“You may have a 1,000 acres at Dumas and you live there and know the tenants and suppliers and everything there. But if you die and give it to three kids, one in Chicago, one in Houston and one who knows where, they don’t know people who can properly take care of it for them. So they worry about that. That asset of yours becomes a worry or a liability for them.”
Economies of scale for agriculture also have changed the picture, Hayenga said. Farming was a very labor intensive operation in the 1860s when the Homestead Act was passed.
“For a family with a couple mules and some kids, it was a big job to take care of 160 acres of land and raise corn, cotton, oats or whatever. Now with the machinery, equipment, chemical applications and the irrigation systems required, for a lot of farmers, I’d say, it is hard to make a living if you don’t have 4,000 or 5,000 acres of land and some may have 15,000 to 25,000 acres.
“And rather than using a 40 horsepower Farmall M, the most recent tractor we bought had 485 horsepower, which is 10 times bigger. We can plant 300 acres a day; whereas back when I was a child, my father could plant 15 acres on a really good day.”
Farms have had to consolidate to stay in business, and as a result, there are not always those one or two children who want to take over such a major operation, Hayenga said.
“The agricultural ladder I learned about back in college was: you start out farming as a hired man working for a parent or neighbor, then you leased the land, then you bought the land and were an owner or operator, and finally you retired to town and leased to a tenant or let one of your kids take over,” he said.
“We don’t have that anymore, because particularly in the 70s, a lot of farmers were doing well and they educated their kids – sent them off to college and they got a professional degree. When they were ready to come back in the 80s, it was a terrible economic time in agriculture. And the question became ‘Why give up a good job in Dallas to take a terrible job back on the farm?’”
Also, Hayenga said, as more of the farm youth moved away and married someone from the big city, it wasn’t as easy to get everyone to agree they wanted to move back to the farm.
“We want our kids to want what we give them, but that doesn’t always work,” he said. “What I have seen lately is the heirs have started to squabble – they just can’t seem to agree. Instead of having land in Dumas, they may prefer a larger retirement plan or to increase the size of their home, and prefer to just sell off the farm.
“We sometimes hear people say they had to sell the farm to pay the estate taxes. But, mostly that’s not true; just some people don’t want the farm.”
For those interested, Hayenga has five more workshops in Central Texas in the next two months. For more information, go to http://bit.ly/1fnFSjp.