Handing Farm To The Next Generation Requires Planning

Succession and farm transitions are a challenging topic that takes a lot of preparation.

“There's two [transitions] that are most important," noted Tim Cobb, owner and President of Spokane-based Farmland Company.  "That's an operational management transition as well as an ownership transition, and those items don't normally happen at the same time. When you talk about day-to-day operations as young people are coming into an organization, they should get an opportunity to manage and do a few things that will allow them to make some choices. Maybe control some budgets, or potentially also sell some grain, and do things like that. On the other side, there's that ownership transition that might come later, but it also might include other stakeholders. And so when you're talking about succession, there are lots and lots of things to consider, and ownership transition normally takes a little bit more time.”

Cobb pointed out the length of a farm transition will depend on several factors.

"It depends on the operation. It depends on the amount of communication, which is important, but really, factors that play into it can make it so a management transition can look like three to five years and an ownership transition, honestly, depending on the equity and the amount and the size of the farms, they can take longer than that. It is not unexpected for us to see something take between five and eight years," Cobb said.  "And as we watch that, it's good to have that continuity. You get the relationships with the banker, and you get the relationships with the other players that are involved in this.”

Cobb added conversations ahead of time are key to a smooth transition, adding all partied involved in need to listen twice as much as they speak.  He added its also important to start those conversations early, rather than later.  For more tips and ideas on transitioning to the next generation and finding expert help check Click Here.

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