The Beginnings of a Farm Transfer
Shared values unite a landowner and beginning farming family
John and Halee Wepking are part of a trend we’re seeing in our network at Practical Farmers of Iowa: people between the ages of 30 and 49 looking for a rural place to not only plant roots and raise a family, but to do so through farming. The number-one barrier for these aspiring farmers? Access to farmland.
John and Halee met working in the kitchen of Prune, a restaurant in New York City’s East Village. As their relationship developed, it was clear they didn’t want to stay in New York City. John grew up in southwest Wisconsin near Lancaster, where his family had been farming for 100 years. One day he said to Halee that his dream was to take over the family farm. They moved back to Lancaster in 2014.
Land in the Family
John’s dad and his dad’s siblings co-owned the family farm. The siblings put together a legal partnership in the early ’80s when they bought the farm from John’s grandpa. “There wasn’t enough attention paid to management versus ownership and how decisions would be made,” John says. “After a time, there was really no operator. The farm has been in semi-operation disrepair since.” John’s dad had wanted to take over farm operations, but his siblings weren’t interested. “When you have a situation where there’s one heir who wants to farm and others don’t, the farmer views the farm as a farm, and the non-farming heirs view the farm as an asset.”
John and Halee moved back to farm, but ended up working part-time on the farm and running a restaurant in Lancaster. “The partnership had already been strained by the time we showed up,” Halee said. “We tried to push them to figure out if they were serious about passing the farm onto us.” John and Halee were expecting their first child with no forward direction in sight. They didn’t want to work full-time jobs and farm on the side, Halee says, especially not knowing if they had a future on that piece of land. “We didn’t want to raise our kid in a restaurant,” she says. “We wanted to raise our kid on a farm.” The situation led Halee to search for organic farms on Madison’s Craigslist site, where she found a post by Paul Bickford.
Paul Bickford grew up on his father’s dairy farm in the Driftless Region of Wisconsin. He went to college not thinking he would ever become a farmer. Then his father made a deal with him. “If I came back, we would set up a partnership, expand the operation and work together,” Paul says. The farm Paul grew up on was being surrounded by development. Paul and his dad invested in an additional farm near Ridgeway, Wisconsin, when Paul was 25. His dad owned his home farm debt-free, and mortgaged it to purchase the additional farm. On the new land, Paul and his father built one of the first modern dairy confinements in 1978.
“It wasn’t working very well,” Paul says. “Around 1992, we looked at each other and thought, ‘This thing’s gotta go.’” Paul transitioned the farm to rotational grazing and started a pasture-based dairy. “Dad thought I was nuts and wanted me to buy him out,” Paul says. At that point, his father’s home farm was about four times the value of the farm he and his dad jointly owned. They decided Paul would inherit the co-owned farm and his father’s farm would be split among Paul’s siblings. “It was an unequal but equal basis, and I was okay with it,” Paul says. “He was helping me along, and my brothers and sisters got his valuable real estate.”
In 2011, after electrical issues caused by stray voltage on the farm, Paul sold his cows, quit dairy and transitioned his 900-acre farm to organic grain production. Soon after, an unfortunate fire gutted the farm buildings. Paul was around the age his dad was when he brought Paul into the operation as a successor, and Paul started to think about the next generation. Paul does have a son, Levi, who loves to work on the farm but does not want the management responsibility that comes with the current size and scope of operations. Without an automatic successor, Paul started looking for someone by posting an ad on Craigslist.
Matchmaking Via Craigslist
“I had nothing to lose by trying,” Paul says. “During my career, I hired for those with experience, and they had none. I hired farm-raised, and they were not. Now I was hiring for nice and trainable.”
“Paul’s listing said he had a wealth of knowledge that he wanted to pass on to the next generation, and that a partnership could be possible,” Halee says. “The values he articulated really lit a spark in me and I wrote him back immediately.” John and Halee met with Paul within a few days. As they were driving around Paul’s farm, Halee recalls a conversation they had. “Paul said, ‘If you come to work with me, I expect you to tell me what I’m doing wrong and bring new ideas.’ He has held up to that. He has gone through many different transitions on his own farm. He is an amazingly flexible, open and experienced farmer.”
Paul, Halee and John started to work together in 2015. For John, the first month was especially challenging: He was using a tractor that was twice as big as anything he’d used before, and spent the first month cultivating soybeans. “Luckily, Paul was too busy cleaning up fire damage to see how many soybeans I killed,” John says. That fall, John was able to convince Paul to plant 40 acres of winter wheat, which wasn’t in Paul’s planned rotation. “Paul has respected our ideas and wanted us to bring them to the table,” John says. “He’s really started to buy into raising food-grade small grains. From the beginning we’ve worked together on a lot of things. We were farm hands working for a wage, but in terms of relationship we were very much partners.”
The Wepkings named the new joint venture Meadowlark Organics. Its mission statement reads: “We are farmers committed to cultivating a regenerative ecosystem by growing real food, improving the health and resilience of our soils, protecting the safety of our water, and investing in the vitality of our rural community.” John says that the mission statement, though simple, has been important to ensure clarity as they make farm decisions. “When you’re involved in a non-family farm enterprise that’s shifting, it is important to articulate goals,” he says. “Our mission statement is pretty straightforward, but to have something to rely on when you’re making decisions is really valuable.”
The farm sits on a ridge in the Driftless Region, a location that is both wind-swept and well-drained. “This opens up possibilities for food-grade small grains,” John says. While the Wepkings grow corn and soybeans, they hope to reduce those acres over time “because they are hard on our slopes.” Meanwhile, they are increasing production of food-grade grains. John and Halee are contracting with a local miller to mill grain into flour, and they plan to build a farmer-owned flour mill in the future.
Values Guide the Transition
Paul, Halee and John focus on four key values as they transition the farm:
Mentorship: “I have all this experience and I started thinking, what am I going to do with it?” Paul says. “I want to be able to share it and let John and Halee use some of my experience that I paid dearly to learn.”
Trust: “Paul trusts we’re not going to leave,” Halee says, “and we trust that he’ll continue to support us.”
Commitment: “Right now we’re committing more and adding more value than the actual paycheck we’re earning, and so a lot of compensation is based on non-monetary things,” John says. “The house part was really critical in terms of commitment.” He and Halee have also committed to having Paul’s son, Levi, as a long-term employee. “He’s really valuable and employable on the farm, and for Paul to have the commitment that Levi will continue to have a job on this land when he’s gone is really important.”
Shared vision: John and Halee came from a culinary background. In farming, Halee says they want to “grow food for people, not just for animals” – a vision Paul has embraced. He and the Wepkings have different views on how fast to achieve that vision, but they are all in agreement about where they want to end up. “I tend to be a little faster and motivated to get to the endpoint than John and Halee,” Paul says. “They’re more conservative because it’s going to be their debt. I want to get down their road and be the powerhouse regional flour king.”
The farm is set up as an S corporation, so there are shares. The farm will be transferred to John and Halee through a combination of gifting, earning and purchasing stock in the corporation over time. Instead of a real estate transaction, there will be stock ownership transfer. “Halee and I are building equity,” John says. “We have our own grass-fed beef enterprise on the farm, and [a Farm Services Agency] microloan for breeding cattle. We’re working toward purchasing the 82-acre farmstead where we live on the farm.” The $625,000, 82-acre farmstead is financed by a 5 percent down payment from John and Halee, 45 percent through FSA and half through a land contract with Paul.
“Our commitment is that we’ll basically provide a pension for Paul for the rest of his life through stock purchase and proceeds from the land contract,” John says. “What we’re doing is a committed relationship, not just a transaction. We’re involved in conversations about long-term care and provisions for his children. The stock transfer realistically wouldn’t be accomplished within Paul’s lifetime, so there’s remainder stock that will probably be transferred through Paul’s estate. We’ll make provisions so the farm is sheltered from long-term care needs should Paul need anything like that.”
John says the arrangement has many benefits, especially considering their financial position when they first started looking to farm. “We would have no shot to be farming on this scale with basically zero equity we came in with.”
Paul says the financing sitation with Meadowlark Organics is similar to what he experienced when farming with his father. “In my relationship with my dad, he would borrow money and I would pay it back. That’s what we’re doing here. I’m highly leveraged, and we’re judicious about how we borrow money.” Paul, John and Halee work on ideas together, and Paul has helped build capital. “They needed a house,” Paul explains. “It was an old, run-down home, but Halee’s dad is a carpenter and John’s dad is a plumber. I borrowed money to fix up the house, but it’s a good investment. If our partnership falls apart, I’ll still have a really nice house.” Paul also borrowed $275,000 to help pay for equipment to bolster the small-grains business. “We bought a lot of used equipment and bins,” he says, “and did a lot of farm labor.”
Reflections From a Farm in Transition
For Paul, part of facilitating a successful farm transfer has been creating space for John and Halee to take initiave, learn from mistakes and contribute their own ideas. “If you hire on somebody and think they’re going to be a partner, give them some responsibility in some areas where they can trip up and fail,” Paul says. “You can’t just hire somebody and continue to do the same thing over and over. Young people want to make their own way. Plus, they have some knowledge base and some creative ideas. The worst case here, I’m not going to lose money or equity on this business. The best case, it’s going to flourish.”
For John and Halee, ongoing innovation is key. Some decisions about the direction of the farm have been rooted in the need to find a viable way to provide for both Paul in his retirement and their own family. Looking for value-added opportunities has been one solution.
“When we look at the farm, we see all of these opportunities: sugar maples, sorghum for pressing into syrup, honey and there’s land that could be farmed for vegetables,” Halee says. “This is all part of the long-term vision to create a flexible, adaptable, resilient farm. Right now we are just trying to get rooted and make what we’re doing successful and we can go from there – but we’re committed to showing that you don’t have to have an off-farm job, that you can make your farm strong enough so it can support you financially.”
“We see such value in taking an existing operation and helping that operation evolve,” John adds. “It gives real peace of mind to the retiring generation, and there are innumerable benefits as a beginning farmer to coming onto a farm that’s already living, breathing and working as opposed to starting from scratch.”
You can hear more about Paul’s and the Wepkings’ experience in the video recording of their conference session below. If you have farm transfer plans or goals you are willing to share to help others along their paths, please contact Sally Worley.