Released April 29, 2008

MORRILL, Kan. – Ever since he learned his way around a computer, Darin Grimm has known he has a knack for technology. After high school graduation in 1992, he chose a career in computer network support, which reinforced that ability and interest.

Three years later, however, changes occurred at his workplace that sparked a reexamination of his career choice. That’s when he realized he could incorporate his ability and interest in technology into his parents’ farming operation – if that’s what they also wanted.

Darin’s dad, Gerald Grimm, has farmed his whole adult life. Having worked previously with his father and brothers, he welcomed Darin into the farm business. If his only son had continued down a different path, however, that would have been all right, too, he said.

The day an adult son or daughter takes on an active role in the family farm can be a happy occasion. But, the transition also can be fraught with difficulties, said Kansas State University agricultural economist Rodney Jones. Too often, the stresses of running a farming business, intertwined with family relationships, can lead to misunderstandings and worse.

Jones, who is a farm management specialist with K-State Research and Extension, recently teamed with agricultural economist Duane Hund of K-State’s Farm Analyst Program to present a series of workshops called “Keeping the Family Farming.”

With the Grimms, the fact that Darin’s sister, Brenda, lives with her husband and children in Ohio probably helped with the transition. Things get more complicated when several siblings or other family members want various roles on the farm, said LaVell Winsor, Farm Analyst program economist who works with the Grimms and other farm families in northeast Kansas.

Gerald Grimm and his wife, Ruby, along with Darin and his wife, Marci, currently farm about 2,000 acres of leased and owned land. They grow corn, soybeans, wheat and sunflowers and have a cattle-feeding operation.

Ruby downplays her own role in the business, saying she’s “a bookkeeper and a go-fer.”

“They have a very progressive – above average – bookkeeping system,” Winsor said.

Darin and Marci have three young daughters – Ashley, Brianna and Megan. They are expecting a fourth child this summer.

Where the farming operation stands financially and where family members want it to be in the future are important considerations for any farming operation – as are the decisions on who is responsible for what, and how much responsibility he or she has, farm analyst Hund said. Much of it comes down to good communication and record-keeping.

“For many farms and ranches, this planning for the future of the business is very informal – sometimes too informal,” K-State’s Jones said. “It often starts with a consideration of current resources. Activities and enterprises are then selected to ‘fit’ the existing resources. In many cases, vague goals remain in the minds of the individual managers or owners.”

Often, a better approach is to develop a more strategic and participatory management style, he said. The management team and other stakeholders begin with a shared vision of where they want the business to go. The vision then focuses on a concrete mission, to be accomplished through carefully considered and documented long-term objectives and short-term goals.

No one structure is best in all situations, Jones said, adding that many small operations run on the hierarchical system. Whoever holds the power (often the father) has the final word.

“But that doesn’t always work for growing family businesses, especially if they’re a multi-family business,” Jones said.

In the Grimms’ case, once Darin came back to the family farm, the division of responsibilities evolved, Darin said. Buying inputs and seed has largely fallen to him.

“The cattle – that’s Dad’s thing,” Darin added.

“Until the last year or so, I hadn’t turned much over to Darin. He’s grown into the position,” Gerald said, noting that at age 59, he isn’t thinking yet about retiring.

On the other hand, Darin brought different skills to the farm, he said. As a result, the family has been able to accomplish more.

“I’m not the tech type person that he (Darin) is,” Gerald said.

“Sometimes we don’t see the advantages, but we try it,” Ruby said. “Sometimes it works, and other times it doesn’t.”

Such was the case when -- at Darin’s suggestion -- the Grimms incorporated precision agriculture technology into their operation. To help with the endeavor, they hired an employee. The precision ag results weren’t everything they’d hoped, but hiring the employee turned out to be an excellent idea. That employee, Klint Beyer, is married to the Grimm’s niece, Kara, and brings a lot of mechanical expertise to the operation, Darin said.

Since then, the Grimms have also hired a second employee, Fritz Strahm.

An example of when things don’t go so harmoniously, said K-State’s Jones, is when a 23-year-old college graduate comes home to farm with his parents and gets paid an hourly wage.

“That can be kind of frustrating, especially if it’s not made clear when the son or daughter can have more input and responsibility,” Jones said.

He encourages families to develop something more than a vision for the farm and the components needed to carry it out. He suggests developing an organizational chart that makes clear what is expected of everyone involved. This assures that each family member understands his or her role in the business and the roles of others.

Sarah Fogleman, former K-State agricultural economist, advises families to hold routine meetings – but not at the kitchen table. Even if it’s a small extra room in a barn or other building, a space away from family members’ homes is best for discussing business. It’s also more comfortable for non-family employees.

“The Grimms have an advantage in that this family also is good at communicating with one another,” Winsor said.

In addition, having Darin involved makes it easier for Gerald and Ruby to get away, particularly to visit their daughter Brenda and her family in Ohio.

“I don’t have to leave a list of things to do,” Gerald said.

Economists Jones and Hund are now planning another statewide series of farm transitions workshops. Their initial sponsors were the North Central Risk Management Education Center, Farm Credit Services of Kansas, AXA Advisors, and K-State Research and Extension.

Sidebar:

Farm Analyst Outlines Keys To Successful Farm Transitions

PAXICO, Kan. – Over the years, K-State Research and Extension’s Duane Hund has worked with a lot of farm families – helping them to identify what works and what doesn’t in their operations, as well as assisting in their setting up effective accounting practices.

During that time, said Hund, who is with K-State’s Farm Analyst Program, he’s found basic commonalities that set successful family farms apart from those that struggle. They include:

• The ongoing interest in and ability to truly analyze the farm’s finances,

• Interest in and understanding of how to evaluate opportunities,

• Interest in and following through with planning for retirement, and

• Interest in and following through on developing an estate plan that is equitable.

“It’s not enough just to say that these actions are important,” Hund said. “They have to actually be planned and carried out in order to be effective.”

Tied to these five main areas are a host of subjects that Hund calls the Five E’s. They include willingness and follow-through in:

• Evaluating each family member’s wants-hopes-needs-fears (an insightful tool),

• Educating family members about different business entities so that all family stakeholders know what’s possible,

• Entertaining new ideas from the successor generation,

• Discussing estate planning concepts and how to get off dead center on a topic no one likes to talk about, and

• Empowering family members to put their game plans into action.

More information on this and other agricultural economics topics is available at K-State’s Ag Manager Web site: http://www.agmanager.info.

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http://www.oznet.ksu.edu/news/sty/2008/family_farming042908.htm

Contacts: Sam Chan, Duane Hund, (785) 636-5462, dhund@ksu.edu Rodney Jones, (785) 532-1957, jonesrd@agecon.ksu.edu LaVell Winsor, lwinsor@ksu.edu