November 14, 2020 at 7:29 p.m.
In 2015, Moeller retired after 40 years of farming but did not have a successor. He went through the process to find someone with a farming philosophy similar to his own to transition into his farm. Thus, the idea for Next Gen Ag Advocates was born.
Next Gen Ag Advocates was founded in 2018 when Moeller reached out to fellow eastern Iowa farmer Steve Bohr. Bohr is co-owner of Farm Financial Strategies which specializes in estate planning consultation for family transitions. Mike Downey, as associate of Bohr’s, also teamed up with he and Moeller at Next Gen.
Next Gen Ag Advocates now has two offices in Iowa located in Lisbon and Long Grove, and works to help both producers looking for a successor and those wanting to launch production agriculture careers meet up with those who make a good business fit.
“One thing I have observed in the dairy industry is that it is so much in someone’s blood; either you have the passion or you don’t,” Downey said. “We have had interest from as far away as Pennsylvania and Ohio.”
According to a study conducted by the United States Department of Agriculture, over 70% of family farms in the United States will change hands in the next 15 to 20 years, and Next Gen Ag Advocates has developed programs to address the issue for many farm families, one farm at a time. Next Gen works with farmers in Iowa and Illinois and has been working with an increasing number of farmers in Wisconsin. They and Farm Financial Strategies have developed a relationship as a preferred referral provider with Compeer Financial.
“There are a lot of other banks, cooperatives, crop insurance agencies and retailers that share the same concerns that Steve, Glen and I did while putting this together,” Downey said. “What is agriculture going to look like in 15 to 20 years? The trends concern us. I think everyone has a vision of what a family farm is in our generation. But what is that going to look like in the future?”
Downey said larger farms are typically made up of several smaller farms that did not transition well for whatever reason.
“That is not a trend we’re probably going to stop, but we just want to talk with folks and let them know there are other options and ways to solve transition problems and to give younger folks the opportunity to enter the industry,” Downey said.
As the company has grown, Downey has seen multiple farms transition successfully. Downey said if he spoke to five farm couples without a successor, three of them would seriously consider the option of working toward a non-family transfer, such as what Next Gen facilitates.
In the future, Downey said people will see more non-family business transfers when it comes to farms, especially dairy farms.
Downey said retiring dairy farmers sometimes find it hard to believe there are actually young people out there who would be willing to relocate to take over a dairy farm.
“We think there is actually more opportunity in the dairy industry for these kind of transitions than in other types of farming,” Downey said. “The passion for dairy farming is just something you have, it is not teachable.”
Downey and his colleagues work to match those questioning older farmers with the eager young would-be farmers to create a successful non-family farm transition.
“A lot of times, it is that they don’t know how or they don’t know what the options are,” Downey said. “I’ve spoke to a lot of people that said they just figured when the time came, they would just have a retirement sale and pay the tax. We want them to know they do have options.”
Downey said those options are not a one-size-fits-all solution, and each situation is tailored to meet the needs of both the exiting and incoming generations as well as designed to best work with the business being transitioned.
“Several farms we are working with now where the land might transition to the family, but the operation itself might be transitioned to another young couple with the interest in continuing that business aspect,” Downey said. “Often times there are win-win advantages for both sides.”
Downey said for the outgoing generation, there are tax advantages from transitioning a farm over a period of years versus having an outright sale of assets; while for the incoming generation, it is more conducive to transition in over a period of years.
“One of the primary limiting factors for young people entering agriculture is the capital,” Downey said. “Finding financing to buy a whole line of equipment or a dairy facility or a herd of cattle from scratch is very difficult.”
Downey said the concept of non-family farm transfers is growing, particularly among young people desiring to become dairy farmers. They have over 200 young people from all over the country signed up on their list, looking for a potential farm match.
“We are really excited about the matches we have helped to facilitate so far,” Downey said. “Our biggest challenge right now is bringing awareness to the retiring generation, that they have other options besides liquidating the herd or selling off the equipment.”
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