Bismarck State College class helps future farmers and ranchers address succession planning
BISMARCK, N.D. — Students in Bismarck State College's farm and ranch management program mostly plan to return to family farms and ranches where they hope to someday take the reins on running the operations.
But Tyler Schau, assistant professor of agriculture, technology and natural resources at BSC, says students' post-graduation plans don't always turn out that way.
Maybe the farm isn't big enough to support another person. Or a parent isn't anywhere near ready to share managerial duties. Or taxes and financial realities cloud the path for transitioning property to the next generation.
To help open students' eyes about what they might face as they finish up the two-year associate's degree program, BSC's agriculture department has instituted a new seminar on farm management, which focuses on budgets, cash-flow plans, balance sheets, income statements and succession planning.
Schau says the importance of the class, and the succession planning component especially, stems from an industry need to replace today's producers as they reach retirement.
"Our farmers are not getting any younger," he says. "If we're going to bring these kids in and we're going to tell them, 'Hey, we're going to help you become good managers,' I think we were doing the kids a disservice by not having the class."
No two are the same
The farm management class on Nov. 29 started off with a discussion of purchasing property via contract for deed versus borrowing from a financial institution. That moved into a look at why succession planning might not be a one-time conversation.
Schau explained that succession planning, whether in business or on the farm, ensures continuity. Taking over a farm isn't something that happens in a day. The process takes planning, training and preparation to ensure the next generation has the right tools.
While people generally want succession coordinators to give them answers, they instead usually offer options, says Schau, who recently became a certified succession planner along with fellow BSC assistant professor Kenan Layden.
"It's always going to depend on you guys and the situation you're going back to," Schau says.
He advised his class to bring in attorneys or lenders when necessary and to get things in writing. And don't be surprised if everything isn't easily accomplished.
"Mom and Dad love you, but not enough to give you half their stuff," Schau says to laughs from the class.
But no matter how difficult it might be, the subject needs to be broached, he stressed. He advised students not to worry about offending someone. If someone is offended by questions about the future? "In my mind, that's a pretty telltale sign that it's going to be a difficult path," he says.
So far, Schau has assigned the students to write a paper about their plans in light of what they've been learning. Out of the 20 kids in the class, he says "a handful" have changed their plans and are looking to pursue four-year degrees or come back to BSC for a different course of study. While that's not the optimum outcome for the program, he says it's better than returning to the farm or ranch and discovering problems years down the road.
Schau's next assignment for the class will be talking to their families about their plans. Several students have begun on their own.
Aaron Leier's parents are ready to move on from farming. He wants to take over the small grain and beef operation near Linton, N.D., but he already acknowledges there's more to work out than that. He has six siblings, including a brother who has taken over an uncle's farm and a brother who has a job in town but still works on the farm. So, it's imperative for his family that everything is handled in the open.
The farm management class has brought up some things for Leier and his family to think about, including what will happen down the road if his parents have to go to a nursing home. Though he's confident in his ability to run the farm, Leier also has one big concern.
"To pay for it is going to be difficult I think," he says.
Katie Horner also plans to return to her family farm in Napoleon, N.D. Her father, grandfather and a partner have crops and cattle, and she's been working to join them.
As she gets ready to return to the home place, it's a matter of helping her family expand the operation and beginning to take on some of the roles of her grandfather as he retires. Her family has been supportive.
"One major thing my grandpa says when he was retiring this past year was 'If you're coming back for sure, I want you to get in it,'" she says. "So he's trying to help me out as much as he can to stay in it. It's something they want to see happen."