Young Farmers Optimistic about the Future of the Family Farm | AccountingWEB

Young Farmers Optimistic about the Future of the Family Farm

More than 95 percent of young farmers and ranchers surveyed at the Farm Bureau’s Young Farmers and Ranchers annual meeting held in Des Moines, Iowa, last month said that they see a future for their children in farming and ranching, the Prairie Star reports. Last year 89 percent saw a future for their farms. “The survey results show that young producers in general are optimistic about the future of agriculture,” said American Farm Bureau Federation President Bob Stallman.

Ninety-one percent of the 330 respondents to the survey said that they are better off than last year and 77 percent said they are more optimistic than five years ago. That number was slightly lower than last year.

The top outside services used by the family farmers surveyed were accounting services (38 percent) and crop advisers (34 percent). Fewer husbands but more wives, worked off the farm in 2006 compared to last year and 2004. The totals for 2006 were 8 percent for husbands, 43 percent for wives and 25 percent for both. The primary reason for having at least one spouse work off the farm, the Prairie Star says, is to obtain health insurance benefits.

Running the family farm as a family business was Susan Ingram’s goal when she opened a horse stable on her portion of her family’s farm seven years ago, the Cincinnati Enquirer reports. After working in corporate accounting and owning horses all her life, she thought she was well prepared for the business, but when she was forced to take a second job to pay expenses, she turned to a SCORE volunteer, Jack Espelage, for help. SCORE is a resource partner with the U.S. Small Business Administration.

Espelage, retired from running coatings and manufacturing companies, saw that Ingram was trying to stay within the traditions of her family. She was not just in business to make money. He set up a spreadsheet so that she could see her cash flow and counseled her on how to collect past-due rent payments.

Ingram told the Enquirer that collection was particularly difficult because the tenants were friends, as well as customers. Espelage coached Ingram through role playing so that she could practice her collection techniques. Ingram has also found ways to cut costs and now has a positive cash flow.

John Baker, Administrator of Iowa State’s Beginning Farmer Center, says that family farmers need a transition plan that is similar in many respects to the plans many small business owners develop, according to a report on Agriculture online. He suggests that farm families analyze the physical, financial and personnel assets available to the business and ask:

  • Is there room for all?
  • What is the actual economic return?
  • Does it fit into the context of current agricultural economic trends.

Baker emphasizes communication between family members, developing ways to resolve conflicts and make management decisions. An estate plan should be set up that reflects the “sweat equity” of heirs. The needs of retiring generations should be taken into account.

The young farmers and ranchers attending the Des Moines meeting accept the fact that they will be farming without government subsidies, the Prairie Star says. In fact most, 79 percent, prefer to rely on markets. The biggest change from last year is in the number who will be planting biotech crop varieties – 58 percent, up from 45 percent.

The group said that the two highest priorities for government agricultural policy, and older farmers agree, the Prairie Star says, should be setting an energy policy with a greater role for renewable fuels and strengthening private property rights.

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