Ties to the Land Succession Planning for Livestock (and other Ag.) Producers Bart Eleveld, OSU Extension Economist Private Lands Committee USDA—Risk Management Agency

Outline for the day 9:30Registration/Check-In 10 amCase Example Ranch and Financial Analysis –Bart Eleveld, Oregon State University 10:30Succession Planning Process, Fair vs. Equal, Conflict Resolution –Steve Hopkins and Doug Sippel, Titan Financial Associates 11:15Appraisal, Valuation Discount Issues –Randy Guyer, CPA 12 noonLunch 12:30Land Trusts –Frank O’Leary, Oregon Rangeland Trust 1 pmLegal Issues—LLC, FLP, Buy-Sell Agreements –George Guyer, Attorney 1:30Charitable Remainder Trusts –Harold Weight, Multiplan Financial Services 2:15Panel Discussion, Q&A 3:00Closing 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 – 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 Sheet Income Statement & Cash Flow FINPACK financial analysis software –Center for Farm Financial U. of MN. –Does balance sheet plus feasibility and cash-flow budgeting for whole farm/ranch management plans –Free trial download available: –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:

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