Presentation by Virginia Cooperative Extension's Tim Mize on Farm Profitability and Succession Planning. Presentation given at The Piedmont Environmental Council's "Sources of Funding for Land Management and Land Conservation" workshop on April 23, 2014.

1. Farm Profitability & Succession
Planning
Tim Mize
Fauquier County, VCE

2. What is Cooperative Extension?
• A local extension of the Land Grant
Universities.
• Nation wide.
• 107 offices in the state of VA.
• Program areas:
– Agriculture and Natural Resources
– Family and Consumer Sciences
– 4-H Youth Development
– Community Viability

3. Loss of farmland
• Are farms retirement
funds?
• No dialogue
between
generations.
• Unwilling to transfer
management.
• No willing future
Participants.

4. Farm Profitability
• Are farmers land rich and cash poor?
• Farm real estate (land and structures) is the
major asset on the farm sector balance
sheet, accounting for 84 percent of the total
value of U.S. farm assets.
• 2 million to produce 20 million/reverse for
farming.

5. Farm Profitability
• Fauquier county- 12th biggest agriculture county in
state.
• Cattle calves is the #1 enterprise, 13th in state, 96th
USA(3076)- 434 farms with cattle.
• 78% farms have less than 50 cows, average 30?
• Gross income- $26,686 (2009 19,356) – $13,136.23=
$13,549.77 return to equity, management, and
family labor. (50 cows $22,540)
• 30 cows =75 acres, 50 cows=125 acres

6. Farm Profitability
• What works for Fauquier?
• Get big/ get efficient
• Direct market/branded products
• Niche/high value
• Agritourism
• Farms in the middle? 182 acres

7. Documents for your Estate:
Pick the most important
• Which is most important?
• Advance Medical Directive
• Will
• Life Insurance Policy
• Power of Attorney
• Trust
• Business Organization (LLC or Corp.)
• Estate Tax Management Plan

8. Power of Attorney
• We have a better than 70% chance of
going through an extended period of
incapacity before we die.
• The Executor of your Estate has NO
authority whatsoever as long as you
are alive.

9. First Steps in Estate Planning
• Owner(s) of the property need to decide what
they want to become of the land.
– What do I want to happen?
– What do I need to happen?
– What do I hope happens?
– What do I fear may happen?
• Establish mission statement/objectives/goals
• Evaluate human resources. Be honest.

10. First Steps in Estate Planning
• Communicate that decision:
– What makes these conversations so difficult?
• Perceived as ungrateful.
• One side to the story.
• Heritage and an asset.
• Generations.
• One Truth?

11. Have a family meeting
• Write a shared family vision.
• Write shared goals.
• Seek the help of competent
transition planners.
• Maintain open communication.
• Make no assumptions about the
feelings or plans of others.
• Of all the different parts of Estate
Planning, the Family Meeting will
be the most difficult in almost
every single case.

12. Elements of Your Farm Transition Plan
• Family Meeting
• Financial Plan for Retirement and Long Term
Care
• A Plan with Defined Goals for Involving the
next generation in our plans and the estate
• Legal Instruments (PoA, Will, LLC)

13. • We all know that preserving our farms means
more than permanently protecting the land.
We also must ensure that families who want
to pass their farms to the next generation
have the knowledge and resources to
accomplish this important goal.

16. Programs

17. Programs

18. Programs