Rick's comments:
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.
Dave's comments;
Rick, In my opinion there is very little risk if the potential new buyer
is employed for a year or few before the take over. They need to have a
basic understanding of grass farming but you'll know if they have that
ability and desire quite quickly. Beyond that very little damage can be
done to the land or for that matter the animals if the former owner
stays slightly involved. If this weren't so the system would not have
worked so well in both New Zealand and Australia.
Rick's comments:
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.
Dave's Comments:
I agree the problem in my opinion is that a conventional farm has such a
small profit and such as large investment in equipment and work load
that there's too much cost for a beginner to get involved.
In a grass dairy starting with a sharemilker agreement and then moving
on to something larger both parties make a respectable income and the
transition proceeds.
Rick's Comments:
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?
Dave's comments:
Chances are slim that land prices will drastically decline so adding
land if it can be projected to be profitable will be a good investment.
Capitol Gains tax in selling land is the major draw back so actually
helping a young farmer buy another farm (perhaps joining) by using your
land as equity would be beneficial for both involved. At some point he
could move on and leave an employee with the same desire and ability and
we could do it again.
Once we show the potential there will be good young people available to
expand the system.
Regards,
Dave Forgey
Dave and Helen Forgey
Forgey's River-View Farm, Inc.
6032 W Georgetown Road
Logansport, IN 46947
574-652-2461
forgraze@carrollnet.org
www.carrollnet.org/~forgraze
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The Grass is Greener on Our Side of the Fence.
Sincerely,
Rick Williams
Misty Ridge Farm
contract dairy heifer grazing and direct marketed farm meat and produce
Viroqua, WI www.mistyridgefarm.com
