Dr. Val FarmerDr.Val
Rural Mental Health & Family Relationships

Story Of Trapped Dairyman Reaction

October 20, 1997

I received some letters from people describing plights similar to the one described by the dairyman who felt trapped by his investment. Others were familiar with his situation and offered advice on how to deal with it.

A Wisconsin woman wrote that after she and her husband raised a large family none of the children were interested in taking over the farm. "They all have good jobs and have the weekend free. They are willing to help out when we need it, but don't want to be tied down seven days a week."

She and her husband have contemplated selling the cows, but the proceeds from the sale coupled with the milk income for the year would create a huge tax liability. She feels trapped.

Recently a cow knocked her down in the barn and she broke her hip. She is unable to help milk or do any farm work for three to six months. When she went to file for temporary social security disability, she found out that, despite filing joint income tax returns all their married lives, all of the farm income was in her husband's name and social security number. She was not entitled to benefits.

"I can appeal the Social Security decision and draw on my husband's number, but then he would receive less. And I won't do that. Basically I have worked on the farm for forty years for nothing . . . When I get to be 62, I can only draw 37% of what my husband gets from Social Security - which won't be very much.

"I just want other farm wives to know that they have to have a separate income to get Social Security. Just have your husband pay you a wage. It can still go into the same account, but you will at least get credit for the work you do in the eye of the government.

"I am going to try and work to change the law on that."

Another small town business owner from Minnesota wrote that she has tried to sell her business that performs a vital community service. But because of a stagnant and shrinking small town economy a young family would have trouble making a living from it. Her husband had to find other employment. They tried to sell the business but there were no takers. She realized that this isn't what she wanted to do with the rest of her life.

"My husband says to "lock the door" but I can't do that to the town or to the memory of the previous generations of family members in the business. I can't be the one to lock the door, therefore I'm also as trapped as the farmer milking cows every morning at 5:00 a.m."

She wondered if I had any insights into her situation.

The emotion of keeping a business (for farmers, it's the land) in the family has a powerful effect on business decisions. It is a big hurdle to cross but once you let go more alternatives open up and better economic decisions are made. In one situation, three businesses from adjoining small communities combined their resources under a single management and formed a more viable business. I'll share with her some of the details.

There were a few letters with helpful advice for the worn out dairyman.

A vibrant and active 82-year-old farm woman from Michigan wrote, "I’ve been down that road. I moved thru freshening heifers to deacons to feeders to cow-calf - also boarding cattle and calves. I backed into the sheep business. They were supposed to eat grass around the farmstead to reduce the fire hazard. Now I wouldn't trade them for the world."

This dairywoman turned sheep farmer then went into detail about her management of the lambs and timing on markets. She enclosed financial information comparing cows and calves with ewes and lambs.

She enclosed an article of a Michigan farm publication that described a family being forced out of the dairy business. She comments, " With the current theory of 'get big or get out' and with numerous small herds going out, it would seem like some kind of lease arrangement should be possible to keep from 'killing' the guy. Another thought: how about a dairy student from the state ag school who has the desire but not the money to milk? Give him or her a stake in the future -not just straight wages."

A South Dakota farmer gave the following brief advice. "Advertise the milk cows and have an auction or take them to an auction. Your cows will sell well. Buy back some beef cows and you will have money left over to pay down your debt. Enjoy life! It's the only one you get. Good luck."

A farmer from Indiana wrote, "Be advised that paying capital gains taxes is unnecessary! Transfer property to a Charitable Remainder Trust before selling. That will eliminate capital gains. The owner still receives all proceeds."