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Three farms tackle family transition in different ways

Progressive Dairyman Editor Karen Lee Published on 15 September 2017
transition panel

Each farm is different and each family is different. Therefore, there is no one-size-fits-all approach to transitioning the family farm from one generation to the next.

Three dairy farmers shared how they approached the topic of transition, the resources they utilized and the lessons they learned at the Vita Plus Chick Day, in Mineral Point, Wisconsin, on Aug. 16.

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Yogi Brown, Sunburst Dairy, Belleville, Wisconsin, said she and her husband just finished buying out the land from her father-in-law last year. Now they are starting the formal transition process with their 25-year-old son and his future wife.

At Schurecrest Farms in Markesan, Wisconsin, Pam Schure is at the other end of the process. Four years ago, as her son was getting married, Schure and her husband determined it was time to transition ownership to him. They developed a plan and started gifting him shares of the corporation. In 10 years, he will be a 50-50 owner with his parents.

Transition is ongoing at Jones Valley Jerseys in Ridgeway, Wisconsin, as Anne Jones and her husband farm together with his parents on a 60-cow registered Jersey farm. His parents purchased the farm 15 years ago and both generations began buying the animals together. Two years ago, Jones’ in-laws purchased a farm down the road for heifers and Jones and her husband moved onto the main farm.

Changing roles

The housing move for the Joneses resulted in a change of roles. Together the younger generation takes care of most day-to-day chores with the milking herd and Jones’ husband does every milking. The older generation cares for the heifers and helps on the main farm too. Jones’ father-in-law has a full-time job off the farm, but still mixes feed each day and helps with the evening milking. Her mother-in-law works off the farm part-time and continues to help with morning milkings and calf chores when Jones can’t be there because she also works off the farm part-time. They try to work opposite each other, but on nights when they both work, Jones’ sister-in-law will come feed calves.

“It’s all family labor. We don’t have any hired help unless we’re making hay,” Jones said.

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With 500 cows, the Browns have several employees on their farm. Brown handles human resources and employee management, along with the farm's finances and calves. She foresees the farm changing as the next generation comes in. During the farm's first transition meeting, she told everyone, “In 10 years I will not be the human resource person; who wants it?” The room was very quiet. “They have to figure that one out,” she said.

That reason as well as others may change the scope of the farm all together. “I don't envision the business to look anything like it is now," Brown said. Her son likes cows but doesn't love them. When he started as a full-time employee three years ago, they began delegating responsibilities to him. With a passion for equipment, he is responsible for the shop and equipment maintenance and is gaining more responsibilities in cropping.

One of the conversations the Browns are having as part of the transition process is asking the next generation what he wants his business to look like in 10 years. “We’re not going to be spending anymore money until we find out what the next generation wants to see the business as,” she said.

For the Schures, the business model has remained the same, but they gained a new employee. Schure’s daughter-in-law wasn’t raised on a farm and was employeed off the farm. As the farm grew to 400 cows, they determined the old refurbished corn crib that had served as a calf barn needed to be replaced. Planning the new calf facility piqued her daughter-in-law’s interest in the farm. She quit her job, and now she feeds and cares for the calves morning and night.

Legal assistance

Prior to the transition, the Schures had an attorney they used for real estate purchases, filing wills and other legal matters. However, after visiting with him at the onset of the farm’s transition plan, they weren’t comfortable with his approach to this topic. Instead they chose to work with George Twohig, a partner in the law firm of Twohig Rietbrock Schneider & Halbach S.C., Chilton, Wisconsin, who is known to specialize in farm transition.

Brown suggested having more than one attorney involved in the process. When she and her husband first set up an LLC with his parents, the attorney structured it to favor the older generation without anyone realizing it until they used another attorney to incorporate the farm. The first move ended up setting the Browns back 10 years because it wasn’t done correctly. “I recommend an attorney for you and an attorney for the other party. That’s just smart business,” Brown said.

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Additional resources

The Browns received a grant from their county extension office, and with it they have the assistance of the University of Wisconsin Center for Dairy Profitability and their county extension agent. They also brought in a mediator – a retired university professor – to aid in the discussion. Their future daughter-in-law is a city girl, and in addition to wanting her to understand what it means to be involved in agriculture, they also wanted to make sure her voice could be heard throughout the transition process.

Gary Sipiorski from Vita Plus kept the Schures on track in the transition planning. He helped by bringing up both sides in the discussion and pointing out what needed to be accomplished at each meeting and in between. “It only took us four months from the time we started until the paperwork was filed,” Schure said.

Jones and her mother-in-law seek out transition workshops at various events to gain insight on the process. “We are always looking at the schedule for transition stuff because it is so hard and we don’t know where to start,” she said. Traveling to and from the events together also gives them time to talk about what the farm’s approach could be.

Team communication

The Joneses have had quite a few spur-of-the-moment conversations about transition when all four find themselves in the barn together. Other times they will plan to meet together at one of their houses.

“I think it was hard for us in one home or the other, because it was not necessarily on neutral ground. The barn worked for us, but then it was more impromptu,” Jones said. She recommended finding a neutral spot but also using a planned agenda to direct transition meetings.

Schure said their home works well for a meeting spot because their kitchen has the bigger refrigerator and well-stocked pantry. They do make sure her daughter-in-law attends all of the meetings so there are no secrets among the four of them.

After building an addition onto their home, the Browns have a nice office with space for everyone to work and a neutral location for their meetings. “There is a lot of history at that kitchen table,” Brown said. “When we went into the new office, our son was now equal to us.”

At times they will have an agenda, especially when meeting with the mediators, but they will also have impromptu meetings.

Incorporating new ideas

Making changes on the farm can be difficult with more people involved. Jones said managing two generations together when one is looking for the latest and greatest solutions while the other prefers to do what they’ve always done can be challenging. She said they try to listen to what everyone has to say and reach a compromise.

At Sunburst Dairy, if anyone on the farm has a new idea, they have to research it and make sure it can either make the farm money or save time or capital. Then they present it to everyone and it is discussed.

The Schures use a trial and error approach. If someone has a new idea, they try it at least once.

Respect

Whether trying something new on the farm or meeting about farm transition, Jones said it is important to remember “everyone is just trying to do what they think is right. That isn’t always the same idea and that’s when you start butting heads and it’s hard.” However, at the end of the day, everyone is family, and that is the underlying feature that should start and end each meeting.  end mark

Karen Lee
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PHOTO: Left to right, Pam Schure, Yogi Brown and Anne Jones shared the different approaches their farms took in transitioning to the next generation. Photo by Karen Lee.

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