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Farm Succession: Which Exit Is Yours?

Handing down the family farm is not a simple event like hosting a twilight meeting or an occasional herd reduction sale.  No.  Farm succession is a journey that happens over time. Putting that time in, sooner rather than later, is an investment that could not only save your dairy farm legacy but your family relationships as well.

A Head Start Now Prevents Heart Break Later!

Unfortunately passing on the farm business is not something you can practice like training calves, improving milking procedures or modifying your feeding program.  Most of us will be involved in this hand-off only twice – and at that — it will be from opposite sides of the bargaining table: coming in and going out! While each position provides a learning experience, it isn’t likely something you will do often enough to become good at it. In fact, each trip to this turning point loads each of us down with baggage which may or may not have an effect on whether the farm moves from “A” to “B” without upsets.

Having said that, we could all sit around the living room and discuss grapevine tales of the horrors, nightmares (and occasional successes) of families who have tried handing off their dairy business to the next in line.  The reason we don’t have as many successes to bandy about is because the very fact that the successes were probably handled seamlessly makes them less of a community talking point.

The passion for dairy farming can start at a young age, but with out a good succession plan, that passion can quickly be lost.

The passion for dairy farming can start at a young age, but with out a good succession plan, that passion can quickly be lost.

Un-Spoken EQUALS Un-Successful

It only makes sense that something a family has felt passionate about doing for more than two generations is going to be a passionate issue when it comes to discussing successful succession. It’s the successful part that is the crunch. When you look at the timeline of a dairy farmer – he or she quite often will have invested forty or more years in the business.  A gold watch and a farewell dinner aren’t going to cut it, when it’s time to make changes at the top. Long before the fond farewells the family has to talk – not only about who’s in charge and when — but about expectations for income both pre and post “retirement” and the realistic sustainability of the dairy operation.  Get talking.  And use the word retirement often. I can’t imagine any dairy farmer who ever accepts full retirement.  While some of the perks (travel, hobbies) beckon, they never really see themselves retired!  And therein lies the rub!

Dairy Farming is a Living Legacy

If you were the one who taught your offspring how to properly hook on the milking machine, along with a thousand other chores that they struggled with at first, you may be reluctant to get out of the driver’s seat for this young upstart.  But that’s exactly what you have to plan for.  If you’re going to be that one dairy farmer in ten that sees grandchildren take over your farm, you’ve got to be able to step aside and let the next generation learn – and fail — and learn some more! Don’t leave the planning until it’s too late to meet the needs of those depending on the business. (Read more: What’s the plan?, Flukes and Pukes – What Happens When You Don’t Have a Plan and Are you a hobby farmer or a dairy business?) When it comes to expectations about your dairy farm legacy both sides have to be open and up front about what they’re hoping and dreaming about.  If you assume that one generation will just fall into place — as it did in the past — you’re setting yourself up for that ass-of-you-and-me situation.


In order for your legacy to continue you need to feed that passion, and good succession plan can help you do that.

LATE Expectations!

You can’t just decide one afternoon that you’re ready to quit dairying. If you’re lucky, any decisions about farm succession will not be forced upon you by illness, financial pressures or any of the numerous dysfunctions that introduce cracks into the apparently firm foundations of the family farm business. We all recognize that maintenance is key whether it’s farm buildings, fields or dairy cattle … but we live in denial when it comes to realistic assessments of physical ability, revenue streams and long-term financial planning.

Start Early to Celebrate the Strengths of Your Particular Family

For years you have both benefited from the economies of scale and shared passion that are more beneficial than each family member owning their own operation.  After all, that’s one of the reasons you’re in this situation to begin with.  Likewise, there are all the benefits of the dairy lifestyle that have made your family memories rich.  Favourite cattle, records achieved, shared work ethic and the ups and downs of a business affected by the vagaries of weather, markets and politics. And you can’t overlook the benefits of being your own boss, or the boss’s kid, 24-7! Seriously.  The time to plan for the future is before you NEED to!


Who’s The Boss?

The most familiar cog in the wheel of farm turnover happens when those at the front aren’t ready for change.  Speaking personally, I will always be of sound mind and body and therefore planning ahead is redundant in my particular situation.  Of course, there are those who are quite convinced that they are the only ones who could run their particular dairy operation. Making all the decisions, doesn’t prepare you or your successor for the future. No wonder our “kids” (even though they too are middle-aged) are considering mandatory retirement as an option.  Our fear is that these upstarts aren’t willing to put in the 70 hour workweeks that we did. “Our heels are dug in.”  “Our minds are made up.”  “Don’t try to confuse us with facts!” It’s hard to tell which generation is talking isn’t it?

Share the Health BEFORE You Siphon the Wealth

There are two occasions in the business lifetime of a dairy operation that are challenging. The first is at setting up and the second is when it’s time to transition down.  Unfortunately, when it comes to farm succession these two often contrary events are happening simultaneously for those involved.  It stands to reason that these changes and the acceptance of them can be difficult. Both sides perceive the other as suddenly unreasonable. Too few families looked ahead while they are in the smooth middle years where everything was chugging along and made plans for ways to keep the farm providing the lifestyle to which everybody had become accustomed or at least comfortable with.


The Time to Get “Buy In” Is BEFORE You Have to “Sell Out”!

Even more frustrating is the situation, becoming more familiar today, where the dairy farm is not at its highest performance level.  Financial constraints may be throwing the entire future of the operation into question and here comes one or more family members looking for a deserved break. Advance planning would provide a way to get money out of the dairy operation without causing cash flow problems. The goal should be to use a combination of methods, insurance, wages and share purchases to name a few, to provide for those who are transitioning out, without creating a huge debt load for the next generation.  The goal is for the family to continue to embrace the future in a way that is achievable and sustainable.

It's never too early to start your succession plan.

It’s never too early to start your succession plan.

The Bullvine Bottom Line – Don’t Leave Trust in the Dust

At the end of the day, the family is more important than the money.  If everyone involved keeps their eyes on maintaining the relationships, everything else will fall into place.  There are many advisors, consultants and financial planners that can assist you. Their help is valuable but getting them up to speed is another challenge in an already challenging situation. All in all, when it comes to planning your dairy legacy you can always recognize success. A successful succession plan saves THE FARM AND THE FAMILY!

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