their sales come from beef. It’s important to introduce young family members to the ins and outs of the cattle ranch when preparing the next generation for continuing the family ag operation. However, transferring the family business to the next generation is not as easy as it sounds. The issue can create a great deal of stress. Experts in the area maintain that communication is key to a successful multigenerational family farming venture.
If you’re considering making the farm a family affair, those who have gone through the transition successfully suggest the following:
• Talk about it often. Discuss expectations and future roles with all stakeholders. What will everyone’s role be?
• Keep finances above board and out in the open. Successive generations have been blindsided by massive farm debt in many failed family farm transfers. The goal should be to pass on the land and the equipment with as little debt as possible.
• Contact a professional for succession planning. Having the details in a contract makes it easier to pay attention to the business requirements of transferring the family ag operation to the next generation.
This column is sponsored by AgAmerica Lending.
column by DONALD HARDEN
BIO: Donald Harden, a Relationship Manager for AgAmerica Lending, grew up in the cattle and citrus business, managing a family ranch of several thousand cattle and horses. He has more than 30 years of experience in the real estate business, and more than 20 years specializing in agricultural sales. Don has owned and operated farm and ranch supply stores, machinery auction companies, and farms. He has served as a director and on the board of the Cattlemen’s Association, as the manufacturer’s representative for ag equipment companies, and as a beef cattle specialist for a national feed company. Don has traveled across the U.S. as a sales rep, conducting seminars and fostering long-lasting business relationships. Don enjoys his work at AgAmerica, as he has never met a stranger. For more information, visit www.AgAmerica.com.