I grew up on a small dairy farm in Doerun, GA, a map-dot town with a population of 722 people as of 2021. Doerun is an agricultural community, and like most rural communities in Georgia, the economic driver is agriculture. Generation after generation, family farms have been in operation in some form or fashion since the town was established. I can personally take you to farms that my Great-Great-Great grandfather stumped with a mule over one hundred years ago. (Side note: How he did that, I will never know. I stumped 10 acres with a Case 980 4WD backhoe, and it took eight weekends and some afternoons to get it done.) As you can imagine, everybody knows everybody, and everybody is good ole salt of the Earth people who work hard all day so that the world can have their goods from blackberries, blueberries, corn, cotton, peanuts, pecans, produce, soybeans, and wheat. I’m sure I am missing a crop, and I apologize to any local farmer whose crop I did not mention.
This group of men and women are the most amazingly optimistic people on the planet. I’m sure if you were to ask them if the cup was half empty or half full, they would tell you, “If you angle it right, it may be overflowing.” In my lifetime, I have seen them overcome the worst-timed hurricanes, pigweed invasions, droughts, floods, and skyrocketing fuel and fertilizer prices. Their input costs have gone through the roof over recent years, and cotton prices have stayed relatively near the same price as in the 1980s and 90s.
However, the agricultural sector is now grappling with a new dilemma—the successors of many farming operations are not as attracted to the farming lifestyle as previous generations. Faced with this predicament, some farmers contemplate selling their equipment and land to retire comfortably.
At Golden Shield, we offer an alternative solution to the Ag Successor Dilemma that has the potential to yield more for the exiting farmer. Our approach involves packaging the entire farming operation as a business and selling it as an operational entity. Structuring the deal in this manner allows the farmer to leverage their leased land and years of profits, aiming for a more tax-efficient strategy at the exit. The key to success with this strategy lies in careful planning, ideally starting 2-3 years before the proposed exit date.
In future blogs, I'll delve into more strategies that can be incorporated to make this solution a reality.