Couple Makes Succession Plans by Splitting Maple and Dairy Operation

Jacques Couture and his wife Pauline of Vermont made succession plans by splitting the maple and dairy operations.

Over the next 20 years, 70 percent of private farmland and ranches in the U.S. will change hands. Within the same timespan, 25 percent of today’s farmers will retire. What’s shocking is the number of farmers who do not have someone lined up to keep those sugar bushes and farms in production once they retire.

“It’s an alarming amount. A study we conducted showed that more than 90 percent of senior farmers in New England do not have a young operator on the farm,” said Kathy Ruhf, senior program director for Land For Good, a nonprofit organization for aiding farmers with land access and farm transfers. It is not a problem specific to maple operations. An Iowa study showed two-thirds of retiring farmers there had also not identified successors.

Jacques Couture and his wife Pauline of Westfield, Vermont, would agree. They entered a partnership agreement with a non-family member about five years ago. None of their six children chose farming as a career. So, the Coutures looked outside their family for someone to keep their life’s work in production.

“From our perspective, it is pretty gratifying to see something we’ve spent 47 years building up continue,” Jacques said, “as opposed to just having a herd dispersal and a lot of older maturing grass in the fields because we have nothing to feed it.”

Jacques Couture developed a 7,500- tap sugaring operation in a 185-acre forest to produce maple syrup, sugar, creams and candy for a prosperous retail maple products business.

The enterprise

Both Jacques and Pauline began farming just north of Westfield, Vermont, in 1970 starting with a dairy herd. They built a sugar house a year later. “Both my wife and I grew up on dairy and maple farms,” said Jacques, “so we got right back into it from the beginning.”

Today, the Coutures own 425 acres and lease another 150 to feed 70 Holstein cows in a certified organic dairy. They also run a 7,500-tap sugaring operation in a 185-acre forest to produce maple syrup, sugar, creams and candy for a prosperous retail maple products business. They started with 1,100 taps and thinned their forest to spur tree growth.

Initially, they sold syrup by the barrel to repackers and later put a sign on the road to attract the Couture Maple Shop’s first retail customers. They gradually built up a clientele, capitalizing, in part, from a healthy flow of traffic generated by the nearby Jay Peak Resort.

“When the snow starts falling, there are quite a few people around here and some stop in for syrup,” Couture said. “And when that jug gets empty, they send us an email or call us to send them another one.”

The internet also helped them grow their maple operation to the point where they sell all their maple products via their retail store.

Once their six children grew up and left the farm, they converted the family home into a farm-country, bed-and-breakfast. They have four guest bedrooms generating peak occupancy during the ski and fall foliage seasons.

Enter David Myers

Still, none of the Coutures’ children wanted to become farmers. “Growing up, we told them, ‘Follow your dreams,’” he said. One of their daughters has a 3,000-tap sugar operation, but works full-time as a school principal and her husband is employed in the computer industry. Their children pitch in to help on the farm whenever they come home but that is the extent of their interest.

In 2009, the Coutures hired David Myers, a recent high school graduate, to help run their dairy operation. Myers had graduated from high school the year before and worked for a landscaping firm cutting grass and filled in mornings and evenings working cows on another farm.

“For five months, I was milking cows every morning and every night and I was mowing 140 lawns a week. I really liked the work,” he said.

When winter came and he had no more lawns to mow, Myers heard the Coutures were looking for help. He started working there on January 1. Three years later, the Coutures had a conversation with him. “We asked him, ‘Dave, what would you like to do with the rest of your life?”

Myers said he’ll remember that conversation for the rest of his days. “I was bedding the barn and the cows were out in the pasture,” he said. “Jacques came in and asked what I wanted to do with my life and I told him, ‘Well, Jacques, you’re looking at it.’”

Armed with the answer they were looking for, the Coutures set about partnering with Myers on the dairy operation. “We’ve still got a lot of drive, but we’re not in our 20s anymore,” Jacques said. “We saw an opportunity in Dave that could make him a partner with us and he was really open to that suggestion.”

Jacques noted that Dave is very motivated. “It’s a way for him to get his feet into it and farm with someone who has some experience. For us, he brings youth to the equation,” he said.

It took the Coutures and Myers 18 months to work out the details. Meyers told the Coutures he was just interested in the dairy and not the maple business or the B&B.

To make the partnership work, the Coutures sat down with Dave, their banker and a lawyer to create an agreement. One of the problems they needed to work out was that, like so many other people his age, Myers had no money and no credit history.

Out of that agreement emerged a plan for Myers to own 25 percent of the dairy’s cattle and equipment in seven years. The Coutures created a limited liability company, limiting Myer’s liability for any debt the farm might acquire to the amount of money he has invested in it.

“We financed his first 25 percent,” said Couture. “We’re beginning the fifth year of our agreement and within two years, Dave will own 25 percent of our cattle and equipment.”

The Coutures and Myers are working under the assumption that at the end of their seven-year agreement, Myers will purchase the remaining 75 percent of the cattle and equipment. “At that point, we’ll decide if we want to finance that part of it, or with the equity Dave will have, very likely he’ll be able to get his own loan,” Couture said.

With the cattle and equipment in Myers’ name, the Coutures will lease their land to the LLC and remain on the farm, continuing to run their maple store and B&B. “There are two dwellings on the property; we live in one where the B&B and maple store are centered and Dave lives in the other,” he added.

If all goes well, in two years, Dave Myers of Westfield, Vermont, will own 25 percent of the cattle and equipment in an organic dairy herd now owned by Jacques and Pauline Couture. The Coutures want to transfer their herd to assure the farm they spent 47 years building will stay in production long after they retire.

Getting started

Mike Ghia is Land For Good’s Vermont field agent as well as the go-to staff person for farm succession work. Ghia said he tells farmers they should initiate succession discussions five to 10 years before they wish to retire.

Often, key to doing that is to have a discussion with the family’s younger generation. Nieces, nephews and grandchildren might also be included. Farmers are taciturn. They struggle with sharing the farm’s financial information. Ghia said he has been on a number of operations where the younger generation did not get their first look at the farm’s books until after he arrived.

To be successful, production skills are not enough, especially as there is more to a sugar bush than simply collecting sap. To increase the chances of future success, Ghia said, “The next owners should also be exposed to the wholesale and marketing aide of the business.”

Somewhat unique to the New England region is the conservation ethic that pervades the region. The Coutures possess that ethic. Not only is their farm conserved under the Vermont Land Trust, they have also taken steps to preserve their farm enterprise by taking on Myers as a partner.

Read more: Tackling the Tough Issues of Family Business

Photos: Farm Business Succession Videos, University of Vermont Extension