From Friends to Family

From Friends to Family

Bob Leifker knows all about life transitions. He was only 12 when his father suddenly passed away, the family farm near Galena, Ill., was sold and he was forced to move to town.

"I thought I could run the farm at 12, and I still think I could have,” Leifker says. Youthful enthusiasm runs deep and a job as a butcher simply couldn't satisfy his craving to farm. In 1978, Leifker rented some farm buildings, grabbed a pitchfork, shovel and wheelbarrow and started raising feeder pigs.

Time passes quickly when you're on a mission. Marriage, four children, acreage purchases, more hogs, more rental land, the acquisition of a grain facility and the hiring of employees have led to a farming enterprise that now faces the ultimate test—the need to plan for succession that embraces both family and nonfamily members.

Zero to 50. The move to become a full-time farmer kicked into gear in 1981 with land purchases and hog facilities. Leifker's first loan application was turned down. An appeal to the state finally secured $130,000 in financing. Leifker still winces at the memory of going through the mail to intercept the bills before his wife, Rita, saw them. Rita's off-farm job was also an important foundation of the operation.

Although all four of the Leifker boys got college degrees in agriculture, the farm still wasn't quite big enough to support additional partners upon their graduation. Each son pursued agricultural-related professions as Bob and Rita kept plowing their energies into expansion. 

The need for extra hands eventually came, but by then, all of the sons were on their own career paths.

Enter Dave Justman, family friend and part-time employee during high school and college, who graduated with a degree in agronomy and a desire to farm. In 2004, Justman became a full-time employee.

Tony Polfer, another longtime family friend, joined the operation in 2006. He had also worked on the Leifker farm in high school and college, but put his degrees to work developing software for the banking industry. Then he decided to move his family back to the Galena area and knocked on Bob's door. 

"I really didn't know if I had a place for him,” Leifker says. "But we found plenty of work.”

Meanwhile, son Jamie Leifker maintained an active interest in the farm decision-making, with his own dreams of possibly returning to the farm one day. His wife, Catari, handles all of the farm's book work.

Part of the Family. While Bob Leifker isn't quite ready to hang up his boots, he knows now is the time to plan an exit strategy. Top of mind is being fair to the entire team, and to do it, the family has devised a 10-year transition plan incorporating all the talent Leifker has accumulated.

Blending a nonfamily member into an operation is the same as adding a family member, says Joe Kluender, a consultant with LarsonAllen. "Before bringing anyone into the operation, you must determine the need of your farm and the value that person brings,” he says. "With multiple members, it is important to have a plan in place that everyone understands.”

Leifker values Justman's talents on the cropping and grain-handling areas of the farm, especially since one of the farm's major expansion moves was to purchase an idled 700,000-bu. grain facility.

Polfer brought precision farming to the operation. "Today, we have auto-steer, swath control, yield mapping and variable-rate fertilizer integrated throughout the farm because of Tony,” Leifker says. Due to precision farming techniques, spray overlap has dropped to under 3%. This efficiency has saved, on average, $6 per acre on seed, $4 per acre on chemicals and $3 per acre on liquid fertilizers.

Expansion Ahead. Right now the group is farming 2,900 acres—1,000 of that owned by the Leifkers and the remainder rented from 18 landlords. Long-term relationships with landlords have been imperative. 

Growth plans include expanding the farm's land base to 4,700 acres by 2014 and farming land that is rented or purchased by any of the team members.  

Leifker's own untraditional entry into farming may make him more open-minded on the topic of non-family members as part of the farm transition. He feels good about the prospects of giving two young men a start in the profession he loves. 

Life eventually comes full circle. Leifker recently purchased some of the land his mother sold 44 years ago and he rents the rest. Now, that's satisfaction.

A Blended Family Plan 
The transition plan developed by the Leifker family gives Dave Justman and Tony Polfer the opportunity to build their own personal balance sheets. Part of their compensation package is the chance to rent a percentage of the farmland from Bob Leifker, have access to the farm's machinery and benefit from the farm's ability to buy in bulk. They make grain marketing decisions together as a team. All input expenses aside from the machinery are shared across the entire operation. Yields and selling price are shared, as well. 

"They are able to build equity and establish their own lines of credit to someday purchase their own land,” Leifker says. "It helps to lower their cost of entry by not having to invest in machinery.”

Leifker's son Jamie and he have established a limited liability company (LLC) for the equipment and grain-handling facility. Jamie has been purchasing shares of the LLC during the past 10 years while working off-farm. Eventually, the transition plan includes allowing Justman and Polfer the chance to buy into the farm's LLC. 

In addition to the written transition plan, Bob and his wife, Rita, have an estate plan in place that includes provisions to allow Jamie, Justman and Polfer the opportunity to remain an active part of the operation.

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