Swallowing Your Pride - Can Family Farms Still Afford to Be Split Up?

[shaney]

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[ColevilleH2S]

Yes Shaney your out to lunch. Happiness should be your only motivator. If splitting the farm is only thing that will keep you from wrapping your hands tightly around your moron brother's neck then split it. You will be happier, your wife will be happier, and your kids will be happier. And your brother will be out of your hair.

Some things are more important than money.

[per]

Splitting this 125 year old farm on more than one occasion has been the best thing that ever happened to it. As successive generations come along you find yourself working with cousins and cousins wives and kids. As the previous poster puts it, we are better off with a smaller operation and a happy family than a structure that only has money as its focus. Back to our situation, my cousin and I both expanded afterward and still kept the economies of scale that you talk about. Even if we hadn't we get along a whole bunch better this way making our quality of life much improved. Now in fact it is a bit of a competition which is healthy and we will help each other in a jam like any other neighbor.

So I say you are dining in a fancy restaurant with a shiny facade but small portions of plain food. Another suggestion... get a tripod.

[workboots]

There are so many variables that you leave out, what kind of debt/equity are we talking about with the current 10000. What level of competence and work ethic do these different managers have? Ask an accountant what the most profitable farms in relation to size are out there. They will tell you its the 3500 acre farms with good agronomic management and less debt. Proper understanding of agronomics, business and marketing, mechanics and vast array of other factors is needed. Large farms tend to lack economic efficiency. Not saying a larger farm cant be profitable, once again it all depends on the variables. interesting topic!

[TOM4CWB]

Shaney,

Splitting a 10,000 ac farm is no problem in my estimation...

If folks want to get along there are a dozen reasons they will be in a joint venture that retains some joint economic autonomy while allowing individual decisions that add to the bottom line. The family farm needs extra flexibility when a farm is this large.

Splitting a 3500 ac farm becomes very sticky economically for viability... and Europeans for dozens of generations required the family farm to maintain an viable economic stature that was/is a heritage builder for the generations of previous family that built this farm structure.

I agree with this building of a family farm heritage of/with co-operation. Working together is a state of mind and becomes a part of a healthy family tradition that needs to be reinforced.

So... the answer is both yes and no!

Your break of 10,000 ac is the problem... but the idea itself has real merritt and application in many instances (under 3500ac.)!

[parsley]

"Splitting a 10,000 acre western Canadian grain farm into 3 separate units is economic lunacy at its finest"

According to your reasoning, then it should follow that amalgamating all the agricultural parcels of farmland in Ontario to incorporate a 2Earth Farm would be both practical and profitable.

How do you feel about doing away with private ownership of Ontarian farmland itself altogether and having 2Earth government manage the Eat's mega farm, with Ontario farmers, such as yourself, paid as employees?

The Chinese model.

Too bad you weren't able to visit the managers of their state farms when they were here some years back.

Size was their only objective, as well.

Much of the time, organizational-conversation is meant to design what Western farmers SHOULD be doing. I'm simply trying to be fair,:>} and move the discussion over to what Eastern farmers should be doing so Easterners don't feel alienated. Pars

[burnt]

parsley, you risk upsetting the common thought patterns if you speak like that . . . tsk, tsk

[furrowtickler]

I think sharing resorces is critical to the efficiency of a farm. But so is farming seperately critical to your own "space" - family and ownership.
We use bolth. I farm with my brother and a neighbor. Dad helps wherever whenever he can and we have one part time guy in the fall - after supper and weekends - so dad can go home early watch the ballgame or whatevere(he does not need to put in 16hr days anymore).
We have it set up like this:
we each have our own dirt to farm and the "company" farm has the majority of the dirt. All our machianery belongs to the main farm, neighbor has his own set. We share all machienery with the neighbor when needed.
This set up seems to work well for us but every farm is different with different needs and goals. And yes there is issues with any multi unit farm but if you are willing to work through them, time management becomes much easier and much more efficient. As we all know timing is one the most critical elements to an efficient farm and by sharing resorces and knowledge you increase your efficiency - as long as everyone gets along as best you can.
I still believe a well managed family farm is the strongest farm business unit in agriculutre and most efficient. I see it all around our area and it stands true year after year. In general the coperate farms try to farm more dirt and the FFU's(family farm units) focus more on more production/$ per acre regardless of size. It's a goal on our farm to maximize the production and the value of our production rather then farm more dirt and spreading resorces and time too thin. One thing we do know is that our farm model may not work for the next generation, so time will tell.

[Hopperbin]

I cannot believe that never split is at 40 percent. Obviously 40 percent know nothing of succession planning. Isn't a 10,000 acre Ontario farm sorta equivilent to a 50,000 western Canadian farm?
I voted can split and don't have to work together as you can work together with anyone does not have to be a relative. Actually should not an estate be divided equally among boys and girls, land is different than machinery, machinery is the working part or a farm corporation. If 2 kids don't want to farm and one does then 1 takes over the machinery by earning into, land in my opinion should be split evenly among siblings unless there is other investment assets involved.

[Hopperbin]

Parsley your comments are always good.
You know we are getting to the point the fasted dollar to be made these days is to marry a farmer have a couple kids and divorce him or her. And other siblings which should have had a cut are sol. In the USA they have a name for rich widows now that married into the son with everything, bang my head can't think of it.

[parsley]

Simply trying my best to help with analyzing the lunacy that must be rampant in Eastern Canadian rural areas. After all, their farms have minimized, resulting in small parcels.

We can learn about, and from, their lunacy, can't we.

In the meantime, it's been UFC night. Lesnar. Thunk. And crying in coconut rum. Pars

[vvalk]

Hopper. Talk about destroying a farm 101. Split all the land up between all the siblings no matter what? How could you afford this? One day your farming the next you have to buy out 1/2 or a 1/3 of your land. This will take a generation just to get back to where you were today. You guys who think spliting up the farm is reasonable maybe come down to southern Alberta and see all the Hutterite colonies. In 30 years or less there will be no one farming but them here. What goes in never comes out while all the "family farms" spin their wheels trying to keep afloat buying out family members.

workboots. You say 3500 acre farms are the most profitable. You make $100 an acre profit for $350000. The 10000 or 20000 acre farm makes $75 profit and they make $750000 to $1.5 million prift. Not sure you can compete in the long run.

[parsley]

Okay, can we look at it with another set of eyes:

#1 VValkIV marries
He farms the family unit
All land owned by corp
nasty Divorce
Assets aand Debts split

or

#2 VValkIV
Land @ individual ownership retained by four siblings
sisters and bros who won't farm
rents from siblings
divorce.
Does #1 or #2 best preserve the original family unit?

[per]

It could be argued that having several families working together could lead to divorce.

[parsley]

Agreed, per.

Particularly hands-on working sibling-partners.

My observation is that property **ownership** is crucial to any farm unit.

Two brothers, each with a wife, spells disaster if ownership in not clearly defined. Particularly when their offspring decide to farm.

Farmland ownership is a religion unto itself, and if you do not understand the profund psychological attachment to say, homesteaded land, or 'the family home quarter', wait until you do before you sign a permanent partnership or succession contract.

IMHO. Pars