Common goals, trust and open communication feed Pennsylvania operation
In the heart of a steeply sloped field, hopper filled to the brim with oats, Clair Esbenshade felt his White 8600 combine groan, unable to pull the peak of a Pennsylvania hill. Reversing, the 8600 bumped the brush and lodged atop a large stump. Exiting the cab to locate the impediment, Esbenshade walked onto the platform — and felt the hair-raising shift of 14,000 lb. of steel.
“I heard the Lord tell me, ‘Jump back in,’” he says. “I scrambled into the cab, and that was it. It rolled with me in it, but seconds before, I’d have been dead for sure.”
A three-quarter spin later, the combine crashed to a halt, yet Esbenshade was unscathed. It was a moment of reckoning for the Lancaster County farmer.
“Work. Work. Work. Work. Never let up. No more of that,” he says. “A heritage is about far more than money.”
Esbenshade, 71, is turning over the farming reins to his sons, Todd and Kyle, intent on preserving a legacy and profitable business.
“You can’t be on a farm and not recognize the brevity of life,” Esbenshade says. “Life is short, and you have to be ready to provide your children with an opportunity to provide for their own families.”
FOREFATHER FOOTPATH
In the late 1700s, three old world brothers from the Esbenshade clan in Germany pulled stakes and rolled the dice on new world farming hopes in Strasburg, Pa. Over 200 years later, Clair Esbenshade has stayed on the footpath of his forefathers, at the helm of Shade Valley Farm, a multipronged operation featuring corn, soybeans, wheat, hay, cow-calf herd, turkeys and hogs, shotgunned with custom cutting.
Raised on a dairy farm, Esbenshade moved into mid-life with a chain of ag-related work and business. His enterprises included milk transport, long-haul trucking and wheat combining in the West, bookended by a poultry house in southeastern Pennsylvania.
However, in 1998, when the urban creep of development enveloped the poultry operation, Esbenshade and his wife, Debbie, sold out and found elbow room 100 miles to the northwest of Strasburg, in Snyder County.
Plain talking and straight shooting, Esbenshade farms alongside Todd and Kyle, relying on the pair to shoulder the heavy lifting. With multiple overlaps, the division of labor places Esbenshade on the sprayer and backup for all other roles.
Todd oversees the antibiotic-free pig operation, bringing in 21-day old nursery pigs and sending them out seven weeks later to a finisher.
Kyle manages two barns of turkeys and handles the cow-calf herd. Todd and Kyle share planting and harvest duties.
Along with a host of jack-of-all-trades capabilities, the brothers have deep talent beyond agriculture. Todd is a self-taught finish carpenter; Kyle is a photographer and artist.
SKIN IN THE GAME
Mirroring their father, both Todd (five years) and Kyle (four years) once cut crops in combining stints across the West. Following his combining sweep, Todd settled into the family operation with Esbenshade, building a hog barn in 2008.
“I skipped my high school graduation ceremony and joined a harvest crew from 2001 to 2005 and did odd jobs in winter,” he says. “Then I went to work for a guy milking cows, and then came back home to build the hog barn.”
Several years later, Kyle bought into the family operation, and Shade Valley Farm LLC, was born.
“We determined how much equity Todd had involved in the operation, and then Kyle borrowed that amount of money and fed it into the farm,” Esbenshade says. “We do some headbanging, but we appreciate each other at the same time, and it’s family all the way.”
“We’ve all got the same goal,” Kyle concurs. “It’s tight, but we can take off and cover for each other. We’re confident in each other’s ability because nobody is here for simply a paycheck — they have skin in the game.”
TRANSITION TOOLS
In 2020, Esbenshade placed the family farm real estate in a trust. In the future, Todd and Kyle will shoulder the responsibility to maintain the trust for future growth and business opportunities.
“That’ll enable them to keep going and seize opportunity as it comes along,” Esbenshade says. “We haven’t determined how to deal with the physical parts of the operation. I’ve granted them partial ownership of the entity, but at some point, we’ll handle the rest.
“I suspect Todd and Kyle will end up buying the remainder of my shares,” he continues. “They have great work ethics and have put so much blood and sweat in this thing.”
FAIR VERSUS EQUAL
As Esbenshade eases into the background at Shade Valley Farm, the transition and inheritance puzzle are far from a dual consideration.
“I’ve also got a lovely daughter, Tiffany, that works at the county courthouse and isn’t involved on the farm,” Esbenshade says.
The three-child dynamic demands a fair, but unequal solution, according to Esbenshade.
“I’ve known operations that tried to be equal with non-participating family members, and it often destroys the farm,” he says. “Here is my belief: You can’t be equal, but you can be fair. We’ll provide for Tiffany in an indirect way. The only way to be equal is if you’re sitting on millions of dollars in cash, and most farmers are nowhere near that.”
Above all, Esbenshade is intent on placing family above all business concerns.
“A farm is not a commodity that you just hand to someone, because there is a legacy that goes with it,” he says. “A farm has two parts: business and family. I never pushed my boys to farm, but I’m so happy they want it passed to them.”
Ownership Through Sweat Equity
A succession solution often relied upon by farmers is separation of operations and land, allowing multiple children to co-own the land, with restrictions to ensure the land base is available to the operator.
“It can be really difficult, for example, if an off-farm daughter wants to convert her one-third ownership of farmland into cash right away, and the on-farm sibling has to go into the hole for the buyout,” says Polly Dobbs, owner of Dobbs Legal Group.
She provides this potential strategy: “If the sons who farm with mom and pop buy into the operating assets or earn their way into ownership through sweat equity while mom and pop wind down to retirement, that can help, because the operating piece has already been handed off in their lifetime.”
The sons on the farm have likely forgone competitive salaries and retirement matching plans that would have come along with the off-farm jobs their peers pursued, instead choosing to work alongside the folks to help grow the farm, she says.
“Such sweat equity might justify a discounted buy-in price during lifetime or perhaps a gift of certain machinery at trade-in time, with the sons picking up the tab for the replacement purchase,” Dobbs says. “Then the land can be equally co-owned by all children, with protections in place to give the sons the right to lease the land at a reasonable benchmark rate. This allows the off-farm daughter to have a stream of income off the land, without requiring the brothers to have to buy out their sister.”
To access resources and tools to help guide your succession planning journey, visit FarmJournalLegacyProject.com
