This weekend in Shelby, Montana was the 5th annual Montana’s Next Generation Conference. We had over 200 people attend from all over the state like Sidney and Plevna to name a few. We are able to put on this conference every year with the help of our sponsoring organizations and the help of local businesses in the area.
One of our keynote speakers was Amanda Radke from Beef Magazine., in her latest article, 3 Things a Solid Transition Plan Should Accomplish, she touched on topics she discussed at our conference from her speech and topics from our other keynote, Elaine Froese. There are only two certainties in life — death and taxes; however, it’s discussions about finances and what happens after we die that are two topics of conversations, it seems, a family works incredibly hard to avoid.
Yet, it’s these two topics that we must face head-on if we want to retire comfortably, be fair to our children, and transition our ranch legacy to the next generation.
Amanda shared her family’s experiences as she moved home from college with a new husband in tow. She explained how they have found their place on the ranch by adding to the pie through diversification rather than cutting the pie in half to support two families and offered advice for millennial producers on managing expectations and communicating with other family members.
Joining her in the discussion was Elaine Froese, a Manitoba seed farmer and certified coach specializing in farm/ranch transition planning, who hosted a five-hour workshop deep-diving into the tangible action items that need to be determined in a proper transition plan. Ultimately, she said a solid plan accomplishes three things — empowers the family, increases profitability and secures the agricultural legacy.
Empowering the family begs a few questions, which child is the best to take over the ranch? What is your personal timeline for an exit strategy? Are your kids aware of this plan, so they can make informed decisions of their own? Farmers need to talk openly about what the business means to each family member, discuss the memories on the farm or ranch, talk about the legacy created by the hard work and sacrifice, and everyone’s hopes and dreams for the future.
Increasing profits: We all want our operations to make more money. Profitability not only allows for a good life but having the flexibility to take advantage of opportunities for growth in the operation. Froese says, “Families who have regular business meetings are 21% more profitable. The older generation should share farm financial information with the next generation. Knowing about debt servicing, cash flow, and input costs is a great education in reality for young people, especially teens.”
Securing the farm’s legacy: According to the 2016 Agri-Food Management Institute survey of farmers, only 16% of farms had a succession plan, despite it being in the top three goals for the operation (right after profitability and debt reduction.)
In addition to having stressful, emotionally-charged discussions about the loss of a loved one, Froese says, “The younger generation may find it intimidating to ask for something that’s so valuable (financially, traditionally and emotionally) that their parents have worked so hard for. And some parents, who maybe are finally feeling financially stable, are frightened that transition could topple the boat again and take it in a riskier direction.” Don’t be afraid to ask these tough questions, but don’t wait for a farm accident, health scare, or family fight to have these discussions. Start having those family business meetings now and be confident in your future financial security, your family’s happiness and the long-term success of your farm and ranch legacy.
All of us at the Next Generation Conference would like to thank those who spent their weekend with us. Hopefully, they enjoyed the speakers and took some great information back to their operations. Be sure to catch us on Facebook at Montana’s Next Generation Conference for updates for next year’s conference.
Toole County Extension