Will Dairy Farms Continue to the Next Generation?
The dairy farm industry is aging. According to the USDA National Agriculture Statistics service, more than 19,500 dairy farmers are 55-years-old or older. Many industry experts expect a significant generational turnover on dairy farms in the next 10 years.
A new MILK Intelligence survey shows not all farms are welcoming back the next generation. Of the producers surveyed, more than 24% said the next generation has no plan to return to the farm. Another 18% of farmers included said they weren’t sure if the next generation will return to the farm.
Whether the next generation of your family plans on taking over the business or not, it’s critical for farm families to have a succession plan. Only a few of the producers included in the survey have a finalized one in place. More than 81% of respondents said they don’t have a succession plan. Of those, 50% said they are working on one. A long and often tedious process, the drafting of a plan requires professionals. Of the farmers who either have a plan in place or are working on a plan, 73% of them used an attorney to draft the document.
A common element of a succession plan is a way to provide the older generation retirement income after they’ve transitioned management of the farm. A South Carolina dairy farmer is concerned about this aspect of succession. “My biggest concern is how to have enough to retire comfortably and let my son take over without being overloaded with debt,” he said. Of the farmers surveyed, more than 45% have a retirement plan in place.