Columbia Basin, Ephrata, WA | NE Ridger - 10/29/2018 06:22
As for helping out the next generation, if his kids are 25-35 years old now and not yet farming, then they're not likely to be interested in starting to farm 15 years from now. If they're not involved in a farming operation of their own at this point, but want to be, then it makes more sense to use the next 10-20 years to help them start out and work on some kind of transition plan.
If he's got four kids and only one wants to farm, and the estate gets split up "evenly" among all four kids, then an extra million in in the estate isn't likely to help out that one kid all that much. Not unless he's got a functional farming operation of his own already.
I guess my point is that an established farmer isn't necessarily "kidding himself" by continuing to farm his paid for ground as long as he's got enough net income to cover all non-land costs (including living costs). Nor is he cheating the next generation by doing so. Why on earth should he go get a town job just to give the money to his kids? If the next generation wants to farm, and he wants to help them start, then rent them a field on shares or some reasonable rent, trade machinery usage for labor, and help them start. Waiting until he dies and splitting up the estate at that point isn't going to help them much.
That would likely be a mathematical impossibility on these theoretical farms we are talking about, without someone having or getting an off-farm job. If the farm only supports the operator by cutting in to the land return, there’s likely no chance it’ll support two operators. It essentially ends up being the same scenario of renting the ground to someone else and getting a job in town for the last 10-20 years that we just laid out, except the new tenant is an aspiring family member rather than just another local farmer.
What usually seems to happen in such scenarios, is the older generation stays on the farm while the aspiring family member works for slave wages with no management influence. That “works” until they are fed up with it or someone dies and the farm is split up between all the heirs, then it all falls apart. These stories are here on NAT, and most of us know of such a story first hand with someone we know that used to farm.
So, back to my original question, if family living is coming out of the land return, is that really “making it work?” Doesn’t seem like it to me.
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The Big Reset underway..?? Corn to $2.. Beans to $6. When does it hit input prices?
