Young producers talk about succession plans, employee management

Four young dairy producers from across Canada talked about how each of their farms approach these issues during a panel presentation at the 2018 Canadian Dairy XPO in Stratford, Ontario. The panelists included: Nick Brown, Brownsville Farms Ltd., Sussex, New Brunswick, with 400 cows in a freestall and parlour facility; Kevin Forbes, Forbesvue Farms, Sarnia, Ontario, with 200 cows in a freestall and parlour facility; Alanna Coneybeare, Conlee Farms Inc., Listowel, Ontario, 125 cows in a robot barn; and Matt Plett, Plemark Holsteins, Blumenort, Manitoba, with 64 cows in a tiestall barn.

Karen Lee

Managing Editor / Progressive Dairy

Email Karen Lee

What is your succession plan?

BROWN: After we came home, we sat down with our accounting firm to go over ways other dairy farms have transitioned. We went with the one that we thought was the best for us from a depreciation and cash flow point of view for me and from a wealth management point of view for my father. We set up a holding company for my father, and we’re basically profit stripping from the farm for the holding company. The remainder we’ll take on as a loan when we do the final buyout. The main challenge for me was definitely communication; especially as we went along and got busy, we stopped talking about it. Another challenge right now is that we’re moving into the farmhouse and my parents are moving into our house. Overall, we’re both happy to see the farm continue and continue to grow. My father has been great. He paid down debt before I came home to put us in this position, so I’m thankful for what he’s done.

CONEYBEARE: Conlee Farms became incorporated in the ’80s. Ten years ago, my parents bought out my uncle and my aunt, and became the sole owners of the corporation at that time. At the same time, my sisters and I all got nonvoting shares. Our succession plan was in place before I had even thought about coming home to farm. It was well-thought and flexible enough to allow people to be integrated in a management role without having to rewrite the succession plan. Now that I am home working full-time, I have the opportunity to buy voting shares, so that allows me to be there in both capacities. Sometimes I get asked how I feel about my sisters being nonvoting shareholders of the farm. I think what’s important to remember is that our parents didn’t owe us a farm or shares in a farm, just because we grew up on a farm. Those nonvoting shares were a gift from our parents that allowed us to be financially secure and show us that they were serious about having this as a family business.

FORBES: A year after I graduated from university, we started talking about the succession plan. My parents hired Betty Hansen [Crossroads Planning Group Inc.]. We discussed what my parents envisioned happening, myself and my sisters, and what everybody thought looked fair. Our farm was already incorporated, and my parents crystalized their assets in the corporation so all the growth from [when we implemented the plan in October 2008] forward was mine and my wife’s. They are withdrawing an amount of money every month to give them a comfortable retirement. It works well for us. One of the biggest challenges is how each generation sees things. I kind of hit the ground running and spent more in the first two years than my dad had spent in 20 years. That caused some friction, but it’s moves that we don’t regret, and we’ve moved forward on. Another thing we did was buy the house across the road. My parents moved into it and my wife and I moved onto the home farm even before we were farming full-time.

PLETT: Our succession plan was pretty streamlined given the nature of the way we got in – there was no succession plan. We just bought the vacant farm at an agreed-to price and got to work putting the herd together and doing the barn renovations. When my wife’s family farm came up for sale, it was pretty simple there as well. She had two brothers that were farming with her dad. One after the other, they both decided they wanted a career change, so the farm was sitting empty for a number of years. When they were ready to sell it, we made the decision to purchase that farm. Even though we didn’t buy a business from her parents, we did buy a family farm.

When we bought my [home] place, all of my family was scattered throughout the U.S., so it really meant nothing to anybody other than to me. When we moved to Tanya’s farm, it was a little different. There were no animals on the yard, so we pushed down a bunch of old corrals, old buildings, built a new heifer barn, we renovated the house, we renovated the barn, and everything kind of happened at once because the whole yard was empty. It caused some hurt feelings in the family that I, as the in-law, was coming in and changing things rather fast. We tried to be sensitive to that, and at the same time realizing it is our farm at this point. Where I think about succession planning is now moving the farm down to our kids. They are still pretty young; our oldest is 12. But we’re starting to realize how fast life goes and to start thinking about some of these things.

How do you maintain happy and productive employees?

BROWN: You’ve got to treat them as if you were in their shoes. We have to keep quite a staff since the morning shift starts at 2 a.m. To find people that will come in in the middle of the night in a snowstorm and walk the last kilometer to the barn, those are the people you want to reward to keep them. We’ve had employees stay for 20 years plus, and it all starts with the way you treat them. If you don’t care about your employees and if you’re not around, they’re not going to stay. They have to be part of a team. They are a big part of our system. We have four full-time milkers. What they do every day, day in, day out, is impressive. They do a great job, and we reward them well – health, dental, benefits, rising pay package. We have to because there are other opportunities out there. If you can find someone that’s not going to milk a cow they treated that morning, that’s worth a lot. One mistake can cost thousands, and you have to respect that.

CONEYBEARE: I think an employee can’t just be a number. You have to ask yourself, what’s in it for the employee? Yes, of course, a wage, etc., but I see it as a learning opportunity. Every time they come to work, you want them to feel like the work is meaningful, that they are appreciated, but also that it’s a skill-building opportunity for them. I also think that as a manager, be aware of your shortcomings and the things that you can do better. Employees can be a fantastic and fresh perspective. I like working with them because they always give great ideas.

FORBES: One of the biggest things we found is good people associate with good people. So if we can find a good employee, treat them well, pay them well and make it a nice environment to work in, whenever that person would finish high school and be off to college, we always had a resume of a sibling or a friend, somebody they knew that wanted to work at our place. I have three full-time and two part-time employees, which is way too many for the size of farm we have. We had a herdsman for 25 years, and his son is now our main herdsman. He’s my right-hand man. I had another gentlemen we hired part-time and he helped get his nephew a job with us. As it evolved, they both enjoyed working on our farm and asked to go full-time. It wasn’t ideal, but I didn’t want to lose either one of them. They are great people and great employees.

You have to pay well. If you pay peanuts, you’re going to get monkeys. There’s also other ways to have benefits on a farm. We’ve given a house at a pretty reasonable rental rate. We give them beef if they want beef, and there are medical and dental packages available if they want. There are different sorts of ways to treat employees well and treat them with respect. It makes a huge difference. You can have all the technology that you want, but you can’t farm without employees. So we really try to treat them like family, and we’ve had tremendous success.

PLETT: One thing I noticed when I did nutrition consulting was the trends of people that attract and retain good staff. There’s generally a vibe about that farm where there’s reinvestment happening and a positive attitude about the industry. When we started, it was just Tanya and myself. As we have grown, we’ve had to add staff. We were very, very fortunate to get our herdsman, Stuart Reimer from Pennview Farm, just a half-mile down the road from us. He’s been great. We’ve been very blessed with good part-time help on the night milkings.

Pay is obviously part of keeping and attracting good help, but you hear it again and again, people don’t leave because of money. People want to feel respected. They want to feel engaged. They want to feel like their contribution makes a difference. If they don’t see the owner come by, they don’t feel like they are really making a big impact. There are a lot of times I don’t want to go back out in the evening, but I realize it’s important to be out there to encourage people, answer questions and even proactively tell them why we do certain things. It just helps engage their mind and the whole process of dairy farming. They can see the big picture, and that it’s not just coming in, milking cows and leaving. Talk lots, share lots and make people feel valued is probably the biggest things for staff retention.