Farmers span multiple generations, with the Silent Generation, Baby Boomers, Gen Xers, Millennials and Gen Zers all working the fields. Baby Boomers are likely still doing their finances with pen and paper while the younger generations move toward a completely digital setup. But no matter your age, finances are a top consideration when it comes to your operation. Things like the strength of your credit and the amount of savings you have are always important, but there are ways each generation may need to view and manage their finances differently - from land acquisition to retirement savings and more.

Navigating the Financial Landscape: Strategies for Millennial and Gen Z Farmers

PEW Research Center defines Millennials as those born between 1981 and 1996, and Gen Z as those born between 1997 and 2012. So, we’re talking about farmers who are somewhere in their late 20s to early 40s and may still be building their finances and their credit history. To build a healthy history, it’s important to make payments on time, check your credit report and make sure you aren’t overextending yourself financially.

While some of these growers may inherit the family farm, others have to find their own way in the business and build their operation independently. Shane Eason, a row crop farmer in Arkansas, mentioned one of the hardest parts for him has been finding affordable land to farm. Eason’s not alone. A 2022 National Young Farmer Survey showed that almost 60% of respondents said finding affordable land to buy is very or extremely challenging. 

Student loans and other debt can be additional challenges for young farmers. Those debts can take time to pay off and can become a hurdle to growing an operation. Having a solid financial plan that prioritizes keeping some cash on-hand can help growers be in a good position to act when affordable land does become available.

Securing the Future: Financial Planning for Gen X and Baby Boomer Farmers

Generation X consists of people born between 1965 and 1980, while Baby Boomers were born between 1946 and 1964. This group of farmers is likely more established and has had more time to build a robust credit history and hopefully a positive credit report. Having been through decades of crop cycles, they’re established in the industry and have a good idea of the ups and downs of farming.

These mid-career farmers should consider saving for emergencies, freeing up cash for expansion plans and starting to plan for retirement. Take Jason Rowe, for example. He farms a diversified corn and soybean operation in southwest Wisconsin. Because he’d worked with Nutrien Financial to finance his inputs, he was able to free up cash to acquire more land to expand his operation.

No matter where you are with your retirement plans, it’s always a good idea to have someone lined up who can begin to take some of the farm responsibilities. Jim Engelsma manages two Nutrien Ag Solutions locations in Michigan, but he’s been working on his family’s orchard operation as well. His daughter, Bridget, has taken the reins of the family operation.

“My daughter is on the farm every day. She works alongside everybody and does a lot of the day-to-day management,” Jim says. “She calls the shots, so I’m pretty much hands off but just keeping my hands on the wheel.”

Securing a Legacy: Succession Planning for Baby Boomers and the Silent Generation

You may be asking yourself, “Do farmers actually ever retire?” Well, some do! Especially if they’ve established a succession plan and have kept retirement goals in mind. Some growers of the Silent Generation (born between 1928 and 1945) are still actively farming, although they, along with Baby Boomers, are at or nearing retirement age.

According to the latest USDA Agricultural Census, 38% of farmers are over the age of 65, an increase from the prior census count, which shows more farmers are working well into their golden years. Most people would like to retire one day, so having your finances set up in a way that supports a productive exit strategy is key.

Establishing a comprehensive succession plan is essential for seasoned growers contemplating retirement or stepping back from day-to-day operations. Think about who would run the farm if you stepped down. Sometimes, it’s a family member who inherits the operation, or maybe someone else purchases all or part of your operation to manage it. Either way, it’s crucial that your successor understands the full scope of financial responsibilities. This includes being transparent about existing debts and liabilities and understanding the nuances of cash flow demands and other fiscal obligations and budgetary needs. Reflect on your own experiences when you first took over the operation. What insights or advice would you give your younger self? Use these reflections to guide how you train your successor. Consider a transition period that allows you to gradually reduce your time commitment, giving your replacement ample opportunity to learn under your guidance.