Seeking a better way to sell a sustainable farm

With the cost of farm land skyrocketing in Minnesota and corn and soybean prices at record highs, John Mesko is worried for the future of sustainable farms.

"I just talked with someone today, a guy north of Madison," Mesko said. "He and his wife are in their early 60s and they have no kids. Given the workload on the farm, they don't want to continue at that pace. They want to transition out."

Yet, said Mesko, executive director of the Princeton-based Sustainable Farming Association of Minnesota, "They say they can't find anyone to take it on and do it the right way. The neighbors are all conventional farmers and they are all chomping at the bit to take that land and turn it into row crops."

Passing a farm from one generation to the next is often complicated. Family grudges can get in the way. Medical bills can force a quick sale. Or farmers might not have children to take over. Even if they do, the kids might not be interested in milking cows or driving tractors. The dilemma is heightened when it comes to sustainable farms--whether based in organic food or grass-fed beef or milk--because they involve a particular way of using the land. There is an ideal at stake.

Mesko estimates that nationally, two out of three farms will change hands in the next 20 years. "In Minnesota, that means over 50,000 farms," he said, noting a host of reasons. "Baby boomers, they are farmers too. There is an unusually high number of farmers reaching retirement age." Other factors include the temptation of high land prices and the rising cost of end-of-life heath care.

This has led the Sustainable Farming Association, along with the nonprofit Renewing the Countryside, to begin holding workshops for farmers who want to establish transition plans.

"The worst way to exit a farm, and this often happens, is the husband dies," said Mesko. "The wife is too old to maintain the business or doesn't have an interest and sells to the highest bidder within a month. It's desperate and quick and provides the least return for the owner and is the worst for the land. We want this land, farmed in a sustainable manner, to stay in that model of production rather than going to corn and soybeans. That is what is motivating our interest."

Dave Minar of Cedar Summit Farm, a grass-fed beef, pork and dairy operation near New Prague, wants the same. He and his wife, Florence, live in the house where Minar was raised, on the farm his grandfather bought in 1926. The couple switched to organic farming in the 1970s before there was even much of a market for organic products.

But now, Minar said, "We're both 72 and starting to slow down a bit."

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Dave and Florence Minar and their family.

The couple has five children and a dozen grandchildren--some of whom work in the creamery part of the business--but so far, none want to be farmers. One son even has a hay allergy. "There is nobody in this family who wants to milk cows," Minar said. "Maybe in the next generation. We have a grandson milking on weekends. But he has a good head on his shoulders and he might follow his father's footprints into engineering."

The Minars have placed their land in a trust for their kids. And they're hoping to find a young couple to work the farm itself. "They would buy the farm, but not the land," Minar said. "They would buy all the personal property and the cattle. They would lease the property at a monthly rate." Ideally, the arrangement would continue after the Minars are out of the picture and the creamery would keep buying milk from the farm. "That is our hope," he said.

He and his wife have never considered cashing out and heading to Florida. "That is not in the cards at all," Minar said. "We haven't even talked about it. I was born in the house where we live. My roots are pretty deep." The only factor that might drive them to sell outright is a new high voltage electric transmission line that is scheduled to run through their property. "It could negate what we did to preserve the farm," he said.

Plans to secure the future of a sustainable farm can take many forms, said Mesko. "We are trying to get people to look at the options. There are creative ways for farms to transfer so everyone is secure. So the full value gets transferred at the end of the day and you are not paying too much to the government. But it takes planning."

One option is to "decouple" the farm and land, as the Minars have done, and sell the business end to someone who will keep up traditions, someone who likely can't afford to buy the whole package outright.

"We are not advocating that people accept less than full value for their property," Mesko said. "We understand that if you are in farming for 40 or 50 years, you've been waiting for this. Who can look a land owner in the eye and say, 'You shouldn't sell it.' There is no 401(k) sitting out there for most farmers." He suggests that given the way taxes work, "Often there is a much better way to sell for a total dollar amount that is less but where you end up with more in your pocket over time. You don't get it all at once."

The details will be discussed at the Sustainable Farming Association's annual conference this Saturday in Chaska, and also during a series of workshops in March in Frontenac.

"Many times, there is a mindset that this is how I did it with my parents and this is how I'm going to do it with my kids," said Mesko. "But that was 40 years ago. Times have changed."

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