by Joann Pipkin

Who will take over the farm? It’s a question that faces the cattle industry given an aging population of chief operators.

It’s a question Deb Thummel and husband Jeff wanted to address sooner rather than later. The Thummels run a diversified commercial Angus cow-calf, backgrounding and row-crop operation in northwest Missouri and southwest Iowa. They also have a consumer-direct fed-beef business and a growing Angus seedstock operation.

As fifth-generation cattle producers, the Thummels had seen firsthand the advantages of a farm transition plan. According to Thummel, the inconvenient conversations of succession planning far outweigh the sheer reality of never having the discussion in the first place.

“My parents had worked through those inconvenient conversations in the early 2000s. When Dad passed away in 2015, the plan worked well — both on paper and in real time,” Thummel explains.

With three grown children, two of whom are actively involved in the family business, the Thummels are a shining exception to data summarized in Industry Insights Powered by Angus Media and CattleFax, a survey of cow-calf producers and feedlot operators.

As outlined in the survey, only 36.4% of cow-calf producers have a written succession plan, compared to 63.6% of respondents who do not. A slightly higher number of feedyard owners — 38% — had a written succession plan.

So, who is taking over the farm? The data only fuel that burning question. Without clear direction of a transition for cow-calf and feedlot operations in the future, the fate of the industry as it tries to ignite another cattle cycle is unclear.

Yet, cattlemen across the country who are willing to put forth a well-thought plan are able and willing to mentor those passionate about the industry. Those open to diversifying the farm business can help bring the next generation back to the farm.

Start the conversation

As Industry Insights outlines, an overwhelming 73.7% of respondents are planning to transition the farm or ranch to family members (see Fig. 1). But, how does that happen? Where do you begin laying the foundation for farm succession?

“We considered the factors of who wanted to be involved in the future of the operation and how our trusts could be structured to meet the needs for those in the next generation that wanted to be physically active in the business and those that did not,” Thummel says.

Transition is certainly less complex when the next generation clearly wants to be involved in the family business.

While he doesn’t have a formal, written transition plan in place, northeastern Utah feedlot owner Brent Gillman says he’s already begun discussing plans with his children, three of whom are in college and one who has yet to graduate high school.

“I’m hoping that we can continue to have this be a family operation and transition it to one of them, similar to what my father did with me,” Gillman explains.

However, he says, that transition will likely include a couple of caveats:

• Work for someone else for a couple of years before coming back to the operation.
• Establish a plan to help grow revenue for the business.

“It’s different working for Mom and Dad than it is working for someone else,” Gillman says. “I think that would be a good learning experience for them. Then, when they come back, they kind of have a plan.”

Starting the conversation need not begin when children reach high school or college, though. Consider the J.H. Minor Co., an Angus cow-calf operation in the Nebraska Sandhills. Fourth-generation rancher Joe Minor owns and operates the ranch, along with the help of wife Kristi; son Tyler and his wife, McKenzie; as well as Tyler and McKenzie’s two young children, Talon and Hannah.

Minor sees value in getting his children involved in the operation from a young age, including them in ranch tasks they find interesting.

“Bringing the next generation into the operation instills our ‘why’ in them,” Minor says. “Why we get up every day and do what we do. We want to keep the legacy alive. No, this lifestyle isn’t for everyone, but it’s self-gratifying, and we hope to pass that down to the next generation.”

Mentor the committed

South Dakota feedlot owner John Moes built his operation from scratch in 1987 after leaving the family’s dairy to work for a grain and beef cattle farmer. The experience would serve him well over the years, as son Bryan now works alongside him in the business he crafted from infancy.

With the proverbial “farm transition” discussion already laid out, Moes is ready for the next step in building a succession plan. As he does so, he hopes to glean insight from industry experts while giving his son some real hands-on experience.

The Moes believe much insight on transition planning can be gained from succession and legacy experts like Jolene Brown, Alan Hojer, Ron Hanson and others.

While 59% of feedlot owners are age 60 and older (see Fig. 2) and 56.1% of cow-calf operators expect to change farm or ranch ownership in the next five to 19 years (see Fig. 3), according to the survey, training the next generation for the takeover must be realized.

“Dad’s done a good job stepping back and letting someone take over,” says Bryan Moes. “He’s been bringing the next generation into the operation and giving them hands-on experience to make some decisions while he’s there to guide.”

Moes goes on to say transitioning with a coach or guide in place helps smooth any bumps in the road.

“Having a mentor, someone to provide verbal reassurance, is a big hurdle (in transitioning the farm),” Moes says. “We’re as connected as ever with technology, but we’re more isolated in our silo, too.”

Tyler Minor agrees.

Tyler is actively involved in the family’s cow-calf operation, including the day-to-day decisions. Still, he knows there’s more behind the scenes to managing the operation.

“Running the operation isn’t just about the outside duties,” he explains. “It’s about money management and making smart decisions, as well.”

As critical as mentorship is, cultivating an innate passion for the industry is perhaps equally as important in bringing the next generation back to the farm.

“We’ve had little conversations with our kids about what they want to do when they get older,” Tyler says. “Yes, we want them to come back to the ranch, but we want them to choose this life because they want to.”

Virginia cow-calf producer Rusty Atkins instilled in his children from a young age that they must want to be involved in the operation for that transition to be carried out.

“If they don’t want to do it, they don’t have to,” Atkins explains. “That is their decision. But I’m not going to pass it on if they don’t have the same love for it.”

Thummel adds, “Their heart must be in it. No amount of encouragement or enticement will produce a heart intent on farming.”

Realizing that it can sometimes be difficult to always be optimistic in agriculture, she says the industry needs the energy and enthusiasm of the next generation.

“We must let them manage a little or a lot, even while we’re still here, even if there is an occasional loss or more than occasional loss,” she says. “Our job is to equip them and encourage them to be better than us. We must let them question us, our management and our motives, and we must give them honest answers.”

Prepare to diversify

The industry question at hand is more than just who is taking over the farm. The present-day difficulty of keeping farm operations out of the red is no secret. More than 58% of Industry Insights survey respondents cited input costs as a major concern for the industry (see Fig. 4). Another 46.1% identified farm profitability as an area of uneasiness.

Farm organizations like the Livestock Marketing Association (LMA) are taking notice. The group sees a continued loss of livestock producers across the United States as a critical threat to both the livestock industry and the nation’s food supply. An initiative launched by LMA last fall aims to help strengthen producer profitability and create incentives for the next generation of farmers and ranchers.

Producer Profitability Initiative organizer Joe Goggins, owner of Public Auction Yards, Billings, Mont., cites a lack of access to land and labor, overregulation and input costs as reasons for more cattlemen exiting the business while preventing new producers from getting started.

As beef producers continually seek out ways to add revenue to the bottom line, diversifying their operations provides a means of doing just that while also creating an avenue for the next generation to come back to the farm.

“When anyone is being added to the operation, remember it is a business,” Gillman says. “What skills do they have that can be an asset? Do they have work experience at a similar operation?”

Diversifying the farm business brought flexibility to the Thummel operation.

“If all eggs aren’t in one basket, the entire operation stands a better chance of surviving the shakes and drops in the industry,” Deb explains.

With their operation diversified in both crop and livestock enterprises, then further by backgrounding, direct-to-consumer, seedstock and cow-calf components, Thummel says their succession plan includes details to address each entity, allowing additional flexibility moving forward.

“Jeff and I are intentionally helpful to the custom-farming components that the next generation is adding to the overall diversity of the entire operation’s scope,” she says.

In addition to their feedlot, the Moes manage row-crop and cow-calf enterprises, retaining ownership of their fed cattle.

The whole systems approach to their feedyard allows for greater cash flow, Bryan Moes explains. “[In our business], if you aren’t diversified, you’re leaving value on the table.”

Living a legacy

A fifth-generation rancher, Minor knows the lifestyle he lives isn’t for everyone. Yet, he says it’s self-gratifying.

“The beef industry needs the family legacies to continue,” Minor says. “All of the experience and wisdom handed down generation to generation is important, and that’s what keeps the industry strong.”