We have been very fortunate to work with many successful farm owners over the years. Many of these individuals share a lot of the same qualities: hardworking, determined, focused and increasingly aged. USDA reports that the average age of US farmers is 58 years old with more than 1/3 of them being over 65. This translates to more and more conversations being geared towards preparing the next generation to come into these businesses.
In those discussions it’s not typically enough to outline the size and complexity of the average operation today, it’s also critical to tap into the motivations and emotions that underpin the way of life that surrounds agriculture.
That allows the conversation with the next generation to start in a natural but rarely articulated matter of values. Now even though these values are not always memorialized in print, they are most certainly demonstrated over a lifetime. The next generation often has a front row seat to these values and behaviors and in many cases already actively emulates them in their own lives. Even so, there is still a lot to be gained by getting them out in the open, documented and discussed as a foundation of the family, the business and the decisions that will come.
Another point that is critical but almost seems elementary is simply the recognition of what the business is. One might say, “Well we’re a dairy farm, we are in the milk business” but I find in reality, that question actually can have quite different answers with very different ownership and management expectations. One dairy could specialize in specialty products that are marketed directly to consumers where another is operating large herds where you are in the low cost, high efficiency commodity business. By framing that reality against the backdrop of what we value, you can begin to really frame out what it will take for the next generation to continue on.
This best leads into the next part of that preparation process and that is the expectations around responsibilities and qualities. If we know what our values are and what business we are in then we need to be able to accurately reflect the types of qualities it takes to own and operate that kind of business now and into the future. The agribusinesses of today often look drastically different than those of our parents and grandparents. The workforce is larger, the regulatory requirements are more complex, the scale is broad and the margins can be thinner. That often leads to the need for a more diverse and multifaceted skill set. This goes beyond just being a good “operator” in most cases and that is often the root of the most candid conversations.
Which lends itself to the final but overwhelmingly most important part of the preparation and that is communication. The ability for everyone involved to communicate fully and openly with each other is paramount. The older generation needs to be able to convey their expectations and concerns about the transition as well as their views around what the business means to them. The younger generation needs to be able to look at the opportunity objectively and speak on where they see things going. Too often we hear feedback like “Man I wish they would step up and take some responsibility” from an owner or “My dad still treats me like a child, and I don’t know that he will ever step aside” but yet these conversations are rarely ever had with one another. This breakdown in communication has derailed more business transitions than markets, management or liquidity ever have.
With all that being said, as you move through these types of transitions it’s important to keep an open mind, remember what is important and prioritize communication above all else. The future of agriculture is bright, and I believe the next generation is well equipped to lead us there.