Photo: My great-grandfather, Maurice Finger, when he was probably in his 20’s. This photo would have been taken around 1910. His parents were the last generation to make a living from the ranch, until now. What I mean by “make a living” is their full income was derived solely from ranching. At least they had the grit and determination to hold onto some of the land all of those years rather than sell out entirely.

Ranch succession is a hot subject around ranching conferences and coffee tables. It’s often an emotionally charged, controversial subject that can tear families apart. It doesn’t have to be that way. Over 50% of America’s privately owned land will transfer to new ownership in the next 10 years according to data from the U.S. Census Bureau. This unprecedented number of ranches will transfer to the next generation. How this succession unfolds is yet to be seen. There is no “one size fits all” solution when it comes to ranch succession. My family’s story is steeped in “what not to do” when it comes to transitioning the ranch to the next generation.

From my experience the majority of ranches in recent years don’t make it intact to the next generation. In our area of Texas there just simply aren’t too many older, family ranches remaining.  There are a lot of reasons for this failure to succeed to the next generation. The primary factor is economics. It is incredibly difficult to make a healthy profit to sustain one generation, much less two or even three generations that may be living or deriving their income from the same property. The old adage that you can make more money with a town job holds true for most folks.

The tradition of splitting the ranch up every time a generation passes has also led to the demise of many ranches. Most ranches simply don’t have the land base to support a healthy income. This is where being innovative about leasing and other management strategies to increase revenue come into play. You simply can’t hold yourself to the idea that you have to own the land your farming or ranching. That is a thing of the past for most aspiring agriculture entrepreneurs. Land values for the most part are no longer tied to their agricultural production capacity, rather the value is based almost entirely on its recreational potential. There also needs to be an honest conversation about what is “fair.” Fair doesn’t always mean equal especially when you may have non-farming heirs. Many factors go into deciding how to split assets among heirs. In some scenarios, farm assets like land, equipment and livestock are given to the farming heirs, while non-farm assets like retirement accounts, savings, investments, life insurance benefits are left to those not on the farm.

Our ranch has been in my family since 1846 when it was acquired as a Spanish Land Grant. It was eventually built up to about 8600 acres in the 1890’s from what I have gathered in historical documents. The tradition has always been to divide assets equally between the children. That was the first mistake my family made. Eventually, generation after generation, you simply don’t have enough land to be operational. I am the seventh generation so you can only imagine how many times the ranch has been divided. My father inherited about 238 acres of the Finger family ranch.  I lease his ranch and an additional 400 acres or so around us from cousins. This is our ranch headquarters and we lease additional properties around Medina County. My point is if I were to attempt to make a living on 238 acres it would be difficult, if not impossible and my options would be very limited.  The ranches that have overcome this are organized as estates that separate the land ownership from the business. The land is often owned by dozens, if not more, individuals. The business side of the ranching operations is owned and operated by those with a vested interest, typically just a few individuals within the family. These relationships require a communal love of the land, animals, community and each other.

My father was a conventional cow/calf producer and farmed some row crops. He was a graduate from Texas A&I Kinsgville with a B.S. in Animal Sciences. He followed the conventional model and it worked at that time. He had built up a sizable cow herd and leased quite a few acres. Then in the late 1980’s agricultural commodities collapsed and he basically lost everything. The ranch never financially recovered from the collapse. My father had been working in the oilfield and spent it all improving the ranch’s crumbling infrastructure left to him by the previous generation. He had not set aside money for emergencies, economical or environmental. In need, he got a stable job with the State and eventually retired from there some 20 years later. The issue was he never treated the ranch like a business. He treated it like so many others in ranching as “a lifestyle.” There is nothing wrong with a ranch being purely recreational, but realize that it comes at a cost. If the next generation inherits a ranch with crumbling infrastructure and doesn’t have the income to sustain that expense then the likely scenario is they will be forced to sell.

The transition from my father to me has been rocky at best. Good ranch succession requires leadership and healthy relationships. Honest and open dialogue is key, but that requires a stable relationship between the owner and heirs. Most tension in families are some iteration of communication, trust and expectations. Too often the talk of transition to the next generation is taboo in the ranching community. Around 2012, my father fully transitioned the business side of the ranch to me. We bought out his remaining share of the cow herd, took control of the day to day management of the land and with that all of that the costs of maintaining the property. Our business, Parker Creek Ranch, is in it’s tenth year and has become financially sound. It’s expanding and becoming more stable. My hope is that as my boys get older they can have a vested interest in the business or perhaps their own enterprises if they wish.

One of our biggest failures as a ranch, specifically regarding land ownership and assets, has been the lack of a succession plan. I am not talking about a Living Will, which is simply a component of the plan. I am talking about a written out succession plan. Ranching for Profit instructor Dallas Mount lists these five steps for successful succession planning: 1) get everyone on the same page (agreements and policies), 2) create a family business policy, 3) define goals, 4) decide who will own what, and 5) retiring in style (what are the needs of the elder generation). Taking the time to build a plan and revisit it on occasion will undoubtedly be invaluable for anyone who wishes for the next generation to continue ranching.