Ties to the LandSuccession Planning for Livestock (and other
Ag.) ProducersBart Eleveld, OSU Extension Economist
Private Lands Committee
USDA—Risk Management Agency
Outline for the day• 9:30 Registration/Check-In• 10 am Case Example Ranch and Financial Analysis
– Bart Eleveld, Oregon State University• 10:30 Succession Planning Process, Fair vs. Equal,
Conflict Resolution– Steve Hopkins and Doug Sippel, Titan Financial Associates
• 11:15 Appraisal, Valuation Discount Issues– Randy Guyer, CPA
• 12 noon Lunch• 12:30 Land Trusts
– Frank O’Leary, Oregon Rangeland Trust• 1 pm Legal Issues—LLC, FLP, Buy-Sell Agreements
– George Guyer, Attorney• 1:30 Charitable Remainder Trusts
– Harold Weight, Multiplan Financial Services• 2:15 Panel Discussion, Q&A• 3:00 Closing and Evaluations
Succession planning ≠, > Estate Planning
• Need to think about what happens if you live as well as what happens if you die
• How to transfer control, decision making and operation of the business if that is an objective
• If the business is not to continue, who gets what, and when?
Inventory of the Legacy:Case Study and Financial Analysis
Of Future Alternatives
Dr. Bart Eleveld
Extension Economist, Farm & Ranch Management
Agricultural & Resource Economics Department
Ray and Reba Rancher• Ray and Reba are mid 60’s, still active on ranch but moving
towards retirement.• Reba had full-time job with no retirement benefits, Max had part-
time job in winter.• 3 children, aged 36 – 41. • 800 Cow-calf pairs• 400 ac. Irrigated alfalfa• 100 ac. Winter wheat rotation crop• 300 ac. Native grass hay (baled)• 100 ac. Irrigated pasture• 3500 ac. Deeded rangeland• 4650 AUM Public rangeland pasture
Family Dynamics• Ray and Reba want to ease into retirement but stay on
ranch. – Have started drawing SS– Fairly good health for now.
• Oldest son, Ray Jr. (41), joined ranch management after college graduation.– Divorced from Rosie (39) and has 3 kids, aged 10 – 14. Oldest
already works on ranch and wants in someday.• Second son, Roy (37), has professional career in NYC,
is estranged from family.• Daughter Rita Wrangler (36), married to Rudy who has
professional, 6 figure income.– Has daughter (12) who is interested in ranching.– Lives in town, but wants to have a house on the ranch.
Current Financial Status• Balance Sheet is pretty healthy but cash
flow and income is tenuous.
• Current ratio = 1.88
• Farm debt to asset ratio = 37% (33% total)
• Farm equity to asset ratio = 63%
• Rate of return on farm assets = 1.7%
• Term debt coverage ratio = 103%
Balance Sheet(Details in hand-out)
Income and Cash Flow (Details in Handout)
YMMV !!!
Resources for Balance SheetIncome Statement & Cash Flow
• FINPACK financial analysis software– Center for Farm Financial Management @ U. of MN. – Does balance sheet plus feasibility and cash-flow
budgeting for whole farm/ranch management plans– Free trial download available:
• http://www.cffm.umn.edu/– Can “rent” an annual license for ~ $100/yr.
• 2 spreadsheet formats– Montana State University’s– OSU/WSU Integrated Financial Statements– Both on Succession Workshop website:
• http://arec.oregonstate.edu/succession.html
Prineville Keywords• Mellow• O on h (brand?)• Blank—11several
pasture• Alder• Blue & red• Key• Family• Lock & key
• Saving the ranch• MAC• Angus1• Midori• JCN• Ford250• Sukey
Baker City Keywords• Blank—(211wheat)• Blackbulls• Sam• Blank—(221
Potatoes/cattle)• Forty seven• Z• Blitz• Bing01 ??• Kathryn• Sutton
• 10dalton• Badger• Busy• Gus• )(• HD• host (or Lost)• Red Rock• Dogger• Cooper• 50
Burns/Hines Keywords• Covert• Steers• Rodeo1• Plan• Family• Ruby• Lyle ???• Rex
• Cottonwood• Hank• CAB• Iris• Lester• Blank—420 cattle• Blank—420 beef• Meat hook• cattle
Klamath Falls Keywords• Blank—110 hay grain• Rabbit• BVR• Maxcat• “?”• FPI• Blank—220 cattle• Tyler
• Marie• Wheatgrass• Angus• Roseblossem• 21• Molly• Gramma• Hereford
Eugene Keywords• SLF• Symphony• Extension• Diamond2• Beef• G&C Farms• 2 Horse• Blank—(411Beef/Timber)• Diamond• Heritage
• Jake• Bellatrace• Hermitage• Douglas Fir• Ponderosa Pine• Oscar dog• Calpooia• Checkers• Kieth• Red1