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August/September 2012 $3.50

INSIGHT

2012

JEFF BRAISHER OPENS NEW HORIZONS

+PLUS BREAK THE PRICING CYCLE HOW COMPETITIVE ARE YOU? NEW SOURCES OF NITROGEN

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Because of you, Pioneer ® brand seed is planted on twice as many farms and twice as many corn and soybean acres as any other seed brand in Canada. But we don’t take our leadership role for granted. We take it personally. We know serving growers is a privilege, not a job. We believe that leadership comes with a responsibility to work smarter and try harder. So we don’t stop at good enough. Or better than last year. And neither do you. That’s why together, we’re breaking barriers in yield, knowledge and success on your farm.

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AUGUST/SEPTEMBER 2012 OUR ANNUAL INSIGHT ISSUE It all feels new, but getting long-term value out of today’s volatile markets requires breaking out of old patterns of decisionmaking first. Can we actually do it? We ask analysts and farmers across the country.

8

RIGHT FACTS, WRONG RESULTS John Heard proves how research gets manipulated to get you to open your wallet when you shouldn’t.

12

THREE TAKES ON AG RESEARCH Everyone complains ag research is broken. Now, here are three unique ideas to fix it.

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BREAK THE CYCLE In every industry, it’s the decisions made in good times that are the biggest risk when times get tough.

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THE HIGH COST OF SUCCESS With the rise in farm spending, Maggie Van Camp asks, are we losing our heads in these heady times?

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REACHING FOR THE MAGIC Ever wonder why non-farmers think Sarah Elton is the real voice of agriculture? Here’s her answer.

28

MINDING THE FUTURE With a new generation of mentors, young farmers like Jeff Braisher are gaining valuable business insights.

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LABOUR LEADERS Understanding your workforce, and exactly why you need them, makes for a pro-business staffing plan.

36

MAKING A COMEBACK New Holland is launching a new campaign to get back into North America’s machinery spotlight.

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NITROGEN WITHOUT AGRIUM With nitrogen prices decoupled from natural gas, these farmers are looking to make their own N.

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GUIDE HR — TOO GOOD AT WHAT YOU DO Any leadership trait will be a negative if you take it too far. Just ask your family.

56

GUIDE LIFE — TIME TO DECIDE Time management is even more important than you think. Here’s how to get started.

AUGUST/SEPTEMBER 2012

GUIDE LIFE — SAYING GOODBYE Selling the farm is life changing, so use these tips and make sure part of the farm stays with the family.

NATURE’S WAY OF DOING BUSINESS Scott Beaton is among a growing number of farmers looking at an old problem in a whole new light.

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58

PRODUCTION 42

HE’S NOT BUYING IT Let other farms grow their land base. Shawn McRae sees more promise in growing his profitability.

46

SURGING WHEAT Despite corn and soybean prices, the outlook for wheat has never been better.

48

THE RIGHT MOVE? On some farms it’s a costly distraction, but more corn growers say they won’t farm without a dryer.

50

PESTPATROL This fall is shaping up as a great window to control perennial weeds. Mike Cowbrough tell us how.

EVERY ISSUE 6

MACHINERY GUIDE Grain carts are becoming as essential as combines for an efficient harvest.

54

HANSON ACRES The aftermath of the hailstorm shows the Hansons why they’ve been taking too much for granted.

60

GUIDE HEALTH You’ve been reading about OxyContin in the newspaper. Here’s how it affects you.

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PETUNIA VALLEY Good yields and good prices? Both at the same time? Our boys in the valley can’t believe it’s true.

Our commitment to your privacy At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Avenue, Winnipeg, MB R3H 0H1. Occasionally we make our list of subscribers available to other reputable firms whose products and services might be of interest to you. If you would prefer not to receive such offers, please contact us at the address in the preceding paragraph, or call 1-800-665-1362.

CONTENTS

BUSINESS

country-guide.ca 3


desk EDITORIAL STAFF Editor: Tom Button 12827 Klondyke Line, Ridgetown, ON N0P 2C0 (519) 674-1449 Fax (519) 674-5229 Email: tom.button@fbcpublishing.com Associate Editors: Maggie Van Camp Fax (905) 986-9991 (905) 986-5342 Email: bmvancamp@fbcpublishing.com Gord Gilmour (204) 294-9195 Fax (204) 942-8463 Email: gord.gilmour@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com Cory Bourdeaud’hui Cell (204) 227-5274 (204) 954-1414 Email: cory@fbcpublishing.com Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562

Tom Button is editor of Country Guide magazine

Looking for what doesn’t change I’ve said it before, but it remains true. The big thing non-farmers don’t understand about farming is that so much of it hinges on decision-making. It’s one of the constants in agriculture. Farmers wrestle with more tough decisions in a year than many of their city cousins face in their entire careers, and not just because of the financial scale involved, although it can’t be completely overlooked that a mid-power tractor today can cost more than the average house. The challenge is that there’s no clear way to evaluate which decision is best. Now, it looks like 2013 is going to be even worse, despite current crop prices. Few Canadians will face choices this winter as tough as a farmer trying to decide whether to match the ludicrous bid that the guy down the road has just made for the land you’ve always rented, or whether to say it’s just too scary and give the land up, even though you’ve sized your machinery with that land in mind. Nor will they spend sleepless nights wondering whether to size up the farm so the kids can come back home, even though land has been on a record run. And of course, that’s without even mentioning whether now is the right time to pull the trigger on some sales, or whether to hang on so you don’t miss out on the next shot of bad weather news from almost anywhere on the globe that sends prices shooting still higher. The experts aren’t a lot of help. Either you can go to your lender, where you’ll be 4 country-guide.ca

told that global population growth means you’re virtually guaranteed a profit on any money you want to borrow. Or you can go to the market experts, who warn that current prices are way, way above what we should pencil in for coming years, as David Drozd tells Country Guide associate editor Gord Gilmour for his piece this month called Break The Cycle. The lesson of the past couple generations is that over the long term, commodity prices tend to hover at just under the cash cost of production for the average-cost producer. Either that’s because prices are low, and inputs are low too, or because prices are high and inputs are high as well, including the inputs that farmers are in charge of, such as land rental and purchase prices. In this way, experience is the third “expert” opinion. But is experience still valid, or are we in a whole new world, where the twin demons of global climate change and global population growth mean that agriculture will fall short of demand more often than it can meet it? To be honest, I don’t know, and I know you don’t know either. But it’s helpful to recall what our parents used to say. Most bad decisions get made in good times. At the very least, a proverb like that has the merit of being based on human nature, the one thing that isn’t going to change. Are we getting it right? Let me know what you think. You can reach me at tom. button@fbcpublishing.com, or phone me at 519-674-1449.

Advertising Services Co-ordinator: Sharon Komoski (204) 944-5758 Fax (204) 944-5562 Email: ads@fbcpublishing.com Publisher: Bob Willcox Email: bob.willcox@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Director of Sales and Circulation: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com Designer: Jenelle Jensen Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 12 times per year by Farm Business Communications.  Subscription rates in Canada — $33.60 for one year, $51.45 for 2 years (prices include GST). U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50. Publications Mail Agreement Number 40069240. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

Canadian Postmaster: Return undeliverable Canadian addresses (covers only) to: Circulation Dept., PO Box 9800, Winnipeg, Manitoba R3C 3K7. U.S. Postmaster: Send address changes and undeliverable addresses (covers only) to: Circulation Dept., PO Box 9800, Winnipeg, Manitoba R3C 3K7. Subscription inquiries:

Call toll-free 1-800-665-1362 or email: subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 131 No. 9 Internet address: www.agcanada.com

ISSN 1915-8491 The editors and journalists who write, contribute and provide opinions to Country Guide and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists, Country Guide and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as Country Guide and Farm Business Communications assume no responsibility for any actions or decisions taken by any reader for this publication based on any and all information provided.

august/september 2012


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Machinery

By Ralph Pearce, CG Production Editor

On more and more farms, the grain cart is as vital to getting the crop out of the field as the combine. That’s increasingly true regardless of farm size, with many smaller operations pencilling out the advantages that come from their enhanced efficiency. Whether your operation is expanding or specializing, grain cart manufacturers are tweaking their designs to take those efficiencies to new heights, as you’ll see from this month’s brief survey of some of the newest models.

J&M LEANER  As farms get bigger, so do combine headers, and one challenge growers face in the field is overlaps between the grain cart and the combine. But J&M grain carts have an answer, with the Leaner series for 1,130-, 1,250- and 1,500-bushel capacities. The Leaner is an extender that is bolted on to the side of the grain cart, bringing the rim of the cart two feet closer to the combine. It also increases the tank’s capacity without raising its height. The design has evolved in response to the increasing width of combine headers and the ongoing risk of a wagon pulling away and running over the header. It also negates the need for a longer auger. www.jm-inc.com

unverferth 

balzer 1550 

In an ongoing effort to help growers manage and reduce compaction in their fields, Unverferth is unveiling its “Tracked advantage” grain carts. By design, tracked vehicles distribute the weight and pressure across a wider area of soil beneath them, thereby reducing compaction while improving grip. Unverferth’s grain carts offer a long, wide track, promoting greater flotation and manoeuvrability without berming the soil as they turn. The steel bogie wheel configuration will also help increase efficiency by reducing maintenance, all while offering more consistent ground contact and enhanced weight distribution. That means there’s less point-loading on each axle. Best of all, this track design is available on all grain carts from Brent, Killbros, Parker or Unverferth dealers. www.unverferth.com

Whatever your goal, whatever your size, Balzer says it can outfit you with the grain cart that matches your needs. Balzer’s 1550 model is the mid-size unit and is well suited to large farming operations. Speed and efficiency are the hallmarks of these carts, including the capacity to unload 1,090 bushels per minute, enough to load a semi-trailer in about 90 seconds. The cart’s tank is independent of the axles and the hitch, so the scales are very accurate, which means improved data management. The joystick control also helps boost ease of operations and efficiency. Last but certainly not least, Balzer’s units have the Auto-Trail steerable axle system on both the tandem and tridem models. That feature provides superior flotation with higher bushel capacities, thus reducing compaction. www.balzerinc.com

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August/september 2012


brandt graincart 1322xr  A companion to the 1020XR, this latest model from Brandt comes to the field delivering a series of key features, including visibility, versatility, stability and easy cleanout. A longer auger provides added clearance for off-loading combines while its adjustable discharge spout, placed 34 inches closer to the cab, offers the operator a clearer view. The walking axle beam on the 1322XR is built for stable transport whether empty or fully loaded, and there are three width positions for crop rows. And when one job is done, the tank’s smooth interior — without ledges or other catch points — means the task of cleanout is that much easier, an efficiency bonus during the harvest, especially when segregating or switching crops. www.brandt.ca

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opinion

Big Idea

Nature’s way of doing business

Scott Beaton is among a growing cadre of farmers looking at an old problem in a whole new light The problem is the cost-price squeeze. Even though crop prices

By Gord Gilmour, CG Associate Editor

the ambition of farmers like Rosser,

way of doing business to cut their input

Manitoba’s Scott Beaton.

costs, improve their margins and make

seem healthy across the country, the

Generally farmers have looked at

outlook for rising input costs may put

their financial realities and seen just one

They’re employing a new arsenal of

next year’s prospects on a knife’s edge

solution. It’s to produce more, which

tools ranging from intercropping to green

for even the most efficient of conven-

typically involves adding more by way of

manures and vigorous crop rotations

tional farms.

inputs. But Beaton and farmers like him

to cut their fertilizer and chemical bills.

But maybe you can change the way

think there might be a better way, one

And while it’s early days yet, they say

the equation works. At least, that’s

that involves leveraging Mother Nature’s

they’re beginning to see results.

Country Guide: How did you come to be involved in this sort of agriculture? Scott Beaton: We’ve been looking to save input costs for a few years now, and this is something I’d learned about in university about 10 years ago from Martin Entz (a professor of natural system agriculture at the University of Manitoba). Having him right here in Winnipeg has certainly been a great resource. There are also farmers out there who have been doing these things for a while — there’s no shortage of knowledge out there.

CG: What’s your primary interest here? Are you a green guy, or is it strictly economics? SB: Oh, I think I’m on the green side, my primary interest is in soil health. But you’re quite right that I see economic advantages to it. The No. 1 reason I do it is economics. For me I want to get my organic matter level up and have a bit of forgiveness in my soil. If we’re heading into an era of more drought and heavy rainfall events, I want to be able to deal with that, and I think having more organic matter in my soil will help take up and retain that water.

CG: I get the impression you view your system as very much being in development. In that light, what do you see as the next big step? SB: I’m pretty interested in getting some animals into the mix and using them to incorporate the green manure, rather than incorporating it with a discer or other tillage, or just leaving it to sit on top. I don’t really have any experience at all with grazing animals though, so that’s a daunting thing, to say the least. Initially I might be interested in developing a partnership with someone who has animals and needs pasture, but we have some spots I’m not sure should be in crop — they’re prone to erosion and flooding. I’d like to see them sown to pasture and use them as a paddock system, so I’d ultimately like the animals to be ours.

CG: The main idea seems to be to mimic what nature is already doing. Can you tell us a bit about what that actually looks like on your farm? SB: We began with some pea-canola intercropping a few years ago. It gives you a more diverse plant population in your field and seems to allow both crops to thrive and complement each other. Now we’re experimenting here and there with green manures, where you plant a relay crop that creates biomass which you incorporate into your land. I just think if you’ve got a couple of tonnes of plant material growing which you’ll incorporate when everyone else around you is tilling, you’re going to be in better shape. What we’re doing is planting it after winter wheat, allowing it to grow, then winterkill. The first time we used a clover alfalfa mix, and this year we used a pea, barley, radish and canola mix. 8 country-guide.ca

CG: Where are we at with the adoption curve for this? I always draw the analogy to zero till, and I think in the early days for the first people doing it, it was pretty lonely. What’s your experience? SB: (chuckles) Well, I think there’s still got to be a few more. Around here there are two or three others looking at it, but I’d say the vast majority of the neighbours who drive by don’t know what we’re up to and don’t really care to know. But then you go to something like the field day in Carman this summer (the University of Manitoba’s annual ecological and organic agriculture field day) and I bet there were 200 people there, so there’s certainly some interest out there. I guess I’d say that only time will tell how it works out.

their farms more profitable.

CG: Do you have any advice for farmers who might be pondering a low-input approach? SB: Start small. We are. Our green manure field this year was just 40 acres. There’s lots of room for just trying a little bit here and there to get a feel for it.

august/september 2012


management

Right facts, wrong results A whimsical Manitoba study shows how research can be manipulated to show agronomic benefits where none exist. Can you spot the fallacy? By Lisa Guenther bviously, it’s silly. Or is it? John Heard, for one, thinks all of us can be lured into believing the research that we want to believe, whether it’s true or not. To put that idea to the test, Heard sprayed diluted maple syrup on a block of canola at the University of Manitoba’s Carman research station. In fact, he went even further, designing a classical research experiment where the maple syrup concoction was replicated 20 times within the same block to simulate a multi-site study. Then Heard, who by day is soil fertility specialist with the Manitoba Ag Ministry, applied the maple syrup to a spring wheat crop to measure the product’s effectiveness as a nitrogen replacement on that crop. Within the spring wheat field, Heard experimented with an unfertilized check, 60 pounds per acre of nitrogen, 60 pounds per acre of nitrogen plus the maple syrup dilution, and 120 pounds per acre of nitrogen. Heard then measured leaf chlorophyll levels as well as total biomass yield, and analyzed the results for both crops. So, what do you predict he found? Much of Heard’s project focused on statistics, which he admits might seem a dry topic. But those boring numbers can take on a life of their own “if someone chooses to be kind of unscrupulous,” Heard says. “Even if it does nothing, if the statistical probability you’re using is 90 per cent probability, two times out of 20 it will seem to be doing something.” In this case, statistical analysis showed the maple syrup gave an average 13 per cent biomass yield bump at 11 of the canola sites… except, Heard had cherrypicked the results, grouping the numbers only from the plots where the maple syrup seemed to be creating a yield increase. It’s why you have to look at such results so carefully. Really, what it’s saying is that where there was an apparent yield increase, the increase was 11 per cent. When the data from all 20 plots was August/september 2012

examined, however, the results weren’t so impressive. In fact, canola yields on eight of the plots were actually lower where the placebo was applied. It’s also misleading that the study only measured canola biomass yield, not grain yield. Though a boost in biomass can seem like a good thing, grain yield is what the farmer actually gets paid for. Results from the wheat crop could sound promising too. There was no significant difference between the plots that received 120 pounds per acre of nitrogen and those that received the 60 pounds per acre of nitrogen plus maple syrup. In other words, it seems like the maple syrup replaced 60 pounds of N. However, a closer look at the results reveals no difference between the check and the 120 pounds per acre nitrogen application. What had actually happened was that the previous year’s soybean crop had left plenty of residual nitrogen in the soil. So, in effect, the crop didn’t require any nitrogen, which explains why the placebo seemed to have the same effect as the applied nitrogen. There isn’t a lot of unbiased, thirdparty testing of new nutrient products. The Canadian Food Inspection Agency has required research on the safety and effectiveness of many fertilizer products in the past. The agency doesn’t require efficacy data on all fertilizer products and is now looking at provisional registrations for new products that would allow foreign or limited domestic efficacy data. Though there usually isn’t a lot of harm in potentially ineffective products, Heard is concerned when they replace proven products or technology. “So if money is tight and financial resources are scarce, it would be harmful for producers to be misappropriating dollars they need for nitrogen or phosphorus into lesser needed products,” says Heard. With technology like yield monitors available, many producers have the tools needed for on-farm testing. If time and

statistical knowledge are constraints, Heard says producers may want to team up with a crop adviser. Producers doing their own testing should replicate tests for new products two or three times, rather than leaving only one check strip. Producers may also be able to pool their data with farm testing groups to get more reliable results. Such groups have been successful in Ontario and Iowa. Heard tells producers to look beyond the scientific language. Insist on seeing the results from all test sites, along with information on soil test results and cropping history. Also look at the yields of the untreated check and standard treatments. Says Heard, “That’s just part of good stewardship of your own crop input dollars.” CG

Third-party ag research organizations often test new products and offer data to producers. Before throwing down cash for a new product, it doesn’t hurt to check the research. Iowa State University has an online database of agricultural research on alternative crop production products.

http://extension.agron.iastate.edu/com pendium/index.aspx The Indian Head Agricultural Research Foundation, a non-profit based in Saskatchewan, runs research trials relevant to Western Canadian farmers.

http://www.iharf.ca/ The Ontario Soil and Crop Improvement Association’s recent research covers boron in spring canola, starter phosphorus in winter wheat, nitrogen losses in corn, and much more. http://

www.ontariosoilcrop.org/ The On-Farm Network, run by the Iowa Soybean Association, runs a range of on-farm trials and pools the data.

http://www.isafarmnet.com/ Producers can also contact their provincial Agricultural Departments for more information on research groups in their areas.

country-guide.ca 9


AUGUST 2012

“ t n P d c t f a

Take a New Approach to Farm Business Management

HELPING FARMERS SHARE THE LOAD Farm business advisor teams help farmers plan to succeed. “Fail to plan and you plan to fail”. It is an adage that holds true whether you are starting a business, embarking on a career, or operating a farm. But planning for the future takes time and patience, and for many, it is an onerous task that often gets relegated to the bottom of the to-do list. According to Statistics Canada’s 2011 Census of Agriculture, farm numbers across the country are decreasing, operation size is increasing, and farm production is shifting. With continuing changes to the agricultural landscape, proper planning for the future is critical to the success of farm businesses.

Share the load Farmers do not have to go it alone when trying to determine how best to move their operation forward. And, they are

Untitled-12 1

o w t o p

A a a fi a

T

D A o t s t a

K t f not limited to using sources that may be unfamiliar with the business of agriculture. With the help of the Agricultural Management Institute (AMI), the Canadian Association of Farm Advisors (CAFA) recently launched a series of multi-disciplinary advisor training workshops in Ontario. CAFA is a national non-profit organization dedicated to helping farm families and businesses. To be accepted for membership candidates must have at least two years of experience advising farmers or working in an agricultural environment. The majority have decades of experience along with a personal connection to the farm. Many have achieved the Certified Agricultural Farm Advisor designation which establishes professional credibility at a national level. CAFA members include accountants, agrologists, lawyers, financial planners, crop advisors, as well as human resource, marketing, and risk management consultants. These new workshops teach agricultural advisors when and how to work in teams to provide non-conflicting, effective counsel to farmers. Attendees also gain an understanding

“ c t i a a o o t r p

F

T p


of how assumptions and biases can affect and impact their work. The workshops were developed in partnership with the University of British Columbia’s Saunder School of Business, with the ultimate goal to implement the program nationwide.

farmers. There are a number of ways that they help farmers plan to help themselves explains Kohl: 1.

Once a team is brought on board, farmers commit to meet one or more times a year to talk strategically about their business and to identify long and short term goals.

“We recognize that to provide comprehensive advice to farm businesses, resources from a range of experts is needed. That’s why the Multi-disciplinary Advisor Training Program was developed,” says Liz Robertson, executive director of CAFA. “The workshops will help advisors to work collaboratively and to be more engaged and involved with the planning process for the benefit of the farm client. AMI funding helped to make the workshops possible and affordable.”

2.

They bring a proactive approach to the business of decision-making, preparing farmers to capitalize on opportunities or avoid pitfalls.

3.

They help to open lines of communication especially in family businesses where an outside third-party can bring unbiased options to the table particularly around succession planning and transition.

4.

They help to identify ‘blind-spots’ in the business such as human resource issues, expansion opportunities, or new revenue sources.

5.

And, they bring first-hand knowledge of what has and has not worked on neighbouring farms and offer new solutions to fit unique farm situations.

A simple model may involve a certified agricultural farm advisor, lender and accountant visiting once a year to review financial highlights and areas of concern, and offer relevant advice. The team approach David Kohl, Professor Emeritus with the Agriculture & Applied Economics Department at Virginia Tech, and founder of AgriVisions LLC, is a strong supporter of farm advisor teams. He has conducted more than 6,000 workshops and seminars around the world, providing perspectives into trends affecting the agricultural industry and its associated economy. Kohl knows first hand the benefits of advisor teams. He uses them to help with planning and expansion at his own dairy farm and creamery. “Advisor teams can be simplistic or complex and comprehensive. To be effective they must be customised to each farm or operation,” says Kohl. A simple model may involve a certified agricultural farm advisor, lender and accountant visiting once a year to review financial highlights and areas of concern, and offer relevant advice. “At our operation we have a more complex model and meet with our advisor team four times a year. We bring in a facilitator to ensure that key advisor recommendations and individual responsibilities are documented and implemented against plans and timelines.”

Farmers plan to help themselves The over-arching goal of advisor teams is to improve the profitability of farm businesses and the quality of life for

“Advisor teams help farmers to allocate funds for the wild card – that unexpected opportunity or threat that comes out of left field. Like the neighbouring farmer who put his acreage up for sale offering an opportunity for expansion. Or the new $300,000 environmental system needed for the creamery,” says Kohl. “While advisor teams must be paid, the value, perspective and knowledge that they bring to the table far outweigh the cost.” Rob Helm, a farmer and seed distributorship owner from Walkerton, Ontario says, “Using farm advisors helped us to structure our business for future transition and to determine the right level of debt to take on.” When hiring an advisor, Helm says that as with any hiring or buying decision, it is important to get references. Ask about the types of work they have done in the past and talk to some of their clients. It is important to be comfortable with the individuals that you choose. If there is a lack of chemistry, the relationship will be less effective. “Ultimately the decisions are your own,” concludes Helm. “But the right Certified Agricultural Farm Advisors will help you to make better decisions.” To learn more about Certified Agricultural Farm Advisors visit www.cafanet.com. To learn more about how AMI can help you take a new approach to your farm business management visit takeanewapproach.ca, email ami@takeanewapproach.ca, or call (519) 822-6618.

16/07/2012 3:49:42 PM


business

three takes On ag research Research for “the public good” is eclipsing research aimed at helping farmers. The question is, what do we do about it? By Maggie Van Camp, CG Associate Editor

Agricultural research in this country has irrevocably changed. For decades now, government has been pulling funding out of production research and sinking it into environmental issues. The argument is, a stronger agriculture can pay for its own science. Yet the numbers show that Canada’s farm productivity is stagnating. According to Agriculture and Agri-Food Canada (AAFC), government spending in support of public research and development has been increasing over the past three years and is now 33 per cent higher than it was in 1990. That doesn’t account for inflation, however. Nor does it take into account how much of the federal research focus has switched to food and conservation and away from crop and animal productivity. Farmers and private companies have stepped up to the productivity plate… and hit a home run. In 2007, total investment in plant research and development was estimated to be $165 million. Of that, farm checkoffs accounted for 18 per cent, the private sector for 40 per cent, and AAFC about 21 per cent. (Other federal funds contributed 11 per cent, and provinces chipped in six per cent.) Where should we go now? That’s the question we asked three research experts, including Richard Gray, economist at University of Saskatchewan, Jim Brandle, the CEO of Vineland Research Station, and Pat Lynch, former agronomist with Cargill. Who should do ag research in Canada, what projects should they take on, and who should pay the bill?

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Jim Brandle, research administrator

J

im Brandle isn’t just talking about doing research differently. He’s forging change by example. For the last five years as CEO of Vineland Research Station and Innovation Centre (VRS) in Niagara, Brandle has employed a unique new business model to make major decisions. This model makes research a link between farmers and retailers, basing project selection on consumer research, and establishing pay-for-use fees for research. That’s quite a departure from the 1886 Experimental Farm Station Act which launched Canada’s research programs. The idea then was to create varieties that would thrive in the North and thereby encourage farmers to immigrate to Canada.

“The old system doesn’t work,” Brandle says. “We need a new policy that leads.” The old model worked well. Marquis wheat, released from the Indian Head Experimental Farm in 1907, was a key driver of economic development across the northern Prairies. Now, things have changed. “The old system doesn’t work in the context of what society is today,” says Brandle. “Horticulture is globalized. Buyers and sometimes even growers operate globally. We need a new policy that leads.” The old system was too paternalistic, based on a group of men in white lab coats knowing better than farmers what research was needed, says Brandle. “Farmers today don’t need me to tell them how to produce, or how to run their businesses.” However, farmers do need a way to test and innovate, especially in fast-moving, quality-obsessed, markets where having an August/september 2012


business edge in innovation can make the difference between profit and loss. Perhaps nowhere is the pressure more intense than in horticulture. Encumbered with our short growing season and high labour costs, local farmers compete directly against a growing flood of imported fruits and vegetables. Horticultural farmers and the sector’s private companies need research, but aren’t big enough to have their own research departments. So Brandle’s goal is to rent Vineland’s research expertise out to them. The team of 70 full-time people plus partners working at the station can then provide professional scientific expertise. “We aspire to be your R&D department,” Brandle says. Vineland’s operating income includes provincial and federal grants, revenues from earlier innovations and payment for services from companies using their research services. It acts as an independent, not-for profit organization, which makes it different from a university or a typical government research office. “We’re not here to train people and we are not a policy organization,” says Brandle. “We deliver results in the field.” Reflecting this, Brandle’s board contains both top retailers and farmers, and he has found that creating mechanisms to bring growers, retailers and scientists together naturally leads to innovation. Having this constant conversation is the first step of the process and one that is often missing or difficult in agriculture. “We want to promote business-tobusiness relationships,” says Brandle. Vineland even has its own consumer science and product innovation department whose job is to find out what consumers really want. “Agriculture often forgets consumers,” says Brandle. At some point, he says, success has to be measured by feet of grocery store shelf space. Vineland also analyses the potential product’s fit for farmers, and whether the results in the test plots can actually be captured in real on-farm conditions. Brandle’s vision is for all public research to be more results based. “Our systems are disintegrating.” Yet that still leaves a troubling question. Should taxpayer money be used to create more profit for private companies? “Overall, society benefits,” says Brandle. “If they (farmers and companies) are smart enough to take advantage, why shouldn’t they?” August/september 2012

Pat Lynch, agronomist

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at Lynch has witnessed agricultural research from both the private and public sides, and today he says the chasm between them is too big to breach. Agricultural research should be left to private companies, Lynch now says. Let the marketplace work out priorities and regulate the processes. On-farm and private-company research have more than filled the gap left by universities and AAFC, says Lynch. “If a company listens to the consumers, it will develop a product the consumers and farmers want. If it does not listen, it will go out of business.” Now, Lynch thinks, Canada should accept the limitations of public research. In future, he says, its primary goal should be to develop scientists who will make the transition to private industry, like he did. “That should be the main focus — develop researchers,” says Lynch. That’s different from the ’60s and ’70s when universities would breed new crop varieties and release them to whatever company wanted them. But it isn’t a nightand-day difference. In corn, for instance, companies would put public inbreds together to come up with new hybrids. Soon companies like Pioneer started hiring their own breeders and got serious about hybrids and exclusive research. At the same time, pesticide companies began developing their own chemistry. Companies started to have research teams much bigger than anything public institutions could afford. Researchers were drawn to private companies by better salaries and better funding. “Public researchers are always trying to raise more money,”

“The last thing we need is more overseeing,” Lynch says. “The government should get out of it.” Lynch says. “Private researchers are given a budget to produce something.” Lynch says the gap between public and private is growing. “There used to be more public researchers than private. Now it is the other way.” Besides, Lynch says, government and university research is getting shaped more and more by non-farm considerations. The people who control the money want to say they’re “green” so they push for more organic and local-food research. Lynch agrees there’s a trend toward private companies sponsoring research projects at universities in Canada. “Cargill has spent a lot of money at the various universities,” says Lynch. However, much that goes on is very confidential. The rules to ensure objectivity are as tight as you can make them, says Lynch. It doesn’t matter how many rules are written, it still comes down to producers and competition overseeing the products. “The government should get out of it and do less overseeing,” says Lynch. “Producers are not stupid, defenceless children.” country-guide.ca 13


business

“We’re following the U.S. system, not a shining star of an example.” — Richard Gray

Richard Gray, Economist

C

anadian farmers today pay about 10 per cent of their expected gross income for the latest seed varieties. In turn, companies reinvest about 10 per cent of their seed sale revenue into research. The result has been a rapid improvement in crop performance and widespread adoption of enhanced crops. But that’s an exception. Not all research is so obviously for the better. The upshot is slower growth in farm productivity, says University of Saskatchewan economist Jim Gray, and it’s hard to see how to turn it around. “Achieving the appropriate mix of public, private and industry institutions will play an increasingly important role in international competitiveness,” says Gray, who has been sounding the alarm since publishing his 2007 paper “Ag Research at a Crossroads.” Gray’s perch at Saskatoon during the canola revolution gave him a close up view of the impact of biotechnology on crop breeding and research. “Ownership of crop traits has been a game changer,” he says. Today, Gray points out, more resources are focussed only on IP traits in annual crops, such as canola in western Canada and corn and soybeans in the east. There’s also greater secrecy among public researchers, and more selective use of processes and germ plasm in some sectors. The most desirable genetic traits and biotechnological processes — which in the old days came to market through SeCan — often are subject to exclusive ownership and control today, and may be distributed 14 country-guide.ca

among the major seed biotech companies via huge contracts. Monsanto on its own is spending close to $1 billion a year on research. Smaller private and public institutions are no longer able to assemble plant varieties to compete with larger private companies. More importantly, the synergies between institutions are breaking down, reducing the overall effectiveness of our research effort, says Gray. “Private research tends to fragment work,” says Gray. “Communication between researchers become proprietary.” Not surprisingly, there’s also more pressure on research to produce quicker payoffs, which leaves much of agriculture in the cold. In spite of its large acres, for instance, forage seed breeding research has been pushed to the fringe. There just aren’t enough dollars at the end of the rainbow. It’s the same for smaller acreage crops such as mustard, flax or lentils too, so they now rely primarily on provincial and levy-funded research. As well, companies have to worry whether they’ll be able to capitalize on their innovations. If they can’t see a clear path to control over their genetics (i.e., if farmers can grow the seed themselves) then the risk can seem too great. “This leaves the role of agronomic research to the industry organizations, the government sector, or some combination of the two,” says Gray. Bigger picture items often take longer to research but may have bigger pay backs for society, such as the no-till seeding

tested at the Indian Head Research Farm in the 1980s. “Those really big breakthroughs only happens every couple of decades and there are high, high returns for these developments,” says Gray. A 2007 study found productivity in the crop sector in Western Canada grew by only 0.51 per cent per year from 1990 to 2004. That’s a huge, annually compounding drop from the productivity growth of the previous 50 years, which averaged nearly 1.8 per cent per year. Now, Gray is concerned that Canada will lose competitiveness as other countries, such as China and Brazil, ramp up their investment in their ag research. Gray is also concerned about the long-term vulnerability of governmentfunded research. “Politicians have shortterm electoral cycles,” he says. “They tend to migrate toward income support for this year’s budget instead of investing in research.” “In some ways we’re following the U.S. system, not a shining star of an example,” says Gray. “Australians are doing it (government-funded ag research) quite differently.” In Australia, the farmer-controlled Grains Research and Development Corporation spends over $100 million per year on productivity related research. It also initiated the creation and is a major shareholder in three of the country’s four twheat breeding firms. For comparison, from 2000 to 2004 Canada spent $31 million ($0.70 per tonne) and the U.S. invested $25 million ($0.57 per tonne) on wheat, oat, barley and rye breeding. Gray is a fan of producer check-off funding research such as programs run by the Saskatchewan Pulse Growers and the new Alberta Barley Commission checkoff, and he suggests government funding be directed to collaborative and joint agricultural research, creating a national consolidated research program similar to the Australian example. Says Gray: “AAFC is in a natural leadership position.” CG August/september 2012


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It’s time to tell the real story Canadian agriculture is a modern, vibrant and diverse industry, filled with forward-thinking people who love what they do. But for our industry to reach its full potential this has to be better understood by the general public and, most importantly, by our industry itself. The story of Canadian agriculture is one of success, promise, challenge and determination. And the greatest storytellers are the 2.2 million Canadians who live it every day. Be proud. Champion our industry.

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Break the cycle In every industry, it’s the decisions made in good times that sink the ship when times turn tough. Here’s how to keep ahead of the curve By Gord Gilmour, CG Associate Editor

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icture yourself in a boat on a river. It’s a fine summer day and you’re drifting lazily along, without a spot of trouble in sight. The water is smooth, the current is steady, and you nod to the locals as you pass them by on the shore, thinking how much luckier you are than them as you go. There’s virtually no chance anything is going to go wrong. If there are rocks, they’re too far down to cause trouble. If there are rapids — well, not on this river. It’s clear sailing ahead. Maybe. Perhaps. Probably. As ever, all you can really be sure about is the person driving the boat, and that different captains drive differently when the boating seems good. Will you stick to a prudent course, or veer too close to shore while showing off and run aground? Will you resist the temptation to load the boat down so the gunwales are barely above water? Will you always leave some room to manoeuvre just in case something unexpected comes up? By now you know that the boat is your farm. The river is the agriculture economy. The water in the river is the level of income and profit your farm can generate. The rocks and rapids are the things that may punch a hole in your hull if you’re not careful. And you’re the captain of the ship, steering the boat and watching the depth display. Only you can prevent major errors in judgment that may look like good decisions now, but might come back to haunt you if the river levels fall around the bend. August/september 2012


business Predictable While times are undeniably good on a lot of Canada’s farms right now, they’ve also got a lot of farmers wondering if that old adage that Dad and Grandpa used to recite really is true. You know the one — that more farmers get themselves into trouble in good times than in bad. That’s not to say you can expect a round of penny auctions in your district any time soon. Rather it means right now you and your neighbours are all making decisions you’ll have to live with for a good long while. Some of these decisions are going to be good ones. Others will be poor choices. Trouble is, how do you know which is which? In turns out that there may be a way to tell. It’s to check your assumptions. Are you assuming that the good times will last forever, and that decisions that boost your per-bushel or per-pound production cost will be OK because the pundits all say there’s sure to be more margin to work with? It’s a pattern we’ve seen before — think the ’70s boom and the ’80s bust. Mike Pylypchuk is a farm business management specialist with Saskatchewan Agriculture who says that while there can be bull and bear runs in the farm economy, nothing is likely to change its fundamentally cyclical nature — which makes keeping your farm operation ready for anything one of your most important jobs. “If you’re not careful you can stretch yourself so tightly that a bad year or two can put you under,” Pylypchuk told Country Guide during a recent conversation. “You have to be prepared, because when this change comes, it could be drastic.” Pylypchuk explains that for an operation stretched too tightly, anything from a price shock to a production shortfall can make for very quick trouble. One of the most common errors, he says, can basically be boiled down to biting off more than you can safely chew — buying high-priced land and equipment for example, and bringing fixed overhead costs too high relative to cash reserves or long-term income prospects. One of the fundamental fallacies that’s likely to encourage farmers to make this error is the assumption that today’s high prices are the new norm — that it’s somehow different this time. Proponents of that world view are partly right — we seem to be in a new era of higher prices that are sticking — but they’re also likely wrong where it counts the most. Grain market analysts describe what periodically happens — and what we appear to be living through — as moving to a new level, where roughly speaking the old ceiling becomes the new floor price. It’s happened before, most recently during the 1970s, and veterans who lived through that era will tell you this rule largely held — but that it also didn’t prevent a painful workout during the 1980s when prices fell and bounced along the bottom end of that range for years on end, leaving overleveraged farmers struggling to pay the bills and coping with dramatically rising interest rates. Grain market analyst David Drozd, who owns the Winnipegbased Ag-Chieve marketing firm which has hundreds of farm clients across the country, confirms there’s mounting evidence we’re in a new pricing environment. “Yes, I think analysis of support and resistance levels on nearby futures contracts confirm we’re in a new era, but that doesn’t mean the prices of today will be the price for years to come,” Drozd says.

Warning signs How safe is your farm? One of the simplest and most basic tests is to check your assets versus liabilities, says Mike Pylypchuk of Saskatchewan Agriculture. “As soon as you get an imbalance there — when your liabilities are greater than assets, that’s a quick early signal that there’s a problem,” Pylypchuk says. In fact he thinks it’s the most important measure of a farm’s financial health from the perspective of looking for problems early, and he says farmers should take it just as seriously as they would a warning light flashing on a tractor dashboard. “It means there’s a problem on the horizon, and it’s the most immediate measure of where you stand,” Pylypchuk says. A farm with good financial health might have something in the order of a 2:1 ratio, where there are assets totalling twice the current liabilities of an operation, though Pylypchuk cautions that seasonality can add some complications. “When the crop is in the ground and all the inputs have been applied, and you’re waiting for harvest, compared to right after harvest, it’s going to be a completely different picture,” Pylypchuk says. Instead he recommends picking a time of year — just after harvest or at the end of the calendar year, for example, and running the numbers annually, so you can see the trendline over time and make apples-to-apples comparisons. The next number he likes to look at is the overall debt-toequity ratio for the operation, where Pylypchuk likes to see debt at no more than 50 per cent the farm’s equity. “As soon as you see debt climbing and that ratio increasing, that’s another signal that something’s happening,” Pylypchuk says. Hand in hand with the amount of debt is the type of debt. For example, it’s one thing to use a credit card responsibly to make transactions easier and capture potential rewards like cashbacks and air miles, and quite another to be carrying balances and using high-interest revolving debt to meet day-to-day obligations. There are also the various cash-advance programs through commodity groups that are funded by the federal government. They’re basically borrowing on the future value of crops and other products and are intended to make operating money for things like input purchases available more cheaply. If you’re forced to regularly dip into your advance payments to meet your overhead operating costs, that could be another warning sign that you want to pay attention to. And if you do identify there’s a problem brewing, don’t just sit at home worrying about it, Pylypchuk says. This is when you want to make your accountant, financial adviser and banker earn their wages, by helping you find a solution. Always remember, Pylypchuk adds, problems that are caught early and dealt with more quickly tend to be resolved more favourably.

Continued on page 18 August/september 2012

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business Continued from page 17 Drozd says he sees the new floor price of ICE canola somewhere around $350 to $375 a tonne, compared to an old floor of $225 to $250 a tonne. CBOT corn is likely going to see a floor in the $3- to $3.50-a-bushel range, compared to an old floor around $1.75 to $2.25 a bushel. CBOT soybeans should see a new floor of $8 to $9 a bushel, up from a $4- to $5-bushel floor, and CBOT wheat is likely to bottom out at $4 to $4.50 a bushel, up from the $2.50- to $3-a-bushel floor during the last grain price era. So the challenge for farmers is going to be delicately walking the tightrope, making investments in their farm that allow them to grow and become more productive, while at the same time ensuring they don’t slip and fall because they’ve overextended themselves and can’t make adjustments when they need to. “I think this underlines the need for farmers to take a structured approach to their marketing, and to incrementally make sales, rather than miss opportunities to lock in profits,” Drozd says.

The dangers So what are the rocks you might inadvertently be dumping into your own path, submerged for now, but lurking below the waterline, waiting to punch a hole in your hull? It basically boils down to overleveraging yourself without paying enough attention to how that might play out if prices fall — and one agriculture economist says there are a couple of obvious weak spots that a lot of farmers seem to share. Al Mussell, of the George Morris Centre agriculture think-tank in Guelph, Ont., says farmers of all sizes, shapes and colours love land and equipment, and good times seem to encourage spending on both. “There’s what I call the yellow and green disease, and there’s buying land,” Mussell told Country Guide. “I don’t really offer them in any particular order, I just think both of them are major risks.” Buying land is an interesting question — clearly a farm needs land to do business. It’s also inarguable that the farms that have steadily and incrementally expanded have been the ones that have enjoyed success in recent years — but again biting off more than you can chew is always a danger, especially during boom time when land prices appear to be on a bull run. At least partially responsible for this is the perception, if not the reality, that land never falls in value. Over the course of many years, that’s likely true, but in shorter time frames, prices can advance and retrench, and markets can be hot or stone cold, with farms sitting unsold for years. “We know that land can fall in value — we’ve seen it fall, in the 1980s, for example,” Mussell says. That means for a farm, land can represent a potential double whammy. You might pay too much for it on the way up and catch what is, in retrospect, the top of the market. Then, when times have turned and 18 country-guide.ca

you need the value of that land to be there, it may have fallen in value just when you need it most — and unfortunately your banker, no matter how sympathetic they might be, has no choice but to use actual current value when calculating your assets and liabilities, rather than what you might have paid for it. Then, there’s the psychological question of how carrying that overvalued asset affects you, your farm and your outlook towards running it, Mussell says. “It’s one thing to pay too much for something — none of us like that obviously — but it’s another thing to pay too much for something that you’re then still paying for 10 or 20 years later,” Mussell says. “That can definitely take a toll, and not just on a farm’s bottom line.” As for the equipment question, it’s a fairly straightforward proposition — there’s a temptation to load up on equipment now, while the getting is good, and purchase the biggest and best of everything. Many farmers might argue that having larger — and more expensive — equipment makes them more efficient, and that could well be so when it comes to field operations. But overspending on equipment will also make your operation less economically efficient, Mussell insists. “There’s a cost to buying too much equipment, to having that line of equipment that’s basically sized for the most challenging season you’ll ever have, that you might need one year in 10,” Mussell explains. “You’re still carrying that cost the other nine years.” Perhaps, Mussell says, the best answer in both cases might be to separate the ownership of assets somewhat from your core business, which is to profitably produce agricultural products. In the case of machinery that might mean hiring a custom combine or renting equipment where necessary, to name just two strategies. As for the question of land, it might help to forget the question of land values entirely when doing the pencilling for your business, Mussell says, since that’s really tiptoeing into the territory of land speculation. “Do you really want or need to own land, or at least own all the land you farm?” he asks. “Isn’t access to land, at a reasonable cost, what you really need?” That metric might make long-term lease and rental arrangements a better bet, as might holding off land purchases if your gut tells you the price tag is too high.

Not nothing So what’s the captain of the ship to do? One thing is for sure. You can’t afford to stand on the bridge paralyzed with fear, afraid to do anything. “If you do nothing at all, because you’re afraid to assume some level of risk, you’re implicitly assuming a whole other set of risks,” Mussell says. For example, you might find yourself left behind in the dust as the industry advances in scope and scale gaining greater efficiencies that you can’t match with a smaller operation. Or everyone else may August/september 2012


BUSINESS adopt game-changing technology that again makes them more efficient than your operation. Saskatchewan Agriculture’s Mike Pylypchuk says what it really boils down to is that farmers should treat debt like a loaded gun. It can be a powerful tool when it’s handled correctly, but you can also shoot yourself in the foot if you’re not exercising the appropriate precautions. “You need to be using debt to succeed these days. There really is no other option,” Pylypchuk says. “There’s no other way to buy land and machinery — but you should be cautious when you do. Make sure you’re not overextending yourself so the slightest problem puts you into trouble.” Even Farm Credit Canada, Canada’s biggest agricultural lender, encourages farmers to act cautiously and take their individual circumstances into account when making decisions. Michael Hoffort, FCC’s senior vice-president for portfolio and credit risk, said there’s still plenty of reason to be bullish on agriculture, but everyone has to recognize that it will still be a cyclical business. “Within the long-term trend, I would expect to see periodic reversals,” Hoffort says. “I think there’s still plenty of reason for overall optimism, but recognize that there are these dangers, and act accordingly.” In the end there’s no one-size-fits-all solution, Pylypchuk says, but rather a handful of rules that all farms should be applying to their operations. They need to take advantage of any production and income protection programs available to them, like crop insurance or AgriStability, to ensure that short-term production or income shortfalls don’t sink them. They also need to structure their farms so they’re not so heavily indebted that they’re vulnerable to even a modest change in conditions, such as an increase in interest rates.

DULL PENCILS Call it “goodtimesitis.” When times are tough and margins are tight, farmers may watch every dollar and only make expenditures that are going to make them money. When margins are better and they don’t have to worry quite so much, you begin to hear things like, “Maybe I should spray, just to be sure.” George Morris Centre’s Al Mussell says that’s not surprising, since farmers want top yields in order to maximize the benefit they get from current high prices, but economically it might not be the best strategy. “In a period of high prices farmers focus on sales and profits, and don’t worry as much about expenses,” Mussell says. “It’s produce, produce, produce, and sell, sell, sell. Only in a later period do they say, ‘I’ve got to reduce cash costs,’ and cost containment becomes the focus.” Essentially farmers become tied up in the day-to-day struggle of running a farm, and give in to the all-too-human urge to make problems go away by throwing money at them. That might work now, but it can make for some real challenges later if prices fall as steeply as predicted in the next two years.

“What would happen if today’s low interest rates shot up in a year’s time? If they were suddenly five, six, seven, even eight per cent? Don’t for a second think that it couldn’t happen,” Pylypchuk says. “It’s not likely we’ll see what we did in the ’80s when those rates were 18, 19 per cent, even as high as 24 per cent — but if you’re overleveraged even at lower rates you’re still in trouble.” Pylypchuk also says that the time to run these stress tests is now, while the sailing is good, rather than in a few years��� time when you’re forced to chart a new course right in the middle of the rapids. That way you can make any adjustments now, while you’ve got plenty of room to manoeuvre, instead of when that noise you hear sounds so like a waterfall ahead. CG

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business

The high cost of success Our Maggie Van Camp wants to know, “Have we lost our heads in these heady times?” By Maggie Van Camp, CG Associate Editor

f you’re farming in Canada, the odds are that you’re in the business of producing commodities. So, whether you like it or not, your competition is global, and in such a commodity marketplace, the lowest-cost producer wins. Not long ago, it was considered vital to know your costs and to keep striving for lower cost of production. Then came the surge in commodity markets, and somewhere in the last few years of agricultural trade pacts, large-scale expansions, monster machinery and unbelievable volatility in prices, we seem to have lost sight of cost management. Some of our costs have doubled in 10 years, but we tell ourselves that at today’s grain and oilseed prices, it make sense to invest in our crops. Does the opportunity to make money by throwing everything at a crop in order to get the biggest possible yield mean we shouldn’t track and compare production costs? If you want an answer, you’re basically on your own. Of all the money that gets spent on ag research in Canada, virtually none goes to studying our competitiveness. In fact, when I contacted Agriculture and Agri-Food Canada (AAFC) in my hunt for analysis on Canada’s farm competitiveness, I was essentially told that we must be competitive. Otherwise, we wouldn’t be producing wheat or soybeans, beef or pork. Case closed. Still, AAFC can be a useful place to start. A 2007 AAFC survey on farm business management practices found only 42 per cent of farmers create an enterprise budget, calculating their revenues and expenses for each product. While the format of such cost-of-production (COP) budgets varies, typically they include gross revenue, direct variable expenses, indirect variable costs (i.e. fuel, labour and utilities), fixed costs and net profit. As most farmers know, many provincial ag websites offer fill-in COP spreadsheets, making it easier to establish break-even points that can be used in marketing and buying decisions. To assess our individual competitiveness, then, the next strategic step could be to compare our numbers against our competitors, whether they’re regional, in-province or even national. Such comparisons could then help us refine our marketing plans or uncover ways to improve production costs. Rarely do we take a hard look at how our cost 20 country-guide.ca

of production compares with farmers in other parts of the world, yet this is the bottom line for competitiveness. A case can even be made that trade deals should be preferentially sought for products that Canadian farmers can grow at a competitive cost of production. Still, the AAFC attitude does have some justification. The competitiveness of the agriculture and agri-food sector is linked to its ability to remain viable and profitable over the long term, especially in relation to its competitors in relevant markets. “Long-run sales growth in domestic and international markets shows that Canada has remained relatively competitive in markets for agriculture and agri-food products,” says Julie Smith, AAFC data analyst.

Canadian Agriculture and Agri-food Exports (Price and Volume Indexes) 1998-2010

Even so, Canada’s impressive export record doesn’t necessarily mean that Canadian farmers are producing commodities at a lower cost than our global competitors. It only means that someone out there is buying what we produce. The difficulties in coming up with meaningful data on competitiveness are also compounded by the complex nature of our industry and the volume of farmers and products, including widespread variations in production systems and farm size, not to mention the endless and heavily politicized implications of food trade policy. Think about the spread in cost of production between different canola production systems, or between no-till Roundup Ready soybeans and conAugust/september 2012


business

ventional non-GMO soybeans. Then factor in the spread in yields and regional land costs, and it quickly becomes mind-numbingly complicated. And that’s in a country with a developed agricultural economy and reasonable statistics. No wonder global COP comparisons have been relegated to internal comparisons and doctorate theses. One interesting approach comes from the Institute of Farm Economics in Germany. This thinktank links up with other teams of economists spread throughout the world to gather real numbers from what they perceive to be typical farms. Under a project called Agri Benchmark, these researchers collect, compile and compare economic farm-level data for the world’s major crops and livestock. Yelto Zimmer, head of Agri Benchmark’s crop team, is immersed in the cold reality of global COP numbers. “The ongoing liberalization of agricultural trade policy will lead to reallocation of agricultural production worldwide,” Zimmer says. Since 2005, Agri Benchmark has been quantifying production costs for the major production areas of globally significant crops, as well as documenting how farming is done in various regions. It has also looked at the drivers of international agricultural competitiveness, and it looks at who may be the industry leaders in the future. For each location, Agri Benchmark creates a typical, hypothetical farm based on standardized questionnaires that explore whole-farm and enterprise data. Local experts then cross-check the results and discuss the changing technical, economic and political situation in each country. Allowances are also made for what Zimmer coins “entrepreneurial profit” or opportunity costs, and the study also looks at valuing family labour at alternative income levels, as well as comparing familyowned land versus farms that need to make mortgage payments. Zimmer’s team also runs projection models of the effect of policy changes, although the group is not supposed to judge. “We provide numbers from which to navigate policy, trade deals and make management changes,” says Zimmer. The result is a snapshot of a country based on fairly small sampling. Admittedly then, there are some pretty big holes. Not all crops in a rotation are considered, and

only some regions are represented in some countries. For example, in Canada, the only place data is collected is Saskatchewan, through Richard Schoney, economist at the University of Saskatchewan. However, this isn’t supposed to be a comprehensive COP. It’s strictly for comparisons particularly around the effects of government policy and production methods. Continued on page 22

“The latest figures from Saskatchewan indicate that crop production in Canada is very, very attractive.” — Yelto Zimmer, Agri Benchmark

Put your business planning skills to the test!

August/september 2012

The Grand Prize Winner will receive the opportunity to attend the 13th International Farm Management Association Congress held in July 2013. For full contest details and entry form, please visit www.takeanewapproach.ca/challenge.aspx, or call (519) 822-6618.

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Total Cost and Gross Revenue Wheat (US$/tonne averages 2008-11)


Continued from page 21 Based on these numbers, Canada looks pretty good. “The latest figures from Saskatchewan indicate that crop production in Canada is very, very attractive,” says Zimmer. Still, it can be frustrating for farmers who are trying to assess whether it makes sense to pay $10,000 an acre for Ontario corn and soybean ground. Agri Benchmark’s thick annual cash crop report looks at a wide variety of issues affecting cost of production. One of the key lessons is how much direct cost of production varies compared to revenues throughout the world. For example, in a number of European countries on smaller farms, growers hardly cover their cash costs growing oilseeds. Farmers in these countries are most likely to continue growing rapeseed due to government payments encouraging the production of biodiesel. For wheat, lacklustre margins have permeated the globe. Yet the differences between countries are stark, especially when you consider how government tops up revenues. (See chart Total Cost and Gross Revenue Wheat.) The other lesson is that uncompetitive costs of production are primarily driven by operating costs, not inputs. In canola, for instance, the report puts the average operating cost at about 40 per cent of total costs, but it ranges from 60 to 20 per cent. That’s enough to give Canada and Ukraine an advantage of close to $200 per tonne compared to the least efficient countries, where farmers’ cost of production was inflated by operating costs, production systems and size of farms, as well as by opportunity costs for labour, land and capital. Weather still controls the bottom line in farming, especially in snapshot annual comparisons. Several areas of drought show up pretty quickly in the Agri Benchmark study because of lower yields. For example, drought-stricken western Australia and Denmark’s Funen Island were the highest per-tonne cost of production among rapeseed areas in the world in 2011. 22 country-guide.ca

Farm size Factor for Operating Costs

Size Agri Benchmark’s original crop analysis in 2005 confirms the link between farm size and lower cost of production for oilseeds, as an “L” shaped cost curve.

Land costs Agri Benchmark’s 2010 analysis found that Saskatchewan, Ukraine and Romania had the lowest total production costs for canola — including land — at less than $300 per tonne. The biggest advantage eastern European areas have is their almost non-existent cost of land. In Europe the leases are much more stable with most being seven, 12 or 18 years, and they are rarely adjusted over that time. “Rental is almost nothing there,” says Zimmer. “That gives them a competitive edge over North America.” At the opposite extreme, says Zimmer, “Argentina has extremely transparent land markets. Basically if land goes up in value, that is transformed overnight into higher land rent.” In the last few years Russia and Ukraine have improved their cost of production slowly. However, they also face unseen costs, like theft. “Russia and Ukraine have enormous potential to reduce cost of production,” says Zimmer. “But the current system of having large tracts of land managed under one operation has led to some inefficiencies.” There are also some red flags for Canada. “Two regions have extraordinary higher costs of labour, Australia and Canada (the study area in Canada is only in Saskatchewan),” says Zimmer. “Both those countries have the mining industry drawing away farm labour.”

Yields As intensive farming methods are adopted in more and more countries, global yield patterns are shifting. Technology is also impacting cost of production. For example, herbicide-resistant GM canola is grown on about 80 per cent of the acres August/september 2012


BUSINESS HOW DO YOU STACK UP? Calculate your own competitiveness Comparing your own farm to the U.S. average can be done fairly easily if you stick to direct costs such as seed and fertilizer. The USDA Economic Research Service has a cost-of-production spreadsheet at www.ers.usda.

in Western Canada where GM canola was first introduced in 1995. Coupled with no-till seeding, Canada has enjoyed this cost of production advantage over Europe for 15 years. In other crops, however, the trend can be reversed. According to the Agri Benchmark study, for instance, Canada

is near the bottom for global wheat yields. However, Canada is among the most efficient in terms of our direct pertonne cost of production. So, the question remains. Are we competitive? At this point, the only answer appears to be: if you’re profitable, you must be. CG

gov/data-products/commodity-costsand-returns.aspx, including average costs and returns for corn, soybeans, wheat, pork and even cow-calf production, among other commodities. You can also plug in your own numbers as a guide to see how your farm compares to averages in different regions south of the border. However, be careful with your comparisons. In particular, be aware that some provincial crop budgets do not include costs for land, overhead and unpaid labour that are included in the U.S. information. “Line-by-line comparisons could be done on the direct costs,” says John Molenhuis, business analyst for the Ontario Agriculture Ministry. “But it would be more difficult for the other costs without knowing what was included…” As an example, the ERS soybean operating costs average in 2011 was $138.84 per acre, with total costs at $401.61. Based on 47 bushels per acre, soybeans in the U.S. netted $123.75 per acre, which meant it was a good year for the average American grower. The picture in wheat wasn’t as bright. Wheat operating costs range in at $121.56 per acre, climbing to $285.76 per acre when overhead costs are added, including hired labour, opportunity costs for unpaid labour, capital recover for machinery, opportunity costs of land (rent), taxes and insurance, general farm overhead. This netted only $2.89 per acre in margins for the average producer, based on prices at $7.35 per bushel, a yield of 38 bushels per acre and an average crop size of 443 acres. (Almost 70 per cent of the crop was winter wheat.) The USDA forecast for 2012 and 2013 is more of the same for corn, soybeans and wheat. Obviously, however, the drought is a new and unknown complication.

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AUGUST/SEPTEMBER 2012

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Reaching for

the magic A shopping trip with CBC food expert Sarah Elton shows why more consumers see her as the real voice of farming in Canada By Steven Biggs, CG Contributing Editor arah Elton poses beside a meat cooler inside the Fresh From the Farm store in multi-hued, residential Toronto. We meet early and pause to give the photographer a chance to take a few pictures while the store is still closed, because when the doors do open in 20 minutes, it threatens to be mayhem. If you want to see consumers passionate about their food, this is a great place to come. Many of us may think that urbanites know nothing about their food, and don’t care anything about it either as long as it’s cheap and easy to prepare. Not here. The questions start the minute the store opens. How was this pork raised? Where is the farm? And I’m standing here with the person they may trust more than anyone else in the country to give them straight answers. For millions of Canadians, Elton is THE voice of farmers. Or at least, she is the voice that they hear. So, having tuned her in, I’m curious. What will I think of her answers to questions that farmers would like to ask? She and I have been back and forth by email for months now, trying to arrange this shopping trip. Finally, today, we have the chance to meet, now that her next book is in the hands of her publisher. Her yet-to-be-named book is all about her favourite subject, food — and specifically about feeding the growing world population. I had originally suggested that we meet at a large grocery store, where a lot of her listeners do their shopping, but Elton countered by recommending this store, Fresh From the Farm, because the specialty here is farm-direct, local food — her passion. Besides, she often shops here. She is clearly stoked about the subject, and it shows. “I love to report on what’s happening in the world and to tell the stories of all the interesting peo24 country-guide.ca

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ple who are doing amazing things on farms across the country,” she says when I ask how she became known as a food thinker. “Food gives you so many opportunities,” says Elton as she turns to start shopping. The idea of opportunity — and the magic she sees in farming — comes up repeatedly as we browse.

Locavore Elton is a self-described locavore, someone who eats foods grown locally when possible. Her last book, Locavore, took readers across the country to meet farmers, gardeners, shoppers, and chefs whose credo is local. She writes about the opportunities she has seen in farming and food. It’s both lively and informative, a mix of storytelling and journalism. It’s also, by the way, a David Suzuki Foundation Book Club Pick, and its readers’ reviews on the Chapters website are five star. Elton also appears on CBC radio as the food columnist for “Here & Now.” In print, her diverse stories are about food and farming too, such as a piece about the resurgence of root cellars in The Globe and M ail , a M aclean’ s M agazine article about investors buying farmland — even a piece about eating Canada goose in the Atlantic.com, where she tells readers, “When I told people I was planning to eat a Canada goose, they looked at me as if I’d said I was roasting a rat for dinner.”

Shopping “Tell me how you shop,” I say to Elton. She picks up a couple of products and shows me what she sees on the label, and then says, “I think about the farmer when I’m shopping.” Then, talking about labels, she adds, “The more information people (shoppers) have, the more on your side they will be.” I hand her some butter from a creamery within a couple of hours of Toronto. “This I would buy,” pronounces Elton, as she reads off the ingredients on a package of Stirling Whey butter: bacterial culture and cream. It’s local, it has only a couple ingredients, both of which are pronounceable, and the packaging is minimal. “I want the least processed food possible,” she explains. When we stop next to the honey, she talks excitedly about the taste of the raw honey. She clearly loves food — and it’s contagious. We continue to scan labels when Elton stops to explain what turns her off. “Raised with love,” she says, is an example of a feel-good, mean-nothing phrase that answers none of her questions. Then she says that counting the miles that food travels to the store isn’t the only measure of what’s best for the environment because other factors, such as processing and packaging, come into play. Elton views labels as the producers’ opportunity Continued on page 26 August/september 2012

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And local is only part of what she looks for when buying meat. When I ask Elton to give me her most important advice — her No. 1 tip to consumers — she says people can best help farmers and the environment by staying away from what she calls factory-farmed meats. She never buys meat at the supermarket, only at stores such as this, or directly from farmers. She says people complain to her that such meats cost more. For her, there’s a simple solution: “Yes it costs more, so eat less meat.” Again the thought arises, can farmers meet the need without high-efficiency farming? Is this really the best way to feed the country and the world? But when I raise this with Elton, she lets me know I’m missing the point.

Magic

to connect with her. They tell her what the producer thinks she’s interested in, and what it will take to get her shopping dollars. We snake our way through the store and end up next to some fair trade coffee. That brings us to the question that all reporters ask her: Do you buy anything that’s imported? She does, she explains, and that’s just fine for items that don’t grow here, listing coffee, sugar, chocolate, mango, bananas, and olive oil. But she never buys imported potatoes or carrots — both of which grow nearby and can be had year round. Fresh greens, she adds, can be found well into the winter. She’s heartened to see lots of grownin-Canada frozen vegetables, even in generic brands in big stores. “I think that people do care how food is produced — they want to know,” she says.

Beyond local For a locavore, local isn’t always local — and it isn’t always the right choice. “Just because it’s local doesn’t mean it’s better,” she says, citing companies in Ontario that make jam with local fruit in season… but imported fruit out of season. She understands why manufacturers do this, but for her, in a place where such fruit grows, the idea of jam with foreign fruit is a turnoff. So she makes her own jam. 26 country-guide.ca

Setting the table Elton’s forthcoming book is about feeding a world of 10 billion people. For someone who sees food as an opportunity, this is surely a big one. What role does local food play in this future? “The local food movement is offering farmers a market for their great food,” she says. As we line up at the till, a woman approaches Elton and tells her how much she loves the book Locavore, and then invites Elton to visit her coffee shop. Elton earlier told me that food brings people together — and, overhearing the invitation, I see what she means. Food has just given a new day full of opportunity. CG August/september 2012

Photo credit: Anne de Hauas

Continued from page 25

The tragedy as Elton sees it is that the story — the magic — of food is lost in commodity-focused agriculture. Here it is in her own words: “The industrial food system and its endless supply of cheap food has taken the magic out of farming. We don’t realize that farmers are partnering with nature to perform amazing acts of magical food production every day,” Elton says. When I ask what it will take for commodity producers to see things her way, she says they’re actually closer than you might think. Profits are better and less volatile in the local, sustainable sector, she says, so it makes sense to farm that way. I’m curious if, during her travels, Elton — a city person with strong ideas about farming — has encountered any such feeling. “I have not had that at all!” she says. She’s disappointed, though, that the farm media hasn’t picked up on Locavore. “I always thought the book would appeal to farmers as it aims to bridge that gap,” she says. She’s not convinced that there’s really that big an urban-rural divide, though, saying, “Farmers are consumers and I think it would be good if we realized how much we all have in common.”


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Selling relationships “It’s bridging a gap — an abyss — between rural food producers and consumers,” Tim Schmucker tells me as we talk about Fresh From the Farm, the Toronto locavore store he runs with his wife Jacqui. Instantly, you realize it’s exactly the same language that farmers use when they describe the disconnect between consumers and the source of their food, even if the message isn’t the same. This store wasn’t planned, Schmucker tells me. Actually, it started as a once-a-month pickup in a local U-Brew cold room. At the time, Schmucker was teaching English to Yugoslavian refugees, who were accustomed to getting food directly from farmers. They asked Schmucker, a former farmer, how to do so here in Toronto. At first the food pickups were for friends, then friends of friends, and then, friends of friends of friends. Eventually, they opened the store in 1996. Fresh From the Farm is on an unpretentious strip of storefronts in a largely residential area of Toronto known for its neat streets of bungalows. There’s a fish-and-chip restaurant, bakery, and an animal hospital across the street — and a Chinese restaurant next door. And whenever I’ve been around here, it’s Fresh From the Farm where I see the most people. “It just took off,” says Schmucker. “We’ve had serious offers to open franchises,” he adds, but explains that’s not in the cards, saying, “It’s about lifestyle for us.” Success, he says, means a sustainable lifestyle, even if it also means driving an older car. Besides, he says, growing into a multi-outlet chain is a bit of a contradiction when what they are doing at the store is all about personal relationships.

A sustainable store

The store

The farmers

Schmucker says that opening additional stores would require quitting his day job, which he loves, and he’s not prepared to do that. So he puts in a dozen hours a week at the store, working around his main job, which is in public engagement with Mennonite Central Committee, where he is in his 12th year. Then, on top of it all, he also finds time to work towards a doctorate in theology. Schmucker grew up in the city, but after finishing his BA, he and a cousin bought a rundown dairy farm from a relative. “I only lasted a couple of years and I realized milking cows wasn’t for me,” he says. But his cousin is still there — and was the person who originally supplied the beef for the pickups, and who sourced eggs from neighbouring farms. Jacqui runs the store and manages customer service, although she prefers that Tim deal with the media — so I’m talking to him. She is great at what she does, and obviously loves it. Once, when one of my kids somehow banged his forehead on a table and started wailing, she raced over with a package of frozen corn (local, of course) to use as an ice pack and keep down the swelling. The hours are long, but Jacqui finds the customer feedback very gratifying — comments such as, “Thanks so much for doing what you’re doing.”

The store is clean, inviting, but not ostentatious. “It’s not about show — it’s about personal relationships,” says Schmucker. At the back is a meat cooler, while out front sit flats and baskets of produce. There is baking, dairy, condiments — even home-canned fruit and vegetables. As business names go, this one is pretty descriptive: Fresh From the Farm. Schmucker says that the customer base broadened beyond his Yugoslavian friends as soon as the store opened. He’s not surprised. In a smaller city, he explains, people can drive a short distance and get food straight from producers. But it’s tough in a big, sprawling city such as Toronto. The client base is very, very diverse, with no one socio-economic, cultural, or gender group dominating. “It’s people concerned with what they eat for health and ethical reasons,” Schmucker says as he explains who shops there. That means some don’t have a large disposable income, but are focused on eating well. Some are neighbours, others come from affluent parts of the city. A shopper from a tonier part of the city recently said, “I come here because of who you are.”

Aside from the direct-from-farm connection, another unique aspect of the store is its farm suppliers. Many are from the Mennonite and Amish community. With his cousin still farming, and himself being a Mennonite and speaking some of the language, Schmucker says that finding suppliers wasn’t difficult. “When you’re in the community and you know the people… that gets around,” he says, adding, “I know people — I know who to talk to.” Sometimes, the personal supplier relationships extend beyond buying and selling. On one occasion he helped a farm get alternative quota for chickens. He wanted a particular breed of larger, flax-fed chickens for the store — and was able to help the farmer get an exemption from the marketing board to produce these. “Many farmers say, ‘If only I could get access to the big city market,’” says Schmucker, as he talks about the niche the store fills for the Amish and Mennonite communities. “It’s not just a financial relationship,” he adds, saying that when farmer-suppliers are in Toronto, they often make a point to visit the store. The day we spoke, Jacqui was at a high school a few kilometres away for an Earth Day event. She was heartened to hear a student say, “Oh, I know you, my mom shops there.” Personal relationships, direct-to-farm and direct-to-consumer, is what the business is all about for the Schmuckers. For them, it’s also what food means.

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Minding the future Mentors mean young farmers like Jeff Braisher can start their careers with a lifetime’s wisdom By Madeleine Baerg

W

hen city types look at Kingsclere Ranch Ltd., what they see is an iconic Canadian farm. Backdropped by the snowcapped Rocky Mountains, the cow-calf operation seems somehow carved right out of an ocean of douglas fir and spruce near Golden, British Columbia. When farmers look at the ranch, they understand that “carved” might be exactly the right word. A century ago, Edith and Alfred Braisher homesteaded the spectacular land, beating back forest to make room for the ranch’s first pastures and hay land, and keeping body and soul together through willpower, grit, and the few dollars that Alfred earned in his side job as stagecoach driver up and down the valley. Four generations of Braishers later, Kingsclere today oozes all the things nonranchers like to think go fist-in-glove with ranching, including history, permanence and tradition. But look a little closer and you’ll see another story. Youth, innovation, and technology are starting to shape this ranch, made possible by some highpowered mentoring. Now 30 years old and bursting with enthusiasm for agriculture, Jeff Braisher

has big dreams and big determination — the same combination that led to success for his great-grandparents. While co-running Kingsclere with his dad, John, Braisher is also going technological, focused on designing a new data collection system that he hopes will change the way he and other ranchers manage cattle. Given Braisher’s contagious excitement for technology and his inspiring passion for the industry, you can’t help hoping his high-tech invention will evolve into a roaring success. But in a very real way, the technology is already a winner, because it is driving the farm forward. As he develops the technology, Braisher finds he is also developing helpful industry connections and a whole pile of knowledge that will serve him well through whatever path in agriculture he chooses. That’s why this is a story about mentorship and its booming importance on Canadian farms. Yes, the details of Braisher’s story are unique, but the insight is universal. It’s all about the value of intergenerational knowledge sharing. It’s a standing ovation to agriculture’s tradition of community, and a call to action for would-be mentees and could-be mentors.

ack a year and a half ago, Jeff Braisher attended a beef industry conference in Calgary, hoping to discover what he needed to know to make his business dream a reality. Turns out, it wasn’t so much a question of what he needed to know as a question of who. And as luck would have it, the who happened to be at the industry conference that day too, in the person of Brenda Schoepp. “I didn’t go to the conference looking for someone to mentor me. I was trying to do homework and collect background information. I was hoping to have a product to sell and I wanted to understand what the marketplace looked like and what I was getting into,” says Braisher. “Brenda was speaking at the conference, I appreciated what she was saying, and I thought maybe she could help me. To be honest, I knew she was fairly well connected, but actually I didn’t really even know who she was.”

Continued on page 30 August/september 2012

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Continued from page 29 “Fairly well connected” is an understatement. Brenda Schoepp is a very big name in the Alberta beef industry. Named one of Alberta Venture business magazine’s most influential people in Alberta, Schoepp is a highly regarded researcher, author, consultant, professional speaker and advocate for the cattle industry. In addition to co-running a cow-calf operation near Rimbey, Alberta, she owns and publishes BEEFLINK, a national weekly newsletter that discusses beef and beef cattle-marketing strategies. She also writes “Straight from the Hip,” a column that runs in multiple provincial and national publications, and she works on both provincial and national policy and research initiatives. Schoepp also runs a strategic business planning and independent executive coaching service for primary food animal producers who are striving to add value to their businesses. Then, as if she’s not busy enough, she also developed YouLead!, a youth30 country-guide.ca

focused ag-leadership program, and she founded Women in Search of Excellence (WISE).  Plus, her speaking engagement at the beef conference wasn’t a one-off. She’s a popular and frequent speaker at beef industry, ag industry and businessfocused conferences and symposiums. “Later, after she was finished her presentation, I had the chance to corner her and ask some questions,” continues Braisher. “Right away she was very perceptive. I tried to be pretty discrete about my project, but she saw right through me. I realized right then that she could be a huge help.” So Braisher took a bold and unsolicited step further. Having just been accepted into the Canadian Cattlemen’s Association’s Cattlemen’s Young Leaders (CYL) program, he phoned the program co-ordinators and told them he’d found for himself the mentor he needed to be paired with. Like other agricultural industry-run mentorship programs, the CYL program is a grassroots professional and leadership program designed to pass an older

generation’s wisdom and experience on to up-and-coming farmers. “The mentors are business leaders from all different segments of the industry, and from all over the country,” says Braisher. “You’ve got people who are extremely busy but are still willing to take some time out of their schedules to exchange IP. For our generation, that’s critical. Our generation is living in the information age, and I’d argue that information is our new currency.” Schoepp was more than happy to oblige. In fact, she says being asked to be a young person’s mentor is the greatest reward one could receive for their life’s work, since it proves the younger generation notices and respects one’s knowledge, accomplishments and experience. The year and a half that Braisher and Schoepp have worked together has fundamentally changed Braisher’s perspective, expectations, and confidence. “Mentorship is making me really refine where I’m going. Since this began, it’s opened up huge opportunities that I wouldn’t have had otherwise. She’s helped August/september 2012

Photo credit: Claire Dibble

Business


BUSINESS me through strategic thinking, and she’s put me in touch with people I wouldn’t have been able to connect with,” says Braisher. Braisher isn’t the only one to have benefited from the relationship. “Jeff proved that agriculture is indeed exciting and through him I got to look at it with a different set of lenses,” says Schoepp. “Jeff not only is smart and candid, he is also a man of principles and values. His business conduct is exemplary and he is well researched and knowledgeable. Whenever you are in that kind of company, you too will gain important insights and lessons. I did. I felt that the journey was as much mine as his as we collectively sought solutions and made a road map for his future. “The ones who approach you for help really have the ability to change the world whether you help them or not. They’re open to another piece of advice, another thought process. They’re thinking with the volume on loud,” says Schoepp. More than that, though, Schoepp fundamentally believes in the concept of mentorship in the agricultural industry. “My best piece of advice for the agriculture industry would be to work together towards a common goal rather than expending energy protecting turf. We need to create an economic environment that is enabling for future farmers, and we need to look at agriculture with a broad lens to protect our values and communities.” In fact, she considers the failure to pass on wisdom as one of the greatest tragedies in Canadian agriculture. “Farmers and ranchers are by nature independent and that can be to a fault. We could never realize the dream of having sons and daughters in the operation when we removed them from the process. By engaging our youth and giving them responsibility, we allow for creative solutions. Experienced guidance ensures that past events are woven into future opportunities. It is the best of both worlds.” Braisher recommends all young farmers seek out mentors, whether through formalized industry mentorship programs or through individual relationships. “One of the commonalities I do see with people who are really effective in the agriculture industry — well, in any business — is that there are people in the background who you might not necessarily know about. Someone is there mentoring, coaching, whatever you want to call it. For myself I think it’s a requirement. A mentor helps you step out and really look at what you’re doing. A mentor gives you another accurate, objective perspective. Brenda has never said “You’re wrong,” but she constantly challenges my thinking. Sometimes my biggest roadblocks or problems are the things I don’t even see.” Like many ag operations, Kingsclere Ranch has changed and diversified over the years. Originally a homestead, it became a dairy farm in the ’30s and then a beef cattle ranch in the ’60s. Today, it is primarily a cow-calf operation with about 300 breeder cows and a 500-head backgrounding lot. But, as diversity is a way of life on so many Canadian farms, Kingsclere also includes a public-private partnership woodlot, and an isolated canola-breeding research program for Monsanto. The evolving nature of this ranch means there’s lots of room for Braisher’s innovation, if it proves successful. “My dad is very supportive of both my project and the work I’m doing with Brenda,” says Braisher. “At the end of the day in any business, something either contributes to the bottom line or it doesn’t. He sees the fact that I’m growing and learning as a person, and that it makes me more effective regardless of what the outcome is with the data collection tool.” CG AUGUST/SEPTEMBER 2012

In her words.... Brenda Schoepp Be absolutely honest with yourself: “I have spoken to farmers — very successful farmers — who have always really, truly wanted to be something else. They have done the best they could with the skills and abilities they have, but they have inner sorrow they didn’t follow a different path. Are you doing what you love to do; what you see yourself doing into the future? What is holding you back from starting on what you want now? Sometimes just saying it out loud makes you able to start.”

Relax in your excellence “We apologize a lot in agriculture. We have in many respects failed to tell our story, failed to ignite new entrants into agriculture by making it negative rather than making it the most powerful industry in the world. Here we are in this fabulous profession, doing great things, yet we tend to apologize. Even the word ‘profession’ makes some people cringe, but it is.”

Figure out what drives you and who has talent where: “Farming to many people is about control. Because we can be independent units, we default to controlling and micromanaging, rather than supporting teams and allowing others the freedom to be excellent in other areas. Whether you would benefit from hiring a bookkeeper or a manager, free up time for the things that really matter. Think about shifting energy to where your real natural talent is. You’ll love what you’re doing a little more, and the pennies tend to follow the passion. And look for support from role models at any age or stage in your profession. The role of the mentor is to empower the individual, and anyone can benefit from empowerment.”

Know where you’re going and how to measure if you’re getting there: “When I ask people who or what they see themselves being, or what the future holds for them, they often are not focusing on developing the education, skills or connections that will get them there. Some people have very specific goals but no road map on how to get there; others have way too many road maps but no goal. It’s quite OK to figure out your direction for yourself and march to your own drummer. That’s entrepreneurship. But, there is value to pausing, and to having a second set of eyes take a look at your plan and your goals in order to get a clearer view of the big picture and to provide guidance and encouragement.

country-guide.ca 31


business

Labour leaders Understanding your workforce — and exactly why you need them — adds up to a pro-business staffing plan for these farmers By Gord Gilmour, CG Associate Editor et’s just call it interesting, at least at the start. The “it” is something that happens in Doug Berry’s farming life every fall at harvest time. The crop is in the field, it’s ready to come off, and Doug is about to see the results of a year’s hard work and careful planning by him, his brother Bruce, son Chad and nephew Kevin. But the crop isn’t exactly what Doug is talking about. Harvest means more than yields at Over the Hill and Under the Hill Farms, the 10,000-acre farm near Glenboro, Man. where Doug is company president. Harvest also means their biggest labour management challenge of the year. With close to 1,500 acres of processing potatoes to dig at the same time that their grain harvest is ramping up, “interesting” might be the wrong word. Even “challenging” might qualify as the understatement of the year. Maybe the word should be “opportunity.” Over the Hill’s full-time staff of seven grows exponentially until up to 40 in total are digging, sorting, culling, piling and storing the year’s harvest. Many are longtime members of the harvest crew — some have been working for the Berrys for 15 seasons. Others are entirely green and might never have stepped on a farm before. Others are retired farmers who are looking for something useful to do and a chance to run a tractor again as much as any paycheque. So how do you take a group of school kids, unemployed city office workers, retired farmers and who knows who else, and merge them in a time shorter than the Stanley Cup playoffs into a cohesive, highfunctioning team? Oh yes, and let’s add the critical point… a team that you’re betting your entire year on? “It’s actually kind of fun,” Berry says, which makes me admit I’m surprised. “It’s really something to watch a crew pull together,” he says, “and really get going good.” 32 country-guide.ca

Start at the top One of the most important questions is a predictable one for a large operation with a number of members on its management team: “Who’s in charge of what?” Berry says it means having clearcut chains of responsibility — and one person who’s clearly in charge of each chain. Knowing who to talk to about what takes a lot of stress and guesswork out of the day for employees, and it ensures that resources and workers are deployed efficiently and appropriately. “When we’re digging potatoes, for example, I’m in charge of the storage, and that’s about all I do,” says Berry. “My nephew Kevin runs the grain operation and my son Chad is in charge of the potato end of things.” Employees working in these various areas know who to talk to, where to get their daily instructions and where to report problems. Those area leaders can then make a decision, right at that point. Then it’s also up to them to co-ordinate any issues that cross the lines of responsibility — such as needing to shuffle employees or equipment between areas. Then, at the top of the operation is one single individual who makes the final call. But in the Over the Hill operation, who that person is can vary depending on the day-to-day reality of the operation and what various members of the management team are up to.

Profitable foundation A few miles east, near Portage la Prairie, grain farmer Jim Pallister agrees that leadership of the labour force at the farm level is important in many ways. On Pallister’s operation — one of the largest in the province — he relies on a handful of year-round employees as well as seasonal additions to the labour force. Pallister says running a profitable and well-managed farm is foundational to his success. It’s something nobody can afford to lose sight of.

“That’s the bottom line — if we’re not profitable, we can’t afford to do some of the things that will make our employees happy,” Pallister says. That doesn’t mean squeezing his labour force, however. Instead, it means establishing a mutually respectful understanding of the nature of the business and the reality of the operation. Indeed, based on hard-won experience, Pallister encourages farmers to gain a clearer understanding of these facts of life themselves by utilizing available IT tools to track how payroll hours vary throughout the season. “It’s quite straightforward and you can get a really clear picture of what your labour needs are through the season using a graph,” Pallister says. “It really does show a clear picture of your labour requirements.” For his operation, things are steady at a low level through the winter months. Then into the growing season there are modest peaks during spring seeding and in-crop pest control. Next the real crunch hits, at harvest time. “It looks like a mountain,” Pallister says of the labour graph for his operation. That might seem like common sense, but Pallister insists that having a crystal clear understanding throughout the operation of the immovable nature of the business is important. “You can do things to meet your employees’ needs, but you can’t change the business you’re in, or the fact that it’s seasonal,” he explains. Sometimes that means denying an employee’s request. For example, let’s say they want every long weekend off. Maybe that works in the summer. During harvest, not so much. Work has to fit into the needs of the farm rather than the calendar, even when that means the farm is operating on a different schedule than other employers. It works, says Pallister, as long as the rules Continued on page 34 August/september 2012


Over 30 years ago, several observant Ontario producers recognized that soil degradation through erosion and loss of Organic Matter was an immediate and long term threat to the sustainability of their businesses. They began to develop very untraditional technologies to stop and reverse this trend. And they met to share successes and disappointments as they recognized that through collaboration they would advance collectively far more quickly than as individuals. The group’s following began to rapidly expand, gatherings became much larger, and they realized that a formal organization was needed for planning, budgeting and liability purposes. Despite the fact that most of the focus of the time was on no-till practices for crop production, they did not paint the organization into a corner with a name that had a narrow focus. The Innovative Farmers Association of Ontario was born. For over 25 years, our focus has been to seek out new and innovative ideas and technologies, and then provide a forum to exchange and share this information. We have presented topics on crop management, manure management, human relations and marketing to name a few. Through this, our commitment to the improvement of Ontario’s soil health has not changed. Please join us at one of our upcoming events.

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business Continued from page 32 apply to everyone on the farm, including family members. To illustrate he tells a story of himself from his younger years. “I was sitting at a friend’s place one day — I was just a kid — and my dad called, and he asked me ‘Do you want to farm?’” he says. “We weren’t even done seeding yet, and there I was hanging out with my girlfriend and my buddy.” Pallister says that the one phone call was all it took to smarten him up. “I told him, ‘Of course I do, I’m on my way.’” Now he says the key to managing employees on a farm is finding good people and motivating them to answer that they want to farm too, even though they’re not the owners of the operation.

Comfort zone Another reality for Berry is the diverse nature of their workforce. Some are extremely knowledgeable about the operation, others are newbies who might not know much about anything. Treating them as interchangeable cogs simply won’t work. For example, a retired farmer might be chomping at the bit to get back behind the wheel of a tractor and pull that digger down the field. Someone who’s never run a tractor on the other hand might — if they have any sense — balk at taking the controls of a complicated and occasionally finicky piece of equipment that’s the very heart of the harvest operation. Knowing what the individual wants to do and is suited to do is very important, says Berry. “I really like to let people do the jobs they want to do, that they like to do,” he says. “There are people who want to work in the shop, for example. There are other people who want to be equipment operators. I myself like it out in the field, not being stuck in the shop. It’s better if they can go where it works for them.” Part of that process is building a comfort zone for new employees — something that has to happen just about every year, says Berry. “It seems like every year we take on three or four new people,” he says. “It changes every year, though we do have quite a few repeats.” While new blood can be a good thing, it also means there are a handful of new people who need to be integrated into the crew so that everything can hum right along. A big part of that is making sure 34 country-guide.ca

they’ve got a good overview of the operation and how the pieces fit together. “We try to take the new people and move them around a bit in the first week or so and give them a bit of everything,” Berry says. Berry also councils a bit of patience with new employees, especially in the early days. “You’ve got to remember that they might not be used to working — physically working, that is — and it can be a hell of a change,” he says. The farm has also found success, Berry says, by working with employees who have other obligations elsewhere, but still want to work on the crew when they can clear room for it. “We might have someone, for example, who has a full-time job — but during the potato harvest he makes arrangements so we can have him from, say, 3 p.m. until we quit at night,” he explains. Because potato growers seek to avoid harvesting during the hottest part of the day — putting hot potatoes into storage is a recipe for disaster — this sort of arrangement can work well for them. On Jim Pallister’s farm, meanwhile, gaining an understanding of his labour needs again takes a systematic approach, this time using a simple spreadsheet program. On it he lists the farm’s various skill requirements — for example, Class 1 drivers’ licences, mechanical ability, welding, and other basic building blocks of a good farm employee. He then fills in the individual employees and essentially then checks the boxes. At the end he has a clear labour matrix of needs and skills. “You can look at it and you can see, for example, that you’ve got plenty of people with Class 1 licences, but you may not have enough people who can weld,” Pallister says. “When you’re running a business, you need to have bench strength — you can’t afford not to.” That means both cultivating the people you have and having a backup plan if things don’t work out, he says. “You’ve got to have numbers to call.”

Motivation? What an employer wants from the relationship between the business and the employee is fairly straightforward — someone who’s productive, reliable and honest likely tops the list for most. But plumbing the depths of what motivates employees is an entirely different matter. Berry says he’s learned that there

are likely as many different answers to, “Why do you want to work here?” as there are employees on the payroll. For some it can be a straightforward financial transaction — they want a few extra dollars for some of the finer things in life, so they take some vacation time from their day job and make it a working vacation. “I think for some of them it’s their Christmas money, or the money to pay for the kids’ sports — it’s a few dollars for those extras,” he says. Others might find a few more dollars to be just fine, but that’s not really what keeps them coming back season after season. “For some, I think it’s a chance to change their life a bit,” Berry says. “They get to work outside, drive equipment and work with a group of people for a common goal.” That might seem a stretch to some, but to someone whose life usually consists of hunching over a computer in some anonymous cubicle eight hours a day, pushing electrons around on a screen or paper around in files, getting out into a farm field can seem like a vacation they’re being paid to take, especially on something like a harvest crew. Pallister agrees there can be many different motivations for employees, but in the end, he says, “Incentives count.” For him that means showing employees that they’ll be rewarded if they show up when they’re needed and work both hard and smart. In some cases it also means rewarding employees with acreagebased bonuses for critical field operations. “We do that during seeding — the guys get an acreage bonus for every field that comes up and I’m satisfied with — even emergence, no misses, proper seeding depth,” he says. “They also know if they get chemical on someone else’s crop or shrubs or something like that, it’s going to come out of that bonus.” What he’s attempting to do, Pallister explains, is to delegate both reward and responsibility throughout the organization, pushing it down as far as possible. Pallister concedes it makes for extra cost. It’s not uncommon for employees to double or even triple their hourly wages during these critical periods, he says. But profitability demands that critical operations must be done right, which works out in everyone’s favour. “If we’re profitable,” Pallister says, “we can share that success.” CG August/september 2012


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management

Making a comeback

New Holland’s restructured management team has launched an aggressive plan to push the company back into the spotlight

By Scott Garvey ew Holland is back,” Abe Hughes II, the company’s vice-president of sales and marketing for North America declared to a group of farm writers in late April at the company’s North American headquarters in Pennsylvania. It was just one sentence, but it is worth coming over 1,500 miles to hear. In a very real sense, New Holland had been sitting in the wings for years watching other brands go head to head. Now, New Holland was saying they were going to climb back in the ring. The question is, can they do it? “We haven’t really been in the media,” said Hughes, admitting that even the company’s most loyal customers are uncertain about its strength. “We haven’t really been doing any of this.” All through the organization, the NH team knows they’ve got a job ahead of them. “When I worked for a competing manufacturer, we kept an eye on New Holland, but we weren’t too worried about them,” said one of the members of the New

Holland management team. “We thought they were asleep… and they were.” One of the purposes of the April media event was to demonstrate the sleeping giant has awakened. The strategy unveiled at the media briefing, intended to breathe new life into the company, is the product of an intense planning effort. “We spent month after month with senior management,” said Hughes. “We spent four or five hours (a day) for nine months from 2009 all the way to 2010 figuring out how we come up with the very best plan to reposition, restructure and rejuvenate this brand. “One of the things that plagued this brand, if you followed it closely over the last 10 years, was there were a lot of leadership changes here, symptomatic of a company that had lost its footing,” Hughes said. “Since we acquired the Case organization we’ve been a bit out of the game. When they did the acquisition a lot of attention was focused on the other brand, and none of the attention was focused here. So it’s really over the last 10 years that we’ve struggled a bit.”

New Holland’s North American management team, ready to climb back into the ring. 36 country-guide.ca

August/september 2012


management Since taking charge of NH’s North American operations, Hughes has put together a new management team and set some clear goals to build on the company’s proud history in hay tool technology, expand its equipment line and move the brand to a stronger market position. To do that, the team took a look at where the brand was positioned in the industry, who its customers were and where it needed to go in the future to build on its strengths. “We needed to really define who are our customers,” Hughes said. “We have to have the right products for that customer base.” For decades, the company’s core customer base has been farmers who need hay-making equipment. “We’re a mixed-farmer-focused company,” Hughes said. “This has been our traditional base of business. But along the way, this farmer has started to get more and more into cash crops. So this area has become stronger in our business. That’s where we’re pushing a lot of our growth and expansion.” An example of the brand’s move into the graingrowing sector is the recent introduction of the twomodel, self-propelled sprayer line. And it’s been a success. “We’re already above eight per cent of the market in Canada in our first year after launch,” said Hughes. The company has introduced several other new equipment models in the past two years as well. “Between 2010 and 2012, we’ve launched 15 new products,” Hughes said. “Our equipment line is really fantastic at this point.” That’s probably true, compared to where the company has come from, but there are still some gaps to be addressed in the crop production segment; and Hughes said the company is actively working on filling them. Figuring out which products to introduce and how to market them is where Hughes and his management team have gone their own way, compared to executive practices at some of the other major brands. Rather than designate marketing managers for specific implement lines, the NH management team has divided its overall business focus in order to concentrate on three distinct market segments: the cash crop grower, the dairy and livestock farmer, and the residential, lifestyle and contractor customer. “It used to be that New Holland was just one big network, and we talked to our network all the same way,” said Hughes. “The more we segment our market, the more we connect with our customers.” And just like executives at all the other major equipment brands, the NH management team recognizes any rejuvenation of the brand needs to filter all the way down to the dealer network. So the focus on targeting the needs of specific types of customers continues through to the retailers. “We’re re-energizing our entire (dealer) network,” Hughes said. “We’re segmenting these dealers and we’re investing heavily in the dealerships. We’re looking at all the different dealers making sure they’re up to the standards we want. We’re rewarding dealers that meet those standards.” August/september 2012

New Holland had “lost its footing,” said Abe Hughes. Now, “it’s back in the game.” That attention is paying off. “Our dealers are perking up,” said Hughes. “And our sales are proving that. I’m happy to say we reported our first-quarter earnings today and we beat analysts’ expectations by far.” Those earnings were nearly 40 per cent above predictions. But even though individual members of the management team now focus on the needs and market demands of their particular segment of the industry, all of them remain cognizant of the core objectives Hughes has set for the brand overall. That means, among other things, working toward sustainable growth. But any manager knows a company can only reach its objectives if everyone in the firm is on board with the plan. So it was necessary to also bring a renewed sense of pride and teamwork to the entire workforce at the corporate head office, not just the managers. Walking through the offices at NH’s North American headquarters, it was impossible to miss the large wall murals reminding all the staff who their customers are and what work the company’s machines are put to. “We also began to do a cultural transition of the brand,” said Hughes. “We’ve rejuvenated the whole administration area, refreshing it, investing in employees, bringing out new benefits, offering simple things like free coffee, things that liven up the environment, really letting people know we care about them.” At the hay tool assembly plant across the street, about 21 round balers make their way out the door each day, thanks to a $30-million upgrade. There’s a new management approach as well. “We’re tasked with achieving six to eight per cent savings year over year,” said Phoenix Rann, plant operations manager. And he said those goals are being met. After the tour, media gathered in the foyer of the administration building to say goodbyes. It was Hughes’ last chance to get his message out, and unlike the NH of old, he didn’t miss it. “We’re back in the game,” Hughes said, confidently. CG country-guide.ca 37


management

Nitrogen without Agrium Can we produce our own N fertilizers? More farmers think the answer is yes By Gerald Pilger armers across Canada and the Midwest Grain Belt of the U.S. are angry and frustrated over the price they had to pay for nitrogen fertilizer this past spring. They want to know why the price of nitrogen fertilizer was nearly as high as it has ever been even though natural gas is near record lows. Nitrogen fertilizer after all is basically modified natural gas, with natural gas forming the main feedstock and accounting for 75 to 85 per cent of the production cost in the manufacture of the fertilizer. Traditionally, nitrogen fertilizer prices have moved in tandem with natural gas prices. When natural gas went up, fertilizer increased in price as companies recaptured their higher production costs. But, says Tom Lilja, executive director of North Dakota Corn Growers, “since 2006 there has been a decoupling of this relationship. When corn futures went up, so did the price of nitrogen. Growers view nitrogen pricing as a problem.” The scale of the disconnect gets clearer when you read the annual reports of some of the biggest fertilizer producers. In its 2011 annual report, one of the largest nitrogen fertilizer producers in the U.S., CF Industries writes, “Total cost of sales in the nitrogen segment averaged approximately $188 per ton in 2011 compared to $189 per ton in 2010.” Yet the company’s first-quarter report for 2012 showed net sales were up 37 per cent, with gross profit up 50 per cent due to higher sales volumes and prices, and lower natural gas costs. 38 country-guide.ca

Agrium, the major producer of nitrogen fertilizer in Canada reported similar results in its 2011 annual report. “Nitrogen gross profit was $322 million in the fourth quarter of 2011, more than double the $160 million reported in the same period last year due to higher realized prices and sales volumes.” I asked Richard Downey, Agrium’s vice-president of corporate and investor relations how fertilizer is priced. He replied, “Competitively.” He explained that the dominant fertilizer market in the world is the Black Sea. That market is three times bigger than the North American market, Downey said, and the price we pay here is the Black Sea price plus transportation costs that would be incurred to bring the Black Sea product to Canada. But there are factors which distort the competitive pricing practice that Downey describes, including the high transportation costs of moving fertilizer from the Black Sea market to North America. As well, the U.S. has imposed tariffs on Russian fertilizer imports because of perceived uncompetitive natural gas pricing in Russia, and last year China imposed an export duty of 110 per cent on nitrogen to stop exports and keep fertilizer prices down for Chinese farmers. Most troubling of all, however, is the continuing consolidation of fertilizer manufacturing and marketing in the hands of a few large companies. For example, with the purchase of Viterra’s share of Canadian Fertilizer in Medicine Hat, Alta., Continued on page 40 August/September 2012


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management Continued from page 38 Agrium will control a huge percentage of the nitrogen fertilizer manufacturing in Canada. Furthermore, it will gain an estimated 50 per cent of the retail market, selling through its CPS retail locations. Koch Industries, a privately held U.S. company, has bought up fertilizer plants in Canada, the U.S., and the Caribbean. It has distribution terminals in the U.S., Canada, Mexico, Brazil, Australia, France, and the U.K., and it can now manufacture, market, and distribute more than 13 million tonnes of fertilizer products annually. Some observers also ask whether it’s just coincidence that fertilizer prices started their rapid climb at the same time CF Industries privatized. Prior to 2002, CF Industries was a traditional supply co-operative, owned by a number of agricultural co-operatives. Its mandate was the assured supply of fertilizer for its members. In August of 2005, CF completed its transition to a shareholder-owned company, and with that change in ownership came a change in mandate. Financial performance became the principal objective. In spite of the fact we have the lowest natural gas prices in the world and we produce so much nitrogen fertilizer in Canada that about 25 per cent is exported, Canadian farmers are paying some of the highest nitrogen prices in the world. That is the problem, but farmers are considering some strategies of their own in an attempt to reduce nitrogen costs.

Legume crops In the West, many producers are adding or increasing pulse crop acres as a way to reduce their nitrogen fertilizer requirements. In Manitoba and the East, soybeans are getting a harder look. Legume crops are able to produce much of the nitrogen they need, thereby reducing the amount of nitrogen fertilizer needed. On top of that, they produce a nitrogen credit for subsequent crops. A survey of Montana growers by doctoral candidate Mac Burgess found pulse growers were able to reduce nitrogen fertilizer in a following wheat crop by an average 6.5 pounds per acre and still harvest seven more bushels of wheat than if they had grown wheat on wheat. Burgess also calculated that half of the fossil fuel energy used in wheat production was used for the manufacture of nitrogen fertilizer. With energy prices likely to continue to increase in the future, legumes can reduce farm and world energy costs.

Shopping internationally While many farmers compare prices between local dealers, one Alberta farmer (who did not want to be named due to ongoing negotiations with suppliers and regulators) compared fertilizer prices between countries and found a pricing difference he hopes to take advantage of. At press time, anhydrous ammonia was selling at port in the southeast 40 country-guide.ca

U.S. for $225 a tonne, significantly lower than what he can buy it for in Alberta, even with transportation costs added in. This farmer is currently looking into acquiring the infrastructure needed to take advantage of this price, and he is also looking into the regulatory requirements he will have to meet to buy, transport, and store his needs for next year. By buying at current prices he expects he will cover all the additional costs and equipment needed to transport, handle and store a year’s supply of anhydrous ammonia in one growing season.

Co-operative production North Dakota’s Tom Lilja says American corn groups have been researching alternate nitrogen concepts for the past seven years in an attempt to find a cheaper and more efficient supply. As a result of this study, the researchers came to the conclusion that the best way to ensure reliable supply at a reasonable price is for growers themselves to build a world-scale fertilizer plant that would utilize natural gas from the North Dakota Bakken oilfield that is currently being flared off. On May 31 of this year, this plan was presented to the North Dakota Corn Growers and approved by the membership, followed by a July 11, 2012 press release announcing their intention to proceed with building a new billion-dollar nitrogen fertilizer plant. Lilja hopes an offering circular will be in the hands of northern state farmers (and also Saskatchewan and Manitoba producers) by mid-winter 2013. He expects construction to start in 2015 and fertilizer production to begin in late 2016. While Lilja says it is too early to talk pricing and product mixes, he considers this venture to be a hedge for farmers. It will add much needed nitrogen supply to the market, which will benefit growers by lowering prices. If fertilizer prices stay high, farmers who invest in the plant will benefit from good returns on their investment. It’s worth observing that IFFCO, the Indian Farmers Fertiliser Cooperative Limited is the largest federated co-operative in the world. It is a true federation of close to 40,000 agricultural co-operatives. It was ranked No. 37 in companies in India in 2011, and produced 7.168 million tonnes of nitrogen fertilizer in 2008. That was 21.4 per cent of the nitrogen fertilizer used in India and roughly the same amount as Canada produces in a year.

BioNitrogen Instead of building more large-scale nitrogen production facilities, Frank Segredo, corporate development officer for BioNitrogen Corporation believes small local plants could reduce fertilizer costs for farmers. “Transportation costs add at least $65 to $75 per ton of nitrogen fertilizer,” Segredo says. “If fertilizer was produced locally, these transportation costs could be reduced.” Until now, this would have required the buildAugust/September 2012


management ing of pipelines to move natural gas to each small plant, greatly increasing capital and operating costs. BioNitrogen has sidestepped this problem by replacing natural gas as the feedstock, using farm biomass sources instead. Three researchers at Texas Tech developed a process whereby agricultural waste such as corn stover is pelleted and then gassified to turn the pellets into syngas, which can then be used to make nitrogen fertilizers. Based on this technology, BioNitrogen has engineered small modular processing and production facilities which can be built in agricultural areas where there is an abundance of biomass which could be converted back to fertilizer. An individual plant would produce up to 124,000 tons of fertilizer per year. BioNitrogen plans to set up joint ventures with producer co-operatives who would use the fertilizer that is produced in each facility. The biomass needed to operate the plants would be sourced locally, much of it from the same co-opertatives that buy the end product. BioNitrogen would then build and operate a specifically engineered facility for the biomass in the area. Segredo says there is a wide variety of biomass Ad Name: More beans please. that could be utilized in such plants, from crop waste Publication: Country Guide to tree clippings and perhaps even municipal waste. Due Date: July 13, 2012 Preliminary work is already underway for plants

in Florida and Texas. Segredo expects these first plants to produce fertilizer early in 2014. “We are the only non-hydrocarbon-based producer of nitrogen fertilizer.”

Genetics to the rescue To plant scientists, nitrogen fixation in non-legume species is what turning lead into gold was to alchemists or the Holy Grail is to religious scholars. It isn’t going to happen overnight, but scientific work on this quest is continuing and gains are being made. This September, the 13th Symposium on Nitrogen Fixation with Non-Legumes will be held in Munich, and scientists from around the world will share their results of their research in nitrogen fixation. Of most interest may be the recent work that resulted in the development of nodules on the roots of a non-legumes. While these nodules did not lead to symbiotic hosting of nitrogen-fixing bacteria, the proof that non-legumes can form nodules is a huge step. If Burgess is right, and half of the energy to grow high-input wheat is in its nitrogen, breeding a wheat plant that could fix its own N would not only be a boon to farmers, it could significantly reduce world Trim Size: 7"x5" File Resolution: 300ppi fossil fuel requirements. Safe Area:The N/A question is, will Colour:the CMYK technology arrive in time 519.457.2178 Bleed:tonone make a difference?Insert CGOrder: CG-BETGO

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production

He’s not buying it By Ralph Pearce, CG Production Editor

42 country-guide.ca

t’s got to be the toughest question in today’s agriculture. What’s the optimum farm size? For a lot of experts — and a lot of farmers — there’s a simple one-word answer. Bigger. Or maybe we should make that, BIGGER. But Shawn McRae isn’t buying it, and although McRae isn’t the kind to try to tell other farmers how to run their own farms, he can’t see how anyone can get onto the expansion treadmill until they’ve maximized their profitability first. It’s all in the delicate balance between modern-day technology and traditional farm wisdom, says McRae, a popular speaker during the winter months who is never shy about sharing what he knows and what he’s experienced. It’s an openness that has helped him win a number of accolades too, including the BASF Innovative Farmer of the Year award presented at the 2012 Innovative Farmers Association of Ontario annual meeting in February. In fact, McRae knows that he’s in the spotlight enough to make some farmers wonder if he’s there mainly for the ego. It’s an idea though that takes him aback, running contrary to what he sees as the fundamental nature of farming. “Farming is a great occupation to nurture self-doubt,” McRae tells me. And then he adds that he goes to great lengths to avoid comparing himself to other growers. Instead, the thing that takes him to more and more meetings and into more and more educational programs, he says, is that the issues surrounding today’s agriculture are just so cool. Or, as he frequently repeats as we talk, “I eat, breathe and sleep this stuff!” He knows he isn’t the only one. “If we’re careful to use disciplined, objective and scientific analyses of our systems and our goals,” McRae says, “we can gain reassurance in our decision-making process and avoid rash mistakes borne of insecurity. “Definitely, the way I approach the business and the lifestyle and the science August/september 2012

Photo credit: Jacqueline Milner

Let other farms grow their acres. Shawn McRae sees more future in growing his profitability


production of farming is all rolled up into one big ball of wax,” McRae adds. “I don’t compartmentalize different aspects, it has to all blend together.”

High yields, low costs McRae works the family farm along the St. Lawrence River near the Quebec border, where the 800-acre operation is nestled beside the hamlet of Bainsville. His great-grandfather grew up and farmed at a location farther north in the same county, and purchased the current plot at auction in 1904. McRae now works 450 acres, with a five-crop rotation that includes roughly 90 acres each of corn, dry beans, oats, soybeans and barley. The other 350 acres include woodlots, wetlands, grass headlands and buffer strips, along with some land that is being transitioned into crop production. For the record, his corn yields are at a five-year average of 178 bushels per acre, with a 15-year trendline increase of 4.5 bushels per acre per year. At the same time, he applies only 100 lbs. of fertilizer N per acre, with no P and K or starter fertilizer. In the production of adzuki beans, McRae has managed to push production to 22 cwt per acre without fertilizer versus the Ontario average of 17 to 18 cwt per acre, typically with fertilizer. And he has the lab analyses to show that his manure and compost applications are replenishing lost nutrients. Roughly one-eighth of the cropland has a manure or compost application, equivalent to 1.5 tonnes per acre, worth 13 lbs. of total nitrogen (N), 13.5 lbs. of phosphate and 9.25 lbs. of potash.

Keeping it simple In an era when expansion and being among the first to buy the latest technology are seen as the twin pillars of success, McRae is a holdout. For him, change doesn’t come quickly. It is planned, analysed and examined from all angles. And when it’s found to work and provide an economic payback, it’s accepted as a new management norm. The McRae farm has been in conservation-till

production since 1983, when Shawn’s father Ron permanently parked his furrow plow. Shawn was 12 when that happened, and by 1988, despite some early growing pains with their chisel plow, the operation was a combination of no-till and ridge-till farming. There is no fall tillage done, although McRae now performs what he terms strategic mulch tillage in the spring before corn. For that task, he uses a mix of old and new, with an old Ford disc that provides the tillage and a tractor equipped with RTK GPS auto-steer guidance to help manage compaction using controlled wheel traffic. (For next year, McRae is planning to eliminate his spring tillage and move it back to August after barley. Then he’ll rebuild the ridges and seed cover crops similar to what he does following oats, and he’ll go back to planting corn no till on a ridge. McRae believes this will reduce holdups with corn planting and reduce the risk of erosion from any heavy spring rains.) After graduating from the University of Guelph in agronomy in 1995, McRae became a partner in the family farm operation, and the learning has continued since then. He’s attended seminars and conferences and he has researched the economic and environmental impacts of no till to the point where he has managed to reduce his fertilizer use, boost his yields and help improve the overall health of the soil on the farm. “This change to no till that my dad undertook took place when I was a pretty impressionable teenager,” says McRae. He adds that it bothered him to see the frustration on his father’s face, trying to remediate the rill and gully erosion that was taking place on the farm. “So I did my high school science project on soil erosion and soil degradation, and then went on to university from there to study it further. For me, soil without a blanket of protection, whether it be a cover crop or at least the crop residue, is prone and threatened.”

Continued on page 44

TRIPLE or PRESSURE-RINSE your empty pesticide containers Only clean containers can be recycled. Take the extra step: rinse before you return.

Visit www.cleanfarms.ca

August/september 2012

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March 2012


production Continued from page 43

In the shop too Just as McRae justifies what he does on the soil, he uses the same reasoning when it comes to his machinery. To say something is old isn’t a reason to replace it. If it works — and in this case, if it works well — then keep it. That’s why McRae uses the same Hiniker ridge-till corn planter with Kinze units that his dad used back in the 1990s. For cereals, he uses a 22-run, 15-foot no-till Tye drill, complete with a coulter cart he purchased in 2003. The fluted coulters on the unit break up the surface after 30-inch ridge-tilled beans. McRae has also outfitted the Hiniker ridge-till cultivator to seed cover crops such as red clover, oilseed radish and annual ryegrass, using grass seed boxes from the Tye drill, a 40-year-old windshield wiper motor and some equally vintage bicycle parts. The modification provides an opportunity to rebuild the ridges following oats, while spreading a cover crop after harvest. The goal, he explains, is to take a common-sense approach while still adopting the latest technology in terms of glyphosate-tolerant corn, GPS autosteer, and RTK. “You name it, if it’s new and it represents a competitive advantage or a competitive tweak, I’ll adopt it or work it in,” says McRae. “But I’m not going to throw the baby out with the bathwater and go back to making the same mistakes that have been made in the past with respect to too much tillage, too much dependence on bank credit and too much artificial fertilizer and artificial pest control. We still need the fundamentals of crop management and crop rotation, so I’m just trying to establish that balance and incorporate as much modern science as I can.” There’s even a “back-to-basics” approach when it comes to heating the family farm operation. McRae manages the farm’s woodlot acreage, removing deadfalls, diseased or wind-damaged trees plus fenceline trimmings, grinds them down using a Hurricane wood chipper and burns it all in a furnace that’s capable of heating two homes (including hot water), an office, machine shop, woodshop and an insulated machine shed. The system is driven by a homemade electric-hydraulic powerpack and an old truck transmission, and not only allows for fine tuning the fuel and air blending in 44 country-guide.ca

the primary combustion chamber, it also comes with a timer-controlled feed of grain screenings from their seed cleaner unit. The system is completely self-sufficient.

It starts with the soil On top of the economic aspects of soil management, there is also the science of soil which has to be factored into the management equation. Informing this complex decision-making process is McRae’s insatiable appetite for information. This past winter, he spent time educating himself on the complexities of Keynesian economic theory versus Austrian economic theory. He also has a business associate who scans the news services of the world every morning, and during the course of the day, sends him news items and economic updates, sometimes to inform and sometimes to stimulate new lines of thinking. “As a farmer, I just read and attempt to continually educate myself in all of those parameters, from global economics and how they impact the financial system, to our markets and credit supply,” McRae says. “It just comes in and goes through your grey matter, and what comes out the other end, in terms of management of the business or the soil, is just a culmination of that.” To say that McRae does not jump to conclusions or make decisions about managing his farm based on convention or a whim is an understatement. He studies, he challenges, he revises and tweaks — and he worries about whether he’s made the right decision.

Blending old and new That curious blend of common sense and technology — of old and new — drives McRae’s world, particularly where soil sustainability is concerned. McRae has studied soil health, right down to its microbiological levels since the fall of 2002, when he attended the National NoTill Conference in Indianapolis. It was at that conference that he heard from the likes of U.S. researchers Jill Clapperton and the late Dean Martens, and realized that there’s a littleunderstood, unappreciated world living in the soil, and that its sustainability has a direct cause-and-effect impact on the sustainability that farmers try to build into their operations. Today, he continues to learn of the role that fungi play in the soil profile, affecting plant-available nutrients, soil aggregate stability, cation-exchange capacity (CEC) and

enhancing crop growth. With his schooling at Guelph, he realized that much of what is known about soil science is based on conventional plow-till systems, and from sessions with Clapperton, Martens and others, he came to learn that soil biology changes significantly under no till. It reached the point that after switching to no-till and ridge-till farming, McRae and his father stopped seeing any appreciable response to applied in-furrow liquid starter fertilizer. Now he wonders if the main tenets in the belief in expansion leading to profitability are wrong. The 2010 Large Commercial Producer Study, commissioned as a joint project between Agri-Studies Inc. and Ipsos Forward Research, established the low end of the large commercial producer class to be $250,000 in annual revenues. It’s arguable that most people involved in the agri-food/ agribusiness sector would think a farm of 450 acres is too small to yield enough to reach that level. Yet McRae’s revenues are well above that mark, and his costs, including fertilizer, are lower than those of many of his counterparts. “I wonder sometimes if the cause and effect is backwards. Perhaps it’s the individuals driving the business who are successful, and expansion is the consequence,” poses McRae. “Another component is that expansion takes timing; a whole bunch of things have to come together for that to be good. That’s why I study history and I study financial markets, I want to step back and be objective, and ask, ‘Is now the time to expand or will there be buy opportunities around the corner?’ I’ve seen some people expand and fail rapidly.” For now, McRae is happy with what he has and how he’s producing. He’s comfortable with his equipment and the fact that his bins fit his acreage, and he has a debt-to-equity ratio that’s manageable. The sustainability that he’s worked to build on the farm is something that helps him manage with efficiency, and will help if any of his children decide that they want to farm as well. Or he can help them as they head off into another career choice. “We can liquidate, we can rent and I can help set them up in some other business, whatever interests them,” says McRae. “Or they can go off on their own, make their own way in life. Whatever makes them happy, that’s what I want in the future. “And that’s another reason I don’t want expansion for the sake of expansion… things can backfire on you.” CG August/september 2012


SPOTLIghT ON CROP ADVANCES Crop Advances is an annual report that summarizes applied research projects involving the OMAFRA Field Crop team, in partnership with commodity groups, industry and the OSCIA.

www.ontariosoilcrop.org/en/resources/cropadvances.htm

Starter phosphorous will increase winter wheat yield By Lilian Schaer Farmers are always looking for ways to boost their crop yields per acre while retaining their competitiveness in the marketplace. In the case of winter wheat, new research is showing that Ontario grain farmers can increase their yields by approximately seven bushels per acre by using phosphorous placement with their seed at planting. “Seed-placed starter phosphorous is by far the most efficient way to get a response from the phosphorous,” says project lead Peter Johnson, Cereals Specialist with the Ontario Ministry of Agriculture, Food and Rural Affairs. “Our research has shown that it is really all about the phosphorous at planting time and the best way to apply it is right in the furrow with the seed.” How was the research conducted? The project was launched in fall 2009 to collect data during the 2010, 2011 and 2012 growing seasons. Each year, seven replicated on-farm trials were conducted evaluating soft red winter wheat response to starter fertilizers. In 2011 and 2012, two additional trials were done evaluating hard red winter wheat. What is the benefit to growers? According to Johnson, growers can expect a yield increase of up to nine per cent when using starter phosphorous, as well as better winter survival and a more uniform crop at harvest time. Approximately 25 pounds of phosphorous is needed for maximum response.

Growers can use either dry or liquid fertilizer, although Johnson cautions that even though liquid is often more convenient for growers who don’t have dry fertilizer capabilities on their equipment, it is more costly to use as it needs to be applied at a higher rate than dry fertilizer to get the same response. “Growers should definitely be putting some phosphorous in with their winter wheat seed at planting,” says Johnson. “Not only are there yield increases, but your crop will also be more uniform at harvest.” Preliminary data also show there is no additional response when using higher priced MESZ (12-40-0-10S-1Zn) in place of MAP (11-52-0) fertilizer. This trial is being repeated in 2012, but Johnson suggests first year results indicate growers might not need to incur the extra expense of the MESZ. Where can I get more information? Results from the first two years of plot trials are available online in the Crop Advances report at www. ontariosoilcrop.org/en/resources/ cropadvances.htm. Outcomes from the 2012 crop year will be available there in February 2013, and an interim report will be posted at www.fieldcropnews.com this fall. How was the project funded? This project was funded in part through the Farm Innovation Program, a federal-provincial-territorial initiative, as well as by Grain Farmers of Ontario, Middlesex Soil and Crop Improvement Association and the Smart Wheat project.

ONTARIO SOIL AND CROP IMPROVEMENT ASSOCIATION Toll Free: 1-800-265-9751 Tel: 1-519-826-4214 www.ontariosoilcrop.org/default.htm

Top four things growers should know about winter wheat and phosphorous • Use starter phosphorous. You should be putting some phosphorous in with your winter wheat seed at planting as it has been found to increase yields by seven bushels per acre or approximately nine per cent. • Apply at planting. Seed-placed starter phosphorous has been shown to be the most effective way to get a response from the phosphorous. • Dry fertilizer is more economical. Both dry and liquid fertilizer will do the job, but liquid will be more costly because you need to apply more to get the same results as with dry. • There are benefits beyond yield. Starter phosphorous also results in better winter survival, and a more uniform crop at harvest which increases its quality.


production

Surging wheat Despite corn and soybean prices, the outlook for wheat may never have been more promising By Ralph Pearce, CG Production Editor ome refer to it with a smirk as “the weed that gets planted after soybeans.” Others see it as a mere rotation crop, something you have to plant whether you want to or not in order to break up disease and pest cycles. However you have always thought about wheat’s role in your own operation, it may be about to change. Many in the industry are taking a fresh look

genetically modified traits have been boosting yields of those crops, and simplifying their weed control. “That meant a grower in South Dakota could successfully grow 40-bushel soybeans and 145-bushel corn versus just 50-bushel spring wheat, and that doesn’t do it anymore,” says Ken Nixon, a farmer from near Ilderton, Ont. Nixon was on the executive with the Ontario wheat board in the 1990s, helping chart the sector’s transition out of mandatory pooling, so he has had an insider’s seat for watching the impact of government policy. “A lot of those programs are also designed or encouraged by the processing sector, because they want to have large amounts of raw product to deal with and choose from,” says Nixon. Nixon believes corn and soybean acres were also stimulated by the input sector, with the prospect of selling fertilizer and potash and keeping rail cars running. Then there is the rise of the ethanol industry, or as some see it, “the ethanol-corn industry.” “It also has a lot to do with genetics, where we have soybeans that will run 40 bushel that can grow in Manitoba and North Dakota, whereas 15 years ago, that was wheat country, no ifs, ands or buts,” says Nixon, also citing 75- and 80-day hybrids for that part of the continent.

at the market and the potential for the crop, and they’re seeing new opportunities. On farm after farm for the past decade, wheat has been losing the battle for acres against corn and soybeans, and those crops can still seem to have all the momentum. It didn’t help that wheat became a political football in the 1980s, complete with government support programs such as Europe’s restitution payments (also known as export refunds) and the U.S. Enhanced Export Program (EEP). Those supports helped their farmers push exports overseas with the help of government-paid rebates. On the surface, the Ontario Wheat Producers’ Marketing Board appeared to net the same $2.50 per bushel as Michigan growers, yet Washington’s subsidies topped up farm returns for American growers with an additional $1.40 per bushel that farmers north of the border never saw. But the climate has changed, both figuratively and literally. New U.S. farm bills have leaned more towards corn and soybeans, while at the same time,

Back in the spotlight

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Corn has taken over the agricultural landscape, regaining its prominence in southwestern Ontario and gaining acres as you go east. Now, however, there are signs the boom may be nearing an end. For several years, Cal Whewell of FC Stone in Perrysburg, Ohio, has been pointing to the rise of ethanol to explain corn’s resurgence, at least from a U.S. perspective. However, last February, he talked about corn’s imminent slide back into the upper$3 to low-$4 range, pointing to a saturation level within the ethanol sector and a resulting lowering of demand. Thanks to the drought of 2012, prices went up, not down, but he still sees long-term fundamentals calling for a huge cut in corn and soybean prices. The drought has postponed those cuts, he says, not cancelled them. Besides, wheat may offer more premium opportunities, says Archie Wilson, general manager with C&M Seeds in Palmerston, Ont. Wilson sees potential where others see barriers. “In August/september 2012


production Ontario, we don’t have the cheapest land, we don’t have the laxest regulatory system, the cheapest tax system or the cheapest labour, and we don’t even have the best environment,” says Wilson. “What we do have is relative proximity to a lot of relatively affluent people who can afford to spend money on food.” To some, it seems pie in the sky. But Wilson points to Manitoba growers who contract wheat to Warburton’s bakeries in the United Kingdom as proof there is plenty of room for Eastern Canada to establish its own quality-conscious value chains. “How much would be a true premium?” Wilson asks, but then reframes the discussion. “It’s not a premium, it’s just a different market. “I don’t think we’re going to save ourselves to prosperity in Ontario,” says Wilson, who believes Eastern Canada needs to get on top of more genetic research in wheat and get innovative with more production and marketing systems for producing and delivering those high-value traits. “I think the way we’re going to be successful is to manage to a higher level and produce better-quality end products for people, as opposed to producing the cheapest crop we can.”

The time is now It won’t necessarily be easy to get to Wilson’s view of the future. From a research perspective, there have been big strides in disease tolerance and the development of fungicide tools, and for Henry Olechowski, these kinds of advancements argue for continued research and breeding, not a “sit on your accomplishments” approach. “I don’t think you want to stop and catch your breath,” says Olechowski, a researcher with Dow AgroSciences based in Nairn, Ont. “You’re always reevaluating what you have and you’re always planning for the future. For us? We’re planning 10 years ahead.” But what should be in that plan? With wheat, it’s more complex, meaning Olechowski can’t look at wheat as a single crop. He sees many classes, from soft reds and soft whites to hard reds, hard whites and durum, each with a specific end use. “Corn is corn, but when you get into quality assessment and what the end-user wants, what quality parameters they want, that gets a little more difficult and the breeding of wheat is more difficult because it’s a hexaploid,” says Olechowski. “There’s a lot more challenge in breeding wheat and forecasting what their needs are 10 to 15 years out.” But is wheat ready for genetic modification? That’s a huge question, and a discussion that seems ready to jump to centre stage. The fact is, genetic modification in corn and soybeans has been part of the farming vocabulary for more than 15 years, with more positives than negatives. But wheat is a direct food ingredient, and toying with that plant is seen as a motherhood issue, like tampering with hockey or Tim Hortons coffee. “As quickly as the technology or science is advancing for the breeders, the same could be said about the technology advancing for the manufacturAugust/september 2012

ers,” says Olechowski. “Some can use many different types of wheat to produce the same product. Others have a very tight spec sheet, and if you go outside of that, it won’t work in their current process.”

But a threat ahead For Al Mussell, all potential markets are feasible. Exports, value added, even the end of the Canadian Wheat Board can create opportunity for those willing to explore the possibilities. Still, competition in the wheat sector is more intense than in corn, and much of this competition is on a global level. “Certainly with the change in the Canadian Wheat Board, we’re going to see a much more transparent marketing of wheat,” says Mussell, a research associate with the George Morris Centre in Guelph, Ont. Further into the future, Mussell sees a looming game changer — air seeder that will plant corn. “Part of the reason wheat works into a rotation with corn and soybeans, quite frankly, is that we have a big bottleneck in the spring,” says Mussell. “That creates an opening for a fall-seeded crop. As the technology improves around the air seeder that will plant corn, there’ll be less of that bottleneck in the spring, and some people will say, ‘What’s the most profitable crop, what do I sell the most bushels per acre, relative to my cost base?’ — and wheat may be challenged in that environment.” CG

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production

The right move? A part of business for some, on-farm drying and storage is a source of frustration for others By Ralph Pearce, CG Production Editor

or Dave Gillespie, the question of whether to install a new on-farm storage bin and drying unit was never really in doubt. At least, it was never really in doubt after the fall of 2010. “The biggest factor was when we sat and couldn’t pick any corn because we were still sitting on beans, and nobody would take them for over a week,” recalls Gillespie, who farms about 1,000 acres on Highway 21 between Ridgetown and Thamesville, Ont. It’s a move that points to both the opportunity that comes with an on-farm drying and storage system, and also to the way that it impacts all parts of the operation. It’s also a move that puts Gillespie in the middle of a major eastern Canadian trend. More growers are pulling the trigger, either building new storage and drying units on their farm, or replacing existing systems or expanding them. In Gillespie’s case, it was a major upgrade. He decided to replace his father’s aging system, and he reasoned that the family farm was also outgrowing the existing system’s capacity. Bin and dryer manufacturers have been working flat out for the last four years, with more and more farmers wanting the flexibility and profitability that they associate with on-farm grain handling. In many cases, they see it as a version of the ownyour-own-equipment versus hiring custom operators continuum. Owning your own ensures you get the work done when you want it done, and that you get it done the way you want it done too. Going custom, however, means your capital isn’t all tied up in steel. “That’s basically what it is,” says Gillespie, agreeing with the comparison. “If you’re going to the elevator, it’s the same as hiring a custom sprayer or a customer harvester. It’s all about what your goal is, and what you want to do.” Of course, management of time is a huge consideration too. Do you hire an expert, or do you take the time to become an expert yourself? But then, the time discussion has two sides. If you aren’t drying and storing your grain on farm, you can be spending a lot of your harvest lining up trucking and delivery, negotiating drying rates, and waiting in someone else’s line. For Gillespie, the decision to build his own storage and drying unit came down to logistics and marketing. There was the challenge of getting the grain 48 country-guide.ca

harvested and stored in his previous system measured against the freedom of marketing and holding on to the grain himself. “I wanted more capacity, because I couldn’t handle having to ship a third of our crop in the fall — and,” says Gillespie, “there were the logistics of getting it out, and I wanted to be able to sell it throughout the year, and I wanted to be able to capture the drying costs on the corn.” “If there’s a substantial amount of grain and you’re spending a lot of time that you should be harvesting just trying to get rid of it, or if you’re paying commercial drying rates,” Gillespie says, “that’s when you should (install a new system).” For Gillespie, there is no reason why farmers shouldn’t have some storage on their farms. In fact, he goes so far as to suggest that there should be storage capacity for at least half to three-quarters of the crop on any farm. Unless a farmer lives next door to an elevator and can unload easily without significant wait times, he believes, then the move towards larger farming units that are often spread farther apart necessitates on-farm storage and drying systems.

Buyer (i.e. builder) beware Helmut Spieser, engineer with the Ontario Agriculture Ministry also sees more farmers building new on-farm systems, and for the most part, he believes it’s a sign of some shrewd thinking. With larger farms, as well as with today’s bigger yields, most farms are dealing with steadily increasing grain and oilseed volumes. Besides, timelines are getting tighter too, and there’s less margin for inefficiency. Plus, more growers are building their new units in the hopes of becoming inland satellite locations for some of the larger commercial elevators, so there may be even more income opportunities. But it’s not as simple as it all may seem. “If they have the assumption that ‘just because I put a system, I’m going to make a whack of money,’ they’re going to be disappointed,” says Spieser. In effect, with larger farms, higher yields and rising land prices, there is simply too much at stake to leave anything to chance, and Spieser points to wheat to explain why. Quality is paramount, and with wheat’s current pricing structure and with its sprouting potential and its specific quality uses within the food industry, the stakes get very high very fast. It’s a trend that helps August/september 2012


production explain Spieser’s belief that if you have a large onfarm system, you should have one person dedicated to managing that system. It shouldn’t be a part-time responsibility, or something that you think you can squeeze into a few in-between moments scattered through the day. “Somebody has to look at it, aerate it, turn grain, move grain, ship it out, or whatever needs doing,” says Spieser. “That needs a full-time person who’s responsible for that. You have to have some continuity and capability there.” Turning and aerating is important, but again, with wheat even more than with corn or soybeans, in part because it’s stored through so much warm, muggy weather. As well, insect pests are another learning curve and can be a bigger threat in wheat. Since wheat is harvested at the height of summer, it’s also the height of insect activity, and as Spieser notes, it’s the first “fresh food” in the bin. “Again, you have to manage it, because the tolerance in the industry is zero,” says Spieser. “That’s zero for live insects at the receiving plant and in some cases, they also want zero dead insects, because if they find dead ones, they say, ‘There’s an off chance there might be a live one in the batch.’ If they find them, they’ll send you home.” Corn can provide a similar challenge with bugs but typically only in those cases where it’s stored for more than a year.

Dave Gillespie agrees that such risks and concerns are valid, and must be addressed. But he also maintains storing his own grain is an advantage. He performs all of the necessary checks and monitoring that is needed, although he acknowledges that those processes are often more complicated than they might appear. “You don’t just think you’re going to put grain in it, and that it’s just going to be there when you need it,” Gillespie says, echoing Spieser’s warnings. “You have to check it and manage it, and really, the only way to be checking it is to be pulling loads out through the year and moving it around.”

Like tile drainage? As farms keep growing, and as risk management becomes more crucial, on-farm storing and drying of grains is also taking on a new value. And in many ways, hiring a professional for storage and drying is mirroring what is happening within the tile drainage sector — where some farmers have to wait up to two years to get a crew on the farm. These are what Spieser calls “the typical expansions,” where farmers add a bin, which is usually larger and taller than any existing unit on the farm. Most are also considering adding new dryers, but timing is important, with manufacturers producing only so many units per year. It’s one more example, Spieser says, that shows the value of planning. CG

Info available The good news is that there are many different resources available to growers looking for information on storage bins and drying units, Spieser says. In particular, Ontario’s Ag Ministry hosts workshops on storage and drying, and also offers written articles and does presentations at Ontario Soil and Crop Improvement Association meetings. Some dealers will help a grower with the initial operating instructions and perhaps some rudimentary training. However, some of the technical detail beyond how the auger works or how the dryer works can be left out, sometimes with very unfortunate results. “I say that I dry a lot of grain on the phone,” Spieser says with a chuckle. “I can usually sense the guys who have the system for the first year because I talk to them about three times through the growing season. ‘This is how it went in, it looks like this, it smells like this.’ ‘Trust me,’ I say, ‘it’s fine. Run the fan.’ But they need to know what they need to know, and unfortunately, some don’t.” It’s one thing to say, “This farmer says he pays 19 cents shipping whereas the mill is charging 51 cents.” But Spieser contends that these comparisons aren’t apples to apples. The price the farmer may be quoting could be for fuel alone. The price the mill quotes usually includes everything, including overhead, insurance, profit, amortization, repairs, demurrage and equipment breakdown. The two prices are not considering the same parameters. August/september 2012

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PRODUCTION

FALL WEED CONTROL – THE ADVANTAGES

#PestPatrol with Mike Cowbrough, OMAFRA

Have a question you want answered? Hashtag #PestPatrol on twitter.com to @cowbrough or email Mike at mike.cowbrough@ontario.ca.

all is a great time to target many perennial weeds. Cooler temperatures as well as specific growth stages will trigger them to move food reserves down to the roots for overwintering. Applying a herbicide that translocates or moves within the plant means more herbicide can also find its way to the root. Therefore control is usually better than when the same perennial weed is targeted in the spring. For instance, studies conducted at the University of Guelph over the years have consistently found that control of dandelion is significantly better when glyphosate is applied in the fall versus the spring. So for perennials, fall applications will give you more for your herbicide dollar.

Cooler temperatures The challenge with fall weed control is the mindset that because temperatures are getting cooler, the herbicide application will have little impact. After all, active weed growth and good weed control are usually associated with warmer temperatures. However, just as some crops can grow under cooler conditions (i.e. winter wheat), so too will many perennial weed species. In fact, some species will require a light frost before they begin to send sugars down to their root system.

Post-harvest weed control There are mainly four herbicides registered for post-harvest weed control in Ontario: 2,4-D, Amitrol 240, Banvel II (and other dicamba products) and glyphosate. Refer to the O NTARIO ’ S G UIDE TO W EED C O N T R O L (Publication 75), which can be downloaded for free at www.goo.gl/fDXPd for specific information regarding weed specific rates, use precautions and recropping restrictions. In general, glyphosate is the most widely used post-harvest herbicide as it is very effective, it is economical and it provides the greatest level of recropping freedom for the following spring. Glyphosate is also the only product that can be applied pre-plant prior to a winter cereal.

Appropriate growth stages The key to successful long-term control of perennial species is targeting the herbicide appli-

50 country-guide.ca

cation at the appropriate growth stage. Table 1 gives an overview of the best growth stage to apply an effective herbicide for control of the many common weed species. It is important to note that the best growth stage for application doesn’t always occur at a time that is practical for fall herbicide applications. For example, the best time to apply a herbicide for the control

TABLE 1. APPLICATION STAGING AND EFFECTIVE PRODUCTS FOR THE CONTROL OF PROBLEMATIC WEED SPECIES. Weed

Application Staging Effective Products

Canada Thistle

Early Bud

glyphosate, Banvel II

Dandelion

No specific staging – active growth needed

glyphosate, Amitrol 240

Field Bindweed

Full Flower

glyphosate, Banvel II

Hemp Dogbane

Past full bloom

glyphosate, Amitrol 240

Milkweed

Bud

glyphosate

Quack grass

3-4 new leaves

glyphosate

Sow-thistle (perennial)

Early Bud

glyphosate, Amitrol 240

of field bindweed is at the full-flower stage. Most of us can appreciate that field bindweed is usually at full flower in July, certainly not in September or October. So another approach for control of this species would be to plant a glyphosate-tolerant crop and apply two in-crop applications. However, targeting field bindweed with a fall herbicide application after a winter cereal can still be quite effective provided there is regrowth of this weed.

Cereal stubble and red clover Cereal stubble provides a tremendous opportunity to clean up some of those troublesome perennial weed problems. Even if you have red clover that was underseeded, the optimal time for control of red clover to maximize biomass, which is around mid- to late October, is also a good time to deal with many perennial weeds. In University of Guelph research trials, glyphosate (360 g/l) at one l/ac. + Banvel II (dicamba) at 0.25 l/ac. provided the best control of red clover.

AUGUST/SEPTEMBER 2012


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ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Details of these requirements can be found in the Trait Stewardship Responsibilities Notice to Farmers printed in this publication ©2012 Monsanto Canada, Inc.

With generations of experience, you can trust DEKALB® soybeans to bring you a combination of industry leading genetics and traits.

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w e at h e r NEAR NORMAL

COOLER THAN NORMAL

MILDER THAN NORMAL

ol Co wery o Sh

NEAR-NORMAL TEMPERATURES AND RAINFALL

Wa rai Scatt rm n / ere t/st d orm s

Scat ter rain ed

AL U S LL -U FA N A IN TH RA ER GE M A AR ER W AV

St at t ormy ime s

Occasio rain / fronal st

August 19 to September August 22,192012 to September 22, 2012

ONTARIO

Aug. 19-25: Generally sunny apart from one or two days with scattered shower or thunderstorm activity. Seasonal to warm temperatures with a few more humid days. Aug. 26-Sept. 1: Look for pleasant and warm weather overall in spite of a few showers or thunderstorms at scattered locations. Chance of heavy thunderstorms in places. Frost threatens north. Sept. 2-8: Seasonal to warm under mostly sunny skies other than scattered showers or rain on a couple of days. Breezy at times with cooler nights. Frost patches central and north. Sept. 9-15: Mainly sunny in the south with highs often in the 20s but expect one or two cooler, wet days with brisk winds. Cooler north with showers and some frost. Sept. 16-22: Pleasant overall in the south with highs at times in the 20s. Scattered shower or rain activity. Cooler, variable in the north with some rain and frost.

QUEBEC Aug. 19-25: Seasonal to warm temperatures dominate the week. Mostly sunny but expect scattered showers or thunderstorms on a couple of more humid days. Aug. 26-Sept. 1: Seasonable but with a few cooler nights. Generally sunny skies aside from scattered rain or showers on two or three occasions. Cooler, showery north. Sept. 2-8: Seasonal to warm and mainly sunny in the south. Scattered rain, breezy 52 country-guide.ca

with a few lows in the single digits. Cooler, showery north with some frost. Sept. 9-15: Fair, settled in the south aside from showers or rain on one or two days. Frost threatens especially central and north. Cooler, unsettled, showery north. Sept. 16-22: Fair skies although rain arrives on two or three occasions with brisk winds. Seasonal to warm. Frost threatens south, but higher risk central and north.

ATLANTIC PROVINCES Aug. 19-25: Seasonal to occasionally warm most of the week. Sunny with a few showers but heavier rain and gusty winds threaten on a couple of days. Aug. 26-Sept. 1: Mostly sunny with seasonable to warm temperatures. Nights cool, approaching frost in places. Scattered showers or thunderstorms west, chance heavier rain east. Sept. 2-8: Expect variable weather as fair skies interchange with scattered rain. Heavier rain and strong winds threaten eastern regions. Seasonal to occasionally warm. Sept. 9-15: Seasonal to warm and generally settled on most days but look for some rain and gusty winds on a couple of days. Some lows approach zero west and north. Sept. 16-22: Fair but weather systems bring heavier rain and blustery winds on two or three days this week. Variable temperatures. Frost in some western and northern regions.

NATIONAL HIGHLIGHTS Warm weather is likely to prolong summerlike temperatures across most of Eastern Canada well into September. The upperlevel ridge responsible for the warmth is expected to suppress rainfall to below normal in many of these regions from Ontario to the Maritimes. However, occasional storms in late August and September may bring a few heavier rainfall events to the eastern Atlantic provinces. Elsewhere, cooler outbreaks in Western Canada will result in the first frost of the season in many areas. As a result, temperatures are likely to average close to longtime normal values from northwestern Ontario westward through the Prairies and into eastern British Columbia. Precipitation in these areas is expected to run near or a bit below normal. Farther west in coastal British Columbia, look for a continued cool circulation off the Pacific with several wet spells showing up in September.

Prepared by meteorologist Larry Romaniuk of Weatherite Services. Forecasts should be 80 per cent accurate for your area; expect variations by a day or two due to changeable speed of weather systems. august/september 2012


hr

Too good at what you do Any strength taken too far will become a weakness By Pierrette Desrosiers, psychologist and coach

hen any of our personality traits become rigid or exaggerated, they become painful both for us and for those around us. They can also jeopardize our success, even when we think that the trait is the very thing that is holding our farm together. Think for example of the entrepreneur who is too independent to take good advice, or who seems so fast to find the weakness in any concept that his family and employees stop telling him their ideas. The irony of course is that we also know that when entrepreneurs listen to everyone, they become indecisive and their leadership suffers. Taken too far, any strength — such as decisiveness — can become a problem, a flaw, a weakness. Consider this example. Andy’s farm looks successful from the outside. It has everything going for it, including excellent yields, a very low level of debt, shiny tractors and machinery, well-managed fields and a spotless barn. However, even Andy will tell you that nothing seems to be going right anymore. He’s exhausted, and he’s frustrated with other people’s attitudes, including his partner, his employees, his wife and his children. “They’re irresponsible,” Andy says. “They don’t have high enough standards. You could say that I’m the only one who wants to succeed and make any effort. “If I weren’t so demanding,” Andy says, “our farm wouldn’t be so productive and we wouldn’t achieve such a high level of financial success.” In fact, when I visited the farm, it was obvious that Andy does indeed have much higher standards than everyone else, and it is true that, without his standards, the farm probably would never have attained the level that it has. Andy sees himself as careful, ambitious, attentive to detail, and hard working, and he believes he possesses high professional standards and a great sense of responsibility. These are crucial traits for success, and he is strong in all of them. However, what Andy perceives as valuable qualities are perceived by those around him in a different way. They see Andy as rigid, stubborn, strict, intolerant, tense, never satisfied, hung up on details, always serious, incapable of delegating and unable to express joy or any other positive sentiment. “No one can ever do enough,” his wife says. “It’s never good enough or fast enough, or it’s not the right thing.” “If you get to the barn at 5:10 instead of 5:00, it’s a big drama,” his brother adds. “But if you do august/september 2012

arrive at 5:00, he will expect you to be there by 4:45 in the future. “In Andy’s eyes, we don’t have enough ambition,” the brother says. “He thinks we’re all losers. He wants to control everything. There’s a lot of employee turnover because no one gets positive feedback, only criticism. They get discouraged and go work on another farm.” The message isn’t that Andy’s strengths aren’t good for the farm. It’s that when they become rigid and exaggerated, without any nuance or flexibility, they become an obstacle to success. Think about your farm as a crop. The harvest represents your objectives. The fertilizer is your management. To have an abundant harvest, you have to add fertilizer (perseverance, attention to detail, high objectives, thoroughness, etc.) because, with no fertilizer, you’ll have a very mediocre yield. However, if you fertilize too much, you’ll waste your money and energy, and even cause damage to the soil. And if you keep overfertilizing, you won’t harvest anything (other people will get discouraged, rebel, become apathetic, exhausted, or they will quit). Here are some questions to ask yourself: • A re your standards realistic given existing resources, materials, skills and time? • Are the people around you stimulated and committed by your objectives, or are they exhausted and discouraged? • Is the climate positive, or is everyone walking on eggshells? • Do you acknowledge and celebrate success, or are you never happy? • Do you start all your conversations with, “You have to,” “you should,” or “you must?” • Are you still able to enjoy life and the presence of others? Most of us feel we are good at identifying our strengths, so a good exercise is to think about each of those strengths and imagine the problems that could come from taking them too far. Then look for signs that this is what you have done — or ask your partner or your children what they think. And always remember…“Too much is the same as not enough!” CG Pierrette Desrosiers is a work psychologist, professional speaker, coach and author who specializes in the agricultural industry. She comes from a family of farmers and she and her husband have farmed for more than 25 years. (www.pierrettedesrosiers. com) Email: pierrette@pierrettedesrosiers.com. country-guide.ca 53


ACRES

By Leeann Minogue

The storm’s aftermath he heavy rain turned to hail. From the living room window Jeff saw peasized stones hit his front lawn. Elaine carried their little boy crying in from the bedroom. “He’s terrified,” she said. “Come here,” Jeff said, taking the frightened toddler in his arms and holding him up to the window. “See? This is why Daddy buys hail insurance.” A similar scene was playing out across the farmyard at Jeff’s parents’ house. Dale was pacing, looking out windows in different directions every few seconds while Donna tried to watch a movie in the living room. “Don’t ask me to tell you what you’re missing in this movie,” she told her husband. “You can’t do anything about the hail, so you might as well just relax.” “Listen to that, will you? Good thing I got all the vehicles in the shop before this hit.” “Look,” Donna said. “We’re about to find out who’s paying the terrorist. Could you please sit down? Or at least be quiet. It’s hard enough to hear with all that noise outside.” “It’s almost like I can see the future,” Dale said. “Jeff and I talked it over just yesterday and decided to buy hail insurance. A hundred and fifty bucks an acre. If we hadn’t done that, this could’ve been a complete disaster.” “If you can see the future, tell me who hired the terrorist,” Donna said. Then the phone rang. It was Dale’s father Ed calling from his condo in town. “Is it hailing out there?” Ed asked. “It’s a real doozie here!” Jeff and Dale were still patting themselves on the back the next morning when they went out to inspect the damage. Ed had driven out from town to join in on the crop tour. 54 country-guide.ca

“Can’t beat insurance like that,” Jeff said. “Buy it one day and it pays off the next night.” “I just hope we get a fair settlement,” Dale said. “I haven’t heard of anybody else around here having any trouble,” Jeff answered. “Nobody down at Wong’s Café has mentioned any problems,” Grandpa Ed said. “Huh,” Dale grunted. “If anybody’s going to talk about a problem, it’s going to be on Coffee Row.” Most of the hail damage seemed to be in the half section north of the yard. The three men bent over the canola leaves, trying to assess the damage. Jeff thought it might be 70 per cent, but Dale thought the damage was closer to 75 per cent. “You’re both wrong,” Ed insisted. “It’s 80 per cent if it’s anything.” Other than that half section, the Hansons had come out of the storm fairly well. They couldn’t see any signs of hail in any of their other crops, and if there was any damage to their buildings or bins, they couldn’t find it. This was such a relief, the men decided to take a little more time and check out some of the neighbours’ fields, farther north. “Yup,” Dale said as he drove. “We got out of this pretty lucky. And we sure got our money’s worth yesterday on that fuel you used to get to town to talk to that insurance agent.” “Yup, sure did,” Jeff agreed. Then his head swivelled around on his neck, his eyes bulged open and he shouted, “What?” “What do you mean what?” Dale asked, sounding a bit confused. Then he stopped the truck in the middle of the road. “What?!” “I thought you were calling Ron to buy insurance.” “No!” Dale said. “We agreed you were going to buy it.” AUGUST/SEPTEMBER 2012


acres “That was not the plan,” Jeff argued. The conversation went on like that until Ed piped up from the back seat. “You guys might want to take this argument back to the yard. The guy in that truck behind you wants to use the road too.” Dale looked in the rear-view mirror and saw Brian Miller stopped behind him, probably out checking hail damage too. Dale waved absently, put the truck back in gear and drove to the next approach. Then he pulled off, made a U-turn and headed back to the yard, shaking his head and muttering under his breath all the way. As they drove, Jeff took his iPhone out of his pocket and used the calculator app to figure out how much money this stupid misunderstanding had cost. It was a big number. He wished he hadn’t done it. “Guess that phone’s not as smart as you thought,” Ed piped up from the back seat. “I don’t know what we’re going to do now,” Dale said as they turned into the driveway. “We can’t go in the house. Those women will kill us when they find out what we just did.” It wasn’t completely impossible. Dale’s wife Donna and Jeff’s wife Elaine often mentioned how important it was for everyone on the farm to communicate. Dale wasn’t interested in discussing his communication skills, but he had been trying as hard as he could to pass off business responsibilities to his son since Jeff had moved home to farm. Only, as it turned out, sometimes it was hard for Dale to remember exactly which responsibilities he’d actually fully passed off, and which ones he was still taking care of himself. The three of them trudged into Dale’s house. Dale and Jeff took their time taking their boots off in the porch. Ed went in ahead, looking for the coffee. Jeff’s wife Elaine was already there. The toddler had wanted to spend some time with his grandma, and Elaine had made some saskatoon muffins from the bushes in the back pasture, and brought them over to share. “Try one of these, Ed, they’re delicious,” Donna said. “Don’t have to tell me twice,” Ed said, peeling the paper wrapper off the bottom of his muffin. “Nothing I like better than saskatoons. I might as well have theirs too,” he said, nodding at Dale and Jeff. “I doubt they have much of an appetite.” “Why not?” Donna asked. “Is something wrong?” Dale tried to avoid telling her, but she wasn’t having any of that. “Get to the point,” she said, giving him the eye. Dale tried taking the slow route, explaining that communication was difficult, and that it’s easy to make mistakes. Finally Donna put her foot down. “Just tell us,” she said. “What happened?” “We didn’t buy hail insurance,” he said. “I thought Jeff was going to town to sign the papers. He thought I phoned it in.” Then Elaine spoke up, for the first time since the men had come in. “I did it.” August/september 2012

“We can’t go in the house,” Dale said. “Those women will kill us when they find out what we just did.” This surprised everyone so much, the room was quiet for at least 10 seconds. “I can show you the contract if you want. They faxed it back right away.” The men just gaped at her, open mouthed. “I was sitting right here when you two talked about it yesterday,” Elaine said. “I’ve been doing the books. I just assumed buying insurance went along with that job… Doesn’t it?” “Um, yeah.” Dale said. “Sure it does. We knew you’d have done it.” “Right,” said Ed. “I could tell that’s what you were thinking.” “I see,” Donna said. “Looks like we need to have that talk about communication again.” CG

Trait Stewardship Responsibilities Notice to Farmers Monsanto Company is a member of Excellence Through StewardshipSM (ETS). Monsanto products are commercialized in accordance with ETS Product Launch Stewardship Guidance, and in compliance with Monsanto’s Policy for Commercialization of Biotechnology-Derived Plant Products in Commodity Crops. This product has been approved for import into key export markets with functioning regulatory systems. Any crop or material produced from this product can only be exported to, or used, processed or sold in countries where all necessary regulatory approvals have been granted. It is a violation of national and international law to move material containing biotech traits across boundaries into nations where import is not permitted. Growers should talk to their grain handler or product purchaser to confirm their buying position for this product. Excellence Through StewardshipSM is a service mark of Excellence Through Stewardship. ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Roundup Ready® crops contain genes that confer tolerance to glyphosate, the active ingredient in Roundup® agricultural herbicides. Roundup® agricultural herbicides will kill crops that are not tolerant to glyphosate. Acceleron® seed treatment technology for corn is a combination of four separate individually-registered products, which together contain the active ingredients metalaxyl, trifloxystrobin, ipconazole, and clothianidin. Acceleron®, Acceleron and Design®, DEKALB®, DEKALB and Design®, Genuity®, Genuity and Design®, Genuity Icons, Roundup®, Roundup Ready®, Roundup Ready 2 Technology and Design®, Roundup Ready 2 Yield®, RIB Complete and Design™, RIB Complete™, SmartStax®, SmartStax and Design®, VT Double PRO™, VT Triple PRO™ and YieldGard VT Triple® are trademarks of Monsanto Technology LLC, Monsanto Canada, Inc. licensee. LibertyLink® and the Water Droplet Design are trademarks of Bayer. Used under license. Herculex® is a registered trademark of Dow AgroSciences LLC. Used under license. Respect the Refuge and Design is a registered trademark of the Canadian Seed Trade Association. Used under license. (3701-MON-E-12)

Country Guide 1/6 page vertical . 2.125 x 5”

country-guide.ca 55


life

Time to decide Small, mid-size and large farms all are searching for more hours in the day. As it turns out, the solution is the same for all of them By Rebeca Kuropatwa

hen James Perry became director of human resources at the United States Department of Agriculture some 30 years ago, he fell into the trap. He felt instantly overwhelmed. Faced with being in charge of training, development and education for 3,600 employees, he spent more time deciding what he didn’t have time to do than he spent trying to find ways to use his time more effectively. Farmers can sympathize. Like Perry, they know the helpless feeling when you just can’t get it all done, let alone have time for a life too. Like Perry, farmers know there are loads of selfhelp books on time management. They also know there are time consultants, and most have heard of the Franklin Covey time management empire. The difference is, Perry has gotten past his doubts and suspicions, and today is utterly convinced that the hocus-pocus actually works. About six weeks into his job at USDA, the Cincinnati-born Perry’s boss paid him a visit to see how things were going. “I’ll never forget what I said to her,” he recalls. “I said, ‘I’m so busy that I don’t have time to get organized.’ When saying that, I realized the fallacy of it — that if only I’d have spent more time getting organized, I likely wouldn’t have been so busy.”

“Planning for what you want takes only 15 minutes a day.” — James Perry Perry’s boss recommended he enrol in the Franklin Covey time management program, which he did. “Coming out of that program, my thinking turned around completely,” he says. “I began doing more effective planning, which is essentially time management. “I was no longer running, scurrying around, getting frustrated, stressed, and uptight, and not being able to get things done. Once I gained a better understanding of how to manage my time effectively, everything began to work for me.” Now retired from the USDA, Perry has become a time management teacher in his own right, delivering an eight-hour version of the Franklin Covey system called 56 country-guide.ca

What Matters Most. He’s also a facilitator for Nikken’s Humans Being More (HBM), teaching the program around the world. After all those years, however, the basic problem hasn’t changed. Neither has the solution. “Effectively planning for what you want takes only about 15 minutes a day, and that will significantly contribute to you achieving what you want in life,” Perry tells me. The individual causes vary from farm to farm, with Perry rattling off a list including “poor planning, failure to listen, unclear goals, socializing, lack of self-discipline, unrealistic time constraints, unwillingness to say ‘no,’ lack of motivation, attitude, failure to delegate, being overly concerned with details, indecision, and a cluttered environment.” Sound familiar? “I believe in the process of effectively planning for what you want, putting it into a formal plan, and goal setting,” says Perry. “We must effectively plan for what we want instead of settling for what we get. “It all comes down to what you want to achieve.”

On the farm “On a scale of one to 10, I’d probably put myself as a six, but I want to be closer to a nine,” Geoff Dyck tells me. Dyck, 45, owns and operates Boundary Creek Farm in the interlake region of Manitoba with his wife, Theresa, and he admits he has thought about learning more time management skills, and has put it off at least once. “There’s always room for improvement when it comes to time management,” Dyck says. “I want to not be totally consumed with the farm and have time for other things.” The Dycks run an 80-acre farm based mainly of vegetables grown under Community Supported Agriculture agreements, where their customers register and pay cash up front in the spring, and in return get a weekly delivery of fresh vegetables throughout the growing season. The Dycks raised their family while living in Winnipeg, but about 12 years ago decided to return to their rural, farm-living roots. They sold their house, quit their jobs, and apprenticed on farms in southern Ontario for two years. They then moved back to Manitoba, found a farm, and away they went. August/september 2012


life Today, the Dycks do the same kinds of time management that most farmers practise. They keep calendars as well as lists of jobs that need doing. They also sit down once a week, often on Saturdays, to look at the week ahead and to block out big chunks of time that they can dedicate to important jobs without interruption. Like other farmers, they do seasonal planning too, spending time in the winter to review their past year and look for opportunities to gain efficiency. South of the Dycks, Pamela and Clint Cavers own and operate Harborside Farms in southern Manitoba, with Pamela saying that on a scale of one to 10, she believes time management on their farm scores a nine for importance. “It’s probably the biggest downfall in our farm management,” she says. The Cavers’ farm is located in Pilot Mount, Man., about 10 miles north of the U.S. border. Clint grew up on a conventional cattle farm in the Pilot Mound area his whole life, following in his father’s and grandfather’s footsteps. Along the way, the Cavers have picked up some time management training. “We took a holistic management course quite a few years ago,” says Pamela. “We learned from there how to set personal goals — for our farm and for our family. We make sure we know our family is equally important as everything else. If we don’t have that family or refreshing time, the farm, everything, will fail.” The Cavers have continued to work at time management too. “We actually use Google Calendar to schedule a lot of our farm tasks,” Pamela says. “We’re part of a group that’s pretty keen on the Internet and computer stuff, so they recently introduced that to us. It works well. We’re all aware of what’s needed and what’s going on.” Now, however, they’re coming up against the limits of their informal time management system. “Oftentimes, people get overscheduled, with lists for absolutely everything,” Pamela says. “That can become destructive.”

Perry’s pointers Perry recognizes that every farmer faces a tough time challenge. “A farmer’s time is very busy, and they’re typically not involved in things that are merely optional,” he sasy. “They typically spend their time on essential tasks.” Still, he thinks his formula will help farmers too. Perry sticks to the rules himself. He August/september 2012

writes down what he wants to accomplish each day and assigns a value to it, with “A” being urgent, “B” being important, and “C” meaning optional. Then he sticks to the list. “I’m always writing things down, and when I set a value to it, I stay focused,” Perry says. “I highly recommend that everybody do this.” The writing down is important, he says. Once a goal is on paper, you have to deal with it. At the same time, Perry also sets monthly, annual, and long-range (over two years) goals. “I often write things down in my planner the night before just so I won’t forget it,” says Perry. “I don’t wait to write time-sensitive tasks down. I’m always thinking and planning ahead, considering goals and how to achieve them. “Getting things done on your list gives you satisfaction, a rush of endorphins. If there’s something on my list I meant to do that day but didn’t, if it’s important to me, I’ll put it on the next day’s and the day after that’s list. But if I find myself continuing to not get it done, I deem it to be unimportant and drop it off my list altogether. “If a particular task is going to take me six hours, I’ll be especially aware of the tasks on my list that day. It can be very discouraging to look at your list at the end of the day and to only have completed two tasks. Putting my list together, I’m keenly aware of about how much time each task will require. You don’t want to overwhelm yourself, getting into a pattern of self-defeat.” Something else Perry learned a long time ago is that family comes first. “The goal is to create a balance between family, society, finances, physical, spiritual, mental, and such. One’s life can’t be all about work.” Perry and his wife sit down together within the first few days of each new year, and, first and foremost, acknowledge that they are truly blessed. “As we put together our annual goals and look at the different areas of our lives we want to balance, we put things into categories. This way, when we’re doing our weekly, monthly, and yearly planning, we’re allocating time in a balanced way to each of the areas we want to fulfil. “Some things are seasonal, especially in the life of a farmer, but then you just need to make adjustments around those seasonal periods,” Perry says. “You may be busy for extended periods of time, but then in your downtime you can catch up with the other important areas of your life.” CG

168 hours is all you get Everybody gets the same. We all have 168 hours in a week. But the truth is, we don’t all get the same out of our time allotment. Even worse, we aren’t consistent. Some weeks we get tons accomplished. Other weeks seem to slide by, and we don’t seem to have actually accomplished anything even though we’ve been busy all week. Laura Vanderkam, author of 168 Hours, may be able to help. She recommends your first step be to keep a time record for a week to see how you are actually spending your time. Her website (www.my168hours. com) has a template that will help you log your week in 15-minute increments. Vanderkam also recommends you create your own “List of 100 Dreams” as a kind of bucket list to inspire you to create goals — both large and small. At the end of your week, don’t make excuses. Don’t tell yourself, “Well, that wasn’t an ordinary week.” Instead, dig into the numbers with the objective of seeing how much time you spent NOT achieving your important goals. How much time did you spend checking email, tracking crop prices, looking for misplaced items, or in front of the television? Then ask yourself, if I hadn’t spent time in those non-profitable ways, what could I have done?. These tips from Vanderkam will help: • D o one thing a time. Focus until you have finished the job. Then move on. Mini-breaks to check email or to tune in the radio news are time killers • A im for good enough. Not every job needs to be done perfectly. Yes, you want to be proud of how the property looks, but imagine how proud you would be if you used that time to build a stronger relationship with your grandchildren, or with your community. • Give things a home. Time spent looking for missing items is wasted time. It can easily consume an hour a day. What could you accomplish if someone gave you an extra seven hours a week? • D on’t get into a rut, especially with meals. The point of having a meal is to have time together, so be flexible. A microwave meal, or sandwiches for dinner, may help your family achieve more of the really important things. • Watch less TV!

country-guide.ca 57


LIFE

Saying goodbye

When it’s time to leave the farm, these tips will keep part of it with you

By Helen Lammers-Helps t isn’t as if you made the decision lightly. In fact, it may be the hardest decision you’ve ever had to make. The idea of retiring rather than working until you drop took months — years actually — to get used to, not to mention the hours of emotional wrestling before you could look yourself in a mirror without feeling guilty for wanting a small slice of what everyone else in society takes for granted. But facts are facts. The kids don’t seem like they’re interested in taking over. Heaven knows, as you’ve told yourself time and again, you can’t farm today unless you’re totally dedicated.

58 country-guide.ca

Even so, the farm is home. It’s where the kids grew up, so you can’t blame them for feeling strongly about it. The farm means family to them, and not only to them. They love bringing the grandkids out to visit too, telling them how the farm runs deep in all their veins. So, you decide, you’ll just have to make the announcement and tell them you’re going to sell out. “Not so fast,” says Elaine Froese, a Boissevain, Man. farm family coach. Before you put up that “For Sale” sign there are some critical steps to work through. That includes making one more check to be sure you know where everybody stands. Avoid the “nobody asked me” syndrome, says Froese. This typically happens when children, especially girls, aren’t invited into discussions about the future of the family farm. Be sure to talk to ALL of the children about your desire to retire and sell, Froese says. Don’t assume your kids aren’t interested in farming. Sometimes these discussions will spur adult children who have moved away to leave their careers in the city and return to the farm, she says. Don Campbell, a rancher in Meadow Lake, Sask. who helps facilitate farm transfers agrees that you need to have the conversation about the future of the farm with your kids. The biggest hurt is often caused by poor communication, says Campbell. “It’s OK for parents to ask their kids if they are interested in taking over the farm and it’s OK for the children to ask if there is a place for them on the farm and if so, what does it look like,” he says. AUGUST/SEPTEMBER 2012


LIFE

No secrets, no gossip If you’ve explored the options with the kids and you are certain now is the right time to sell, be open and up front about the process. “There should be no family secrets and no family gossip,” says Froese. John Fast, a family business coach in Waterloo, Ont. agrees. People don’t like surprises so don’t be secretive about your decision, Fast says. Be open about your reasons for selling. Even if you’ve received a sudden offer from a gravel pit company or land developer, talk to the kids before you sign on the dotted line. Holding a family meeting can clear the air so nobody is making assumptions and jumping to conclusions, says Froese. “It’s better not to be guessing and trying to read minds,” she says. Not knowing what’s going on is the bigger source of stress, she adds. People can learn to live with the decision if they understand why it was made. Before moving forward with a plan, both parents need to make sure they are in agreement and united in their decision. “If the parents aren’t united, children will often play one parent against the other,” says Froese, who recommends parents seek outside counselling if they’re not in agreement. Parents should also seek financial planning advice to be sure they are putting their own needs first, she says. When a farm is sold outside the family, it’s important to understand that people will often experience a sense of loss and grief at the sale, says Froese. For the parents, it’s also the loss of a dream if they had hoped that one day their children would follow in their footsteps and take over the farm.

A family project There are many ways to make the transition easier for everyone involved. For example, Froese says you could capture special memories by taking pictures and creating a scrapbook, saving some rocks from the rock pile, keeping some barnboards to make picture frames, using an old barn window to make a mirror frame, or welding some old farm implement parts into a sculpture. If there’s a garden, transplant some of the flowers to your new garden. Be creative and explore ways that are meaningful to your family. There are also professional services that can help you preserve your farm memories. For example, in Acton, Ont., Nora Zylstra-Savage and her partner, Carol Pollock of Storylines (www.myHouseMemories. com), create customized hardcover books with photographs, voice recordings and written text. For 20 years Zylstra-Savage had been helping people write their memoirs before she founded Storylines last year. And Pollock, who is from a farm in Bruce County, saw the need with so many farms in their area being bought by developers, which upset AUGUST/SEPTEMBER 2012

the extended families. “These books of memories help to document and acknowledge the past and maybe heal a few hearts,” says Zylstra-Savage. In Moose Jaw, Sask., mother-daughter duo Kelly Thorson and Jess Zoerb of Farm Legacy Photography (farmphotography.org) create hardcover books and framed prints from the artistic photographs they take of the farm. Thorson also operates a graphics company, Kel-T-grafix ( kel-t-grafix.com) from her farm in Holdfast and can make a range of products including calendars, cards, clothing, signs and etched glasswork with farm images. You can also create a coffee table-style book yourself using your own photographs through online custom book publishers such as blurb.com, blacks.ca, photoinpress.ca and photobookcanada.com. Holding one last family gathering at the farm to mark the occasion can also be a good way to say goodbye, suggests Froese. For example, you could have a family picnic and a walk around the farm. You may also want to ask permission from the new owners to walk the property in the future. Froese cautions that it takes time to process the complex feelings of loss when the farm leaves the family. If the situation becomes highly charged, she recommends seeking an outside facilitator, preferably someone with a farm background. Make sure every voice at the table is heard and try to understand what the issues are. “Is it hurt, frustration, anger?” Froese asks. “You need to understand what is behind the emotions.” Of course, the other option is simply not to deal with the hard issues at all, hoping they’ll take care of themselves. You never farmed like that, though, so don’t become that kind of farmer when you leave, says Froese. “Good farmers don’t avoid conflict.” CG country-guide.ca 59


h e a lt h

OxyContin in the news By Marie Berry ecently, you have probably heard about OxyContin, and you may be wondering what the issue is. To understand the matter better, let’s start by thinking a bit about the opioid class of drugs. The first historical mention of opioids is in Greek writing dating back to the third century BC, although the pain-relieving and psychological effects of these drugs may have been discovered even earlier. Indeed, these drugs have been around for a very long time!

Use any pain reliever for the shortest time possible, and on a scheduled basis The words opioid and opium are derived from the Greek word for juice, for a very simple reason. These drugs are obtained from the juice of the poppy plant. Opium itself contains more than 20 distinct compounds and the first, morphine, was isolated in 1806 and named after the Greek god of dreams, Morpheus. Other pure compounds such as codeine followed and thus the use of the pure compounds rather than opium itself started. Today, opioid drugs, including oxycodone, are synthetically manufactured. Opioid drugs are effective pain relievers due to their ability to attach to various nervous system receptors called — what else? — opioid receptors. The receptors are referred to by the Greek letters μ, δ, ε, κ, and σ and there are various subtypes of each. Once the opioid is attached to the target receptors, pain messages are blocked, which means the sensation of pain is alleviated. For patients, the differences between the opioid drugs depends upon which receptors — or which combinations of receptors — they block. You may also have been reading in the news about fish oils, and you may have friends or relatives who take fish oils for their health. Next month, we’ll look at what fish oils are and the health claims associated with them.

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It is also important to know that while they are effective as pain relievers, opioid drugs do have sideeffects, for example constipation, dizziness, drowsiness, respiratory depression, altered mental states, tolerance, and dependency. In fact, it was this potential for dependency and addiction that prompted a change in the OxyContin formulation. About 17 per cent of Canadians experience chronic pain, with women and the elderly being more often affected, and opioid drugs such as OxyContin are treatment options. Over time, tolerance and dependence can develop. As well, all opioid drugs can be abused for their nervous system effects, specifically euphoria. The OxyContin tablet was a slow release formulation which could be crushed to obtain the total amount of the drug and either inhaled as powder or mixed with water for injection. While there are no data regarding how many Canadians have an OxyContin addiction, there seems to be a prevalence in Atlantic Canada and rural areas including First Nation communities. Rather than discontinue the product completely, the manufacturer replaced it with OxyNeo which contains the same amount of active ingredient, but in a tamper-proof formulation. This new tablet is much harder to crush and it forms a gel when added to water making it difficult to inject. Unfortunately for people addicted to OxyContin, they may need to change to another opioid drug or enter a drug withdrawal program. If you take opioid drugs, including OxyContin, for a chronic pain condition, effective analgesics are still available. And, if you need pain relief for an acute problem, the opioid drugs will still be effective. But remember to use any pain reliever wisely. That is, only use it for the shortest time possible and on a scheduled basis to keep your pain under control. Of course, don’t forget the non-drug approaches to pain relief such as exercise, massage, physiotherapy, rest, braces, supports, heat, cold packs, relaxation techniques, and even solving the underlying problem that’s causing the pain. Pain may be inevitable, but suffering is optional. Marie Berry is a lawyer/pharmacist interested in health care and education. August/september 2012


“Life is hectic. There is no time to relax. I can’t find a balance between work and play. I rush here and there but seem to be going in circles.” The award-winning movie “To Make a Farm” follows the stories of five young people who decide to farm. They find great pleasure in developing their properties, tilling their soil and marketing their products. All of them comment on how much work is involved  during the busy growing season. One woman expresses regret that starting a farm takes her away from libraries, leisurely reading and digesting the daily news. She hopes to resume a more reflective life after harvest, and to find more balance between work and leisure. When I became a military chaplain, I was sent to the legendary quartermaster stores to collect my uniforms, boots, sleeping bag, and even a tin plate, knife and fork. The corporal stacked an enormous mound of stuff on the table. Then he handed me a kit bag to pack it in.  I struggled but could not get it all in the bag.  Finally the soldier said, “Padre, let me show you how to pack this stuff.” He folded each item and found a space for everything. I wonder if Jesus was thinking about balance in life when he said, “A good measure, pressed down, shaken together, running over, will be put into your lap.” When you jam items into a lunch bucket in a haphazard way, you end up carrying part of your lunch in a separate bag. If you arrange the items, they usually fit. Kelly edits the Alberta Flying Farmers Newsletter. He also has a full-time job and volunteers in his church and community.  A few months ago he “was working night and day and getting only a few hours sleep each night.” He asked some friends to pray for him “to make his life not so hectic.” He says his prayers were answered. His life is still busy but he is sleeping more, enjoying his job and eating more balanced meals. I have had many conversations with people in nursing homes. Not one of them has tried to impress me with a resumé. All of them have told me about their families, their work, their church, their hardships and moments when they made a difference for someone else. Their gratitude pours out of their stories. If there is a regret, it is a wish they had spent more time doing things that had real meaning. Speaking of balance, Joseph Lowery, a preacher from the American South, tells the story of a farmer from south Georgia. The farmer sold rabbit sausage and nearly got rich at it. “He sold his product to people who did not eat pork. When the supply of rabbits became scarce, he used horse meat but continued to call it rabbit sausage. Somebody snitched on him.  Federal food investigators objected to calling his product rabbit sausage because he was using horse meat and as many rabbits as he could find. The inspectors evaluated his product and accused him of misleading the public. They suggested he should correctly advertise the proportion of the contents. The farmer began advertising contents with equal parts of horse and rabbit, and stood firm on this claim. They questioned him again about the portions he was using in making the sausage. He assured the inspectors he used equal amounts of each ingredient. “Every time I put in one rabbit, I put in one horse.” Suggested Scripture: Isaiah 40, Luke 6:37-38

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Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. August/september 2012

country-guide.ca 61


Va l l e y

The stars align

ILLUSTRATION: RICK KURKOWSKI

Dan Needles is the author of “Wingfield Farm” stage plays. His column is a regular feature in Country Guide

n the middle of August, my neighbour Vern Bunton and his son were leaning on the box of my half-ton down by the mailbox enjoying a visit, when I made a polite remark about the lovely crop of beans young Matthew had grown on 50 acres across the road. This was Matthew’s first crop and it was a good one. Vern raised an eyebrow and lifted one index finger in the air as if to test wind direction. “The writer is correct. It is in fact, an excellent crop,” he agreed. “What’s more… the price of beans is also excellent.” He paused for dramatic effect and looked at us both significantly. When Vern does this he achieves the same effect as Gandalf or Yoda and he carries it off without the benefit of white robes or a staff. “Pay attention to this moment, Matthew my son,” he said solemnly. “For, like a great comet, it comes around only once in a person’s lifetime. I am an old man and I have witnessed many combinations of yield and price in the great tapestry of agriculture. This alignment of the stars is most rare.” We pondered this thought in silence. “Revered Father,” said Matt, for he has inherited Vern’s oracular turn of phrase, “I have never heard you speak this way about a crop that is still standing in the field. Stuff happens between here and the elevator. There’s crazy weather, shattering, dockage… “… and the thousand shocks that life is heir to,” Vern completed Matt’s thought. “All very true. But consider this. Already we have taken in winter wheat and canola in abundance and the horse people are lined up like the Israelites leaving Egypt, ready to pay famine prices for hay. It doesn’t get much better than this and there’s a good chance our luck will hold another few weeks. When did any one of us ever say that?” “Not in living memory,” I said dryly. Vern ignored me. “And this leads us to the fateful question. Will the little grasshopper sell his excellent crops now for an excellent price, or will he hold back and wait until it’s too late and the bottom drops out, as I have always done?” Matthew shrugged. “I don’t know. I was in a chat room on AgLine this morning and lots of people are saying there is still plenty of upside to the price of beans…” Vern covered his ears. “Stop! Stop!” he cried. “My boy, you have to understand that this farming game is a zero-sum business. For you to do this well, others must suffer. That is the way of it. Why just this morning I was talking to my brother-in-law, and where he is in Alberta, the canola flowered in the heat. It looks OK from the road but there is nothing in the pods. And just 100 miles south of us, right here in Ontario, you have 62 country-guide.ca

people with flood damage and drought damage in the same field, and other places where the corn is never going to see a combine. Twenty states south of the border have endured a punishing drought so that you can be handed this gift price of $15 a bushel.” “Really?” said Matt. “Our success depends on the misfortune of others?” He frowned and looked to me for guidance. “Your father has had maybe a little too much sun,” I said. “He is beginning to rave a bit. But he makes a valid point about taking a good price when you have the chance. Historically, two-thirds of farmers sell into the bottom third of the market.” “So you think I should sell now?” Vern was fairly hopping at this point. “Yes, yes!” he cried. “Straight to the elevator and sell!” I left the two of them to their struggle. Who knows what Matthew will do? Who knows what any of us will do? I drove home and parked at the barn and looked at my little flock of lambs. Vern sure is right about the inverse relation between yield and price. These are the best lambs I have raised in 25 years but the lamb market crashed this summer and it looks like I will be giving them away as usual. But I will seek comfort in the idea that my suffering may help some poor soul out there. August/september 2012


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