There comes a time in the life cycle of agriculture property when it has become fragmented or family asset management has become distant enough that thoughtful owners recognize something needs to change. All too often owners of “family ground” decide, in frustration, that it is easier to potentially split cash than land ownership and so the farm/ranch is put up for sale. This doesn’t have to be the case.
All across the country there are licensed professionals who specialize in the long-term management of farm and/or ranch properties for the benefit of the absentee owner. These are folks who dedicate their careers to the sound stewardship and management of land for families who have had the benefit of owning agricultural assets.
Let’s consider three questions you should ask yourself when considering if professional farmland management is the right option for you:
WHY SHOULD I HIRE A FARMLAND MANAGER?
The cycle of farmland ownership and management often starts with a farm family who spent their lives working the land. Over the course of time, the land is paid off and circumstance has caused most—if not all—of the family members to go “to town” for employment and the farm is rented to a neighbor. The neighbor almost always does a great job and helps keep the land productive. However, time is passing for all parties and there eventually comes a time when change is needed to ensure the farmland remains productive, and in the family, into the future.
One main reason to hire a farmland manager is to bring stability through the process of transition and change on the farmland as well as within the ownership family (incident to capital needs, portfolio management, death, etc.). There is much at stake when change occurs and having an individual or company that works daily with agriculture and looks out for the best interests of the land is critical.
Another important reason to consider having a farmland manager involved is the neutrality and unbiased direction that they bring. This will aid the ownership in the reduction of emotional and decision making risk that is common with generational assets that are owned between multiple family members. We call this risk “family dynamics,” which is often present with family farmland ownership. Having a trusted advisor at your side to help make common decisions to protect the asset will ensure that the land continues to provide as was intended from the beginning.
IS IT THE RIGHT TIME?
When considering how best to manage an agriculture asset, one of the most important questions may be “is it the right time” to get professional help? We have heard the old saying, “timing is everything,” so ask yourself the following questions:
How is my communication with the farmland tenant?
Do I receive sufficient information about the crop production?
How comfortable am I marketing the production (crop/share lease)?
What is the current value of the land compared to the market cash rent?
Is our ownership group able to make a decision together or has it become too fragmented?
Who will lead the ownership group in the future?
Who can be trusted to help ensure the land is productive?
These questions, and more, can offer the ownership an opportunity to introspectively consider the chance to sit down with a farmland manager and determine if the time is right for additional management help on the farm and/or ranch.