How to Transition Young People Into Farm Ownership

February 16, 2016 01:00 PM

The Moes began milking cows in South Dakota in 1884. The family’s fourth generation, brothers Jim and Greg, joined the operation in the early 1970s.

What was once a 200-cow dairy is now a 2,000-cow dairy, a heifer-rearing facility and the farming operation. Three of the brothers’ sons have come back to the farm to transition into ownership, something Greg says took a lot of discussion and preparation over the years.

As farm families across the U.S. prepare to transition their businesses and land, it makes sense to ask the next generation of leaders: Are you ready to be an owner? 

At MoDak Dairy, the Moes say their children began learning about the operation at a young age. “Preparing to take over the farm is something that happens as you go through,” Greg explains. 

Qualify For Leadership. Once their kids were grown, the Moes made them work for someone else. Not only did their sons learn to work with others, Greg says, but working off the farm broadened their perspective and helped them realize what they want in life. 

Although none of the Moes has been to college, Greg says the family has made it a priority to send their returning children to workshops and seminars to prepare for ownership. 

Having the skills necessary to become a farm owner is something younger generations often overlook, says David Marrison, associate professor and Extension agent at The Ohio State University. 

“We are really good at looking at the older generation and analyzing what they haven’t done,” Marrison says. “Are we taking the time to look at ourselves? Do we have the skills necessary to be successful?”

He advises young people interested in taking over the family farm to do a S.W.O.T. analysis to discover the strengths, weaknesses, opportunities and threats to the business. “What do you need to learn to take over, and how will you do that?” he says. 

In some cases, a lack of technical knowledge about a piece of accounting software might be remedied with a class at a local community college. Yet the younger generation also must learn leadership skills. 

The Moes have sent their sons to several courses during the transition.

Initiate Changes. Once producers identify the things the next generation must do to come onboard, the next step is to identify the process by which the transition will occur. Greg recommends developing a vision for the ideal transition and being prepared to discuss that vision for the future with your children when the time is right. 

The hardest part of farm succession is the initial conversation, Marrison says. After all, every family has at least a little dysfunction. 

After the initial conversation, Greg suggests taking that plan to trusted advisers for their feedback. 

“The hardest part was coming up with what we wanted to do,” Greg says. “Talk to your accountants, but don’t let them dictate what you should do. When we first went to our accountant, they told us our idea wouldn’t work, but they figured it out and so far, it has worked.” 

The farm is required to remain a single entity, and the majority of the operation will be gifted to children who wish to return to the farm. 

“We wanted to give them a legacy so when they look back, they realize we wanted to keep it together like our grandparents and great-grandparents did,” Greg says.

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Spell Check

Ed George
Lincoln , NE
2/24/2016 12:37 AM

  As a retired Nebraska agronomist, Extension Educator, environmentalist and conservationist, I grew up on a York Co. Nebraska farm owned by my 92 year old dad and 86 year old mom. My brother is a farmer with his wife having three grown children not interested in farming the farm. My brother is fortunate to have a very successful irrigated grain farm totaling 700 acres. He is seeking a youngster interested in production agriculture desiring to farm. That decision is very hard to hand over the day to day decisions of land management and agriculture production

Ed George
Lincoln, NE
2/25/2016 03:40 PM

  How do farmers educate, inform and promote farming and ranching occupations to youth from non-farming and ranching backgrounds? Would be challenging hopefully rewarding for a farmer/rancher to teach agriculture to youth from urban inter-cities. Youth can be easy to influence with great enjoy but may not youth may not like the blood, sweat and tears associated with hot summer days and cold winters feeding livestock. We're talking about mega bucks at stake built upon generations of experience, luck and hope to survive as agriculturalists. Best for youngsters to learn about animals at the county fairs, plant a garden growing food and learning the economics, labor and time involved. 4-H, FFA, Boy Scouts and Girl Scouts are ideal for youth to have skilled and knowledgeable adults to advise youth about agriculture. With more farmers and ranchers reaching retirement age, their children as adults pursing other careers and leaving the farm, fewer youth in rural towns, where will the next generation of agricultural producers come from? Immigrants from foreign lands? I don't have any problem with any of those individuals but there is a lot to learn with new technology and farming methods.

Chappell, NE
2/17/2016 09:53 AM

  In light of the current reality on the farm the more appropriate question is "are you ready to be broke"?


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