How do beginning farmers and ranchers connect with the record number of retiring producers? What should be a straightforward question with a straightforward answer isn’t always so simple.
Recent research by Oregon State University, Portland State University and Rogue Farm Corps found that the average age of Oregon’s farmers and ranchers is nearly 60, higher than it’s ever been. As a result, 64 percent of Oregon’s farmland — 10.45 million acres — will change hands in the next 20 years. Yet the majority of Oregon producers might not have comprehensive succession plans, which means this land is not guaranteed to stay in agricultural production.
Estate taxes, attorney fees and family strife can come with any estate, but they are especially likely and costly in an unplanned estate. As one rancher said: “either you pay the attorney now and have something left over for your kids, or you pay it all to the state after you die and you burden your family in the process.”
Land-rich but cash-poor farmers and ranchers often sell their agricultural land to pay estate taxes and divide the estate among multiple heirs, jeopardizing the future of the business that created this wealth. One farmer asked: “if the first generation spent their lives buying the asset, how can they help the next generation not have to pay for it again?”
In a recent series of agricultural succession workshops around the state, attendees included not only retiring producers, but first-generation farmers and ranchers without property to inherit. Among them was Aimee Danch, a Jackson County rancher in her 30s.
Aimee grew up in a semi-urban area, but was always drawn to agriculture. Fearing it wasn’t a viable profession because she wasn’t born into it, she worked on and off ranches until apprenticing at San Juan Ranch in Colorado, where she finally decided there must be a way to make a living. Aimee couldn’t stop ranching. “I feel most myself when I’m doing this work,” she said.
She went on to manage a 600-head cow operation with upwards of 1,000 head of finish beef for a company in California. After 4 years, she met her husband Jeremiah Stent, a ranch manager in Central California, and together they decided to form their own land and cattle company, Pacific Grasslands LLC.
Business has grown steadily for them. But one thing they couldn’t do during the decade of amassing the skills and experience necessary to successfully run a livestock business, is save enough money to purchase land. As Aimee explained, “You simply cannot legitimately learn the skills and save or raise the money for a down payment at the same time.”
Aimee and Jeremiah now raise their 1-year-old daughter outside Jacksonville, running several hundred head of cattle on more than 10 leases in Oregon and California. None of their properties are contiguous and each has a different landlord. The decreased efficiency of this model and the inability to scale due to a lack of access to large parcels makes it nearly impossible to acquire the capital they need for a down payment.
They know about the mass farm and ranch succession, but wonder, “How do we develop a process that doesn’t depend on luck for connecting retiring ranchers who have solvent ranches and are looking for successors, with qualified first-generation ranchers? Having the skills and equipment isn’t enough when the price of the land is often too high to cash flow with agricultural income alone. We don’t know of any first-generation ranchers who’ve been able to purchase land unless they’re backed by a landowner or benefactor.”
Organizations are working to make these connections. Online programs like Oregon Farm Link connect landowners to land seekers; Dirt Capital LLC in the northeastern states pools capital from private investors to help beginning farmers buy land; and some land trusts help farmers purchase land in transactions that include a working lands easement. These easements prevent development, allow for production, help the seller get cash from their land without having to sell parcels, and make the land more affordable for young farmers.
The Oregon Agricultural Heritage Program, HB 3249, would help fund working lands easements as well as other voluntary tools like temporary covenants and conservation management plans. It also would support succession workshops and a study of Oregon’s estate tax. This bill is an important part of the solution — a starting point. Agricultural land is changing hands, aging farmers want to see their legacy continued, and qualified beginning farmers and ranchers are ready to take it on. We should continue to explore tools and opportunities for connecting generations of farmers and ranchers for the future of agriculture in Oregon.
Nellie McAdams is on the board of the Oregon Association of Conservation Districts and is the Farm Preservation Program Director at Rogue Farm Corps, where she helps create programs for farm and ranch succession planning and the preservation of agricultural land for the next generation. She also works on her family’s hazelnut farm in Gaston, Ore.