Succession planning is being addressed across the nation to help farmers and ranchers plan to pass down an operation to the next generation. These plans focus on the transfer of assets to one or more heirs, keeping land intact if possible, providing for retirement and so on. But they often overlook the operational succession. What do I mean by that? I mean asking, “What does the future production look like for the operation? Are we planning for that? Are we taking the right steps now to ensure the operation's success continues through the current ownership and into the next?”
A peek at the outlook of food and agriculture will help guide these thoughts and planning efforts. This involves a more in-depth analysis of the operation itself by examining not only the current ownership and management structures but also the products produced by it, the markets relied upon, and of course, the laws and regulations impacting it. Using this information, the succession plan can be set up for success – it will not just include the ownership transfers and retirement plans, it will include a business plan so that there is a higher possibility of continued profitable operations into the future. This is not only important for the benefit of the current and future owners but for the benefit of the population as a whole.
Food security is a growing concern in the U.S. and across the globe. With population growth, loss of lands usable for production, water access, technology gaps and more, there is a lot of planning that needs to happen to make sure that in another 25 years, we are still able to produce enough food to feed ourselves and the world. The heart of this lies with our farmers and ranchers, their lands and operations, and the products they produce to feed the world.
- What can be done as a part of the operation’s succession plan? Research, learn and adapt. Once the planning is done on how to pass it on to the next generation, plan how the next generation will continue on.
- What is the operation’s current product or products? Are there other options? If it has always been a certain breed of cattle, is there a better one, or is there a crossbreeding option that will produce a better product? Or are there alternate feeding practices that will improve the final results from the cattle currently being raised?
- Is there new technology available to make the operation more efficient? Computers, monitoring equipment, data analysis software and more are out there and could have a potentially significant impact on production.
- Are there different practices that need to be implemented to preserve our resources – land, water, grasses, etc.? Is there alternate equipment available? This involves a bit of research and study to stay updated on new practices with not only the product being produced but also on the resources being used for its production and determining whether there is an alternate way of growing and working the lands to preserve the resources.
- Can we change the supporting products used – fertilizers, feeds, seeds, chemicals, etc. – that would improve the efficiency of product production? Habits produce good results, but habits can also prevent growth. Education is key here. While we may know ryegrass works for us, is there a different variety of grass that produces the same result but perhaps with fewer inputs? Is there a corn variety that is genetically modified to result in less pesticide applications? Or is there a cattle feed that gives better growth results? Keeping up with the research and development within the industry can lead to making proactive decisions to keep your operation at the top.
- Do I want to make sure the land is used only for agriculture and production? Are there ways to secure that, even if it is under different ownership? I cannot say there is ever a 100% guarantee, but there are programs for lands that help secure conservation efforts for the future.
For each of these, probably the most important considerations are what it is, what it costs, how it works and if it's feasible to add to the operation. The good news is that there may be financial aid, financial incentives or benefits; programs with educational resources and guidance; or other help available. Regardless of the challenges and solutions, the first step is taking a closer look at planning for the future.
This article is provided for informational purposes only. Readers should consult their own professional advisers for specific advice tailored to their needs. Information contained in this article may be subject to change without notice.
