Issue link: http://osercommunicationsgroup.uberflip.com/i/586335
P r o d u c e S h o w D a i l y F r i d a y, O c t o b e r 2 3 , 2 0 1 5 5 8 LOOKING AHEAD: SUCCESSION PLANNING FOR AGRICULTURAL BUSINESSES An interview with Doug Constant, Market Leader, Agribusiness Wealth Management, Bank of the West. PSD: A common issue for many agricul- ture businesses is transferring assets to future generations while maintaining a properly sized entity after the transfer. How can that be accomplished? DC: If the focus is maintaining a credit- worthy operation during and after the transition, it takes revenue generated by them consolidated into an entity that leaves the borrowing authority and deci- sion-making ability in the hands of the farm's operators. For the smoothest tran- sition, those "operators" could be a com- bination of existing management (e.g., the father and/or mother) and their heirs operating as a board of directors (for a corporation) or as managers (for an LLC). It's important to remember that when gifting to future generations or leaving a farming operation to the heirs upon death, the only thing passed on is the shares/membership interest of the farming entity. The entity's existing man- agement decisions and revenue to sup- port borrowing needs remain intact. Another benefit to keeping the oper- ation consolidated is that succession of ownership and succession of manage- ment can be done separately. This approach provides flexibility and can be useful when family dynamics present challenges. Potential tax advantages are avail- able too, such as receiving a step-up in basis of the assets upon death; an estate tax deduction when farm- land isn't the "highest and best use" for the property (e.g., urban influence); and the ability to defer payment of estate taxes over an extended period. A tax profession- al should be consulted regarding the entity's specific circumstances. PSD: How can you ensure that heirs who want to stay in the business can do so, while financially taking care of heirs who want to liquefy the assets? DC: This situation often comes up with operators who want to provide equally to all their heirs or donees. But, is equal always fair? An exit strategy for those that don't want to stay on the farm is impor- tant to put in place early. A lawyer, tax consultant, insurance agent and financial advisor (retirement and estate planning) will be important partners in that process. One option worth looking into is using life insurance to fund a buy/sell arrangement. The policy's cash value may accumulate and be available before the insured's passing, and the death benefit available after. Inserting payment terms – such as a five-year payout at a predeter- mined interest rate – into a buy/sell agreement or the farming entity's controlling documents (e.g., an LLC operating agreement) can help smooth cash flow demands. These provi- sions can also help the farming entity remain credit worthy. Note that this publication is intended to provide general information and should not be construed as providing tax or legal advice. It should not be cited or relied upon as legal authority. State and federal laws vary and no attempt is made to discuss the laws of any particular state. For advice about how these issues might apply to your individual situation, consult a tax professional and attorney. To speak to a Bank of the West relation- ship manager, call 866.501.4976 or visit booth #714. SOUTHERN VALLEY LAUNCHES NEW WEBSITE AND BLOG Southern Valley is excited to announce an updated website with the addition of a blog to keep both customers and con- sumers connected to the farm's story. Southern Valley originated as a four-man farming operation, but after two tragic deaths, Kent Hamilton and his mother Wanda were left as the sole owners of the farming operation. Over the years, they brought trusted family and community members into the business to continue growing the operation. Since those hum- ble beginnings, Southern Valley has grown into a progressive and innovative growing, packing and shipping facility while remaining true to its traditional farm roots and family values. "An updated website has been a long time coming," says Courtney Hamilton, Administrative Assistant for Southern Valley, "and is evidence of our commit- ment to remain progressive and innova- tive." The new website allows customers to view all products grown, packed and sold at Southern Valley along with avail- able pack sizes. There is also a seasonal availability chart, allowing customers to see where they can expect product from during the different growing seasons. The company blog, "Taste the Valley," which can be accessed using the header menu, is of specific interest to both the customer and the consumer. "We are so excited to be able to tell our fami- ly's story to our customers and keep them informed on our production practices. We love the story of how our family farming operation came to be, and we think they will too," says H a m i l t o n . "Consumers want to get in touch with where their food comes from now more than ever, and this is the per- fect time to let them know who we are and how we grow the food they love to eat." In addition to telling the family's story, the blog shares information about specific products and production prac- tices as well as addresses current contro- versial issues for consumers. The website launch comes alongside new convenience package products – Salad Cucumbers, Summer Squash and Farm Fresh Green Beans – which provide consumers with access to original Southern Valley recipes through each QR code on the back of the packages. Each packaged product allows consumers to connect back to the farm that grew their product via the website URL on the bag. The most recent addi- tion to the website includes a staff page, complete with individual biographies of each staff member, and allows direct email contact with the salesmen. "We're proud of the individuals we have hired over the years and grateful for the chance to share their story alongside ours," says Jon Schwalls, Director of Operations for the company. Southern Valley is a female-owned and family-operated company that com- bines old-fashioned values and traditions with progressive and innovative thinking. Formed as a four-man, 100-acre farming operation in 1987, Southern Valley now grows produce year-round at three loca- tions: Georgia, Yucatan and Tennessee. For more information, visit booth #4663, go to www.southernvalley.us or call 229.769.3676. HERLITZ'S HIMPACT A BEST OF BREED SUPPLY CHAIN SOLUTION An interview with Carl Herlitz, President and CEO, Herlitz IM. PSD: As the designers and builders of E3, you've had great success in whole- sale and retail, supporting tens of thou- sands of customer locations. Why have you and Anders devoted your lives to supply chain planning? CH: There are two reasons. First, we have always believed that buyers deserved a toolset to help make smarter and timelier decisions. Inventory is a dis- tribution company's largest asset – driv- ing both customer satisfaction and prof- itability. Poor customer service affects both top line and bottom line numbers. Having immediate insights and making the right buying decisions lowers inven- tory, improves service and the bottom line. Second, we believe that an inte- grated forecasting and replenishment solution built on today's technology provides huge benefits together with right-sizing inventory. Your cell phone is way more powerful than the AS/400 we designed TRIM around in 1992. Our new products are designed to drill into details and drive better decisions. PSD: Why do you believe HIMPACT is more than just a replenishment solu- tion? CH: We view our solutions as scientific tools to identify problems and opportuni- ties; leveraging technology is the most practical way to make our customers smarter and more profitable. Our solu- tion, built on decades of experience, reviews all information daily and pres- ents its results, transforming the buyer into Ultra-Buyer. Ultra-Buyer reforecasts each item daily, anticipates seasonality and evalu- ates customer promotions. He finds the most profitable service level down to each SKU and location and tracks vendor lead time to that same level. Ultra-Buyer evaluates customer service targets, dynamically adjusting inventory to meet your goals. Oh, it also replenishes daily, telling you how often to buy and how much. PSD: What made you decide to get back into the supply chain space? CH: Our customers were looking for answers to their business challenges. The highly competitive marketplace and the economic downturn changed consumer buying habits. They wanted a solution that was smarter and that was better at tracking demand. The marketplace has shifted: multi- channel execution, customer expecta- tions and the need to collaborate to suc- ceed. Technology has grown exponen- tially: powerful analytics, access to gran- ular customer data and the bandwidth to forecast daily. HIMPACT provides an opportunity to capitalize on these power- ful business and technology forces com- ing together. PSD: What kind of feedback is coming from your customers? CH: Customers have embraced HIM- PACT. The workbench puts all informa- tion at their buyer's fingertips. The sys- tem feels familiar to our loyal customers. It contains a wealth of new features and "better ideas" that Anders and I gathered from our customers and consultants from around the world. Our bolt on solution is up and run- ning in less than a week with full func- tionality for all users; replenishing DCs, store replenishment or business partners doing VMI. Everyone is using the same full toolset, in office or remote via the cloud. Customers are seeing significant improvements in inventory flow; improved customer service, lower inven- tory and higher sales. Whether using one of our old systems, one from competitors or an ERP solution, we have a proven track record. HIMPACT will improve your performance dramatically. For more information, visit www.HerlitzIM.com, or call 617.440.7550.