One dairy’s goal standard

Farm Transition Planning Workshop will be held Jan. 19, Feb. 16 and March 16

One day in 2014, a man stopped by Bill and Bonnie McMillin’s farm in southeastern Minnesota’s Wabasha County and offered to pay cash for all 160 acres, lock, stock and barrel. Such an offer can be tempting. After all, Bill and Bonnie had worked hard over the previous few decades to build a 45-cow dairy operation, which they later transitioned to a grass-fed beef enterprise. Working with livestock takes a toll on the body, and at the time Bill was 60 and Bonnie 58. It was time to think about the future of a farm that had been in Bill’s family since 1946.

The McMillins had recently completed a Land Stewardship Project (LSP) Farm Transition Planning Workshop, where, among other things, they learned the importance of setting goals and figuring out ways to attain them, while developing a retirement plan that would guarantee a sustainable income. The McMillins came out of that workshop committed to seeing their farm remain a “stand-alone” operation, a home to crops and livestock, as well as a place where a family would reside, rather than just another 160 acres appended to a larger corn and soybean operation.

“Providing an opportunity for somebody to farm is big for us,” said Bill while sitting at a table with Bonnie in their farmhouse.

They knew once they took the cash, they would have no influence on the farm’s future, and the chances of the buildings being knocked down and the land becoming just one more corn and soybean field would be increased.

As the McMillins relate this story, sitting across the table is someone who has made sticking to their goals of using the farm to launch a new agricultural career easier: Bryton Miller. The 22-year-old had just wrapped up the morning chores in the nearby barn. Miller grew up on a dairy just up the road from the McMillins, and has made it clear his entire life that his ultimate goal is to own and operate his own milking enterprise.

“Farming oozes out of my pores,” said Bryton with a laugh.

By the time they received that offer to sell everything in 2014, the McMillins were already in discussion with Miller about how he could take over the operation.

Farm transitions are full of missed opportunities, connections that aren’t quite solidified and timing that doesn’t work out for the parties involved. Given that, the McMillins and Miller seem to be a perfect match: a rare bit of lucky providence where a retiring farm family’s goals and a beginning farmer’s aspirations intersect logistically and timing wise.

But a closer look shows that a lot of preparation went into making certain the two parties could take advantage of that luck and ensure long-term success for all involved.

Getting it on Paper

In order to make sure the transition went in a way that ensured a good retirement income for the McMillins while Miller didn’t get in over his head financially, Bonnie and Bill knew they had to develop a formal agreement that covered everything from how to handle down payments and conflict resolution to where the retiring couple would live during the next few years.

Both parties hired attorneys to help draw up a contract and hammer out an agreement, something that was emphasized in the LSP Farm Transition Planning Workshop.

They developed a “contract for deed” arrangement. This consists of an initial down payment, and then a regular payment schedule stretching over a 10-year period. At the end of the 10 years, roughly half of the price of the farm will be paid for at that point, and a “balloon payment” for the balance will come due. Then, Miller will either have to refinance to pay off the McMillins, or the two parties could decide to have him continue making regular payments to Bill and Bonnie for the balance. The McMillins felt an important piece to include in the arrangement was that they be allowed to continue living on the farm for up to four years.

The Cows Come Home

In March 2017, after a dozen-year absence, milk cows returned to the McMillin parlor. Today, Miller is milking 50 cows. The McMillins are thrilled that dairying has returned to the farm. For one, the land is considered highly erodible and vulnerable to runoff, and keeping it a dairy operation means there is a better chance that the farm will be covered in a diversity of plant systems, including hay and pasture. Bill, who long utilized managed rotational grazing to raise livestock, has encouraged Bryton to experiment with this system. The young farmer has also been planting cover crops, which has reduced erosion.

The McMillins say they get a lot of comfort knowing that they have developed a plan that helps them, as well as a beginning farmer, attain important goals.

“The best part of the Farm Transition class for me was it made us ask, ‘What are our goals for the farm?’ ” Bonnie said. “And whenever something came up around decision making, it was clear we could go back to our goals, and that really helped us make that decision.”

LSP’s 2019 Farm Transition Planning Workshop will be held during a series of Saturdays–Jan. 19, Feb. 16 and March 16–in Rochester. For more information, contact Karen Stettler at 507-523-3366 or stettler@landstewardshipproject.org.