Turning Over the Soil

Tab 1

November 14, 2016


 Increasing farming income with a little help from The Private Client Reserve.

 

Following the patriarch’s death, a family in southwestern Minnesota faced a difficult farm management situation.


The family’s CPA, who became lead trustee and manager of the farm, didn’t have the agronomical and economics background to properly take care of the family farm, including negotiating leases. This caused the mother and one of her three daughters to question whether they were getting a fair profit for their farmland. Meanwhile, the other two daughters were more concerned about the tenants. All of this created family friction.

 

The family turned to U.S. Bank for advice and support. After learning about the situation, Barry Kelner, Personal Trust Relationship Manager at U.S. Bank Wealth Management,

engaged Jim Myhra, Managing Director of Farm, Ranch & Timber Management at U.S. Bank, as well as a team of other experts, to step in to take over as trustee and farm manager for the family. This team was tasked with providing farm management services administration and asset management for the family’s farm and non-farm assets.

Tab 2

November 14, 2016


“This client’s situation is an example of what many families go through when a parent dies,” explains Myhra. “The kids might not share the same viewpoints, and conflicts can arise. We can take some of the stress off their shoulders by managing with an unbiased point of view. We are experienced with working through family dynamics and stressors that can arise when family members are put into the position to manage an asset such as a farm.”

 

Myhra’s farm management team embarked on a mission to potentially increase the family’s farm rental in come and enhance the soil stewardship management. An ancillary issue was to decrease their insurance expense. Their first order of business: a site visit.

During that first visit, Myhra carefully inspected the farm to assess crop production potential and any fertility and drainage issues. Although a visual assessment suggested that the farm had been well-maintained, a closer look unearthed a few improvements that needed to be made. “We found out that the previous trustee wasn’t doing soil testing,” says Myhra.

 

When it came time to negotiate the tenant’s lease, Myhra considered all of the costs that go into running a farm, such as expenses to grow a crop, and then he increased the price of each acre. This boosted the family’s farm rental income significantly, and the family was elated, Myhra says.

 

 

 

 

 

Tab 3

November 14, 2016


Myhra and his team also helped the family find an insurance policy from another provider that decreased the annual insurance payments while increasing coverage. In addition to negotiating leases and paying bills, they worked hard to maintain the farmland by obtaining soil tests every year, monitoring everything that goes into the soil and looking for visual signs of disease and nutrient deficiency in the soil. This is on top of fundamentals such as managing weed control, soil conservation and drainage management.


“The farm has been in the family for more than 50 years, so there’s an emotional tie there,” Myhra says. “It’s our responsibility to preserve the value of the land because it’s precious.”