Farm Planning & Finances

Who has the control of the Farms Future

Who has control of the Farms Future?

Did the answer come easy? Is it you? Or do you just think it is you? Let me ask you another question, what would cause you to quit farming and have it not be your choice? Could it be the banker that doesn’t renew your operating loan? Is it a Father or Brother or even a Grandparent? Once they pass away, you don’t know what will happen to either the land or equipment? Maybe you want to change your answer. Who has the control of the farm’s future?

Planning the Future of your Farm, Do you have one?

As a Farmer, we are highly dependent on things outside of our control like the weather and the markets. We have a tendency to hope for the best, but do you prepare for the worst? There are different types of insurance to help with the weather, and there are different strategies you can do with the markets, but the worst can still happen, but at least you are prepared for it!

What can happen if an entire aspect of your farm is reliant on one person?  What if something happens to that one person?  An example for many people including my own is that my dad owns all of the equipment. Seriously farming equipment is my dad’s things, he is always looking for a good deal on a piece of machinery, so he can fix it up and sell it. We farm and custom farm a good amount of acres so we have large equipment that can accommodate getting a lot done in a day.

Machinery cost a lot of money, and it is machinery that more than one operation depends on.  What happens if my dad passes away unexpectedly? (My Dad has had heart issues on and off for the past 15+ years, so while we would be devasted, I won’t put my head in the sand as if it’s not a possibility) What happens to the machinery or the land he rents?  What happens to the guys he currently custom farms for? The ones that come on our operation as a hired hand and can cut down their custom costs? I can tell you; there are at least two families that would be in major trouble!

Our hired hand has worked for us for almost 15 years. In those 15 years, he has bought a farm, and my dad has helped him get started. He now runs the planter, combine, and sprayer 95% of the time.   If my father passes away I know my mom will end up having a farm auction, I don’t blame her one bit. She needs to be able to live also and is hoping to retire in the next few years. She doesn’t want to deal with it.

Then there is my Husband and me who plan on using my Dad’s machinery when we get some land. We are going to be stuck in the same boat, not being able to afford the equipment to farm our acres.  It’s a scary thought when your livelihood is dependent upon someone else’s future. So what do you do? You plan!

I don’t mean to be pessimistic, but I have a tendency to look at the structure of a business and find the weak link. One of my college professors and I have no idea which one anymore, said your business would only be as strong as your weakest link. Meaning that once one thing fails the entire business can soon collapse. That struck a cord with me. I have always wanted to farm, and be my own boss. I know with that comes a lot of responsibility, so I analyze and look for the weakest link and think how I can improve that?

Oh, and it won’t be easy. After all, you are dealing with family. We never want to kick someone out of the operation, but if what you are working for so hard can be easily destroyed, maybe it is time to schedule a meeting and figure out how to fix it for everybody.

Farming has always been an occupation of multiple generations, getting passed down from one family to another, but with that comes many problems. In the past few years, I have seen many in just my surrounding community struggle letting people out the farming operation and making room for the next generation to join.  The people who are good at it, they just leave a small bump in the road of the farm. Individuals who didn’t have a plan, it’s not unheard of to have to sell off capital they had worked years to gain just to recoup costs.

So ask yourself these following questions:

1. Who has control of the farm’s future?

2. If something were to happen to a majority holder could the farm continue?

3. What is the Farms weakest link? How do I fix it?

4. Does the plan include the next 2-3 generations if they decide to farm?

 

If you didn’t love farming, you would have found a way out by now.  Do what is best for your operation. Every farm is different, every farm has its struggles but from what I hear from farmers is they all have similar goals. Make a living doing what they love and give a chance to future generations if they want it. So keep your operation’s goals in mind and schedule a meeting to make sure those weak links are addressed properly and have a plan in place.  As always hope for the best, prepare for the worst, and if something happens well at least you have a plan!

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