Rural Lands At Risk In The West As Ranchers Prepare For Retirement

  FEB 2, 2018

Winds were gusting over 45 miles per hour on an overcast day at the Dunmire Ranch in southeastern Wyoming. Black cows grazed in the distance with wind turbines lined up on the horizon. At the center of ranch, young colts milled around the corral. Gator, a 14-year-old blind and deaf dog, barked, guarding the home of rancher Les Dunmire.

Inside the house, Dunmire put on his dirt-caked cowboy hat and boots, as he told me how he’s owned this ranch for just over 30 years and that this lifestyle goes back generations.

“My dad had a ranch in Iron Mountain Wyoming and my granddad had a ranch in Sioux County, Nebraska,” Dunmire said.

Land on the Dunmire Ranch
CREDIT COOPER MCKIM/WYOMING PUBLIC RADIO

 

Back when he started in 1987, Dunmire only had a few hundred head of cattle. Now, he owns over 100,000 acres and 1800 head of cattle. But at 66, Dunmire is starting to take a step back from it all.

“I always tell people that I’m going to work as long as I can and then become a burden for my children,” Dunmire said,”but seriously, as we get older we do a little less. As we get older, we transfer more of the day-to-day operations of the ranch to our children.”

Dunmire said he sees passing on lands as the last responsibility of a rancher. “We’re trying to get it to the next generation, or the next two generations, intact with the smallest amount of tax pain that we could possibly have,” Dunmire said.

He’s been preparing for succession now for 26 years. It’s required an accountant and lawyer to figure out the best way to keep his kids from drowning in estate taxes. One strategy has been to divide the land into six legal entities. To put the situation in context, Dunmire recounted the story of how his dad came into his ranch. It also serves as a worst-case scenario of poor estate planning.

Sign at the entrance of the Dunmire Ranch
CREDIT COOPER MCKIM/WYOMING PUBLIC RADIO

 

“There was kids that wanted to stay there, but when the grandfather passed away he had not done any estate planning or gifting or anything to get ready to pass it on. And they had to sell the ranch, basically, because of [the] tax situation,” Dunmire said.

He’s far from the only one going through this process. In 2012, the average age of farmers and ranchers hit a record high of 58 years old. According to a report from the National Young Farmers Coalition, 63 percent of farms are on the verge of transitioning. Experts say the U.S. needs to be prepared for a massive land transfer in the next decade.

John Hewlett, a farm and ranch management specialist at the University of Wyoming, is one of many who working to smooth that transition.

“A lot of folks need help in terms of transferring ownership, worrying about how to best structure their farm or ranch in terms of tax, as well as making sure that the ownership is transferred such that the ranch or farm can be viable after the transfer,” Hewlett said.

He said easing the transition isn’t just about helping the older generation, but the younger one. That’s increasingly tough with fewer and fewer young people joining the industry. In 2012, only 6 percent of farmers were under 35.

“They become educated and they have other income opportunities as a result. It’s a lot different than 50 years ago when a lot of people’s focus was to be on the land, and to do some kind of jobs on the farm. It was part of the family’s activities,” Hewlett said.

Principal operators by age group
CREDIT USDA CENSUS OF AGRICULTURE

 

He’s helped create a website full of resources on steps to take in land succession. There are many other organizations offering seminars, programs, and workshops as well, like the Plank Stewardship InitiativeUniversity of Wyoming Extension, and the Western Landowners Alliance. Lesli Allison, executive director of the WLA, said her organization wants to help lower the barriers to entry for young people by supporting policies like loan debt forgiveness programs for those weighed down by student debt.

“As a nation, we need to be looking at policies and economic strategies to sustain these landscapes and make it possible for people to make a living in the rural west, to stay on that land, to raise families on that land, to stay in rural communities in a way that supports both agriculture and conservation,” Allison said.

She said a football field worth of land is lost to development every two and half minutes in the west. And that’s partially private land that supports wildlife, clean air and water, and biodiversity.

Average Age of Principal operators
CREDIT USDA CENSUS OF AGRICULTURE

 

Allison said beginning the process of land succession early is crucial to preserving ranches and farms, whether there’s an obvious heir or not. That starts by simply talking about it.

“Simply raising awareness and encouraging uncomfortable conversations.” Allison said, “they can become quite positive and transformative.”

Back at the ranch, Dunmire drove his red truck through a shallow, ice-laden stream, giving way to an open field with hundreds of cows grazing. A few trotted out of the way as the truck drove past. Dunmire said he’s loved raising a family on the ranch.

“The family is intertwined with the ranch and it’s a great place to raise cattle and kids,” Dunmire said.

And he said he feels lucky to pass that on.

WHO AM I IF I AM NOT A FARMER or RANCHER ANYMORE?

FIND PERSONAL AND PROFESSIONAL OPPORTUNITY.

Let’s face it, transitioning to a niche market or picking up more work is not a solution for every farmer facing hard times. Some will need to stop farming. While that may be hard, it can also be an opportunity.

Outside agriculture, career shifts are often seen as a way to advance, points out Extension educator Megan Roberts. “In other occupations, if we switch jobs, that’s not seen in any way as a failure,” she says.

READ MORE: Shortage of truck drivers means opportunities for farmers 

Here’s a look at how to stop farming and the opportunities that come with the change. Ending a career in farming begins with making a decision.

Mental health practitioner Shauna Reitmeier explains, “In some situations, that decision is something you’re choosing to do on your own without any external pressures, and in some situations, you have to do it in order to sustain. We know that this current environment we’re in, many farmers dealing with commodity prices and weather situations are needing to decide, ‘Do I liquidate? Do I need to sell half of my dairy cattle, or not?’ ”

Anxiety and worries about the unknown are totally normal, she says. To keep from getting overwhelmed, it is important to recognize what is in your control and what you can’t control.

Keeping your values front and center as you make decisions may ease the heartache of difficult choices. Ask yourself, what are the two or three values that drive you to get up every day?

“Yes, farming is a way of life and we identify ourselves with farming, but it’s really those strong values that get you up every morning to continue to farm. Those values don’t change based on whether you’re farming,” Reitmeier says.

“It isn’t the farm that makes the farmer – it’s the love, hard work, and character,” says Brenda Mack, who lives on a farm and works as a licensed independent clinical social worker.

After making the decision to end or pivot your farming career, don’t expect to bounce back overnight. Some people experience real grief and loss over the change, and that’s OK, says Reitmeier, who grew up on a farm. Be prepared for the following range of emotions as you make decisions, develop plans, and put them in place.

  • “Normal” functioning
  • Shock and denial: Avoidance, blame, fear, numbness
  • Anger: Anxiety, embarrassment, irritation

“You might be having more fights with your spouse or get more irritable with the lenders you’re having conversations with,” Reitmeier says.

  • Depression and detachment: Blahs, helplessness, lack of energy
  • Dialogue and bargaining: Reaching out to others, desire to share one’s story, struggle to find meaning for what happened
  • Acceptance: Exploring options, a new plan in place
  • Return to meaningful life: Empowerment, security, self-esteem, meaning

The stages of grief may not all come in this order. “One day you’re angry, the next day you’re feeling a little acceptance, another day you’re depressed. You’re all over the place,” Reitmeier says.

Mack remembers watching her own parents process their decision to retire from farming. The transition was especially hard for her proud, third-generation row-crop farming father.

After retiring, her dad felt as though he didn’t fit at the table of neighboring farmers discussing their problems at the local café. He struggled to find where he belonged. Conversations with his wife, other farmers, his priest, and a mental health therapist all helped him find a new, broader identity for himself and a renewed sense of purpose.

“I was really proud of my dad for having the understanding and ability, and not feeling shame in reaching out to a formal provider because that can be really terrifying. It can be hard to go see a mental health provider, but it’s what he needed at that point in time,” Mack explains.

Mack acknowledges mental health resources aren’t always easy to find in rural areas.

In addition to seeking professional mental health services, there are other strategies to cope with the massive changes that come with the end of a farming career.

Keep in mind who you are in addition to your role as a farmer. Farmers wear many hats: parent, child, sibling, community leader, church member, history enthusiast, 4-H leader, to name a few.

Building self-awareness can help you discover you are more than what you do. If you’re struggling to get out of the grief and loss process, Reitmeier suggests knowing your body cues. Sensing when they become different can be helpful. Also, keep tabs on your relational, cognitive, and physical health

LEARN MORE

Cultivating Resiliency resources are presented by American Agri-Women, District 11 Minnesota Agri-Women, University of Minnesota – Women in Ag Network, and Upper Midwest Agricultural Safety and Health Center.

umash.umn.edu/cultivating-resiliency-webinars/

The 7 Critical Skills Of Successful Strategic Thinkers

Life as business are both long-term races. They require to fully commit to the present while seeing through years ahead in order to define and achieve the best of the future. They require to embrace today while deciding on objectives, understanding the options, creating possible alternative scenarios and situations and determining the direction to be followed. They require strategic thinking.

Defined as the process that determines the manner in which people think about, assess, view, and create the future for themselves and others, strategic thinking is basically the ability to know what you want to achieve and how to achieve it. Developing a strategic approach is not always easy as it is as much a mindset as a set of techniques. However, it does result in the main difference between an average and an exceptional achiever.

Success and achievement can not just be left to hazard.  In a study conducted by Harvard Business Review, 97% of the 10,000 senior executives asked chose strategy as the most critical leadership behavior to their organizations’ future success. Strategic thinkers are able to imagine the big picture, identify the possible impact of their decisions and project the way to get there. These are the seven traces that define them all.

  1. Vision

Strategic thinkers are able to create and stick to a very clear visioning process. Using both the left (logical) and right (creative) sides of their brain, they defined an ambitious but rigorous vision of what needs to be achieved. A clear, positive and big enough vision is what inspires for action and pulls in ideas, people and other resources. A vision is what enables commitment and moves the needed energy to make it happen. In this way, strategic thinkers are visionary leaders. They see the potential for how the world should exist and take steps to get there.

“The purpose of life is a life of purpose” (Robert Byrne)

    1. Framework

Vision should be carefully embedded within a framework. Successful strategic thinkers have the ability to define their objectives and develop an action plan with goals broken down into tasks specifically measured in terms of timeline and resources. They set up deadlines and they commit to them. Self-aware enough, they are conscious of their own biases and factor their own circumstances, perspectives, and points of view within this framework. This helps them to ensure that their own backgrounds are not an impediment but a boost to their goals. Their framework envisions always a plan A, B, and C that drives them all to the same expected result. They factor all possible ways within a reasonable timeline for action.

  1. Perceptiveness

Strategic thinkers are able to look around and understand the world from all the different perspectives. They listen, hear and read between the lines. They observe before forming a judgment and absorb and make use of the different angles that could be helpful for better guidance. They understand peoples’ intentions, hopes, and desires and play with them in a symbiotic way that could help all to achieve greater. They recognize internal and external clues that may sharp and clear the direction to be taken. They are able to grasp the perfect match and put together all the pieces of the puzzle. They are able to feel the breeze because they know that big achievements are just the collection of all the different angles.

  1. Assertiveness

They are good at decision-making. After a comprehensive evaluation, they chose the way to go and walk firmly into it without vacillation. They may doubt but they do not let the doubts to fog the vision. They communicate effectively what they want and need by using clear orders while simultaneously respecting the thoughts and wishes of others. They are able to react appropriately under pressure and reduce anxiety by sticking to their decision and avoiding excessive questioning. Through high levels of confidence and self-esteem, they receive both compliments and critics in a constructive way. They defend their points of view without harming others and manage to convince without force or hostility. They are easily followed.

“Your attitude, not your aptitude, will determine your altitude” (Zig Ziglar)

  1. Flexibility

Strategic thinkers are clearly aware of their weaknesses so they are committed to seeking the advice of others. They are humble enough to be flexible and twist their ideas and framework as to truly achieve the desired vision. They do not confuse flexibility with lack of structure. They accept the rules of the game because they are aware that without rules there is no fair game. Strategic thinkers are flexible thinkers what allows them to shift gears and think about something in more than one way and develop different strategies. Along with working memory and self-control, flexible thinking is one of the three main executive skills allowing to properly manage thoughts, actions, and emotions to get things done.

“Life is a sum of all our choices” (Albert Camus)

  1. Emotional Balance

Strategic thinkers are able to balance their emotions in a way that always favors the achievement of the ultimate goals. They are aware of their emotions, they are able to name them when they arrive, they do not react to them as an important element of accepting them and just when they are over control of them, they take a decision. Whether they received positive or negative feedback, they are able to deal with it, understand and respond in a way that protects and progresses toward their desired outcome. They are able to control and master the three drivers of any emotional state. They stand tall and breathe fully as part of their physiological reaction. They think positive and look for the opportunity as part of their psychological reaction. They are kind, compassionate and optimistic whenever facing their language response.  Strategic thinkers are tremendously creative but they are able to balance this creativity with pragmatism through a sense of realism and honesty about actuality. They are realistic optimists.

       7. Patience

Strategic thinkers do not ignore that achievement is a long-term ride. Milestones have all a concrete time and moment. And success is the result of a process of strategically planned work and efforts. Strategic thinkers have the ability to be patient. They do not rush conclusions. They do not bet it all at once. They invest their energies in a way that is sustainable and led by a long-term vision. They have learned to wait.

“The two most powerful warriors are patience and time” (Leo Tolstoy)

Don’t Break Rule #1

Raising cattle comes with a lot of rules, but one stands out as most important.

R. P. ‘Doc’ Cooke | Dec 16, 2015

Yes ma’am or sir, there are lots of rules in the cattle and land business. There are several rules that get tagged as Rule No. 1. But the list is topped by one rule which states “Do No Lasting Harm”. Pain often leads to gain. Death does not.

Page 115 of Walt Davis’s book “How Not to Go Broke Ranching” explains a part of Rule No. 1 that needs to be burned into the cerebral cortex of each of us cattle ranchers/farmers. Cattle feeders should have it fire branded on the back of hands as well as minds.

Following one simple rule can avoid a world of hurt to your cattle herd.

The part of Rule No. 1 that I am talking about is “Don’t Make Sudden Changes in Cattle Diets.” Sudden, drastic shifts in rations and/or forage move animals toward a dangerous health cliff.

Remember that cattle do not digest forage or feed. The bugs (mostly bacteria) do the forage digesting and the cattle digest the bugs.

Bacteria that digest the sugars and simple starches found in grain are not the same as the bacteria that digest the sugars and simple starches found in cool season plants and grasses, and are not the same as bacteria that digest the more complex starches (cell wall cellulose) of warm season grasses. Different still are the bacteria that digest woody plants.

The different bacteria needed to digest the various feedstuffs are present in a healthy ruminant (cow). But the numbers vary depending on what the animal is consuming. When feed changes the bacterial species number changes and this change needs time as its major cushion. Major changes need 18-30 days to safely occur.

Fast forage changes especially when moving to higher sugar and simple starch grains, cool season plants, and other immature grasses result in a tremendous ‘kill off’ of rumen organisms (bacteria and protozoa). Performance and animal health head south. Scours is frequently seen as is a lack of cud chewing. The cattle do not seem content. Bad boys (bugs) raise their heads. Clostridial perfringes can take cattle out in a matter of hours, but we can also open up several other ‘cans of worms’ that are expensive.

Plan and manage

Nature tends to work or move in what has been described by Montana’s Ray Bannister as ‘boom and bust’. Walt Davis and I believe and recommend that it is always wise to plan and manage in a way so as to cushion the boom and the bust when it comes to cattle. I think Bannister agrees.

Ionophores (Rumensin and Bovatec) are cushions for high sugar and simple starch feed and forage and cattle health. The same is true of long stem hay especially long stem warm season (C4) hay. The same is true for amounts and time.

Remember that cattle just do not handle sudden changes well if the change exceeds 15 to 20% of the dry matter intake or consumption. Changes from C4 based pasture to C3 based pasture are much tougher than changing from C3 to C4.

Related: Reviewing a few basics might help

Ionophores, C4 hay, and limited grazing time are all more than a good idea when moving cattle onto small grain or pretty fescue, rye grass pasture, etc. The old advice of “never move hungry cattle onto pretty pasture” has not changed. The same is true of grain feeding. Remember that cud chewers take the majority of a month to make successful feed changes.

Cattle health must be and is very important. My phone has been ringing regularly with questions, problems, and sometimes wrecks for most of the last 40 years. Lack of knowledge, planning, and execution are usually evident. The weather often gets the blame when the mirror would reveal the demon.

Optimal health may be less than a necessity; “pretty close” is where we likely need to be almost every day throughout the year. Setting goals for cattle health is a requirement of profitability. Annual profitability is a requirement of sustainability. Goals without execution are no more than dreams.

Walt Davis says that if we don’t know what we are doing it does not make a damn what we do. I agree with Walt but when it comes to cattle we had better know or be plugged into someone who does.

Out in the pasture cattle are made to move and what they ate yesterday needs to be real similar to what they eat today.

The ‘take home message’ for all of us is to think, learn, plan, execute and don’t forget the rules.

Think and grow rich.

Overcoming Barriers to Entry for the Next Generation of Ranchers

By Dan Childs
Senior Agricultural Economics Consultant

Posted Nov. 6, 2019

 

The U.S. Department of Agriculture has been saying for years that the average age of the American farmer is going up. The latest estimate of the average age is 59.3 years, as the baby-boom generation gets older. As a result, it has been estimated that 70% of the land in agriculture will change hands by 2031. This is a startling forecast and one worth contemplating in terms of how the transition will occur.

The number of farmers and ranchers in the United States has been decreasing, with the latest estimate just a bit more than 2 million in total. Fewer children are being raised on farms or ranches, too, and many of those who have are choosing other occupations, with no plans to return to the farm or ranch. Young people who have developed an interest in agriculture but do not have farm roots face a variety of barriers to entry as beginning farmers.

According to the balance sheet of agriculture, the total value of all U.S. farm assets is just over $3 trillion. When divided equally among the estimated number of farmers in the U.S., the average investment per farmer is $1.5 million, with the majority of that being in land. So how does an interested young person get started, when the day one could buy land and expect to pay for it by working it is long gone?

70 percent of the land in agriculture will change hands by 2031. This is a startling forecast and one worth contemplating in terms of how the transition will occur.USDA estimate

LAND: OWN OR LEASE?

It is generally agreed that the biggest barrier of entry to agriculture is the price of land. When the price of land prohibits entry into agriculture, what is the best alternative? Typically the answer is to lease it from a landowner. Lease payments are usually much lower than land payments, even in today’s low-interest-rate environment. However, leasing does come with challenges. Often landowners will only negotiate one- to three-year terms. It is usually not feasible to develop infrastructure through permanent structures or invest in long-term soil health improvements with lease terms no longer than three years. Aging farmers need to be more amenable to longer term-lease agreements or willing to recognize improvements lasting longer than the lease term by cost-sharing or including a refund clause if the lease is terminated.

OPERATING CAPITAL AND DEBT CONCERNS

A second barrier common among many people wanting to have their own farm is operating capital. Granted, there is a greater awareness by some lenders such as the Farm Service Agency and the Farm Credit System, which have created special credit standards for young, beginning and small farmers and ranchers to be able acquire financing. However, then debt becomes a concern. As noted in the below figure, U.S. farm income has been somewhat of a roller coaster. Managing debt in such an uncertain landscape can be very difficult.

ChartU.S. Net Farm Income 2000-2019 Source: USDA, Economic Research Service, Farm Income and Wealth Statistics

PROFITABILITY AND RISK MANAGEMENT

This brings us to a third barrier: the lack of consistent profitability. The perils present in production agriculture are many. At the end of each day, every agricultural producer must be an astute risk manager. First and foremost, weather risks could be at the top of the list, with markets or commodity prices not far below, followed by government policy, including regulations, trade, tax and labor laws. Many other risks exist that challenge consistent profitability. Considering all these factors, it becomes apparent that agricultural producers truly have a genuine passion for the work they do and the contribution they make to feed the world, despite the risks.

ENSURING THE FUTURE

The U.S. has not had to depend on another country for food, and that is a great blessing. We have achieved national food security because of the work ethic and productivity of American farmers and ranchers. Yes, there are obvious reasons for the U.S. to trade with other countries and benefit from our comparative advantage. Fair trade between countries helps both consumers and producers.

Much work lies ahead for the U.S. as we navigate the transition of farmland to the next generation. It is paramount that the transition is made to people who have the same passion and dedication to production agriculture as past generations, who have made U.S. agriculture the envy of the world.