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Unit 3: Managing the Farm/Ranch Business for Long-Term Success

CONSOLIDATION AND RETIREMENT

The final phase of the business life cycle is consolidation and retirement, including transfer of the farm business to the new owner/manager. This is the point at which the business has matured and the owners are ready to think about retirement and how to access business assets without having to shut down the business or sell the farm. You may be wondering how relevant these topics are to your work as an advisor or consultant. Is this final phase of the business life cycle something that you will encounter or be asked about? If demographics are any indicator, the answer is yes, most definitely.

The 2012 Ag Census shows an aging farm population. According to census data, the average age of American farmers is 58 years, up 1.2 years from 2007. In addition, 33 percent of farmers are now of retirement age (65 or older), and only six percent of principal farm operators are 35 or younger. In addition, it is estimated that 400 million acres of farm and ranch land will be transferred to new owners in the next two decades. How much of that land will remain in agricultural production?