Dave Forgey wrote:
>>>>>I strongly recommend we find ways to get the next generation started
running our farms. The profit potential is there to support both our
retirement an the next generations start-up and what better way to enjoy
the satisfaction of seeing our farms continue to prosper along with the
next generation.
====
Rick's comments:
I find it a bit hard to consider this to be "off topic" but will leave the
header intact.
Realistically, if you have a successful farm, just like any successful
business, you will be able to sell that business to an interested party. It
may be possible to transition a buyer, who is willing to provide the labor
and management, but it is very risky to do as they must have exceptional
competency. If they fail, you can lose a great deal of money. Much of the
risk is on the seller, particularly if livestock are involved. Many older
farmers do not want to take on this risk. On the other hand, if they do try
such a transition, it is often difficult for them to give up the control
which they must do in order make such a transition.
Although we have had a program in Wisconsin to assist in transitioning,
there has been almost no interest on the part of buyers. It may be that
sellers have an unrealistic business view of their farm.
In our region, the difference between a farm business compared with most
other business ventures, is that people are often willing to receive a very
low return for their investment. But, many existing farms, while they do
provide a modest return for the current owner, can never provide an income
for a new entrant.
Those farms are either going to be sold as rural property, or are going to
be combined with other parcels to expand existing farms. In our area, there
was a window of opportunity open about 5 years ago. At one time we even
considered the possibility of setting up a dairy here at Misty Ridge that we
would lease out. We own 150 acres of mostly tillable land. The neighboring
land, much of it CRP and "scrub" land was for sale about 5 years ago. That
property would have enabled us to expand to 330 acres, with additional
grazing land and an outstanding winter weathering area complete with winter
accessible spring. We decided we did not want to take such a risk and passed
on the opportunity. That 180 sold for around $160K. Five years later it was
divided up and yielded well over double the initial investment. But who
could guess that the market would move that rapidly?
Sincerely,
Rick Williams
Misty Ridge Farm
contract dairy heifer grazing and direct marketed farm meat and produce
Viroqua, WI
www.mistyridgefarm.com
