Growing the Farm Dream

1/26/2013 7:00 AM

Young Producers to Discuss Transitioning the Farm at Pa. Dairy Summit

Charlene M. Shupp Espenshade

Special Sections Editor

When the Mullen and Good families began the farm transition process, Ben Mullen said, finding dairy farms similar to their size and transition goals was hard.

Rich Lindell said the farm transition challenge for his family was keeping up the momentum on the last phase of the farm expansion.

Transitioning a dairy farm from one generation to the next takes time, planning and effort. Two young producers will share their farm transition experience at the Pennsylvania Dairy Summit, Feb. 6 and 7.

Mullen, a partner in Good View Farm LLC of Canton, Pa., and Lindell, a partner at Lindell Farms LLC of Russell, Pa., will speak at the closing luncheon Feb. 7 at the Lancaster Host Resort.

Lindell credits his parents, Jack and Gale, for making farm investments before he returned to the farm in 2004 after graduating from Cornell. They built the first barn addition while he was in high school and the second during the later part of his time in college.

The farm grew from more than 60 cows to 110, setting the stage for the next phase of the farm operation.

Lindell said the family discussed whether he should work at another farm for a few years before returning home; however, several opportunities came up in Warren County to facilitate the farm’s rapid expansion. Several local farms were planning to exit the dairy business, which provided the chance to expand the farm’s land base as well as purchase extra cattle.

Since 2004, the farm has expanded from 110 cows to 380. They built a new barn and manure system. Then 2009 hit, slowing the last of the capital investments, a new milking parlor.

“There were a lot of growing pains,” Lindell said. And with the negative profit year of 2009, the family was “gun shy” about finishing up the milking parlor project, he said.

The delay came with a price, he said, as cull rates rose and milk production dropped. The family pushed the parlor project through, finishing in spring 2012. Production has jumped about 8 pounds per cow per day and the cull rate dropped.

“I felt like we were stagnating,” he said of the delays in finishing the parlor. “Now I feel like we can move forward again, we made the right decision.”

The farm is organized as a limited liability company. Lindell purchased cows that were leased to the farm to begin gaining equity in the business. The family transition agreement lays out ownership breakdown, profit sharing and a long-term plan for Lindell to purchase the rest of the farm from his family.

Ben Mullen joined the Good family farm as an employee in 2002. He married daughter Karla Good in 2005. After two years of marriage, Ben and Karla approached her parents, Jay and Fay, expressing interest in transitioning the family farm. The Mullen and Good families operate a 600-cow dairy in Bradford County.

It took another three years before they had an agreement they were happy with. They worked with their accountant from MSC Business Services and a lawyer to develop their plan.

There is no expansion plan at this time, Mullen said. The family is focused on maximizing its farm efficiencies.

Like the Lindells, Mullen said 2009 was a tough year.

“2009 was not the best year to start a partnership or anything like that,” because of the financial stresses on the farm, he said. However, since then, the partnership has worked out very well.

The main focus of the transition plan is a detailed timeline for purchasing the balance of the farm’s cows and home farm. They also worked out an estate plan so the farm can continue working in the event something unexpected happens to one of the family members.

Lindell and Mullen said transitioning the farm is not simple. Both stressed having to recognize that, for the parents involved, this has been their livelihood.

Lindell said there was a lot of give and take in the early days of the transition. For example, he would opt for a reduced lease payment to help farm cash flow when things got tight.

Changing farm leadership does not happen overnight, either.

“It’s not like on Jan. 1 you get to make all of the decisions,” Mullen said. It’s been a gradual process as they slowly take over different aspects of running the farm.

The Mullens and Goods went to three different consultants before finding the right transition advisers for their farm.

Both families have as part of their agreement the purchase of the farm and assets, opting not to gift. Lindell said, for him, it has been a motivator to keep working to improve profits.

Mullen said goals are important when starting a transition plan.

Jay Good asked Mullen to write out his future goals after they talked about transitioning the farm.

“That gave him an idea of what I expected,” Mullen said. “And he expressed the same (goals). Both (sides) have to look at the long-term goals and be on the same page. I know that it’s easier said than done, but you have to communicate.”

Lindell said he is grateful that his parents have given him the chance to pursue is farming career. He is always planning the next step. When he has an idea he would like to pursue, he works out a plan and then talks with his father.

“I have been really fortunate,” he said. “We have arguments and heated discussions, but most of the time he lets me call the shots. It’s been a good ride so far. I hope it keeps going.”

Editor’s Note: The producer panel discussion, The Next Generation of Growth in Pennsylvania Dairy, will be on Feb. 7, starting at 11:30 a.m.

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