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Latest from Young Farmers

Succession Strategies for Beginning Farmers

An important new report by Michigan State University highlights the issue of farm succession after retirement, which is of much interest to new, beginning farmers. How might this apply to those of us planning a career in farming?

First of all, a large turnover is expected soon among longstanding farmers surveyed in Michigan. According to the report, 40 percent of small-farm owners in the state are over the age of 65, and about 35 percent of Michigan farmers plan to retire in the next 10 years. As farmers retire, the critical question of who will continue to run the farm is raised. Michigan Governor Rick Snyder’s 2013-2014 budget recommendations include investment in local food hubs to support an expanded, demand-driven good food economy. Michigan’s investments in its agricultural sector indicate that growing the next generation of farmers should be a priority.

The Michigan State study found that nearly one in five of the farmers surveyed anticipate retiring in the next five years, and owners of larger operations are more likely than owners of smaller farms to engage in succession planning to prepare for retirement. Children or other family members are often the designated successors, but for those who have no children to take over the farm, “…a sizeable subset of operators will turn to alternative succession planning that includes leasing property or outright sale of the farm.”

The study found that age is often indicative of both the expected time of transfer of ownership of the farm and the stage of succession planning. For example, the Michigan State researchers demonstrated that owners over 75 years of age are more likely to have identified a successor, whereas those between age 20 and 39 are far less likely to have made such plans. Also, the report shows that farmland changing hands due to retirement is most likely to occur at small- and medium-sized operations.



Photo by Sifter on Flickr

A huge change is expected among Michigan farmers over the next 10 years, when 35 percent of farm operators plan to retire from farming, and over the next 20 years 60 percent intend to retire. More than a quarter of the Michigan farm owners who are 75 or older have not chosen a successor, and indicated that they are likely to either sell their land or leave it idle. Nearly two-fifths of the farmers surveyed plan to keep their businesses whole under one unit after their retirement. But the rest of the farmers have different plans for their land: One in four foresee dividing property among their heirs, nearly 20 percent plan to sell their farm, and 17 percent will retain operations as one unit under more than one heir and will divide the proceeds across heirs.

From this report, it appears that Michigan may be facing a rapidly shrinking number of farmers in the state, at a time when farmers are scaling up production to meet a growing demand for fresh, locally-grown food. In order to prevent the possible loss of farmland, and to take advantage of the growing market for locally grown foods, new generations of farmers need to move into farms of retiring owners. Young farmers not just in Michigan but around the country should take note of this important report and the need for young farmers to step into the shoes of retiring farmers and growers.
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