From the September issue of Drovers CattleNetwork.

“Fifteen miles as the crow flies east of the Missouri River” and nestled in the Swan Creek Valley of north-central South Dakota, sits Rock Hills Ranch. The ranch and Angus-based commercial operation is owned by fourth-generation cattle producers Lyle and Garnet Perman, and managed by the fifth generation, their son Luke and his wife Naomi.

The location itself is not where the original Perman family roots lie, but rather where Lyle and Garnet began their own operation.

It was 1977. Lyle and Garnet had been married for a year and were fresh out of college. The couple decided they wanted to get into ranching, moving to a 960-acre patch Lyle’s family had purchased just a couple of years prior. By the time 1979 rolled around, the two had purchased the ranch as their own.

“When I was growing up, it had always been my intent to come back to farm and ranch,” Lyle says. “The term ‘succession planning’ wasn’t used back then; it was more of dad saying, ‘I’m going to sell you the place that you’re on,’ and us being fortunate enough to buy it.”

There’s a common saying that goes along the lines of, “If your neighbor’s land goes up for sale, you better do what it takes to buy it, because it will be the only chance in your lifetime.” Three times over the last 35 years the Permans have had that opportunity and put their noses to the grindstone to expand their operation. The first popped up shortly after the couple started their own operation, right in the heat of the farm financial crisis in the early 1980s.

“It wasn’t an easy time to be in production agriculture,” Lyle shares. “As a result I started an insurance business on the ranch to help keep the operation moving forward. I also sold feed and balers and anything else I could to feed my family and pay the bills.”

Ownership from a young age

Together, Lyle and Garnet had two children, Luke and Kajsa. For Luke, who is now 33, it has been a lifelong journey to his management position of Rock Hills Ranch.

“A lot of time, people discourage the next generation from being involved in production agriculture,” Lyle says. “We decided to start off by encouraging instead, getting our kids involved in 4-H and youth range-management-related events.”

Ownership was also created at a young age, Lyle says, with encouragement for his children to build themselves up toward larger ownership — starting with chickens, moving those profits to sheep, and finally purchasing cattle, which would pay for their college.

“Incidents of ownership and for them to be able to say ‘this is mine’ were such an education and pride factor for them growing up,” Lyle says.  

Making room

It was 2006. Luke had just graduated from South Dakota State University after studying range science for livestock production.  He cherry-picked range management, economic, business and livestock marketing classes to maximize his education for when he returned home.   

“When I returned home, I was able to collaborate with some of our neighbors to expand my position in the ranch,” Luke says. “And many of those relationships have carried over into the way we operate today.”

This includes Luke taking on a neighbor’s cow herd and managing them alongside his own to better utilize the land and resources. He also farms on shares with his neighbor who is equipped to handle crop production, splitting costs 50/50, and pitching in on labor when needed. The ranch also started a hunting business to bring in a new business element to the family operation. 

Communication and patience

As Luke worked to expand elements of the operation, Lyle gradually began to hand him responsibilities to promote his personal growth.

“When it came time for us to start transitioning management decisions to Luke, it became very apparent that communication was a pivotal point,” Lyle says, adding it is a constant challenge to make time for talking when they get busy working, but they make it a priority. “I remember when I came back and not having communication or being fully engaged in the decision-making process right off the bat, and I didn’t want that to happen with him.”

Slowly but surely, Lyle and Garnet began leasing land over to Luke and Naomi. The cattle herds were also combined to a joint ownership, and the majority of equipment is leased from Lyle and Garnet. According to them, the transition took about five years prior to where they are today.  It took almost three years of tweaking land-lease agreements to get them to where they are now.

“There had to be a certain comfort level reached by the both of us before we could move forward,” Lyle shares. “And it wasn’t an easy cut-and-dry step process.”

Eventually, Luke took over the majority of management decisions, and at the age of 60, Lyle has stepped back, only tending to certain responsibilities while working for free.

“It was my goal that if something were to happen to me, Luke would know how to run the business without me being there to tell him what to do,” Lyle says. “I also didn’t want to be 80, and Luke making management decisions for the first time at 50.”  

The Perman family is quick to acknowledge this type of setup isn’t for everybody, and it isn’t easy to execute.

“The generational transfer is going to take two willing parties — the older generation has to be willing to eventually hand decisions down, but the younger generation has to be patient and not expect to run the place when they’re 24,” Luke shares. “Patience is hard, but if I had been less patient, it may have pushed me away. I could see things progressing over the course of time, but I had to earn that responsibility.”

Lyle agrees, saying, “The generation that follows you is not going to do everything the way you did. They can’t; if they did, we’d still be farming with horses. You have to be receptive to change, and you have to allow the younger generation to make decisions under your guidance, learning from small mistakes when they’re young, so they don’t make big mistakes when they’re old.”

Raising the sixth generation

As Luke and Naomi raise their four children, 4-year-old twins Isaac and Ella, and 10-month-old twins Micah and Noah, Luke is already keeping a mental note on how to engage his children into Rock Hills Ranch and grow them as strong individuals, just like his parents did with him.

“I feel like the most important thing is not that they have opportunity, but that they are set up to be successful in life — knowing how to function in society and having a strong relationship with Jesus,” Luke shares. “Naomi and I want to teach them responsibility and how to think critically to solve problems.”

Luke says a similar method of forming ownership that rooted his yearning to return to the family business will be carried over to his children.

“I want to not only teach them the responsibility of feeding a calf before school but how much the calf and feed cost,” Luke says. “Because at the end of the day, it’s not just about working hard; it’s about running a business.”

Click here to read, "Ranch succession-planning series: Seven keys to succession planning, Part I."

Click here to read, "Ranch succession-planning series: Seven keys to succession planning, Part II."

Click here to view the entire series on the ranch succession-planning series resource page.