With great inheritance comes great responsibility

Before Max Katz was a well-known Oklahoma cattleman, he was an immigrant from Nazi Germany who became a self-made man in his new homeland.

A lifelong bachelor with no children of his own, Max built his empire from the ground up before leaving it to his beloved nieces and nephews.

Like many beneficiaries who are willed agricultural real estate, Max’s heirs were not involved in the agriculture industry and were soon faced with an emotional decision of what to do with the land. Fond memories versus feasibility of managing farm land from a different time zone soon forced the family to realize there is a season for everything and sometimes the right decision is also the most difficult.

Max Katz’s story is also one of perseverance and achievement. He, his parents and two brothers narrowly escaped Nazi Germany in 1938 and immigrated to the United States. He became a commission buyer before building his own cattle operation in Stillwater, Oklahoma. From 1952 to 2008, he expanded his cattle business that covered 2,850 acres. After Max’s death in December 2010 at the age of 89, his seven heirs created a company to manage their fractional inheritance collectively from out of state.

In the years since Max has been gone, they’ve discovered how challenging and time consuming it can be to manage such significant agricultural assets collectively from so far away.

As a teenager, Carl Katz, Max’s nephew, spent many of his summers coming from the East Coast to Stillwater to visit Max. He enjoyed being on the ranch and learning about the cattle business.

“We fed and worked cattle and went to multiple auctions throughout the week,” Carl said. “He was one of the most prominent buyers in the area. At any given time he’d have close to 3,000 head of cattle split between various feedlots and his own pastures.”

Carl says he was interested in being involved in the cattle business as he got older, but Max did not want that for his nephew. Max wanted Carl to stay in school and get what he considered a more stable job with less hardship and uncertainty. Carl ended up with a successful career in the software industry.

Carl says he tries to get back to Oklahoma about once a year, but it is a daunting task to have a full-time day job and manage another business from so far away.

“Today, we’re spread out all over,” Carl explained. “I’m here in Boston, I’ve got a sister in Nashville and a brother in Maryland, one nephew in Florida and two others in Tulsa that have zero interest in ranching. It’s a conundrum because we don’t live in that location so we can’t really oversee it on a regular basis in the way that it should be.”

The Katz family has leased the land out for grazing as well as for recreational use over the years, but Carl says when you have that many family members as business partners and everyone has different financial circumstances and needs, sometimes it becomes hard to align on the direction to take things.

In 2016, the Katz family ended up selling 1,700 acres of their land because the oldest heir, with the largest fractional interest who lived outside the U.S., no longer wanted to hold on to her share of the property. Although the other heirs wanted to retain the entirety of the ranch, they ultimately acquiesced and agreed to sell some parcels to accommodate a buy-out for her portion. Carl says it was heartbreaking to let it go, but given the circumstances, they did not have many other choices that would not result in a lengthy and expensive family squabble.

Recently, they made a difficult decision: sell the ranch in May, figuring that perhaps the time had come to provide another farmer or rancher a once-in-a-generation opportunity to acquire 1,100 acres of prime pasture land that he or she could tend to professionally and enjoy in the same way that Max once did.

Will there be future farmers to inherit?

Although the Katz family’s story of triumph through adversity is unique, the chapter when the land was left to nonagricultural inheritors is not as uncommon as one might think.

According to the 2014 United States Department of Agriculture Tenure, Ownership, and Transition of Agricultural Land Survey, 2 million landowners rented out 353.8 million acres of land for agricultural purposes. This is 39 percent of the 911 million acres of farmland in the states surveyed. Of these land owners, 13 percent were farmers and ranchers and 87 percent were landlords who do not operate a farm.

These statistics show just how uneven the number of agricultural versus non-agricultural land owners is and indicates that a large number of people are probably in the same situation as the Katz family.

According to the USDA Economic Research Service, in 2012, more than 31 percent of principal farm operators were 65 or older and the average age of the American farmer was 58.

As the average age of farmers keeps getting older and fewer young people are pursuing farming or ranching as a career, fewer agriculturists inherit the land and keep the farm in the family for another generation.

Given the Katz family history, the heirs realize the importance of the family farm and the obligation of caring for the property itself. In the end, they were confronted with the reality and delicate balance of making the best decision for themselves and the property and at the same time understand letting go of the land does not mean letting go of Uncle Max’s memory.

“We came to a point where we realized the land is agricultural in nature and is really best suited for that use, whether it be running cattle on it or farming it and unfortunately the folks Max left his prized possessions to just aren’t in that business,” Carl explained. “We decided it probably makes the most sense to give somebody else the opportunity, particularly people that are in the industry, to make good use of the land for its intended purpose.”

At the end of 2018, after deep consideration, the Katz family decided to sell the remaining balance of the land.

Ending an era or starting a new one?

The Katz family takes some comfort in knowing a new farm family will have the chance to buy a prime piece of land and start building their own legacy, just like Max did.

“It’s difficult to part with the land because we know the history and I’ve got a very sentimental spot in my heart for that property,” Carl said. “Max worked so hard all those years to acquire it and build his business, but we’ve got to look realistically at the practicalities of continuing to operate it.”

Carl said given the size of the parcels and since several of the tracts are contiguous, the sale of this spread is a once-in-a-generation opportunity to acquire prime agricultural real estate in Payne County and in such a large quantity.

Gregg Pickens, of Pickens Auctions in Stillwater, will conduct the auction. That’s only fitting, because he had known Max for many years and always had great respect for him.

“It’s an honor and a privilege to work for the Katz family which is a true American success story,” Pickens said. “Max was a man of few words but his words counted and just about everyone from his era has a Max Katz story.”

 Pickens said the 1,100-acre offering is the largest undeveloped, privately owned land tracts that close to Stillwater. He described the land as a nice blend of Native and Bermuda grasses with some cultivation used for wheat pasture grazing.

“The fact that Max Katz put together such a large amount of land in his lifetime and also the fact that he started with nothing and how he took care of his family during his life and now after is nothing short of amazing,” Pickens said.

The auction is set to take place at the Payne County Expo Center in Stillwater on May 17 at 10 a.m. To learn more, visit www.pickensauctions.com.

Lacey Newlin can be reached at [email protected].