Farm Succession Research, Trends and Programs in Wisconsin Joy Kirkpatrick, Outreach Specialist, Center for Dairy Profitability.
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Farm Succession Research, Trends and Programs in Wisconsin
Joy Kirkpatrick, Outreach Specialist,
Center for Dairy Profitability
Agenda for the hour
• Farmer Retirement & Farm Succession Survey
• Implications – Rural communities– Extension
• Farm Succession programs in WI– Extension programs– Other programs
Farmer Retirement & Succession Survey
• International FARMTRANSFER Succession survey – ISU Beginning Farm Center
• Similar studies in 7 countries and 8 states
• Why important to learn retirement & succession plans?
Farmer Retirement & Succession Survey
• Two populations surveyed–Brucellosis Ring Test list
• All dairy herds in Wisconsin
–Farm Service Agency• Anyone who received any type of FSA payment
• Eliminated – duplications between the two mailing lists– FSA addresses w/ zip codes outside of the 4
county area
Farmer Retirement & Succession Survey
• Design– Mailing– Media
• 589 viable responses (23% response rate)
• BRT list – 26% rate vs FSA – 17% rate
• Compared to US Census where possible
• Non-response bias tests
Farmer Retirement & Succession Survey
• Survey design– General farm information– Demographic information– Retirement plans
• Retire?• Retirement age?• Who have you talked to about this?• Moving from current residence?• Retirement income sources?• Successor?
Farmer Retirement & Succession Survey
• Respondents Profile – Average age – 54 years
Ranged from 21 to 93 years old
– 90% male– 67% dairy enterprises; 18% beef
• Average #milk cows = 80 cows• Own an average of 375 acres; rent on average
another 280
– 69% sole proprietorship; 17% partnership; 7% LLC/LLP
Farmer Retirement & Succession Survey
Operators' Levels of Education BRT vs. FSA
8%
52%
14% 14%11%
2%
6%
41%
11%15% 16%
11%
0%
10%
20%
30%
40%
50%
60%
Less than highschool
High School Some college Technical ortrade school
Collegegraduate
Graduateschool
BRT
FSA
Farmer Retirement & Succession Survey
Farming principal occupation by population
98%
48%
2%
52%
0%
20%
40%
60%
80%
100%
120%
BRT FSA
yes
no
Farmer Retirement & Succession Survey
Respondents' 2005 Gross Revenue
28%
6%8%
15%
4%
7%
24%
7%
0%
5%
10%
15%
20%
25%
30%
$1-$50,000 $50,001-$75,000
$75,001 -100,000
$100,001 -$150,000
$150,001 -$175,000
$175,001 -$200,000
$200,001 -$500,000
$500,001+
Farmer Retirement & Succession Survey
Respondents' 2005 Gross Revenue by Population
8%4%
10%
21%
5%8%
35%
10%
60%
8% 6% 6%3% 5%
9%3%
0%
10%
20%
30%
40%
50%
60%
70%
BRT
FSA
Farmer Retirement & Succession Survey
• A. If you are retired or plan to retire you will provide neither managerial control nor labor to the farm
• B. If you are semi-retired or plan to semi-retire you will provide some managerial control and/or labor to the farm
• C. If you never retire you will maintain full managerial control and provide some labor to the farm
Farmer Retirement & Succession Survey
Retirement Plans comparing BRT & FSA respondents
29%
44%
21%
6%
28%
34%
18%20%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Never retire semi-retire fully retire already retired/semi-retired
retirement plans
Perc
enta
ge BRT
FSA
Farmer Retirement & Succession Survey
Semi-retiring - discussions?
43%
3%13%
4%8%14%
50%57%
97%87%
96%92%86%
50%
0
0.2
0.4
0.6
0.8
1
1.2
with family with lawyer with banker with farmconsultant
withaccountant
with other haven'ttalked toanyone
Checked
Not checked
Farmer Retirement & Succession Survey
Fully retiring - discussions?
48%
80%
94% 93%
83%
93%
63%
52%
20%
6% 7%
17%
7%
37%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
w ith family w ith law yer w ith banker w ith farmconsultant
w ithaccountant
w ith other haven't talkedto anyone
Checked
Not checked
Farmer Retirement & Succession Survey
Planning to move?
40%
60%
20%
80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yes No
BRT
FSA
Farmer Retirement & Succession Survey
Where are you moving?
21%
30%
1%
11%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
another house onthe farm
moving into town moving in withrelatives
other moving to anacerage
Farmer Retirement & Succession Survey
Identified a successor?
28%
72%
35%
65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
BRT FSA
Yes
No
Farmer Retirement & Succession Survey
Identified successor according to 2005 gross revenue
23%29% 31%
29% 29%
20%
33%
50%
77%71% 69%
71% 71%
80%
67%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
$1-$50,000 $50,001-$75,000
$75,001 -100,000
$100,001 -$150,000
$150,001 -$175,000
$175,001 -$200,000
$200,001 -$500,000
$500,001+
Yes
No
Farmer Retirement & Succession Survey
Successor's Present Occupation
12%
52%
5%
19%
3% 2% 3% 2%
0%
10%
20%
30%
40%
50%
60%
Stu
dent
Wor
king
full
time
on th
is fa
rm
empl
oyed
full-
time
on a
noth
erfa
rm
off-f
arm
empl
oym
ent
colle
ge/u
nive
rsity
man
agin
g hi
s/he
row
n fa
rm
runn
ing
a no
n-fa
rm b
usin
ess
othe
r
BRT only – 67%
BRT only – 10%
Farmer Retirement & Succession Survey
• Decisions/Responsibilities shared– Day to day– Physical labor– Employee management– Long-term decisions– Negotiations/Marketing– Financial management & record keeping
– Age of successor a factor?
Farmer Retirement & Succession Survey
• Estate Planning
Preference for inheritance of – Farm land– House– Other assets
Farmer Retirement & Succession Survey
Having a successor impacts inheritance of farmland wishes
6%
24%22%
47%
10%
57%
11%
23%
0%
10%
20%
30%
40%
50%
60%
Singlesuccessor/individual
should take over
All heirs should sharebut not equally
All heirs should shareequally
Other
Yes
No
Farmer Retirement & Succession Survey
• Open-ended questions– What will you miss
– What will you be happy to give up
– Primary barrier to planning for succession
Farmer Retirement & Succession Survey
• Implications of findings for:
– Agriculture in southwest Wisconsin– Extension programs
Farm Succession Programs
• One-day workshops– Build awareness– Call it Estate Planning and they come out of
the woodwork!
• Three-day workshops– AgVentures – build in some strategic
planning exercises– Commitment, more than one generation
needed at workshops
Farm Succession Programs
• Four-day workshops – Returning to the Farm– Modeled after ISU and UN-L– Target audience seems to be key
• Junior & Seniors in College
– UW-Platteville– UW-River Falls
Farm Succession Programs
• RTTF - Agendas November/February– Strategic planning– Financial Analysis– Communications– Taxes– Business Arrangements– Treatment of Heirs– Breakout sessions vs. all in same room
Farm Succession Programs
• Returning to the Farm Evaluations– End of Session for both UW-P and UW-RF– Nine month follow-up evaluations
• Decisions made or action steps taken on succession plan
• Before/After workshop questions
• Comments
Farm Succession Programs
• Future programs, projects
• Next Returning to the Farm – changes
• How do we reach those farms with 41 – 50 year old successors?
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