Non-family Transition Plans: How to Make it go Smoothly

Non-family Transition Plans: A Success Story to Take Notes From 

For every senior rancher looking for an heir, there is an eager member of the rising generation trying to find ways to get started. The challenge? Getting the two parties to meet with their compatible counterparts.  

Lydia Carpenter and her husband are an example of how to adapt their business and find a member of the senior generation to build with instead of against.  

Question #1: How did you get started in production agriculture? 

“We started a farm business when we were in our 20s on leased acres. I grew up in the Red River Valle where land is quite expensive,” says Carpenter. “We decided that we were going to run a livestock operation, so we moved to the western part of Manitoba where agriculture is a bit more diverse and mixed. This is where we built our direct-to-consumer meat business.” 

Question 2: How did you find a non-family member looking for heirs? 

 “We subsequently started buying heifers from an individual that was living in Alberta at the time,” says Carpenter. “He was originally from Scotland, had moved to Canada in 2000 and subsequently decided to sell the land in Alberta and move to Manitoba.” 

She continues, “Before doing that, he had asked us if we were interested in working with him more closely. So when he moved here, he bought a farm not too far from where we were renting at the time. And then we started working together.” 

Question #3: How is the business structure set up? 

“We run individual operations. So we file our own taxes and we've got separate businesses,” says Carpenter. “Both businesses are profitable and we have similar structures in our business.” 

Additionally, she explains, “We recognize that in order for us to be able to access land and build our security, we need some support from another generation. So, we started purchasing land to build our equity from him and his wife.” 

Building trust is also a part of the business structure.  

“Now we're neighbors and we are purchasing assets from him,” explains Carpenter. “Transitions take time and it's not the kind of thing that happens overnight, but a relationship builds over time along with trust and accountability.”  

She says, “Over time we’ve recognized we are compatible and have similar philosophies around management.” 

Question #4: What else goes into building trust in these types of relationships? 

“Trust is an interesting thing that ties into accountability,” says Carpenter. “Even business acumen can help build trust if you as the rising generation have the financial literacy, interest and good management practices to take on the business.” 

“I think clarity of expectations is really important and then it builds over time,” explains Carpenter. “It’s not without risk to invest in somebody.” 

She explains, “I think having open conversations about written agreements, business structure, general profitability of the business are important and trust is then built over time through general accountability.” 

Question #5: How can other members of the rising generation find opportunities like this? 

“If you are interested in a specific sector of production agriculture, go work in other areas of that industry and in those communities,” says Carpenter. “Additionally, be present at different events in agriculture and open about your goals as a young individual.” 

She also says, “Don’t silo yourself in any specific production type unless you have really good reason to do so. Sometimes the opportunities around you are bigger than that.” 

Question #6: What are some red flags to be aware of in any farm transition? 

“Some red flags would be no desire to have written agreements,” says Carpenter. “Another one might be just general lack of financial literacy or like poor money management that can go for either generation.”  

She also shares, “Another one can be people's general health and well-being, Are you having compatibility issues because someone is really struggling with like unresolved mental health or addictions issues? There's going to be some interpersonal stuff that could be red flags as well.” 

You can listen to the full conversation on the Casual Cattle Conversations podcast.