Finding the Buyer or Seller
The Center for Rural Affairs, a non-profit corporation located in Lyons, Neb., created the national program Land Link. Land Link offers computer database matching and consulting services, retirement planning, beginning farmer financing, farm business and environmental assessment information assists in transferring family operations to new generations. The program matches new farmers' or rancers' interests with for sale or otherwise available farms and ranches in their database. Users will receive a description of those farms/ranches along with contact information.
Land Link also matches characteristics of a retiring farmer or rancher with the interests of those looking to buy, in their database. After they review your farm or ranch description with you, a copy goes to beginning farmers or ranchers that match those interests, with you receiving their contact information.
After participants match with someone, Land Link’s staff provides examples of other successful matches, and makes suggestions and referrals based on your unique circumstances.
Following are two examples of “Successful Linking Strategies." All principles used in the examples may apply to the acquisitions and transferals of cattle ranches.
Example No. 1:
Beginning farm family sought place of their own on which to raise cattle and three young children.
This ranch couple had been renting a piece of ground and working as employees. The owner/employer wanted to sell. The young couple got a bank loan to pay for the ranch home. The owners provided a 30-year mortgage on a portion of the operation. Annual interest payments were made during the first 10 years.
This arrangement allowed the beginning farmer to use the initial 10 years to build the cow/calf operation. The remaining acres carried a crop share lease with a long-range plan for a purchase. After 10 years the young couple will start paying on the principal. If the owners do not survive, the payments will go to their estate.
Example No. 2:
Beginning farmer found a landowner with a full herd of cows and machinery.
The arrangement began with an initial employment period of 90 days to provide guidance and to demonstrate varying techniques by the older person. A rental arrangement followed the 90-day employment period with an option to buy later. The machinery was valued at approximately $75,100, and a rate of return of 8 percent was decided upon.
An arrangement was also made on the cattle herd. The two parties agreed to a crop share of 60/40. There was room on the ranch for an additional 30 head of cows that the beginner would own and bring to the ranch.
The 60/40 arrangement allowed for a transition of the cow herd. As the older cows were culled, replacement heifers would come from the beginners’ share. The herd would turn over within approximately 10 years.
Visit www.ozarksfn.com for a link to the Center for Rural Affairs. This article first appeared in the Winter 2008 issue of RanchWorldAds Magazine.