Farm Succession Research, Trends and Programs in Wisconsin Joy Kirkpatrick, Outreach Specialist, Center for Dairy Profitability.

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?



• 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


• 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


• 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?


• 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


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


Farming principal occupation by population

98%

48%

2%

52%

0%

20%

40%

60%

80%

100%

120%

BRT FSA

yes

no


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+


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


• 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


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


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


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


Planning to move?

40%

60%

20%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes No

BRT

FSA


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





Identified a successor?

28%

72%

35%

65%

0%

10%

20%

30%

40%

50%

60%

70%

80%

BRT FSA

Yes

No


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


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%


• Decisions/Responsibilities shared– Day to day– Physical labor– Employee management– Long-term decisions– Negotiations/Marketing– Financial management & record keeping

– Age of successor a factor?


• Estate Planning

Preference for inheritance of – Farm land– House– Other assets


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


• Open-ended questions– What will you miss

– What will you be happy to give up

– Primary barrier to planning for succession


• 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


• 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


• RTTF - Agendas November/February– Strategic planning– Financial Analysis– Communications– Taxes– Business Arrangements– Treatment of Heirs– Breakout sessions vs. all in same room


• 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


• Future programs, projects

• Next Returning to the Farm – changes

• How do we reach those farms with 41 – 50 year old successors?

Questions, Discussion?

Questions, Discussion?

Joy Kirkpatrick

Outreach Specialist

UW-Center for Dairy Profitability

608.263.3485

[email protected]

Farm Succession Research, Trends and Programs in Wisconsin Joy Kirkpatrick, Outreach Specialist, Center for Dairy Profitability.

Documents

succession slide

farm slide

assets slide

llcllp slide

retirement succession

dairy profitability

farm succession research

county area slide