As a continuation of my series on being enthusiastic about agriculture, here is the fifth reason in my Top Ten countdown.
Number 5: Opportunities Due To Business Transition
One of the most commonly used terms in American agriculture is transition management. The term is not just synonymous with production agriculture, but related and support industries, as well. As the World War II generation passes on and the baby boomers move into retirement, there will be many opportunities for young people who desire to work in an industry that is globally recognized, utilizing the latest scientific developments and management techniques.
Focusing on production agriculture first, some experts indicate that 70% of land and other farm assets will turnover in ownership by the year 2025. That is not only by purchasing and investment opportunities, but also building a business through renting, leasing, strategic alliances and partnerships. Previous generations owned a majority of their assets; however, the next generation of agriculturalists will defer ownership to the concept of control of assets by the aforementioned renting and leasing.
Many of the new landlords of the future will be grandchildren of the current generation, living in metro areas or smaller cities with very little linkage to the farm or rural community. Others will be investors, both local and Wall Street types, that are lured to farmland as a method of wealth diversification. This phenomenon will require the younger generation to have a keen understanding of contract negotiations and written agreements as a critical part of risk management in accumulating and acquiring assets to develop a profitable business model.
In agricultural support industries, the number of opportunities is sky high. Whether it is the lending field, agribusiness or related support industries, the older generation is phasing out. This leads to opportunity for a person who is well grounded in business, economics, and communications with a technical appetite, but who has old-time work habits to effectively relate to the new agriculturalists.
Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at firstname.lastname@example.org.