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The Family Dairy, Reimagined

  • In the small town of Lindsay, Texas, with just a few milking dairies still operating, Circle N Dairy has reinvented the standard for family dairies.

In the small town of Lindsay, Texas, with just a few milking dairies still operating, Circle N Dairy has reinvented the standard for family dairies.  

Michelle Neu married into the family dairy business, and the lifestyle that came with it, in 1980. Her husband, Tommy Neu, is a second-generation dairy farmer.  

Michelle Neu, adoring the calves, said that animal welfare is a top priority for the Circle N Dairy.

“Choosing this life was easy, I just loved him. I supported him,” Michelle said. 

Tommy’s father opened the dairy in 1967; the family’s only source of income was from the cooperative. The milk truck would gather milk from neighboring dairies, then combine the milk at the processing plant to be used for dairy products.  

Circle N Dairy opened an onsite store in 2009 to supplement their income, in addition to traditional revenue from the co-op. Michelle said she wanted their product to go directly to their customers.  

A once private dairy only visited by the cooperative milk truck is now a hot spot for local goods. While there are benefits to providing an outlet for customers to experience agriculture up close, the hardships of owning a small dairy do not go away.  

“It was easier when the milk truck came,” Michelle said. “I won’t lie about that, but the store is more rewarding because you meet the customers that actually use our product.” 

Raw milk was the first product available to customers directly from the dairy; however, Michelle said she wanted to bring in a more well-rounded supply of local goods. 

“This is a place that customers want to come to because they don’t have access to something like this.”

Michelle Neu

“We opened our little bitty store and were excited to start bringing in other things,” Michelle said. “We had neighbors bring eggs and someone else made baked goods. It has only grown from there.”  

In addition to completing the expected daily tasks of owning a dairy, Michelle coordinates with local vendors, restocks the store throughout the day, and markets the dairy to customers.   

“Dairy farmers are often recognized as some of the hardest workers in the agricultural industry,” Michelle said. She remembered waking up around 2 a.m. one Christmas Eve for the morning milk, trudging through waist deep snow to get to the milking barn.  “Those are the moments where you decide if you truly want this life,” Michelle said. 

“This is a seven days-a-week, every week of the year job,” Michelle said, “and I don’t want any sympathy for that.” 

Michelle said she understands consumer’s growing interest in knowing their food comes from wholesome operations. Circle N Dairy has been offering private tours since before the opening of the Country Store. Interest in the tour amongst customers has grown as the popularity of the dairy increases. The tour shows people what dairy farmers do every day, teaches consumers about agriculture, and generates revenue.  

“This is a place that customers want to come to because they don’t have access to something like this,” Michelle said. “We want them to experience the country life and enjoy it the same way we do.” 

 With investment and family tradition driving the day-to-day operations, Michelle said she could not imagine losing the dairy.  

“People will come to our store and thank us for what we are doing,” she said. “They appreciate what we do and when we are feeling down, they kind of give us momentum to say, ‘Yeah, we’re going to keep going and get up again tomorrow.’” 

Change to the Estate Tax Means Good Things for Farmers and Ranchers

There is no question that the number of family-run farms and ranches in America are on a fast decline. According to the United States Department of Agriculture (USDA) Farms and Land in Farms report, the number of farms has decreased by 137,500 farms in the past ten years. This can be attributed to many causes; such as loss of interest in the upcoming generations, or farmers and ranchers struggle to earn what they need to live. There is also one big reason these operations are declining that many do not think about, and that is the estate tax.

The estate tax, also known as the “death tax”, is a tax placed on the deceased’s estate when it is passed down to the heir. In plain words, when a farm or ranch is passed on to the next generation, a steep tax can be placed on the estate if it is large enough to not be exempt. This is what leads operations to be parted out and often sold-off, and makes farm succession very difficult.

Estate taxes can make it hard for all generations to enjoy the ranching lifestyle without having to worry about the burdens of paying such a large tax. Original photo by Sterling Shrum.

What the Estate Tax Was

Originally, the exemption was $5.49 million per person. If a person’s estate is valued at less than that amount, they are exempt from the estate tax. If the estate is worth more, it will be taxed for the amount over the $5.49 million, at a rate of 40 percent. For example, if I was an heir to my father’s ranch that is worth $10 million, I would be taxed for the $4,510,000 that is over the exemption level. At a tax rate of 40 percent, I would pay $1,804,000 in taxes just to inherit an operation that has been left for me.

What the Estate Tax Is Now

The Tax Cuts and Jobs Act was passed at the end of 2017 and increased the tax exemption level. The new exemption level went into effect on Jan. 1, 2018, and raised the exemption level to $11.2 million. With this increase, my father’s estate of $10 million would fall under the $11.2 million amount, and I would be exempt from paying a high tax on the estate. This means I would not have to pay almost $2 million in taxes!

What the New Estate Tax Means

The increased tax exemption means more operations can be passed down without having to incur a tax. This can help to keep family-owned farms and ranches intact and successful. Many families were resorting to piecing out sections of land, or resisting the growth of the operation, just to keep the value small and under the original $5.49 million exemption level. This caused many operations to deny opportunities that could have exponentially grown their business, which led to missed income. One thing that did not change about the estate tax in the Tax Cuts and Jobs Act is the timeframe to pay the tax. Heirs have nine months to pay the tax, and in some cases this time frame can be expanded to 15 years, if you qualify.

There are many resources, such as this one, if you are interested in setting up a succession plan for your operation. Graphic courtesy of Farm Bureau Financial Services.

Estate taxes play a large role in farm succession planning for families. Hopefully with the exemption level almost doubling, it can take away some of the burden of losing a loved one.


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