DIDSBURY, Alta.- Louis Shultz lives across a gravel driveway from his son Shawn but they chose the neutral turf of a cafe in the city to talk about the family farm succession plans.
“We sat in a restaurant to avoid being interrupted,” said Shirley, Louis’s wife.
It was there that parents Louis and Shirley, their daughter Renee of Calgary, son Shawn and his wife Tina began, somewhat uncomfortably at first, to talk about their future on the mixed farm near Didsbury, Alta.
When they first met last year, they came armed with an icebreaker meant to stimulate discussion, a series of workbooks provided by Agriculture Canada called Managing the Multi-Generational Farm. They agreed to meet again the next month after working through the first of four books.
Read Also
From farmer to award-winning distiller
Pivot Spirits showcases transition from farmer to distiller with provincial award-winning results in Alberta for Lars Hirch
“It wasn’t too bad. It made you think about it. It wasn’t necessarily fun, but we got it all out,” said Shawn, 26, who one day will operate this family farm with his wife of two years, Tina, 23.
“It was a neat thing to get you talking,” added Shirley, 47.
Shawn committed himself to farming here at age 18 by acquiring a quarter of land, then later adding three quarters of rented land.
Tina plans to continue her work at a local school office until the couple starts a family.
The books helped them create a family tree and define their short and long-term goals, roles and responsibilities on the farm. It enabled them to list and prioritize personal and business values and discover how each resolves conflicts.
“They helped guide us on the best approach and procedure for us to work our operation out,” said Louis, 53.
The second book, which they started this past summer, focuses on making farm and family business interactions smooth. The final two books deal with bringing formalized management to the farm business and succession planning.
Hearing each other’s goals and holding regular meetings were central to hatching a succession plan.
“If we want to turn over the farm at age 80, and Shawn wants it earlier, then we won’t accom-plish our goals,” said Shirley.
The Shultzes, who got the ball rolling on a farm transfer more than a year ago, have since contacted Alberta Agriculture and an accountant for additional help and advice.
“Everyone was too close to the operation to see through the windows,” said Louis, 53, who characterized their thinking as tunnel vision.
Louis said the farm was “paying its way.” The challenge was finding what would work best for their situation.
That succession planning led to decisions about getting out of a 50 sow farrow-to-finish operation by Christmas 2001, and putting the remaining farm operations into one company this past spring. Remaining in hogs would have meant upgrading equipment and barns, Louis explained.
They rolled all facets of the farm operation into the existing L.S. Cattle Company, set up in the 1980s for their cow-calf operation.
Louis said a lot of things were happening at once when they decided to start their succession planning – from the parents’ increasing age to Shawn’s desire to make his life here, to an increasingly complicated farm structure.
They decided to put the farm, animals and equipment into a company, with shares available to family members working for the farm. Renee, 24, would acquire shares in the company if she chose to join as a working member. She currently works in Calgary and is not planning to farm.
Louis said previously the farm assets were so intertwined that it was difficult to track each one, to keep the custom hay and bale stacking operation separate from their export timothy crops or grain growing, or the 120 cow-calf operation. It made planning and running the farm more difficult and caused bookkeeping headaches.
The farm once had five sets of books, said Tina, who handles much of the computer inputting and paper files on custom work.
“We didn’t have a simple working plan,” Louis said.
“Every entity needs to stand alone. Each has to be viable and tracked.”
Under the new plan, the family does the day-to-day bookkeeping while the accountant will handle the year-end tallies.
They devised a 10-year plan for transfer, which includes Shawn and Tina moving out of their trailer and into Louis and Shirley’s farm home where Shawn was raised.
The parents plan to build a new home in a separate yard site on the farm within four years.
Each partner has shares according to his input and equity, with Shawn’s portion increasing as he assumes a greater role in the business.
“What it did more than anything, was make Louis and I set goals on when we’re going to do things,” said Shirley.
The Agriculture Canada books allowed them to write down what they had only talked or thought about. It also helped all to see their area of responsibility.
“I have a pretty heavy load and I’d like to lighten the load as soon as that can happen,” said Louis.
For Shawn, the biggest and most positive change has been that he now feels more like a business partner than a worker, one with a vested interest who has greater confidence in speaking his mind on business matters.
“I can picture myself here,” he said. “Time doesn’t matter. I know it’s going to happen.”
For now, he is content to do a greater share of the physical labour while Louis continues to seek out markets and search for the best prices.
The succession planning has helped the family work together, pulling in the same direction, for the greater good, said Shawn.
“Now with shares, everybody works for the company and all goes back into the farm,” he said.
Tina feels the process has made for better communication and greater understanding of the farm business.
“I’m more in tune with what’s going on,” said Tina, who felt the first phase of the transfer has gone well and has helped each to see the other’s viewpoints and strengthened communication within the family.
Their advice to others just beginning the process is to get relevant information and seek expert help, preferably those with a farm background and extensive experience in farm transfers.
“I can work with anyone but not just anyone can help me with the operation if they don’t have experience in that field,” said Louis.
