Cge140204

EASTERN EDITION

country-guide.ca

February 4, 2014 $3.50

TOUGH CHOICE

YOUNG FARMER DUSTIN WILLIAMS SEARCHES FOR LAND HE CAN AFFORD

+PLUS OTTAWA FUNDS NEW GROWER CO-OPS, BUT IN UKRAINE, NOT CANADA THAT WAIT FOR LOWER LAND RENTS LOOKS LIKE A LONG, LONG WAIT ENERGY FROM THIS FARM KEEPS THE WINNIPEG JETS ON ICE Publications Mail Agreement Number 40069240

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ECOLO-TIGER 875 Tiger Point

CONTENTS

FEBRUARY 4, 2014

BUSINESS 8

BLOOD, SWEAT AND DEALS

12

TOO YOUNG TO GROW?

19

STICKY LAND RENTAL RATES

21

IT’S A VERY DIFFERENT MARKETING YEAR

24

THE OTHER ENERGY BUSINESS

27

GUIDE HR — A QUESTION OF CHARISMA

28

FOOD FOR THOUGHT

31

‘BETTER’ MARKETING!

After a landmark 2013, Federal Ag Minister Gerry Ritz shares how he is going to reshape Canadian agriculture.

Canada’s next generation of farmers are smart, ambitious — and trapped on small acreages.

If you’re waiting for rental rates to go down as much as grain and oilseed prices, you’re in for a very long wait.

Now is the time to start hunting for new-crop profits in what our Errol Anderson says is sure to be a difficult marketing year.

Manitoba’s Colleen Dyck is building her farm-made Gorp energy bars into a national brand.

Great leaders seem special, but with Pierrette des Rosiers’ help, you can generate just as much loyalty as they do.

Can you be a farmer and a food processor too?

Our Steve Biggs goes looking for the answer in Quebec.

Fast food chain A&W isn’t doing anything farmers haven’t already tried, Gerald Pilger reports. They’re just doing it better.

34

AT THE HELM

36

AN AGRITECHNICA PhD

38

THE WORLD’S NEXT BREADBASKET

54

GUIDE LIFE — A PLACE FOR WOMEN

56

58

How are young farmers going to build sustainable farms if they can’t afford to buy land? It’s 2014’s conundrum, from coast to coast.

Viterra boss Kyle Jeworski is used to being called a young man in a mature man’s business. He says it gives him an edge.

The world’s best farm classroom may be the cafeteria where international farmers rub shoulders at the German farm show.

After dismantling the Canadian Wheat Board, Ottawa is using our tax dollars to build a new series of co-ops — in Ukraine.

PRODUCTION 45

EARLY DAYS

46

LESSONS LEARNED AND SHARED

MACHINERY GUIDE

48

WHY NOT SPRING WHEAT?

GUIDE HEALTH

50

THE CHEQUE IS IN THE MAIL

52

PEST PATROL

Women are making progress in farm management, but not enough women, and not fast enough.

EVERY ISSUE 5

PG. 12 THE TOUGHEST QUESTION

Self-propelled sprayers are among the fastest growing machinery segments, and among the most technological too.

These rules from Marie Berry will help make sure your heart medications keep your heart healthy.

HANSON ACRES

The call came just as Jeff’s parents disappeared on the other side of airport security. What would you do?

The critical weed-free period may start earlier than anyone had thought — maybe even before the crop is up.

Ohio cash cropper Dave Brandt says the most important change you can make isn't in the field. It's in your attitude.

With a tough winter for wheat survival, is this the year you should try spring wheat? Maybe yes. Maybe no.

Pull the plug on company programs, writes Warren Libby.

Spraying your wheat may be your best hope for getting ahead of glyphostae-resistant Canada fleabane.

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.

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FEBRUARY 4, 2014

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) 453-7624 Cell: (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 Andrew Winkels Cell (204) 227-5274 (204) 954-1414 Email: andrew.winkels@fbcpublishing.com

Tom Button is editor of Country Guide magazine

It’s the vision we need If there was ever a time for great farm leaders, it’s now. If you’re like me, though, what you see in government, in farm organizations, in marketing boards and in myriad other groups are rank upon rank of strong, dedicated, capable leaders. But not inspiring leaders of vision.

There’s an irony here, because the leadership that today's farmers are providing their own farms has never been stronger or more highly skilled.

Even so, the lack of industry vision is a great worry for the coming decade.

With or without such leadership, I’m confident Canada will reach 2020 with a phenomenal capability to produce crops and livestock. But what of the years beyond?

I’d be interested in your views, but it often strikes me that agriculture may never have been so unequal as it is today.

Mid- to late-career grain and oilseed producers who have sized up and then went into 2008 with reasonable debt loads, and who had good fortune in their marketing, have emerged stronger than perhaps any group of grain farmers have ever been in this country. They’ll stay strong too, riding out the current bear market.

Surrounding those farms, however, are neighbours whose timing wasn’t quite so good, and who face the conundrum of either being undersized in a world where lower margins require more acres, or of being saddled with debt payments in a market turned stingy.

4 country-guide.ca

On every road, there are farmers who want only to be left alone to grow and thrive. Beside them, though, are farmers who, if being left alone is all they can look forward to, will have a tough outlook.

That’s without even mentioning the complication of supply management, and the difficulty that grain and oilseed farmers can have in competing for land against poultry and dairy farms.

All these farmers feel entirely justified, as they should. Late-career farmers struggled through years of bleak returns to get to a point where they could reap some rewards.

Supply management farmers face their own serious pressures. Nor can young farmers be faulted. How can you blame a 35-year-old for not having bought more land seven years ago?

The easy assumption is that these farmers can’t be brought together, and that the discord must inevitably get worse, hence the need for leaders who can get us to focus on end points, not on how we get there. What do we want our agriculture to look like in 10 years? Are we seriously saying goodbye to the family farm?

One of the keys is to fous on the factor that unites all of these farmers. It’s their passion, not for the lifestyle (because that can mean so many things) but for the farm.

Of course, the other key is to listen.

Are we getting it right? Let me know. I’m at tom.button@fbcpublishing.com.

Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562 Advertising Services Co-ordinator: Sharon Komoski Fax (204) 944-5562 (204) 944-5758 Email: ads@fbcpublishing.com Designer: Jenelle Jensen Publisher: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com President: Bob Willcox Glacier FarmMedia Email: bwillcox@farmmedia.com 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. C o u n t r y G u i d e is published 13 times per year by Farm Business Communications. Subscription rates in Canada — Farmer $39 for one year, $58 for 2 years, $83 for 3 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.

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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.

february 4, 2014

Machinery

By Ralph Pearce, CG Production Editor

In no time at all, you’ll be out in the field finishing up with herbicides and checking your phone apps for the latest alerts on insects and diseases. So, before the snow melts, here’s our latest on self-propelled sprayers, a category that has seen some of the fastest-growing sales and some of the fastest upgrades in technology of any in the farm equipment sector. From Tier 4 compliance on emissions to advanced ergonomics for improved operator comfort, each of the four models featured in this edition has something new. If you’re in the market for an upgrade, or if you’re considering a switch from pull-type sprayers, these will be on your list, but check company websites. You’ll want to know who has the very best self-propelled for you.

case ih patriot 3240 and 3340 

apache 2014

When it comes to finding the right sprayer for your operation, performance is important, and so is flexibility. To meet those demands, Case IH brings the new Patriot 3240 and 3340 sprayers to the market, complete with more horsepower and new options for improved spray control. The new AIM Command PRO system offers individual nozzle control in a next-generation version of the AIM Command spray system, delivering constant rates and pressures under a range of speeds. Another option is the capability to turn nozzles on or off, one at a time, cutting down on skips, overlaps and overspraying. The Patriot 3240 and 3340 offer a 6.7-litre FPT Tier 4B/Final compliant engine, with 250 hp and 284 hp, respectively. With its selective catalytic reduction (SCR) emissions control technology, the company says farmers will also see fuel efficiency to go with added power.

Last August, Equipment Technologies rolled out its 2014 lineup of Apache sprayers featuring a suite of cab enhancements plus field computer compatibility. For 2014, the Apache lineup offers superior operator comfort with an ergonomic cab design coupled with advanced “plug-and-play” ISOBUS technology. Now, every 2014 Apache sprayer can connect any ISOBUS-compatible field computer system to Equipment Technologies’ Pilot System. That delivers as much control as it does ease of operation. It’s complex and innovative, yet simple, with a field computer system that the company says will add value and efficiency to a farmer’s operation. Apache sprayers also have a standard operator foot throttle and reoptimized HVAC, boasting automatic climate control for the ultimate in comfort.

www.etsprayers.com

www.caseih.com FEBRUARY 4, 2014

country-guide.ca 5

hagie 2014 sts Billing itself as the pioneer of the industry, Hagie introduces the new 2014 STS sprayer with a new drive system and improved cab design for improving efficiency, safety and overall performance. The STS sprayer is available with 1,000- or 1,600-gallon capacity, plus “All Wheel Traction Control” as standard, enabling the machine to carry on through any conditions or over the most rugged terrain. As with other manufacturers, Hagie has gone to great lengths to enhance operator comfort, with an increase of 25 cubic feet over previous cabs. Yet through all of that, operator safety has also been enhanced, including Bluetooth capabilities and a standard backup camera. The 2014 STS also offers farmers a decal pedal, droplet size monitor, and an infinitely programmable drive system that measures field efficiency. Hagie’s Cummins engine design is also Tier 4-compliant and comes with optimized airflow.

www.hagie.com

rogator rg700  It may be a little smaller than previous RoGator sprayers, but the RG700 comes to the farm with the same durability and attention to detail. Launched late in the fall of 2013, the RG700 combines professional-grade quality with dependability. At the same time, it provides operators with greater flexibility with a 700-gallon design.

Other key features include adjustable track widths, courtesy of two axle configurations which allow for multiple track widths for smooth and easy operation, no matter the crop, the crop height, or the field conditions.

The RT700 provides sprayer and boom-height controllers, plus assisted steering systems. There’s also the RoGator Management Center and AGCOMMAND system that monitors your performance data.

Plus, the 165-hp engine produces more torque for more consistent power in any field, wet, dry, flat or hilly.

www.agcocorp.com/rogator 6 country-guide.ca

FEBRUARY 4, 2014

S:7”

NEW

FLUENCY AGENT Bayer CropScience from

Important Notice for the 2014 Planting Season When using a seed flow lubricant with neonicotinoid treated seed, only Fluency Agent from Bayer CropScience is permitted. (PMRA – November 2013) Fluency Agent is a new seed lubricant for corn and soybeans. It is a replacement for talc, graphite and talc / graphite blended seed lubricants. Fluency Agent reduces the amount of insecticide active ingredient released in treated seed dust during planting by 65%, therefore reducing the risk of exposure to non-target insects, including bees.

Carefully follow use directions for this seed flow lubricant.

• Apply the recommended rate (see chart below) - Do not over apply!

• Mix with seed in the seed hopper – centre fill hoppers add Fluency Agent as the seed unit is filling.

No stirring required.

S:10”

• Stir or mix the product into seed for individual hopper units.

• Use in all makes and types of seed equipment that recommend the use of a seed lubricant.

RATES oF APPLICATIoN CRoP

APPLICATIoN RATE

SEEd UNIT SIzE

Corn

1/8 cup

80,000 seeds

Soybeans

1/8 cup

140,000 seeds

Fluency Agent was rated as equal to or better than other seed flow lubricants. - 2013 in field research on 13,000 acres.

To ensure that grower practices help promote agricultural sustainability, we encourage growers to follow these tips:

C

Communicate planting activities to neighbouring beekeepers when practical and be aware of beehives adjacent to the planting area.

A

Be aware of wind speed and direction during planting, particularly in areas with flowering crops.

R

Reduce risk to pollinators by eliminating or reducing flowering weeds in fields when practical.

E

Ensure seed is planted correctly. To help protect the environment, clean planters and seed boxes in a way to minimize dust release and ensure treated seed is planted at the proper depth.

Always read and follow label instructions. For additional information call 1 888-283-6847 or visit our website at BayerCropScience.ca or talk to your seed supplier.

BUSINESS

BLOOD, SWEAT

DEALS

After a landmark 2013, Gerry Ritz sets his goals for the future shape of Canadian agriculture

By Maggie Van Camp, CG Associate Editor erry Ritz knows how to make news, whether it’s at an Ottawa media scrum, or if it’s 42 C and he is standing over a barbecue — in a leather apron — cooking beef in China. After years of closed borders to Canadian beef, China had just opened to young animals.

That particular Canada Day was in 2010, and Ritz and then-governor general Michaelle Jean were determined to start getting the word out to 1.3 billion potential customers. Between them they handed out thousands of samples of Canadian beef.

Lifting his head from the grill, Ritz saw masses of people, and an equally massive need for food. In a snapshot, he now says, he saw the vastness of the opportunity for Canada’s farmers to feed the world’s growing population.

“When I took over six years ago, our mantra was that it was going to be from the marketplace, not the mailbox.” — Gerry Ritz Since that day, Ritz’s passion to open more trade routes for Canadian agricultural products has popped up in one news story after another. There have been deals, retaliations, and negotiations, and along the way there have been domestic politics too, including the CBC taking him to task for having racked up the biggest travel and hospitality tab of any of his Conservative colleagues in recent years.

Trade issues continue to dominate agricultural news, and Ritz has somehow managed to shake hands through, around and over enough diplomatic stumbling blocks to silence most of his critics.

COUNTRY GUIDE talked to Ritz shortly after he returned from the recent WTO negotiations in Bali.

During those trade talks, Ritz networked among the myriad trade alliances he has built over his years and his many travels.

He tells me about how, years ago, he gave a pair of cowboy boots, made from the ostriches he raised 8 country-guide.ca

on his own farm in Saskatchewan, to the Russian minister of agriculture, forging a friendship. He talks about the small-farm versus big-farm debate he had with Tom Vilsack. He talks about how, after countless meetings on four trips to China, Ritz finally got the call from the minister, went out for lunch and finished the trade agreement.

“Getting deep into China, we have access that Americans don’t,” Ritz tells me.

Before writing this story, COUNTRY GUIDE talked with a panel of Canada’s top ag journalists, representing different publishers and publications. The consensus is that Ritz talks a lot. But it’s also a consensus that Ritz has done a lot.

In fact, in just a few years, the current Conservative administration may have made more changes to agriculture than any other single federal administration in the country’s history.

“There have rarely been more changes in such a short period in Canadian agriculture. You may not agree with what he’s done, but he’s done it,” says John Morriss, associate publisher and editorial director of Farm Business Communications, which publishes the MANITOBA CO-OPERATOR. After pushing through the monumental ending of the Canadian Wheat Board’s grain-marketing monopoly last year, Ritz hasn’t backed down.

Now, he’s looking forward to the CWB’s plan for restructuring and how they’ll maintain market share.

During this past year, the CWB made the news with sweeping cuts to staff and office space, and significant investments in bricks and mortar on their handling side.

When 2013 was just new, Ritz announced a new federal agricultural support program, called Growing Forward 2.

The news hit the headlines with a bang, mainly thanks to provisions that cut payouts under AgriStability when farmers suffer moderate losses (technically, when individual farm margins drop to between 70 and 85 per cent of the farm’s adjusted long-term average).

Ritz says this was offset by an increase in coverage when farms need it the most, and more money was earmarked for innovation and trade development.

“In order to keep Canadian agriculture on the cutting FEBRUARY 4, 2014

business

Not afraid of the spotlight, Ritz has introduced more sweeping changes than farmers have seen in at least a generation. edge, investments must be focused on research and innovation,” Ritz says.

Ritz also wants to see the remaining gap be filled by private market insurance, and he has been working on ways to make it happen in this country so farmers will buy into it. “Insurance-based programming should be your first line of defence against any changes in market,” Ritz says, adding the qualifier, “Government may have to backstop it until there’s economies of scale so that it’s an affordable program.”

Besides the GF2, the whole year seemed to be peppered with federal cutbacks and downsizing. In August, the Canadian Grain Commission cut its services due to changes to the Canada Grain Act and the Canada Grain Regulations, and it moved to a user-fee system.

In past, the federal government covered about half of the CGC’s budget. Now, most CGC revenues will come straight from farmers and grain companies. “We still will be relying on their grading system,” Ritz insists.

Also, both the Prairie Shelterbelt and the Prairie Farm Rehabilitation Administration programs were terminated, and the vast federally managed pastures in Saskatchewan were turned back to the province FEBRUARY 4, 2014

to either manage, lease or sell. It was a move that brought out the critics, including Canadian literary diva Margaret Atwood. But don’t expect Ritz to apologize. He won’t.

Ritz is also on side with how Ottawa is stepping back from supplying farm services. Many such services should be delivered by companies, he says. “We have to look at new funding models, with industry and government collaborating.”

In a similar way, Ritz strode into the perennial Prairie discussions around grain transportation. New federal legislation, he says, will “make the railways play nice in the sandbox,” being more accountable for the movement of cars and number of cars. However, with the bigger-than-expected 2013 harvest, the system is strained, and storage is bulging at the seams.

In mid-December Ritz also introduced Bill C-18, the Agricultural Growth Act, into the House of Commons.

This legislation would amend not only the Plant Breeders’ Rights Act, but also the Feeds Act, Fertilizers Act, Seeds Act, Health of Animals Act, Plant Protection Act Continued on page 10 country-guide.ca 9

business Continued from page 9 and the Agriculture and Agri-Food Administrative Monetary Penalties Act. The bill would also amend the Agricultural Marketing Programs Act (AMPA) and Farm Debt Mediation Act (FDMA).

The government plans this August to sign on to the new international agreement for the protection of plant breeders’ right. Canada’s existing Plant Breeders’ Rights Act is based on the 1978 global agreement Ritz says farmers will still be able to save and plant their own seed under the new law, but he believes the updates to plant breeders’ rights will see more investment in genetic research come to Canada.

This change in legislation coupled with open wheat and barley marketing should encourage companies to develop higheryielding varieties of grain, he says.

Ritz also plans to continue working on trade, chopping away at the non-sciencebased issues that get trotted out to sidetrack trade agreements.

Meanwhile, U.S. regulations under its

2008 country-of-origin labelling (COOL) law look like they will continue as the single biggest trade irritant for Ritz going into 2014.

The dispute boiled over in 2013 when the U.S. cooked up its own set of rules to meet the WTO complaint that favoured Canada’s position, leading Tyson Foods to say it would stop buying slaughtered cattle from Canada because of the high costs associated with COOL. Ritz blustered back with threats of trade retaliation. “I said to Tom Vilsack, this is harming your industry, not just ours.

“It’s a political solution for a social problem, saving their small farmers,” says Ritz, frustration ringing in his voice.

Despite such contentious trade issues, Ritz says overall during his tenure, it has become easier for Canada to negotiate trade deals with other countries. “It’s like we’ve come of age,” he says. “Prime Minister Harper is like the dean out there.

Everyone looks to him…”

Ritz also says that the editorial press coverage saying supply management is

derailing trade deals is wrong. “Supply management is not holding us back,” he says.

As the Conservatives gear up for a federal election in the fall of 2015, Ritz says his first priority is maintaining trade routes. Second, he wants to continue pushing his agenda of innovation and self-reliance, partly through the value chain roundtables that have been set up for many commodities After six years as federal minister of agriculture, Ritz hopes to be remembered as the agricultural minister who helped Canadians realize that agriculture is business, and that farmers must adjust to the realities around them and work on their bottom lines.

Canadian farmers need access to global markets, Ritz says, and they need a dynamic domestic market with more innovations moving forward. But, he repeats, “When I took over six years ago, our mantra was that it was going to be from the marketplace, not the mailbox.”

He says it firmly. Clearly, Ritz sees no reason to change. CG

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business

Too young to grow?

Canada’s next generation of farmers are smart, ambitious — and trapped on small acreages

s land prices ride high across Canada, it’s a struggle for young and mid-career farmers to compete against established farms and outside investors to buy land, or even to find it. They also need to ask themselves some tough questions. How much can I afford to pay? Can I service the debt?

And then there’s the most important question of all: Is this really the right investment to make?

“Each year you think the land price has topped out,” says Dustin Williams, a young grain and oilseed farmer who is the fifth generation to farm his family’s land near Souris in southwestern Manitoba.

“Then the year following, you get another 30 per cent increase,” Williams says. “You are tying up a lot of money buying land.”

Bullish factors are driving up the price of land from every direction. Low interest rates make mortgages attractive. High farm cash receipts mean there’s cash for down payments, especially on grain farms that went into the past five years with low debt.

Besides, the buying splurge, especially in the last three years, has seen farms invest big dollars in high-capacity machinery and on-farm bins, meaning they’re ready and able to expand their acreage base.

And then there’s the land market itself, where success breeds success. For farmers, it’s hard to find a more secure or more lucrative investment. Nor are farmers alone. With Statistics Canada saying farmland has averaged a return on investment of 10 per cent a year since 1950, investment companies are singing the praises of Canadian farmland, and financial advisers are encouraging more of their clients to become absentee farm landlords.

12 country-guide.ca

Stymied by bidding wars and by farms that get sold without ever hitting the market, young farmers like Manitoba’s Dustin Williams are too often mere bystanders

That said, over 60 per cent of farmland in Canada is still owned by the people who farm it. But that in itself presents a challenge, especially when the older generation wants to retire or pass the farm on to the next generation.

Succession often requires expansion to generate the cash flow needed to allow the outgoing generation to fund their retirement and the incoming one to be able to make a go of it, not to mention the years in between when there are two generations that need to earn a living income from one farm.

It all means that the only land that many young FEBRUARY 4, 2014

Photography: Sandy Black

By Angela Lovell

business

farmers can acquire is from retiring family members, friends or neighbours they have known for a lifetime.

Williams took over the family farm a few years ago and has only been able to increase his land base over the past couple of years by around 300 acres to its current 4,500 acres. He wants to expand further, but says it’s a continuous struggle to find more acres to move on to, and to compete against the larger established farms in the area.

Although he knows he’d only have to move one municipality over to find a lot of outside investors bidding at every sale, “it’s predominantly farmers in the FEBRUARY 4, 2014

neighbourhood who have been getting a majority of the acres here,” says Williams. “I guess maybe it speaks to how little land has actually transferred in our area and how close to home the seller can stay and find a buyer. At the moment it doesn’t stay on the market long enough for anyone outside to really get a hold of it.”

Across the country, tales of bidding wars are rife in the coffee shops, and with a lot of farmland purchases still being handled privately, it’s not always easy to get a good handle on the exact price being paid.

“ Each year you think the price has topped,” Williams says.

Continued on page 14 country-guide.ca 13

business Continued from page 13

Show your stuff It might be time to take that off-farm job.

Across the country, farmland prices have outstripped the productive capacity of the land to pay for itself.

“Unless you have got a huge equity base that you can spread the debt over and term it out over a number of years, it’s really tough,” says Terry Betker, CEO of Backswath Management. “To buy some land and then have the productivity of that land make the payments is just really difficult.”

“That’s the reality for a lot of young producers,” says Betker.

But as always, the nature of the challenge itself might suggest how best to overcome it.

Betker says that persuading the bank manager to lend you the money is a big problem for many young producers, who often don’t have much of a track record with the bank.

That’s something they need to think about changing, which means they need to start building their own relationship with their banker, says Betker. “When the lender has been in the business for a while, oftentimes their primary relation-

14 country-guide.ca

ship is with the young farmer’s parents, not the young farmer,” he says. “The young farmer needs to create his or her own relationship and build confidence in his or her management ability.”

It’s also a good idea to try and build up as much cash as you can, says Betker. If you decide to add off-farm income to do that, it speaks volumes to the banker about both your management ability and your work ethic.

“If you have cash for a down payment on land, it will help to a huge degree when you go to a lender,” Betker says.

“If you go to a lender with only equity, it can work, but if you go to a lender with $50,000 in cash and you’ve saved this up over the last five years, what does that tell the lender?”

Building up your own working capital will also show liquidity, which is equally important to a bank. “Liquidity is going to be huge in grain and cattle,” says Betker. “It’s always has been important, but with more volatility in the industry it’s just going to be increasingly important.”

“It’s hard to know what land is selling for unless you go straight to the owner,” agrees Catherine Jordan, who farms with husband, Don, near Manitou in southcentral Manitoba. Even then, you can’t always be sure, she adds. “People are still secretive about what they get for the land, but when you hear who has purchased the land, you can make an educated guess at what the price was.”

It’s equally hard for landowners to set a price, she also agrees. “Most owners will state a reasonable price, but when they look around at the middle-aged farmers driving new trucks and machinery, they have a higher price in mind.”

The Jordans want to expand upon their half-section of grain land, but they know it’s not going to be easy with land around them reputedly now selling for $4,200 an acre, well out of the reach of this young couple just starting out.

“We had an opportunity to purchase land that was of more sentimental value than anything, and of course we could not match or come close to the price that was offered,” Jordan says. “Naturally we didn’t get the land and now we see how it’s being bulldozed and cleared. It’s very sad to see a century farm gone for just that little extra bit (of crop land).”

Finding the land is the first problem.

Being able to afford it is the next. Young farmers don’t typically have the deep pockets or the asset base to spread the purchase over. Then there’s the added problem of figuring out just what the “going rate” for land really is.

What’s the right price?

In many areas, it’s rare to see a real estate sign at the edge of a field or even a “for sale” notice in the local newspaper. More often than not, land purchases are private transactions and both parties are apt to be close-mouthed about the price they agree on. That makes it hard for a potential buyer to even figure out what he or she should offer for the land.

“When you try to bid and you look at what the municipal assessment value for the land is, and you look at the long-term productive capacity of the land, none of those values have really changed,” says Williams, so neither are very useful as a guide to pricing land value. “You are trying to throw a dart in the dark, and pick a number that makes sense for the banker FEBRUARY 4, 2014

business

Dustin and Laura Williams are watching for their chances, building relationships with retiring farmers, but they know the odds are long

who is looking at it and that is going to be enough so that the seller feels that they too have cashed in at the right time.”

In the end it comes down to a lot of negotiation, says Williams, and it may not always end up how you had hoped.

“Where we start and where we end up can be quite a ways apart,” he says, speaking from his own experience. The question is really whether you chase land when it gets that expensive, but depending on the condition and the circumstance, it might be land that you can’t afford to walk away from.”

“Maybe from a business standpoint you were offering something initially that made sense and wasn’t going to triple your debt,” Williams adds. “But by the end of the deal, you might be back to where you didn’t want to be in the first place, and you don’t have a choice.”

FEBRUARY 4, 2014

Sometimes there is no option but to walk away from a deal, but that can be a lot easier said than done.

“To push yourself away from the table is hard,” says Williams. “From my own experience, I know it’s a tough call when it comes down to it, to back away from land that is in your heart or that you have farmed yourself for a long time.

You’ll have a hard time seeing that land farmed by someone else.”

Although you have to keep a sane head in negotiations, Williams still believes that land is a good investment for the farm and it’s worth giving it every best effort to try and purchase the land that you need. “You are going to have to try your hardest to make those (land purchase) decisions first and maybe sacrifice a little bit on other

parts of your budget, whether it’s the equipment or the extent of the crops you grow,” Williams says.

Getting creative Options to secure land may come down to exploring some new and creative arrangements and approaches such as land sharing, long-term leasing or limited liability partnerships. Williams is open to any and all creative approaches to increasing his land base and has already used a few.

When he took over the farm from his own father he didn’t go the traditional family succession route. “We built our own farm company first, and then as my dad wanted to reduce the size of his farm and reduce his responsibilities, my Continued on page 16 country-guide.ca 15

business

Photo: Basil Holewka

For young farmers, it’s extra hard to know what’s a fair price in this market, says Catherine Jordan

Continued from page 15 farm company took his operation over,” says Williams. “In the end we purchased his company outright and now have a land-lease agreement with him and some other landlords to get us going.”

Agreements with retiring farmers don’t always mean that they have to sell the land outright on the spot. With the right relationship, agreements can extend the purchase of the land over a period of time, which has benefits for both parties. “From a retiring farmer’s perspective there is a significant tax advantage to rolling the operation out over a longer period of time and keeping active ownership of land or equipment, but not having to make the financial or risk decisions any more,” says Williams.

A new program from Farm Credit Canada is designed to assist young farmers to make these sorts of arrangements.

FCC’s Transition Loan program assists young producers aged between 18 and 39 to purchase land or assets. The seller is paid in disbursements over five years 16 country-guide.ca

and FCC guarantees the full sale price to the seller. Interest is charged only on the amount disbursed and FCC will, if the purchaser qualifies, finance the down payment for up to seven years. The purchaser can choose to make interestonly payments to improve cash flow or principal-plus-interest payments to help build equity.

High crop prices have undoubtedly had an effect in driving up the price of land.

Now, they might spark some bargains, but only for those who are fast on their feet.

“The grain sector has always cycled and it’ll cycle again,” says farm adviser Terry Betker. “The young guys out there should be watching the grain market right now because if the grain market starts to go sideways or soften, there’s going to be some landowners who will want to sell now in case it goes down. So they should be watching for that to occur.”

Having a plan is vital in the search for land, Betker adds, so get out the municipal map and identify any producers in the area who may be retiring

soon. Williams agrees. If you want even a chance to own more land, building relationships is vital, he says, and that happens over a lifetime. “My experience has been you have to keep a good rapport with your neighbours and you need to be on a first-name and a friendly conversation basis with everyone so they think of you when the time comes for them to move on.”

Most retiring farmers would still prefer to sell to a young person starting out who is from the local area, says Williams. “Those lifetime friendships are important and you shouldn’t be too shy or awkward about letting the farmers know your intentions,” he says. “And making sure that you put it out there that this is where you want to go and this is what you hope for the future, and that there’s no missed opportunities because the right conversation hasn’t been had.”

“No young farmer on their own has the equity to compete at these prices and make a go of it,” adds Williams. “It’s going to be a real struggle to try and keep the young farmer in the game.” CG FEBRUARY 4, 2014

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How much can you pay?

First, ask yourself these six questions

“When you see that ad in the local paper for land for sale, there are six things you need to consider before you pick up the phone,” says Jacqueline Gerrard of Backswath Management.

1. Carrying cost

5. Return on investment

“Think of this as your interest or opportunity cost,” says Gerrard. “In other words, what will it actually cost you to own the property?” For a farmer purchasing land at $2,500 per acre which is 100 per cent financed at five per cent interest, the carrying cost of owning that land is $125 per acre for the interest only. However, it still costs you money even if you paid the full amount upfront. That’s because you could have been using that money as an investment. Even if you had it deposited at two per cent in the bank, you’d still have earned $50 an acre.

Each farm operation is different so each producer will need to calculate what he or she is going to be able to make as a return on his or her investment in new land expressed over the whole farm operation. “If you know you are going to make $100 per acre net profit on the new land at a cost of $2,500 per acre, that gives a four per cent return (i.e. $100 divided by $2,500), but the whole farm return may be different,” says Gerrard. “You need to determine how the new asset fits into the whole basket of assets on the farm.”

2. Leverage versus cash

6. Additional costs of expansion

Cash is still most definitely king, and there’s always a way to make money with money, unless you have to borrow it. When you start to accumulate some interest-earning cash reserve it may be wise to do the math carefully before you make an investment decision you might regret.

“One million cash in the bank earning two per cent interest will give you $20,000 per year,” says Gerrard. “If you took that million in cash and invested it in 400 acres at $2,500 per acre and you make a net profit of, let’s say, $100 per acre, you will make $40,000 per year. But if you need to borrow a million at five per cent interest, it will cost you $50,000 to make $40,000 per year, and we are only talking about the interest cost here.”

Consider any additional costs of expansion that might be necessary as a result of purchasing new land, such as machinery, bins, barns, technology or land improvements.

These costs will factor in to the overall return on investment and the net operating profit of the farm.

Depending on the circumstances of the farmer and the availability of land in the area, the answer to these questions might best be weighed by asking another question.

Would it be cheaper to rent land? “You really need to think about what the answers mean,” says Gerrard. “Does the purchase of new land push you past rental costs? Is the carrying cost higher than rental? Is it a good addition to what you already have? And we are only talking about the productive capacity of the land; remember you will never capitalize on the land itself unless you sell it.”

Farmers will often make the point that there isn’t any land in their area to rent, adds Gerrard. But true as that may be when they are looking at a land purchase, they should also consider whether it’s really worth paying three times more than the current rental rate (or whatever it pencils out to be).

The “what if?” questions should be the next ones you ask, says Gerrard. “What if interest rates went up, what would the effect be? What if profits went down? Can you always rely on that $100 per acre net profit or whatever you calculate it to be on your farm?” she says. “When you want to capitalize on your purchase, who will you sell it to? Is there a possibility you may be selling it one day to your kids and if so, it may not be possible to get the cash out that you are hoping to get for your retirement.”

3. Weighted average cash outflow for capital Farmers may sometimes try to justify the cost of new land by averaging it over the whole farm (including land that they already own or are paying for at a lower cost than the new land). This gives a cost per acre that is weighted against the full land base of the farm and it may be higher or lower than current land rental rates in the area.

4. Net operating profit This is a figure that will vary from farm to farm and is one that you absolutely must know. Take your accrued financial statements and calculate what your net profit (after all expenses) is per acre.

18 country-guide.ca

FEBRUARY 4, 2014

business

Sticky land rental rates With other farmers bidding up 2014 rates, your only choice may be to go big or stay home

rain prices have sunk, but it’s no news in farm circles that farmland rental values don’t look set to follow anytime soon. Nor, perhaps, should it be any surprise.

“If we look at the trends in rental rates versus crop receipts… rental rates go up slower than crop income, but then they also take some time to come down,” says James Bryan, an agricultural economist with Farm Credit Canada in Regina.

“They’re sticky on both ends.”

In theory, when projected and actual returns begin to decline, so too should rental rates. But there are two caveats that can prevent this.

“If farmers perceive declines in commodity returns to be a short-term phenomenon, there’s no reason to expect rental rates to decline,” says Jared Carlberg, an agricultural economics professor at the University of Manitoba.

If farmers’ expectations are that commodity prices and, hence returns, to farmland, will increase, the opposite, in fact, will occur.

“Given excessive demand for access to land, I would expect to see no decline in rental rates,” Carlberg says. “The supply of land is fixed and there are many, many, many producers looking to get bigger. So quite aside from any normal variations in returns, rates could be expected to face upward pressure due to demand-side factors.”

Rick Dehod, a farm financial specialist with Alberta Agriculture’s livestock and farm business branch, says softening grain prices have spurred growers to talk about the high rental rates that have been negotiated in the province the last five years.

Even so, Dehod expects that with so many commercial farms looking to grow and capture economies of scale, the continued strong competition to rent land in No. 1 soil areas will maintain high market values.

“You get in that corridor in Olds, Strathmore, Lethbridge, where there are good cash flows and strong farm families, and it’s very competitive,” Dehod says. “Everyone’s saying we can’t get land, we can’t get land.”

Similar scenarios prevail in farm districts all across the country, with similarly strong resistance among landlords to drop their expectations.

Many of those landlords also know they have an even stronger position than they might have in previous cycles.

Photo: Sandy Black

By Richard Kamchen

When times are good, rental rates lag behind the growth in land values. When times aren’t so good, though, they’re also much slower to fall

Continued on page 20 FEBRUARY 4, 2014

country-guide.ca 19

business

Rent, or share?

Innovative rental agreements are as cyclical as rental rates The popularity of renting farmland has risen in Canada in the last 30 years.

In 2011, 61.5 per cent farmland was owned and 38.5 per cent was rented out, according to Statistics Canada.

Proportionately, the West rents more, although rental levels were high across the country: 29 per cent in Ontario, 34 per cent in Manitob, 36 per cent in Saskatchewan, 40 per cent in Alberta, and nearly 44 per cent in B.C, What is identical across the country, however, is that the lease rates on those property rentals depend heavily on farmers and what they’re willing to pay.

When producers weigh their bids, they’re taking into account their cost of production and also expected revenues, with the latter based on anticipated yield and crop prices. The quality of the land and expected input prices are additional factors.

Farm Credit Canada’s James Bryan adds that interest rates can have an impact on both rental and farmland values. Higher interest rates can boost the returns on safe assets like farmland, as well as bonds and money markets.

“As interest rates go up, it should be putting upward pressure on rental rates,” says Bryan, based in Regina. “But that doesn’t mean they will go up, because if producers are bidding on their cost of production, if they can’t afford it, they should have a max bid and stick to that.”

The price of farmland, though, takes into account broader considerations than rental rates.

“In addition to factors that influence rental rates, farmland values may reflect expectations regarding interest rates, government payments, and future non-ag uses of the land like residential housing,” says Brady Deaton, ag economist at the University of Guelph.

Deaton explains that farmland values are also based on the expected net returns to the land parcel in future years, not just the coming one.

Rental rates and farmland values are expected to move in similar directions, though there are a number of factors which may influence farmland values in a more pronounced manner than rental rates, as cash rental rates involve much shorter expectations than farmland values. The cost of renting climbed from 2009-10 to 2012-13, but in jurisdictions like southern Ontario, it hasn’t risen at the same rate as farmland values, Deaton says.

“Though rental rates appear to have appreciated over the last couple of years, I don’t think they rose in the meteoric fashion that land values have,” says Deaton.

The majority of rental contracts are for cash and a term of one year, although the relationships between renters and landlords extend longer than that. In southern Ontario, farmers typically rent from the same landowner year after year for, on average, close to 10 years, Deaton says.

There are also cash rental contracts with a bonus, in which a farmer’s rent would increase if crop prices or his yields hit certain levels, says Bryan. But he believes those kinds of flexible cash rental contracts are rare.

Sharecropping in Canada and the U.S. has become less common over the last 30 years, but that’s just the sort of contract that could take into account changing circumstances for farmers, Bryan says.

“Sharecropping is actually one of the easiest ways to allow the rental rate to fluctuate with increased commodity prices and yields.” Bryan says. “But at the same time, we have to remember that for lots of people, if they aren’t familiar with farming and don’t know the risks of farming, they might not be comfortable with a share lease.”

Data is scarce on who the sharecroppers are, but most analysts believe they tend to be landlords knowledgeable about agriculture. An urban-dwelling landlord might not understand the discrepancy in paycheques from one year to the next.

Share agreements can balance farm risks and profits, but will the landowner go along?

20 country-guide.ca

Continued from page 19 Commodity prices have dipped, but that doesn’t mean farmers lack the wherewithal to continue bidding up rental rates. Working capital remains strong from the 2012-13 crop year, and although 2013-14 crop prices have fallen, robust yields will aid in supporting good gross revenues.

“Though margins will tighten into 2014, strong balance sheets developed in the last five years will continue to support a strong rental market, as operations continue to grow and compete for land,” says Dehod. “The difference in land rentals to land payments is still substantial, so for young producers expanding, land rental — even at higher rates — is still attractive.”

Dehod adds that landlords won’t be keen on offering discounts anyway, especially since many of the contracts they were locked into when crop returns rose in 2010 to 2012 didn’t provide for profit sharing. In other words, they felt they didn’t get their slice of the extraordinary run-up in grain prices in those years, so it’s time they started getting some of their own now.

Yet in fringe areas with poorer soil and on pasture land, rental values could at least stabilize. With cattle numbers coming down, there just isn’t the same demand for pasture, says Dehod.

Land prices and land rental rates generally would weaken too if there is another large global crop in 2014, which would further decrease grain and oilseed margins into 2015, Dehod notes. But that remains to be seen.

In Ontario, the University of Guelph’s Brady Deaton saw farmers actually pay their landlords a bit more in rent than they had initially agreed to pay when commodity prices were high.

“From preliminary survey results… approximately 14 per cent of farmers surveyed in southern Ontario said they paid more than the required rental rate to the landlord for a given property in 2012,” says the ag economics professor.

In times of lower commodity prices, would landlords reciprocate? Deaton doubts it. Nevertheless, the majority of farmers surveyed didn’t expect to pay more: “We also asked farmers if they expected rental rates to increase in 2014, and approximately 31 per cent of farmers in southern Ontario expected it to increase, while 69 per cent didn’t.” CG FEBRUARY 4, 2014

TOOLMAN

It’s a very different marketing year

By Errol Anderson ommodity markets never guarantee that prices will remain above your cost of production. That is a cruel reality.

It’s also a point that should never be overlooked. Rallies must be harvested, even months ahead of the actual crop.

Pre-pricing grain at profitable levels is a great antidote for a high-risk market. It also helps manage those fall cash flow needs.

A key to new-crop marketing is to begin gradually. Weather, insects and disease can derail your yield goals and quality. As a rule of thumb, don’t forward price more than 30 per cent of your expected harvest before the seed drill hits the field, or more than 50 per cent ahead of the combine.

To increase your success at locking in profitable prices, the marketing calendar needs to be turned ahead a few months. For example, let’s say you do lock in half of your new-crop 2013-14 grain production profitably by the time the combine needs to be greased. In theory, you would still have half your grain production yet to be marketed over the next few months. But once harvest is complete, it’s already time to start looking toward your 2014-15 crop.

Searching for solid pricing opportunities never ceases, whether it’s for the current crop year or the next.

It’s time to start hunting for new-crop profits in what is going to be a very different and difficult marketing year Marketers who continually scout for new-crop grain profits reduce their risk of being forced to price grain for cash flow reasons. Cash flow selling has a nasty side to it. It can push your grain price return into the bottom third of average yearly prices.

A variety of pricing tools can be used as part of your forward pricing program. The goal is to capture profits as they appear. Here are some suggested steps to take when considering how to pre-price new-crop grains and oilseeds in the weeks ahead.

This year, western Canadian cash grain bids are punctuated by excessively weak basis levels. Normally, we would suggest signing deferred delivery contracts as a first step since there is no need to provide upfront margin money. But this year a first step may be to sell or short the new-crop futures or purchase put options with your commodity broker. This strategy buys time to allow fall basis levels to narrow and normalize.

As well, the futures market has been offering “full carry,” meaning it is paying you to store your grain.

FEBRUARY 4, 2014

This is another incentive to hedge or sell the deferred futures months. You pocket the carry.

Once basis levels improve (narrow), then it is time to convert your short hedges into a deferred delivery contract (DDC). This is a different year due to the excessive supply of grain and limited delivery opportunities. Remember, when you sign DDC contracts you are committing to delivery. Inability to provide grain or proper quality to meet contract requirements could produce financial hardship after harvest.

Grain company payout penalties take a toll.

Use DDCs up to your personal grain production comfort level. Discuss with your buyer what the potential discounts would be for off-grade grain. You just never know when weather may hit. Grain marketers may pre-price 10 to 50 per cent of expected production using these forward cash contracts.

Let’s say you’ve now reached your comfort level signing cash DDC contracts. Then dry weather ignites new-crop bids. That means it’s time to scale in and add more “put options” to your pricing portfolio. Put options are essentially price insurance policies. “Puts” guard against price spills.

If a summer weather scare develops, gradually scale in puts as the futures price spirals. The advantages of this marketing tool are twofold. Put options never commit growers to grain delivery. And there is no risk of margin call. Also in a weather scare, the futures generally run far higher than the actual cash market. These are key advantages to put options.

Marketers can aggressively add put options to their risk management portfolio without excessive delivery or financial risk. Up to 100 per cent of your expected production could be topped up with this tool.

But here’s a caution on selling futures as a protective price hedge. Market volatility and margin call risk are highest during the growing season. If using futures as a part of your pre-pricing program, be prepared for margin calls. They are the inevitable.

Consider planting protective “buy stops” above chart resistance to avoid taking a nasty futures loss should weather drive grain prices higher. Ask your commodity broker to help.

This is a tough marketing year. Marketing skills can’t be emphasized enough. Forward pricing using cash contracts, scaling in put options and selling or shorting futures as a protective hedge will lock in profits. They will go a long way toward stabilizing your farm’s balance sheet. CG Errol Anderson is author of “ProMarket Wire,” a daily risk management report and a registered commodity hedge broker in Calgary. He can be reached at 403-275-5555, email: prowire@shaw.ca. country-guide.ca 21

Ag Outlook 2014 Understand the trends, see the opportunities

Hear the coming year’s economic outlook, learn how weather patterns could impact your operation and get insight into market trends. Discover how a focus on farm management could positively impact your success in the year ahead, and boost your enthusiasm for ag with motivating facts and positive stories about the industry.

Get an expert’s opinion on trends and opportunities coming in 2014, and be confident your business decisions are based on the most up-to-date information available.

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business

The other energy business While Grant focuses on the farm, Colleen Dyck is building their Gorp energy bars into a national brand

By Rebeca Kuropatwa always knew I was going to start something,” says Colleen Dyck. “I just didn’t know what it was going to be or what it was going to look like.”

Of course, many people have dreams, and many people nurture a hope that they will become, build, or do something special.

It doesn’t always happen. But Dyck turned her ambition into reality.

Here’s how she did it.

If it seems a circuitous route, that may just be because in business, sometimes it seems that the straight lines aren’t always the ones that take you where you want to go.

Dyck began by studying business administration with a major in entrepreneurship at Winnipeg’s Red River College. When she finished college, she applied for a job at aircraft engine specialist Standard Aero, where she got her first taste of how business works in the real world.

24 country-guide.ca

Next, Dyck switched to Mountain Equipment Co-op (MEC) to be part of an industry she felt more passionate about.

That in turn gave Dyck more opportunities to spend much more time outside, which then led to her participation in triathlons.

Now an extreme athlete, Dyck realized she needed extreme food. “Extreme athletes typically look for a convenient source of fuel to keep them going and going,” says Dyck. For her, the best answer seemed to be energy bars.

During her search for fuel-filled energy bars, however, Dyck learned that the energy foods on most supermarket shelves were packed with preservatives and additives that are turn offs to many athletes, and she began experimenting and making home made energy bars.

Dyck shared her bars with other athletes; they all wanted more. And thus, a new business was born.

“I’ve always been really careful about what I put FEBRUARY 4, 2014

business

in my body,” Dyck says. “One of my favourite sayings is ‘Food is a tool. What are you building?’”

After researching what she wanted in an energy bar, Dyck began sourcing the best ingredients she could get her hands on, with a mindset of “first local, and second organic.”

Growing up in the small southern Manitoba town of Niverville, at the age of 18, Dyck moved to Edmonton. Eventually, the Prairies called her back.

In her early 20s, Dyck had been certain she would never marry a farmer — yet, that is exactly what she ended up doing — and now she has rediscovered a huge passion for agriculture.

Dyck’s husband’s father was a farmer who passed away early. Grant (Dyck’s husband) had big shoes to fill while he was in his own early 20s, taking over a large family farm at that time (7,000 acres). “He took this on and a lot of our staff who had worked for his dad stayed on the team and worked with him, which he was really grateful for,” says Dyck. “Grant managed to grow and keep the farm, and we didn’t go under.”

They also learned to transform their challenges into opportunities. “When our old farmhouse burned down,” Dyck recalls, “we knew I had this energy bar idea to pursue, so when we rebuilt, we built the basement to be at a level suitable for a food-handling facility.”

While the farm — now at 14,000 acres — is still the Dycks’ main business, its proximity to Niverville has been a blessing for the energy bar business with, as of now, Dyck not quite yet needing full-time production workers.

As for the bars’ ingredients, Dyck sources most of her supplies locally, importing “southern” items such as coconut, peanuts, and brown rice protein.

Finding just the right protein was one of the more difficult tasks. Athletes are under stress, Dyck says. She needed to find a source that wouldn’t upset their stomachs. “There are just so many cheap proteins out there that upset the gut and have a lot of fillers in them,” says Dyck.

After intensive research, Dyck found an excellent brown rice protein that is hypo-allergenic and made in the U.S. “Something I hear from a lot of people is that the bars sit really well on the stomach — actually, something many of the Winnipeg Jets have mentioned,” says Dyck. “The Jets have been using the bars since they returned to Winnipeg.”

To develop the bar, Dyck went to the Food Development Centre in Portage la Prairie, which was costly and, partly, the reason it took as long as it did to get the bars onto the market.

“Eventually, we got a recipe that worked and then it was just a matter of getting my hands on some loans,” says Dyck. “Through the Women’s Enterprise Centre, which gives funding to women specifically, I got to buy the packaging machine I needed. This was the missing piece — a big ticket item I needed to get started.”

Dyck began by making the bars available locally, giving away free samples at local fun runs and marathons. She also gave out samples at the Swamp Donkey Adventure races, partnering with race organizers and showing up at all the races, giving away samples and conducting taste tests to gradually get the Gorp name out there.

It didn’t take long for satisfied customers to start doing the selling of the bars through word of mouth, telling others how good they are. Today, Continued on page 26

FEBRUARY 4, 2014

country-guide.ca 25

business Continued from page 25 Dyck regularly receives telephone calls from retailers, informing her of the many customers who come to their stores asking for the product.

Home grown ingredients “We try to grow the ingredients on the farm that go into the bar, but once you send the crops to the processor, they get mixed with crops from other area farms,” says Dyck. “Then we buy product back from them, so I can’t necessarily say it all comes from our farm.”

The Dycks work hard to grow as many of the ingredients and buy locally back from the processors in their own backyard — including oats, sunflower seeds, hemp, flax and honey, as well as prairie-grown pea fibre.

Dyck is also working to find ways to cut gluten from her products, as this seems of increasing value to consumers.

Overall, Dyck believes whether it comes to gluten-free, organic, or other more specialty elements, “There are many different ways to grow food and feed the planet. As long as we’re moving forward and trying to do better, we’re going to get better.”

The making of the Gorp bars is currently a fairly manual process. “After having tried a bunch of different machines when we were at the Food Development Centre, we just ended up crushing the bar to smithereens — to the point you could barely tell you were biting into an almond,” said Dyck.

“I thought we’d just do it the oldfashioned way until we could afford the machine, still keeping the texture and integrity of the bite.”

With “Fuel for your next adventure” as their tagline, the Dycks are building an adventure of their own

After all the ingredients are combined in a large mixer, the rolling crew rolls them out by hand, with about eight people around a long table rolling batch after batch.

Dyck went to a local welding shop and custom-designed a cutting machine to cut the bars. In fact, much of the equipment for rolling, forming, and other operations is custom-made locally.

The bars go into a packaging machine (a conveyor that wraps the printed packaging). Then they are packed by hand into boxes and shipped out.

The energy bars are shipped mainly to locations in Manitoba, but sales are building across the country, and Dyck’s goal for 2014 is to build Gorp into a national brand.

That means forging relationships with national retailers, such as Mountain

Endorsed by the Winnipeg Jets, Gorp energy bars sell at a premium to other bars.

26 country-guide.ca

Equipment Co-op (MEC) which plans to stock their shelves across Canada with Gorp bars after having tested them in 2013 in their Winnipeg location.

Next on the horizon for Dyck is to expand the Gorp bars’ production to a new location in the yard. Dyck will retrofit an older shop building, and although the building isn’t very big, it is situated right on the yard — keeping production local.

In Winnipeg, Gorp bars are available at health retail outlets, such as Vita Health, Nutrition Plus, Organza, Sunrise Health Foods, and Humboldt’s, as well as at some chiropractic offices and fitness centres.

“Usually, these kinds of energy bars sell for around $3,” said Dyck. “Ours sell for about $3.25 to $3.49.

“We have a lot of repeat customers,” Dyck says.

There are three different kinds of Gorp bars: cocoa, hemp, and almond; peanut butter and apple; peanut butter and raspberry.

“We’re always thinking about new flavours,” says Dyck. “There are new products that have been shelf-life tested and that we’re about to launch in the next couple of months. We’re not quite talking about them yet, but soon.” CG FEBRUARY 4, 2014

HR

A question of charisma Good leaders seem special. It’s a talent you can grow

By Pierrette Desrosiers, work psychologist, business coach, and author eople with charisma stand out. It’s a trait that we associate with leadership — that something special that makes an individual seem exceptional.

But it turns out that charisma has little to do with good looks, wealth, titles or authority, and although it can seem that individuals with charisma must have inherited it at their birth, we now have a better idea of its actual ingredients.

In fact, charisma isn’t what we would call a “natural” quality at all. You aren’t necessarily born charismatic; you become that way.

This means you can actually boost your “charisma quotient” by cultivating the ingredients that go into making a person charismatic.

Chief among these ingredients is trustworthiness, says author David Hosager. “Trust has the ability to accelerate or destroy any business, organization or relationship,” Hosager says. “With greater trust comes greater innovation, stronger brands, increased retention of good people, higher morale, multiplied productivity, better results, and a bigger bottom line.”

The take home is clear. Be sure to walk the talk, but also take a hard look at the following questions.

Q: “Am I trustworthy? Do I keep my promises to everyone?”

Have a vision. As a manager or boss, give meaning to everything you do. Have a vision for both direction and content. Ideally, that vision or grand project must align with your company strategy and be consistent with your own personality. Therefore, take some time to reflect on your vision for your future and that of your farm. Write it down so you can articulate it clearly and consistently.

Find stimulating projects, and get out of your comfort zone. Individuals are capable of taking calculated risks for their projects. Therefore, accept being unconventional, and invest in yourself emotionally and financially. At the same time, dedicate a good part of your time to your mission, projects or other causes that are important to you.

Q: “Where do I see my business in two, five or even 10 years? What will it look like?”

Communicate your vision. You have to know how to communicate your project or vision as well as possible and be able to talk intelligently about an emotional subject.

Q: “Do my family and employees understand my vision?”

Know how to smile. Talk with your hands, express yourself clearly, be enthusiastic and dynamic, listen and do not judge. You must master your emoFEBRUARY 4, 2014

tions. That does not mean containing them or not expressing them but rather knowing how to recognize and manage them — in short, how to use them appropriately depending on the circumstances.

Q: “How do I contaminate others?”

Emotions are contagious. As a leader, you have a huge impact on others, so be consistent. To evaluate your charisma potential, it is crucial to analyze, several times if necessary, the way you behave in your private life. Am I a charismatic leader with my friends? With my kids? If the answer is yes, you can then try to reproduce certain attitudes and behaviours outside the home that you adopt in your private life.

Be confident while remaining accessible and human.

Undeniably, there can be a thin line between confidence and pretentiousness. Having a clear vision of the future and confidence in your methods and values doesn’t mean that you have to be stubbornly sure of yourself and deny others’ concerns or even reject criticism. Furthermore, people who have charisma also know how to say that they have doubts, uncertainties, fears and desires, thereby making connections with others.

Q: “Am I at ease sharing my emotions?”

Practise it. It will benefit you. Listen to, respect and think about other people. Above all, try to understand others before being understood. Develop a healthy curiosity about the people to whom you are speaking.

Take an interest in them and respect differences.

Q: “When I communicate, do I really want to understand the other’s point of view?”

Recognize and value other people. Charismatic people publicly recognize other people’s contributions. They regularly give positive feedback and praise strengths. People really appreciate being recognized, and they feel heard, supported and respected when others show them empathy.

Q: “How do I recognize others’ contributions?”

Remember that, whatever you do, charisma resides in the way others perceive you.

How much charisma and what style of it do you have? Curious?

Take the test: What is your charisma quotient? http://pierrettedesrosiers.com/outils_en.html CG Pierrette Desrosiers, MPS, CRHA 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. Contact her at pierrette@pierrettedesrosiers.com. country-guide.ca 27

BUSINESS

Food for thought If you decide you want to be both a farmer and a food maker, is it inevitable that you will give up one or the other?

By Steven Biggs, CG Contributing Editor arlier last fall, I was hanging out here in the Charlevoix region of Quebec for a sort of family vacation. We were exploring local farms that have developed food businesses — a part of Canadian agriculture where Quebec seems to be the clear leader.

My focus was what farmers here are advertising as their local taste trail, and I brought my wife and kids as my own consumer panel to help me tell whether these farms are actually hitting the mark.

Some are surprises. The duck farm selling foiegras was a big hit with my kids, although that was partly because they were stoked about the waterpowered mill. So, as we pulled into the parking lot at Laiterie Charlevoix, our next stop, it seemed only natural that they would tear off toward the old Massey-Harris they’d spotted in the picnic area.

While my wife followed to keep an eye on the kids clambering into the tractor seat, I got past the white barn and headed to the on-farm store. I had one thing on my mind: fresh, warm, squeaky cheese curds.

They’re a staple around here. I’ve grown to love them.

But as I looked around me, the same question started echoing again. Can you be both a farmer and a food maker? Or, if you decide to start down that path, is it virtually inevitable that one side or the other will win out, and the other will drop away.

Opening the door, the store was bustling. I found the curds, and as I looked through a large window into the cheese plant, Richard Lambert strolled over to explain the cheese-making process. They make cheese seven days a week. “Cows don’t take holidays,” he quipped.

Then he told me the bag of curds I was holding had been made that very morning.

PHOTO: STEVEN

28 country-guide.ca

BIGGS

FEBRUARY 4, 2014

BUSINESS LAITERIE CHARLEVOIX Stanislas Labbé and Elmina Fortin started this family-run on-farm dairy in 1948. At first, they sold bottled milk locally in the Charlevoix region. In the 1960s, they started making cheddar cheese with surplus milk. Then, the business grew to include a milk run along the north shore of the St. Lawrence, all the way to Baie-Comeau — a five-hour drive. But in 1982 they sold the milk run to focus on cheese.

Today, the dairy makes seven different cheeses and has 35 employees in the busy season. It processes approximately two million litres of milk annually, making 200,000 kilograms of cheese.

While a lot has changed since 1982, having a focus is still a big part of the mindset. The focus is now on building their regional identity and on carving out an upmarket niche.

Laiterie Charlevoix is well placed to catch tourists, being on the main road and being part of La Route des Saveurs de Charlevoix (meaning the Charlevoix taste trail.) It is a tourist route that features food-related businesses including farms, restaurants, and specialty food producers… everything from hard cider to bakeries, market gardens, and foie gras.

Is this the future of agriculture? Certainly not for everyone, but for any farmer thinking of diversifying into a more consumer-oriented, value-added direction, this is a great road to travel.

Lambert lowers his voice as if he’s about to tell me a secret.

“There are no cows here.”

The LA ROUTE DES SAVEURS DE CHARLEVOIX magazine that is given to tourists features profiles of area farms and businesses, recipes featuring local foods, and a map — bringing together gastronomy and terroir, and they hand out magazines box after box.

You’ll see why when you hear the numbers.

SEVEN BROTHERS

PHOTOGRAPHY: www.fromagescharlevoix.com

“Seven brothers are running this place,” says Lambert as he talks about the seven third-generation Labbé brothers.

Three of them work at the dairy full-time. Dominique Labbé is head cheese maker, Jean Labbé is the accountant, and Paul Labbé manages shipping. A fourth, Bruno Labbé, manages the family-owned campground next door, while the three other brothers have full-time off-farm careers.

I ask about the dynamics of having seven decision-makers.

Lambert says that they want the business to continue to the next generation, adding, “They’re not always on the same wavelength, but they talk it out and it’s OK.” We chat for a while in the store before going to the sampling counter. Lambert handles English public relations, so he can rhyme off the stores in Toronto that carry his cheese. He has a brother there too — so we compare notes about traffic.

Then I ask how many cows they milk.

Lambert lowers his voice as if he’s about to tell me a secret.

“There are no cows here.”

Continued on page 30 FEBRUARY 4, 2014

country-guide.ca 29

Photography: www.fromagescharlevoix.com

business

Continued from page 29 “There used to be a herd of Holsteins,” Lambert says — until 1989. The decision to sell the cows had to do with focus. “They were dealing with the farm seven days a week, the cheese factory seven days a week, and they also own a very big campground here next to the dairy… They made a very hard decision,” he says.

Losing focus The dairy uses milk as a way to differentiate its cheeses. Holstein milk — all from the Charlevoix region — is delivered to the plant. “We buy our milk from the local federation,” (the marketing board) Lambert says, adding, “We want to associate our cheeses with milk produced here in Charlevoix.”

Milk from Jersey and Canadienne herds is kept separate. “We go get it with our own truck,” says Lambert. Through an arrangement with the marketing board and the farmers, they pay a premium of $0.10 per litre for the Jersey and Canadienne milk, something Lambert says helps to make up for the fact that on a volume basis, these breeds give less milk. This way, he says, the dairy ensures it continues to get milk suited to making unique cheeses.

There is a new cheese every two or three years, he says as he tells me about the new Emmental-style cheese that they now produce and will soon officially release. “They always have ideas,” Lambert says as he talks about the cheese makers. The focus is on specialty products. “We don’t do any ‘industrial’ production — we want to make fine cheese,” he says.

Location, location The store accounts for approximately 25 per cent of sales. It is more than a cheese shop, with a wide variety of food from other local producers, everything from pies to meats to preserves. Lambert says 30 country-guide.ca

that in the summer, there are often 1,200 people moving through the store every day. “We’re lucky, we’re on the main highway,” he says as he talks about tourist traffic.

“Ottawa, Montreal, Vancouver, Toronto,” says Lambert as he rattles off some of the cities where the cheese is sold. While the dairy has someone working on national sales, a distributor takes care of fulfilment. “We send our cheeses to Montreal, and from Montreal he distributes the cheese,” says Lambert.

Even though they’re cheese makers now, not really farmers, the old farm skills and aptitudes help them succeed.

In 2010, for instance, the company installed a facility to convert the 15,000-20,000 litres of whey that they generate annually into methane. This waste previously went into the septic system. After passing through the digester, remaining wastewater goes through a biofilter that uses live plants. Treated water can then be discharged directly into a nearby stream.

Cheese-making takes lots of hot water for washing and cleaning — and the dairy goes through about four million litres of hot water annually. All of that water is now heated by methane. “Before we used to heat water with a very old boiler,” says Lambert, adding that it took a lot of heating oil.

The facility cost of $2.8 million was defrayed by approximately $800,000 in federal and provincial grants. The estimated timeframe for the system to pay itself back is 10 to 12 years.

When I ask about plans for the future, Lambert says that there are now five members of the fourth generation working in the company. “They want to continue for the fourth generation. They’re working on it right now.” At this point, it’s a matter of transferring some of the responsibility.

The focus of my trip to the store — the curds — are delicious. Unfortunately for me, they’re for the local market. The focus for the Ontario market is fine cheeses. CG february 4, 2014

management

“Better” marketing!

A&W is showing farmers how to win with branding

By Gerald Pilger

ast September 23, the fast-food chain A&W announced all its burgers would now be made from beef raised without the use of hormones or steroids, and by ranchers committed to sustainable farming practices. This has got many ranchers fuming.

These ranchers believe A&W’s depiction of hormone-free beef as “Better Beef” means the A&W ads are misleading customers into believing there is something wrong with conventionally raised beef.

Susan Senecal, A&W’s chief marketing officer disagrees. “People are taking a lot more interest in the food they eat and where it comes from,” Senecal says. “Beef raised without hormones and steroids is very important to our customers.

Says Senecal, “Better Beef is simply providing people with what they are asking for in a great burger.”

Senecal also told Country Guide that A&W does not and has never claimed that meat raised without hormones or steroids is healthier or more nutritious.

That is simply a perception people already had, and A&W is responding to it.

wheat as high quality and high protein, and as a superior wheat for making bread due to the climate and farming practices of western Canadian farmers.

The federal government considers branding such an important strategy in promoting Canadian agricultural products that Agriculture and Agri-Food Canada created and funds the “Canada Brand” under Growing Forward.

Some 600 agricultural businesses and organizations have been approved to carry the Canada Brand. Besides being able to label their products with the Canada Brand logo, these companies can also access an extensive photo bank, graphics, and even government market research at no cost.

A pro’s insight Michael Baicoianu is a professional certified marketer in Toronto and his company, BrandUniq assists small businesses in differentiating their products or services. He is not sure why cattlemen would be upset with A&W’s Better Beef promotion.

Baicoianu believes that in today’s global economy,

Unlike many writers, bloggers and cattlemen, I salute A&W for its ‘Better Beef’ program While A&W is the first national burger chain in Canada to offer hormone-free beef, it is by no means the only company that is using branding to capture market share in the competitive food sector.

Cattlemen themselves (likely including some of those upset by the A&W promotion) have tried to differentiate their beef with branding that includes “Alberta beef,” “barley fed,” “grass raised,” “Angus beef,” “ranch raised” and “Kobe beef.”

Just like A&W, these cattlemen are attempting to market their beef based on the perception some consumers have that beef raised in Alberta rather than elsewhere, or beef fed barley instead of corn, or pasture rather than feedlot raised is “better.”

Other sectors of agriculture also use branding.

Seed companies and canola crushers vigorously market “healthy” canola seed to farmers, and “healthy” canola oil to the food industry and consumers. The Canadian Wheat Board, when trying to market overseas, relied heavily on branding western Canadian February 4, 2014

virtually everything is a commodity, including beef.

Sellers can either compete for market share by lowering the price of the product they are selling, or by changing the product into something the consumer perceives as different from anything else on the market.

If sellers can successfully take advantage of consumer perceptions that a product is unique in the marketplace, they can gain market share and sometimes also increase their selling price.

“It is no longer good enough for a food producer to claim it is providing a high-quality product. Canadian consumers expect all food to be high quality and safe,” says Baicoianu. “To get a premium price, food producers must move beyond the product and offer consumers something different. They have to move the consumer’s perception that the product they are selling is somehow better.”

Baicoianu lists a number of strategies that have Continued on page 32 country-guide.ca 31

management Continued from page 31 been successfully utilized to brand food products and make them more appealing to consumers. These include organic, buying local, packaging, private labelling, product features such as preservative free or enriching, changing the manufacturing process such as cooking in low trans fat oil, improving the taste, and improved service.

Unfortunately, differentiation and branding are a lot more complicated than simply changing a product and hoping consumers buy it. First and foremost, you have to know your customer and be willing to change your product to meet the customer’s wants.

Too often in agriculture we do the exact opposite.

We expect customers to want what we produce, rather than producing what the customer wants.

Second, we need to realize that the advantage of branding is limited to those who market the unique product. In the case of A&W, it is introducing the Better Beef brand to sell more hamburgers and grow its business, not to grow the business or bottom lines of Canadian beef producers. If consumers really feel hamburgers made with hormone- and steroid-free beef are better, A&W will likely sell more burgers.

However, if and when this happens, other hamburger chains may copy the A&W differentiation and A&W could lose the unique hamburger brand it has invested so much into building.

Winners on the farm Some cattlemen are also winners in A&W’s venture. Spring Creek Ranch has been producing and marketing the type of beef A&W needs for its burgers for a number of years. Spring Creek had already built its own brand of ethically raised, hormone-free beef which enabled it to become one of the three companies that will be supplying the beef A&W needs.

Spring Creek was able to leverage its existing unique brand of beef into becoming the supplier of A&W’s unique brand of burgers.

Since Spring Creek is currently supplying less than half of the beef A&W needs, and since A&W has had

Differentiation strategy Branding expert Michael Baicoianu lists three important questions that must be addressed before embarking on a differentiation strategy. (Excerpt from Baicoianu’s www.branduniq.com website.)

• Is my brand the first in the category to claim this differentiating idea? If one or your competitors already owns that positioning, your best bet is to explore a different option.

• Will my business be able and willing to deliver on that competitive advantage over a long period of time? Brand building takes a long time, consistency and perseverance. If you are not willing to allocate the necessary resources (which vary by industry and level of competition) then your strategy will die in its infancy.

• Does my differentiation translate into a perceived benefit for the consumer? If the consumer isn’t willing to pay for your new product, then you have to start from scratch.

32 country-guide.ca

to import from the U.S. and Australia, there is a real opportunity for Spring Creek to grow its business too.

In the future, Spring Creek will likely try to source cattle from other Canadian ranchers who are willing to follow the strict feeding, handling and husbandry regiment Spring Creek has used to build its brand and which is required for the A&W hamburger brand. It is likely many cattlemen are already producing this type of beef but have never been rewarded for the “Better Beef” qualities simply because, unlike Spring Creek, they have never marketed their production as ethically raised and hormone and steroid free.

Unfortunately, any potential rewards these ranchers receive will be mitigated by the fact they will not be producing a unique product. Rather they are simply producing a new type of commodity beef that is hormone free. Any rewards that they do gather will likely soon be lost as more and more ranchers compete to sell similar “Better Beef” to Spring Creek and A&W and, as in any commodity market, the price they receive for their beef will likely decline.

Indeed, the switch of the live cattle behind “Better Beef” from a premium product to a commodity may actually happen a lot faster than many ranchers expect.

A&W did not create the consumer perception that beef raised sustainably and without hormones, steroids, and additives is better, they simply acted on it. The perception that this type of beef is better was already widely held. Since 1988, Europe has banned beef which has been implanted with hormones and steroids, effectively closing the border to Canadian and U.S. beef.

The EU trade deal In late October of 2013, the Canadian government announced the signing of a European trade agreement which would allow Canada to export duty free an additional 64,950 tonnes of beef and veal to the EU annually. But what the government did not state was this beef still must meet current EU standards of hormone and steroid free.

The perception was further enhanced for North American consumers when in August, Tyson and Cargill, two prominent North American packers, announced they would halt purchases of cattle fed the growth enhancer Zilmax.

The rising demand for hormone-free beef from A&W and Europe combined with negativity arising from the packer decision to refuse to process Zilmaxfed cattle will lead many ranchers to seriously consider changing to raising cattle without hormones.

Senecal says A&W is already getting two or three calls a day from ranchers interested in supplying hormone-free beef to A&W. She says she appreciates these calls because part of the verification process used to ensure the quality of “A&W 100% Pure Beef” burgers includes A&W knowing the ranches where the beef is raised, backed up with detailed tracking of the entire life cycle of every animal.

Senecal invites any rancher interested in raising beef as per A&W’s criteria to contact the A&W head office in Vancouver. CG FEBRUARY 4, 2014

CHRISTIAN FARMERS FEDERATION OF ONTARIO 7660 Mill Rd. RR4, Guelph ON N1H 6J1 Voice: (519) 837-1620 Fax: (519) 824-1835 Email: cffomail@christianfarmers.org Web site: www.christianfarmers.org

Leadership is a Key to Agriculture’s Future Success

T

he future success of agriculture in this province will depend on many factors. There are some factors that are far beyond our control, but there are some where we can take pro-active steps. As a sector, we often consider the physical factors that impact our businesses, but we do not always consider other factors including developing quality leadership for the future.

Agriculture needs a variety of leaders that can look at a broad range of issues from a number of perspectives. The modern world we live in, with its ever-changing technology, ever-changing consumer demands, the demand of climate and weather pattern change, and the pressure of international competition requires strong leadership if Ontario agriculture is to succeed.

The sector will need a wide variety of leadership styles to

meet these challenges. The sector needs people with a caretaker mentality, looking out for the well-being of their industry. The sector needs innovators that are willing to push the limits of our current practices. The sector needs visionaries that can lead the way towards future opportunities. The sector needs facilitators that can forge these divergent views into a coherent strategic direction as a whole.

The challenges of the future need to be met with strong leadership. For every anticipated challenge agriculture faces, another completely unexpected

Long Term Thinking for Today’s Issues

issue will arise. With strong leaders at the helm, agriculture in Ontario will prosper in our ever-changing world.

“Don’t give up, look up” The Christian Farmers Federation of Ontario is one of two accredited General Farm Organizations in Ontario. The organization is focused on the long-term issues facing the sector, and is supported by 4000 farmers in the province.

Learn more about us at www.christianfarmers.org

• 22 District Associations Across Ontario • Supporting our members since 1954 • A Professional Organization of Entrepreneurial Farming Families

www.christianfarmers.org

A professional organization of entrepreneurial farming families

business

At the helm: Kyle Jeworski Viterra’s new boss has always been a young man in a mature man’s industry. This time, though, he’s in one of the biggest ag jobs in the country.

Critics know what his job really is

By Anne Lazurko, CG Contributing Editor hile occupying the corner office at Viterra is relatively new for Kyle Jeworski, holding a spot at the top of his peer group is not. In 2011 he was named one of “Canada’s Top 40 Under 40,” while acting as vice-president of grain merchandising and transportation at Viterra. In December of 2012, Swissbased Glencore Xstrata made him boss shortly after it acquired Canada’s largest grain-handling company. A year into this endeavour he’s just 39 years old. A young CEO with a big resumé.

Saskatchewan born and raised, Jeworski has a business degree from the University of Regina through its co-operative education program. The work portion of his degree found him employed at Saskatchewan Wheat Pool and the rest, as they say, is history. Over the next 17 years, Jeworski held various positions as the co-operative dissolved into a publicly shared company and then was further restructured into Viterra, with Jeworski appointed CEO of its current incarnation as Glencore’s North American grain business.

Along the way he’s seen the company through seven years of Prairie drought that left it nearly bankrupt, and the “refocusing and right sizing” that brought it back from the brink.

34 country-guide.ca

FEBRUARY 4, 2014

business

“I was fortunate to be with the company as it built itself back up,” Jeworski says. “It leads a person to reflect on what has happened, and I think it grounds you. If you came into this industry and had seen nothing but the highs or nothing but the lows, you may not have perspective. I’ve been fortunate, if you can put it that way, to have seen both. You learn to celebrate the highs, but you don’t get complacent and you make sure to do the little things right. You can’t lose sight of the core business because you need a strong company to weather the downtimes.”

Grain is at the core of Viterra. In its $6.2-billion takeover bid, Glencore dealt away almost all Viterra’s processing and some grain-handling assets to Richardson’s International, and its farm supply retail business to Agrium, recouping about $2.5 billion.

It’s become a lean grain-handling machine, focusing on a critical mass of grain and oilseed production with access to what Jeworski says is “the best global trading group in agriculture. Glencore is in 50 countries and can provide real-time, unbiased market information and real-time insight into what customers require. We have more face points with end-use customers than ever before.”

While Jeworski has had exposure to all aspects of the business, his strengths as CEO neatly align with Glencore’s vision for Viterra, which is to lead in the merchandising, risk management and transportation of grain. And to do it efficiently. The company’s new found critical mass will help in a Canadian industry heavily reliant on export.

“We are 1,650 kms from the Port of Vancouver,” Jeworski says. “Other countries are producing on major waterways, and so for us to compete on a global scale we have to be efficient.”

That efficiency is being tested with the West’s huge 2013 crop. Grain and oilseed prices are dropping as elevators plug and as rail cars become scarce. “This record crop is going to show us where there are pinch points or challenges in the industry,” Jeworski says. “And we see Canada producing ever-more grain, so the challenge is to address efficiency, and this is the reason we are spending capital in the country (elevators) in receiving and shipping, investing in ports, and working with the railways to see what we can do to increase capacity.”

Glencore took over Viterra only a year ago, and Jeworski has been CEO for roughly that long. But in that same year the company spent $20 million on facility upgrades at four grain terminals in Saskatchewan, and announced another $34 million to go toward expanded terminal operations in Alberta.

With 2,000 employees, 65 Prairie elevator points, over 1.5 million tonnes capacity, port terminals, and a small number of processing facilities, Jeworski is a busy man.

FEBRUARY 4, 2014

Leadership style Jeworski doesn’t claim to do it alone. “I believe in surrounding myself with good people,” he says.

“Good people make me look good and they help each other as well. I feel we have the best people in the industry.”

Jeworski is big on mentorship and succession, and strives to provide training to employees whether it’s in Regina’s head office or out in country operations.

That others might think him relatively young to be leading and mentoring is not lost on the CEO. He’s been told the same thing at various points throughout his career, but sees it as an advantage.

“I’ve had to be better prepared at all times in order to prove myself,” he says. Clearly it has worked.

“I believe I’m tough and focused, and I like to stay on top of, and be current with, the business,” Jeworski says. “I think it’s important to be grounded and clearly understand the day-to-day operations without micro-managing. Because of the risk and volatility of the industry, it’s important to be fully engaged in every aspect of the business.”

Communication is key, Jeworski says. “People want to do what’s right and that requires them to be informed and to understand what’s going on. Being candid and open for questions create the right atmosphere.”

Jeworski sees a plus when he’s called too young: “I’ve had to be better prepared at all times to prove myself.”

And he doesn’t believe in creating a bureaucracy.

“If I have a question about IT, and I run into an IT guy in the elevator, I’ll ask him the question. I don’t have to go to the head of IT. And the head of IT isn’t threatened by that.”

Jeworksi also cultivates a culture that recognizes the historical significance of the company. While it has morphed over the years, Viterra is a heritage organization. “I feel a lot of responsibility because of the history of the company,” Jeworski says. “It’s been earning farmers’ business for 100 years and now we have to keep earning it… we have to embrace the past but have the proper foresight to anticipate the future. We don’t want to be reactive.

We want to be leading change.”

So that is what keeps Jeworski energized and challenged. Innovation, embracing and enacting change, leadership.

And it would seem Glencore has set him in an environment where he can thrive. Viterra has 100 per cent regional autonomy, and its growth plans all come out of Regina. For Jeworski, it’s a chance to flex his leadership muscle. CG country-guide.ca 35

business

An Agritechnica PhD For farmers, a visit to Agritechnica is a path to a unique education

By Scott Garvey, CG Machinery Editor n Germany earlier this winter, I was sitting across a table from Ralf Küsel, a South African farmer, as he sipped his coffee in the International Visitors’ Lounge of the Agritechnica showgrounds in Hanover. “I’ve heard somebody say an overseas trip is worth a degree,” Küsel said. “Of course it costs you (the equivalent of) a degree, but it opens your mind and gives you a different perspective and different ideas.”

Küsel was sitting with his business partner, Kurt Klingenberg after enduring 14 hours flying to northern Germany from their mixed farming operation in the eastern part of South Africa. They came to see what was new in farm machinery at Agritechnica, the world’s largest equipment exhibition.

If it’s true that an overseas trip is worth a degree, Küsel and Klingenberg were well on their way to a PhD. “Everywhere, we find something we’ve never seen before,” said Küsel as he looked at Klingenberg, who nodded vigorously in agreement. “We came with the attitude, look and learn.”

During a wrap-up press conference, executives of the German Agricultural Society (i.e. DLG, the group that organizes Agritechnica) announced that 450,000 visitors had come to the November show. About 112,000 of those were from outside Germany.

Nearly every region of the world was represented, meaning, apparently, more than a few degrees had been earned. And the show’s organizers helped give those degrees a wide-ranging scope. Places like the International Visitors’ Lounge facilitate meeting farmers from other parts of the world to learn how they see agriculture and its future.

“I come to Agritechnica to have conversations with people like you,” said Klaus Münchhoff, who has been farming his family’s traditional homestead in the former East Germany since 1991. That’s when the agricultural land was returned to the families of those it had been confiscated from. “The family fled to the west in 1953, and I went back in 1991,” he explained, speaking in German.

“Everybody is here (at Agritechnica),” Münchhoff went on. “It’s more important to talk to people than look at the machinery.”

Although Münchhoff, Küsel and Klingenberg wanted to hear other points of view and unfamiliar ideas, the machinery was still an important aspect luring them to this event.

“You don’t get one big eye-opener,” said Münch36 country-guide.ca

hoff. “There are a lot of little things. All the small things together gives you a lot of inspiration.”

Küsel agreed. “You’ve got to walk the whole show,” he said. “There are a lot of little things. It’s all those small, little, different things that you pick up. You think, here’s something. You take a photo of it or get a brochure. They’re things you wouldn’t have seen or thought of before. Maybe they are a solution to your circumstances. The big companies, we just walk past them. Those are things you can see anywhere. That’s just showmanship. The big companies can only mass produce a single solution.”

With a record 2,898 exhibitors, Agritechnica had far more than “the usual suspects,” as one British journalist expressed it. In fact, it was important to keep your eyes open for the small, unusual displays. Some, like the RHEA project sponsored by the European Commission, had eye-opening concepts to reveal. The engineers in that consortium developed a totally robotic weed control system in conjunction with the University of Madrid.

Directed by automated aerial drones that employ optical sensors to locate weeds in a field, wireless, real-time signals are sent to driverless tractors that respond to the identified locations and spray the appropriate herbicides only where required. The project managers hope to attract a manufacturer to license and commercialize their creation.

There are also more immediate alternatives for farmers looking for equipment solutions today.

“Ninety to 95 per cent of our equipment (in South Africa) is imported,” said Küsel. “Here we get to see what is available rather than what an importer tells you is available.”

In the past when he couldn’t find exactly the machine he wanted in his home country, Küsel went pretty far afield to find it. “We’ve imported our own stuff directly,” he went on. “We bought a (Hagie) sprayer from the U.S. that we brought in ourselves.

The world is getting smaller.”

“I came to get an overview of what’s new with digital technology,” added Münchhoff. “The most important topic for me is data management. I’ll be making investment decisions next spring and I’ll want the companies to come to my farm and show how these new technologies will work for me.”

And like Küsel, Münchhoff sees having the best machine for the job as critical to his operation. But despite his focus on digital technology, he wouldn’t february 4, 2014

business

Clockwise: Farmers from all around the world were able to meet and share ideas at Germany’s Agritechnica machinery show, which is held every two years in Hanover, Germany.

Klaus Münchhoff farms 1,000 hectares (about 2,470 acres) in Eastern Germany.

Kurt Klingenberg (l) and Ralf Küsel travelled to Agritechnica from South Africa where they operate mixed farming operations.

Photos: Scott Garvey

“ Everywhere, we see something that we have never seen before.”

— Ralf Küsel compromise on having the right iron in the field to advance his digital ability.

“Having the best machine is more important than getting standardized digital systems,” he said emphatically.

As Münchhoff sees it, different brands excel at certain types of machines. “The best is Claas for combines and John Deere for tractors,” he said. (That’s a relatively common view among German producers.)

And like many Canadian farmers, he believes dealer support is paramount.

Said Münchhoff, “If the combine quits, every minute it’s not running costs me eight euros (roughly $11.50).”

As you’d expect, when you have farmers together from all corners of the february 4, 2014

planet, opinions differ on how best to work their fields.

“What is lacking to me here is the amount of conservation tillage equipment,” said Küsel. “The thing that was disappointing to me was the lack of notill solutions… I think there should be people trying to promote it.

“I thought equipment suppliers would be thinking about it, trying to change farmers’ minds,” Küsel said. “Obviously they look at the market and see there’s no demand there. But sometimes you need the mindset to be the other way around.”

In South Africa, Küsel estimated, no till has climbed to 50 from about 10 per cent in 10 years. In the last few years, it has been snowballing.

But Münchhoff sees things differently.

“Plowing is more cost effective,” he said.

“I need less crop protection products.”

He plows roughly two-thirds of his cropland each year.

The one thing all the farmers do seem to agree on is Agritechnica is a place to get new ideas that make you re-evaluate your own operation.

“It’s a must to go see,” said Küsel.

“In two or three days I can get all the information I’m looking for and talk to all the right people,” added Münchhoff.

They’re both bullish on the future.

“I think we’re relatively positive,” Küsel said. “We’re investing in farming.”

Said Münchhoff, “Agriculture has a huge future ahead of it.” CG country-guide.ca 37

business

Ukraine

The world’s next breadbasket

By Nicolas Mesly The world has its eyes on the Ukraine. What it is seeing there is nothing less than a new El Dorado in agriculture, based on some the world’s most fertile and most underutilized soils. For centuries, Ukraine was Asia’s breadbasket, but since the collapse of the Soviet Union, much of its potential has essentially lain fallow. But even at that, Ukraine is the world’s third leading exporter of wheat and corn.

The question used to be, will the country ever get its agricultural act together?

Now, the “if” questions are gone. Instead, they’ve been replaced by two others. Who will reap the profits from an efficient, productive new Ukraine? And what will that new grain juggernaut do to global grain markets?

Now, Ottawa is investing $13 million to develop grain co-operatives like the pools that used to dominate Western Canada. The objective is to equip Ukrainian farmers with a more effective, more efficient marketing system that moves more grain and puts more value back into the farmers’ hands. Ottawa is also betting that the co-op business model will create hundred of jobs in rural areas of the second-largest European country — a country that is in deep economic crisis.

Ag journalist Nicolas Mesly has travelled with the Canadian team in charge of this project. He has also met with international investors, who discuss the challenges and opportunities of conducting business in Ukraine. Mesly also met farmers, like Ludmila Nikiforienko, right, and he learned why another Ukrainian farmer is a national hero in his country.

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FEBRUARY 4, 2014

business

Ottawa’s gamble A year after pulling the plug on the Canadian Wheat Board monopoly, Ottawa is funding a new generation of Ukrainian co-ops hen Camil Côté landed in Ukraine’s capital Kiev last July, he was on a mission to establish grain co-operatives in a country that used to be the breadbasket of the Soviet Union. But if there was any irony in a Canadian going to the heartland of communism to build new co-ops, it wasn’t on anyone’s minds.

Ukraine is sitting on the greatest — and most underperforming — expanse of prime farmland in the world.

To make that farmland productive is going to take more than machinery, and more than seed. It’s going to take imagination and some brilliant strategic planning.

And that may be just what is finally underway.

Côté’s assignment comes directly from Ottawa. At 64, he is project manager at the cumbersomely named Canadian Cooperation Society for International Development (Socodevi), and he is a veteran of international affairs.

Ottawa also set the terms. Côté has a budget of $13 million, and a time frame of five years to accomplish his task.

The official name of the project at the Canadian International Development Agency (CIDA) headquarters is the Ukrainian Grain Storage and Marketing Project. It has received a green light by Canada’s former minister of interContinued on page 40

Dnipropetrovsk

Crimea

Roughly the same size as Saskatchewan, Ukraine has more land dedicated to grain production than all of Canada. It also has direct access to year-round shipping via the Black Sea, with competitive advantages into Egypt and China, the world’s two biggest grain importers.

FEBRUARY 4, 2014

country-guide.ca 39

business

What is chernozem?

Chernozem is the rich black soil that makes Ukraine one of the most fertile places on Earth. It’s a soil that was formed from very fine mineral particles that prehistoric winds carried away from ancient glacial beds. “The wind acted as a huge filter,” says Dr. Léon Hardy, a Canadian geomorphologist in Ukraine. “There are no rocks in this soil.”

Grasses and broad-leaf plants thrived in these gigantic mineral deposits, and when they died, their decomposition turned into the organic matter that makes chernozem so black today.

Nor does the beauty of chernozem stop there. The soil is porous too, and the fields are naturally undulating, so they don’t need expensive drainage. Plus, chernozem contains limestone, so there is no need to add lime, and it is ideal for no till.

Ukraine isn’t the only place in the world with chernozem. Some can even be found along the U.S. border in Western Canada, but chernozem accounts for 60 per cent of the arable land in Ukraine, and it seems to go on forever, commonly from one to as much as six metres deep.

A French connection “It is the incredible potential of chernozem that brought us to Ukraine,” says JeanPaul Khim, a French grain farmer and one of the five shareholders in KMR, a corporation they set up in order to get their slice of Ukraine’s farm outlook.

KMR bought its first Ukrainian farm in 2006, followed by a second two years ago near Dnipropetrvosk, an industrial city and former Russian missile construction centre.

Today KMR farms 20,000 acres, having invested $6.5 million since its arrival in the former Soviet breadbasket.

“The very low price of the land has allowed us to invest in machinery and technology, and to construct buildings and silos,” says Michel Jean-Loup, another shareholder met at one of the KMR farms.

The company employs 32 people, including one full-time person to manage rental contracts with 1,300 landowners. KMR produces annually between 24,000 and 30,000 tonnes of wheat, colza, sunflower and spring barley. All the crops are no tilled to minimize wind erosion and retain moisture.

A big consideration for the French is that they finance their operations through French banks, using their French farms for collateral. If they had to finance through Ukrainian banks, the group would face prohibitive interest rates of 25 per cent and more — the same rates that Ukraine’s farmers must pay.

Farming in Ukraine isn’t always easy, say KMR’s partners. For example, repair parts for the combines or the tractors can take months to obtain, and they can’t get the seeds that they would like because of heavy restrictions inherited from the former communist system.

40 country-guide.ca

Attracted by the rich chernozem, the French grain grower Jean-Paul Khim and four other shareholders have been farming in Ukraine since 2006. Their wheat yields in Ukraine are around 4.5 tonnes/ha whereas they can go up to more than seven tonnes/ha on their farms in France. The extensive production system found in Ukraine is similar to the Canadian Prairies, says the producer.

Photo: Nicolas Mesly

Another problem is the extreme Ukrainian weather. “In France, we cry when we lose 20 per cent of our yield; here it is sometimes 50 per cent,” says Michel Jean-Loup.

The other climate they have to deal with is the business environment. All the wheat production is sold internally, the sunflower goes to a local processor and the colza is exported. But the signed contracts on volumes and prices are not always respected, warns Jean-Loup. “You need to know how it works in order to not lose your shirt.”

Continued from page 39 national co-operation, Beverley J. Oda, while visiting Ukraine in April 2012 — which not incidentally was the UN Year of Co-operatives.

This Canadian scheme does have unusual optics, of course. Just four months after the project was approved, the Harper government axed the Canadian Wheat Board (CWB) monopoly at a cost of some $350 million of taxpayers’ money.

During its 75 years of sometimes controversial existence, the CWB acted as a giant co-op, pooling and marketing on behalf of Western Canada farmers’ more than 20 million tonnes of wheat and barley for human consumption.

Even its opponents will agree, however, that the CWB contributed to Canada’s reputation as a reliable and topquality wheat supplier, and that it helped transition Canada’s West from a remote, undeveloped agricultural resource into an agricultural powerhouse.

Could a new generation of co-operatives help Ukraine achieve the same?

Camil Côté doesn’t let himself get sidetracked by political considerations. His only concern is to achieve his “Ukrainian project.” He needs to build and get grain flowing through two new elevators in Ukraine with a combined capacity of 40,000 tonnes, at a cost of $4 million each.

I accompanied Côté and his team on a recent trip to Ukraine to assess his chances of reaching that goal.

As soon as he landed in Ukraine’s capital, Côté and his team tested the ground to see what reception their project might get.

“You can count on us,” said an enthusiastic Volodymyr Klymenko, president of the Ukrainian Grain Association (UGA).

The association is an umbrella group representing the gamut from individual grain producers and domestic merchants to international players such as Cargill.

Since Ukraine achieved independence in 1991, as the result of the fall of the former USSR, “We have quickly passed from a socialist system to embrace a capitalist system with big, vertically intregrated agribusiness operations,” said Klymenko. Some of his individual members farm from 200,000 to up to 1.25 million acres.

FEBRUARY 4, 2014

business

Population: 44.5 million GDP/capita: $7,500

Legend: Yellow band represents wheat fields; the blue band represents the sky.

Ukraine recent history 1922 A fter Pierre Giguère, a Canadian engineer and expert in grain elevator construction talks with Camil Côté, in charge of the Canadian grain marketing project in Ukraine. The two men discuss the possibility of buying five ha of land to build co-op silos near the railways that cross the village of Vasilkivka.

Photo: Nicolas Mesly But Ukraine cannot count only on big players, he says. The country intends to double its annual grain output to 100 million tonnes with the use of better technologies and better seeds, and there is plenty of room for small- and medium-size producers to operate under co-operatives.

On one hand, says Klymenko, UGA members want to see the maximum possible volume of cereals going through their grain terminals in order to make them most profitable.

But the scale is daunting. According to the United Nations Food and Agriculture Organization (FAO), the country needs $5 to $8 billion to modernize its publicly owned inland terminals as well as its port storage capacity located on the Black Sea. With such great needs, the Canadian investment in co-op elevators is welcomed with open arms, especially since the co-operative strategy could put more leverage in the hands of Ukrainian farmers.

Côté and his team receive another warm welcome from Victor Andrievsky, president of the Agrarian Markets Development Institute (AMDI), a non-governmental organization based in Kiev. After independence, Ukraine’s 600 state-owned silos were quickly privatized.

The country now counts 751 silos, of which 80 still belong to the state. “Today our producers are in a situation like serfs were during medieval times,” says Andrievsky. “Without appropriate storage capacity at the farm level, they are forced to sell their grain right after harvest at low prices to the elevators. A lot of them (elevators) cheat on the grain quality and the volumes stored.”

Co-op elevators built along the country’s railways would create a balance of power, Andrievsky believes. How? By offering a storage alternative to producers and more transparency on pricing, as well as extra access to markets.

Continued on page 42

FEBRUARY 4, 2014

the First World War, Ukraine tried to form an independent republic, but in 1922 it became instead a founding member of the USSR — the Union of the Soviet Socialist Republics. Second in size only to Russia, Ukraine became the granary of the 15 USSR republics.

1927 USSR

president Joseph Stalin launched massive, brutal immigration from the countryside to industrialize the cities. Under his first Five Year Plan, industrial output increased fourfold.

1932 S ome

three to five million Ukrainians died in a famine caused by Stalin’s farm collectivisation. The process gave birth to the kolkhozes, the huge farms run by the state. In Ukraine, the tragedy is known as the Holodomor.

During the Second World War, more than six million Ukrainians died. Stalin freed Ukraine from the Nazis only to better control it.

1986 The most terrible nuclear accident in human history happened at Chernobyl, contributing to the dismantling of the USSR in 1991, when Ukraine obtained its independence.

However, a savage privatization program then led to the birth of an oligarchy, with power and wealth concentrated in a few hands.

2008 Ukraine

joined the World Trade Organization, with more support from institutions ranging from the FAO to the World Bank.

2011 Viktor

Yanukovych was elected Ukraine president. Considered pro-Russian, Yanukovych replaced Viktor Yushchenko, one of the two leaders of the Orange Revolution launched in 2004. The Orange Revolution had promoted democratic values and stronger economic integration with the European Union (EU).

2013 Since

November 2013, Ukraine has experienced social disturbances after the president Viktor Yanukovych refused to sign an agreement for more integration with the EU. Some 200,000 people opposed to the government celebrated the new year 2014 in Maïdan Square, located in the centre of Kiev.

country-guide.ca 41

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“ To sell co-ops, you need strong leaders!”

— Ludmila Nikiforienko Ludmila Nikiforienko, 63, has bought the former collective farm located near the village of Andriivka where she was milking cows with her husband, Vladimir, 72. The couple started their grain farm in 1991 with 125 acres but today they rent 10 times more land. Nikiforienko says that a co-op elevator would help sell her wheat and sunflower crops. “We tried to form co-ops in the past but it did not work because there were too many different interests,” she cautions. “Big producers already own some storage facilities and the little ones don’t.”

Nikiforienko also says that, in order to get off the ground, a co-op will need visionary leaders. “I am too old for the task,” she says, laughing. The biggest barrier to the rise of coops is psychological, she believes. Ukrainian producers fear the co-ops will be too much like their old collective farms, Nikiforienko explains. “For many of them, it is going back to the past.”

Photo: Nicolas Mesly

Continued from page 41

A misunderstood gift

Among other things, Andrievsky and his team are working to strengthen Ukraine’s national system for elevator accreditation.

If an elevator goes out of business, for instance, AMDI wants to ensure producers still get paid for their stored grain.

The rise of one or a few co-operative elevators in Ukraine would give farmers tremendous economic leverage, insists Andrievsky. Producers must deal with annual interest rates of 25 per cent and more to operate their farms.

“It’s complete nonsense! For each $100,000 dollars you borrow, you have to give $25,000 dollars to the bankers,” says Bodhan Chomiak, a Ukrainian who left Ukraine and has worked for some 20 years in Alberta.

Director of the consulting firm Lapersa, also based in Kiev, Chomiak thinks the only way to farm in Ukraine is through the injection of sovereign capital or mutual funds in big and well-managed, vertically integrated agribusiness companies. This is in order to achieve economies of scale and to escape having to depend on Ukraine’s banks.

Victor Andrievsky has an alternate plan, however. He is working on a system that would put some money into the hands of the Ukrainian producers through the implementation of a Grain Warehouse Receipt (GRW) system.

This system would be similar to Canada’s Advanced Payment Program (APP), under which producers can get cash advances based on the value of their future crops held in storage.

Andrievsky believes such a system would allow Ukrainian farmers to buy seed, fertilizer and tractors, and even to build storage on their farm or to invest in a co-op. The problem, however, is that the Ukrainian government doesn’t have the cash to launch GRW. “But we benefit from $250 million in aid from the FAO to implement the system,” says Andrievsky.

Strongly confident with the support their project has received in Kiev, Côté and his team fly 400 km southeast to Dnipropetrovsk, capital of the state of the same name. Dnipropetrovsk is Ukraine’s third-largest agriculture state.

There, the team of 12 board a minibus for the 30-km trip to the rural village of Vasilkivka.

What they find seems ideal for launching a first co-operative elevator. An important railway system runs through the village, and the area has 300 producers, each farming an average 750 acres of grains.

More importantly, their farms are concentrated within a radius of 30 kilometres, a key consideration for reducing the cost of grain delivery to the future elevator.

Approximately 20 producers, men and women ranging from 25 to 50 years old, await Côté and his team in the city hall, a grey monolith whose entrance is shaded by a colossal statue of Lenin.

Maksym Maksymov takes the stage and explains the advantages of a cooperative elevator. It would offer storage facilities, plus cleaning and drying.

It would also blend grains for sale by the pool, and he says it would provide these services for half the price charged by surrounding elevators, according to the team’s market study.

The project would be built in three phases: a first silo of 20,000 tonnes would be built near the main railway, followed by two other silos of 10,000 tonnes each.

Questions fill the room, especially regarding the financial obligations on the farmers. There are answers too, but suddenly, voices and tension increase.

One farmer gets up and quickly walks out of the room, followed by almost everyone else.

What happened?

Continued on page 44

In 2013, the Ukrainian government established a domestic quota of 26.5 million tonnes of grain, roughly half of the country’s production. Only surplus grain can be exported. “More than 30 per cent of our population lives under the poverty line. Our government doesn’t want to end up as the government of Egypt did,” says Volodymyr Klymenko, president of the Ukrainian Grain Association. In 2008, the sudden rise of bread prices plunged Egypt into a deep social crisis. Even so, Ukraine has become a major wheat exporter to Egypt and, according to the FAO, it will soon displace Canada as a gobal wheat supplier.

42 country-guide.ca

FEBRUARY 4, 2014

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business Continued from page 42

“The first draft of this project was laid out five years ago. Each time, the Canadians change the rules,” Leonid Chernoknijiyj, president of the local grain producers association told us through an interpreter.

The issue is farmer control. Under the original plan, farmers would have had 80 per cent control of the co-op. Under the new plan, they’d get only 30 per cent.

The reason, says Côté, is that the elevator would be managed as a part of a larger union of co-operatives. “We are not coming to Ukraine to build one or two elevators,” Côté says. “The goal is to spread the co-op movement all over the country.”

Only three producers remained in the room to discuss the project. Among them, they farm less than 500 acres, and produce less than 500 tonnes of grains.

The Canadian team seems very far from its objective to rally at least 70 producers to get the critical mass necessary to erect the first silo.

At the dinner following the disastrous meeting, presided by Chernoknijiyj, the few toasts filled with local vodka don’t quite warm the atmosphere, but Ukrainians and Canadians promise they will work out their differences.

According to Vadim Udovitskiy, chief of Dnipropetrovsk’s agriculture department, it is very hard for the Ukrainian producers, having only known state farms for more than 60 years. “Our producers don’t realize that they can take individual business decisions within a collective movement,” says Udovitskiy.

Undeterred by this first meeting, Camil Côté is now rethinking his strategy.

Four years ago, he launched a similar program in the dairy sector and today seven dairy co-ops operate in the country.

These co-ops have doubled the annual net returns of 1,100 dairy producers, using better feed management and better animal genetics to increase milk production.

“We have done it in the dairy sector,” says Côté. “I don’t see why we would not succeed in the grain sector.” CG

44 country-guide.ca

Oleksly Vadaturskyy, farmer and Ukrainian hero Met on his home turf in the port city of Mykolayiv, Oleksly Vadaturskyy is a hero in his country. Following the dismantling of the former USSR in 1991, the 66-year-old farmer founded Nibulon, a vertically integrated enterprise which has become Ukraine’s largest grain exporter.

Nibulon rents 200,000 acres, owns its own truck fleet, and sells 3.2 million tonnes a year of corn, wheat, soy, sorghum, and sunflower.

Cherished by the international bank-

ers, Nibulon has developed a network of 22 ultramodern grain elevators along two of the country most important rivers, one of which is the Dnipro, considered the Ukrainian Mississippi. Cost of this investment to date is some $470 million.

In November 2007, then president Viktor Yuschenko gave Oleksly Vadaturskyy the title of Ukaine Hero for the social and economic contribution of his company to the country.

Now, Vadaturskyy has been nominated for the World Food Prize.

Land ownership, Ukraine’s time bomb From one extreme, Ukraine has gone to the other. Under the Soviet Union, the country’s farms were centralized into a system of huge state farms. But following independence in 1991, those state farms have have been privatized, with the result that more than seven million Ukrainians own farmland today, averaging eight to 10 acres apiece.

On top of this, Ukraine also has another 43,000 farms of 2,000 acres each.

As well, individual agribusiness companies rent from a low of 10,000 to as much as 1.2 million acres of land. Rents vary from $35 to $50 per acre, serving as an “invisible pension plan” for millions of Ukrainians.

Land ownership is also a very sensitive issue in Ukraine since it is directly related to food security in a country that has known terrible famines in its recent history.

Change is coming, however. But the change may be slow, and it may be hard to interpret.

Months after rumours started swirling about China acquiring rights to lease up to 7.5 million acres in a 50-year deal to feed grains and pork, it is still unclear exactly how much land is covered by the deal.

Also unclear is whether Ukraine’s recent rejection of EU demands will mean Russian corporations will have the inside track on new land acquisitions.

FEBRUARY 4, 2014

production

Early days

By Ralph Pearce, CG Production Editor

The critical weed-free period may start even earlier than we thought... maybe even before the crop emerges

cientists are known for a lot of things, but exaggeration isn’t one of them.

If anything, they’re likely to err on the side of caution, rather than planting their flag and making bold declarations. Their default position seems to boil down to a catechism of “more research is needed,” or words to that effect.

So when a plant scientist of Clarence Swanton’s stature slips even a half-joking comparison to last summer’s discovery of the Higgs bosun particle into a conversation with C ountry G uide about recent work that he’s been supervising, it’s likely time to sit up and take notice.

The Higgs bosun discovery is a certifiable big deal in the world of science.

The particle was first theorized in 1964 as the unseen cause of a number of basic physics observations, but it wasn’t until 50 years later that it was finally found.

ious than battling a plant for a finite amount of water and light. It appears to harm the plant at the cellular level.

“They’re changing their physiology,” Swanton says. “They’re detecting the presence of weeds and those weeds are causing the loss of, for example, anthrocyanins, which are the pigments that protect the plant from UV radiation and are also important in the defence mechanisms against insects and diseases.”

They’ve also found an increase in free radicals in the plant tissues, for example hydrogen peroxide, which can break down cell membranes, damage plant DNA and cause myriad other nasty side-effects.

“This all happens because the corn plant or soybean ‘sees’ a weed,” Swanton says.

So what’s causing these changes that are impairing yield potential far earlier than previously thought? That’s exactly

“We think of plants as being fairly passive out there — but there is nothing passive about this.”

— Clarence Swanton, University of Guelph

So why is a University of Guelph plant agriculture scieintist making these sorts of comparisions? It’s because of work that Swanton is doing to refine some of his own research from 20 years ago that established the concept of the critical weed-free period and laid the groundwork for Integrated Weed Management (IWM) systems.

To put it as simply as possible, Swanton and his team are finding that weed competition can start much earlier than previously thought — even before the crop emerges from the ground. And this form of competition is even more insidFEBRUARY 4, 2014

what Swanton and his associates are trying to learn now. One area they’re paying particular attention to is the quality of light the plants are getting and how the early development of weeds might affect this. It builds on Swanton’s earlier work, which found that red light reflected from weeds, on the far end of the spectrum of light the plants can “see,” and even what’s known as far-red light, just beyond the plant’s “vision,” play a major role in losses due to weeds. This reflected light makes the crop seedling change how it grows underground, especially in the development of root structures.

“We’ve started to look at what’s actually going on when these tiny seedlings come into contact with light-quality changes, such as the far-red light effect,” Swanton says.

Swanton says so far there are two key messages he’s taking from the available data. First, the critical weed-free period is still important. If anything, there’s now a case to back it up even earlier, to cover this early pre-emergence period and justify better early season weed control. Second, there’s new evidence that suggests these early physiological changes in the plant are affecting the yield potential of the plant far earlier than previously thought — from the time of emergence or even before.

“We have evidence to suggest that as the seedling is coming through the ground, as it nears emergence, it’s already detecting its above-ground environment,” Swanton says. “This is a biological system and we think of plants as being fairly passive out there — but there’s nothing passive about this. It’s aggressively measuring and cuing into environmental signals and the biology and genetics are just firing like a control board, making changes.”

One message Swanton is emphatic about is the continuing importance of the critical weed-free period. He has already encountered some questions about whether it continues to be relevant and he says the answer is a resounding “yes.”

“The critical weed-free period is still a valuable guide,” he says. The new research simply explains more clearly why the critical weed-free period works, rather than undermining its importance.

“Control prior to emergence should still optimize yield, so the bottom line is the critical weed free period still stands,” Swanton says. “You want to be sure that when the crop emerges, all the plant sees is the sibling. That’s the bottom line.”

Swanton also says growers should stay tuned for more, since the research from the 2014 season is set to answer some of the major questions the initial findings have raised. CG country-guide.ca 45

Production

Lessons learned — and shared A good attitude and a willingness to learn make all the difference, says Ohio farmer Dave Brandt

By Ralph Pearce, CG Production Editor armers spend too much time doing the same thing season after season, and not enough time looking for new and better ways of growing their crops. In particular, they’re enamoured of high-tech tools and new genetics, yet they aren’t working hard enough to maintain and build soil health.

That’s the message Ohio farmer Dave Brandt has been delivering recently throughout Eastern Canada.

In the past 12 months alone, Brandt has spoken to farm groups in Ontario and Quebec, and has appeared in the Canadian agriculture media providing a farmer’s take on a new USDA soil test (see sidebar).

“What we’re trying to do is get some high carbon established.”

Brandt’s farm experience is applicable to much of Canada because he farms under shared environmental conditions. July and August are his hottest months, and his lowest temperatures are around -20 C for just a few days most winters, while his farm averages about 32 inches of rainfall annually.

Despite these similiarities, Brandt says the important message isn’t that Canadian farmers should do everything exactly the way he does, but rather that they should keep open minds and challenge conventional wisdom, especially when it comes to improving soil health and production levels.

“Too many farmers and too many people are in tune with doing the same robotic thing, year after year, and maybe they don’t like to take a risk,” says Brandt, who farms 1,250 acres of mostly clay soils with five to 10 per cent slopes at Carrol, in the central part of the state.

46 country-guide.ca

By adopting that open mind, Brandt says growers can adopt new methods that keep soil where it belongs and prevent nutrients from migrating off their fields, thus curbing costs and boosting soil health.

Not revolutionary The goal of improved soil health is nothing new, but Brandt has taken soil health to a new level.

A dedicated no tiller since the 1970s, Brandt uses up-to-date tactics including the new USDA Haney soil test and a cropping system that incorporates two cover crops in a three-crop rotation.

He plants rye after corn, then rotates to soybeans, followed by wheat and a second legume cover crop before going back to corn.

“What we’re trying to do is get some high carbon established,” says Brandt, referring to the rye between corn and soybean crops. “We can pick up about 6,000 to 7,000 pounds of carbon biomass, which will give us about a quarter of a per cent organic matter that we can change our soil dynamics with, which is more than we change with a corn and soybean rotation. So we’re building organic matter each year.”

The second cover crop of legumes, mainly intended to boost soil nitrogen, may be supplemented with a bit of rye to continue to augment soil carbon levels.

His corn harvest typically starts in late September and can run through to December 1, which is typical in his area as it is in many parts of Eastern Canada. He has used a drill to no till the rye after corn harvest, and he has also used a fertilizer spreader, including mixing the seed with fertilizer and spreading it on the soil surface.

“Now our newest piece of equipment is a highboy seeder, so we’ll be doing a lot more seeding in August and September over the top of the corn,” says Brandt. “What we’re trying to do is be more profitable and leave the soil in better shape than when we began to farm on it. And with the use of

FEBRUARY 4, 2014

production

cover crops, we’re able to do that and control erosion. Presently on our farm, we’re losing less than a ton per acre per year, because of the no till and cover crops.”

Asked for the most valuable lessons he’s learned over the years, Brandt says the key for him has been accepting the challenges he’s encountered while trying new approaches.

“I was going to call them failures, but they’re not failures, they’re challenges,” says Brandt. “You have to adjust to the things you do as you think outside the norm. If for some reason that cover crop you’ve planted grows too tall, what do you do with it? Well, you have to learn to adjust your equipment and make that equipment work or modify it.”

Tools, not solutions Equipment and the other technologies now available to growers are all very important, Brandt says, but it’s a mistake to think of them as the be-all and end-all. Yet he fears there’s a common belief that precision ag systems, genetic modifications or seed treatments and fungicides are answers to any or all of farming’s hurdles.

That’s another area where Brandt challenges conventional thinking. He suggests agriculture has seen something of a plateau on yields, and that there’s only so much that can be done to alter a plant’s performance through GMO traits and breeding.

“If we look at genetically modified traits, we’re seeing increased yields to the tune of three to four bushels per acre on corn, maybe two bushels on beans,” says Brandt. “But the really exciting development is that we’re learning more about the soils, and as we improve our soils and improve the biological activities of the soil, we no longer have to rely solely on herbicides and fungicides and artificial ingredients to make the crops grow.”

Brandt says technologies such as yield monitors and GPS guidance make farm operations a lot easier, but he insists they can’t be used to replace soil health.

Using the Haney soil test, for instance, Brandt has learned that there’s now a quantifiable value to the no-till practices he’s been using for decades, as well as to the cover crops he’s been planting. As a result, he only needs to apply the fertilizer the grid sampling says is required, with savings as high as 50 per cent in some parts of his fields. His confidence in what the Haney method is telling him has convinced him to adjust his sampling grid. It was on a 2.5-acre grid but in 2014, he’s starting over with a one-acre grid.

“Now we have to go back and look at how we can enhance the growing medium of the soil to make it perform so much better,” Brandt says. “As we do that, nutrients become available, so we need to spend less on artificial ingredients.”

It’s a message worth sharing, Brandt says, and doing so is another of the life lessons that he brings with him to his presentations, whether those invitations come from near or far.

“I’ve come to the conclusion that I can’t farm all of the land in the U.S., so I would rather farm a small portion and do it well, but I also want to teach other people what we’ve done so they do not have to reinvent the wheel,” says Brandt.

“From our failures, maybe we can keep them from failing and be very positive in adapting a new way of doing things.” CG

FEBRUARY 4, 2014

What is the Haney soil test?

Debate has gotten more intense over soil test values.

Earlier in 2013, there were stories out of the U.S. about a return to the wet extraction method of the 1980s to counter the traditional dry-and-grind method that has become the norm. Soil scientists and agronomists countered that it would simply be nice to get more growers to sample their soils — period.

But now there’s a third method being tested and used in the U.S., dubbed “The Haney soil test.” It has been adopted by several well-known U.S. growers and agronomists, including Dave Brandt.

Available in the U.S. through Ward Laboratories, the test was developed by Dr. Rick Haney, a researcher with the United States Department of Agriculture (USDA) Grassland, Soil and Water Research Laboratory in Temple, Texas, based on research conducted in 2000, 2004 and 2008. This new soil sampling regimen can actually account for the long-term effects of no-till cropping and the inclusion of cover crops.

Haney says the traditional strategy for soil sampling is based on applying enough N to achieve what he refers to as “unrealistic yield goals.” Those high N rates cut farm profitability, he says, and also lead to environmental concerns.

The new test sets N application rates focused on average yields. This “enhanced soil test method” can also account for all sources of plant-available nitrogen, i.e. not just nitrate nitrogen (NO3-N) but also ammonium nitrogen (NH4-N) and mineralizable organic N. It’s the mineralizable organic N that is particularly telling. This N isn’t accounted for in traditional soil tests, yet Haney and his colleagues developed protocols for a speedy and accurate measurement of the microbial activity in the soil and then relating it back to the N that’s released as NO3-N and NH4-N. It’s that measuring and accounting for all sources of N that’s available to the plant that results in substantial savings, and that’s what drew Brandt to the test.

There is some sticker shock for growers. It’s cited as three times more expensive than conventional testing methods. Yet the detailed analysis it provides results in sizable savings. Brandt, who’s been no tilling since the 1970s and growing cover crops (including rye after corn) since 1978, likes the more comprehensive test results, including phosphorus (P) and potassium (K) levels.

As a result of two years’ use of the Haney test, Brandt says he has reduced his fertilizer costs by 50 per cent on his 1,250-acre farm.

country-guide.ca 47

Production

Why not spring wheat?

2014 might be the right year to jump into spring wheat. Or maybe not

By Ralph Pearce, CG Production Editor sk Ontario farmers what they think about spring wheat, and you’ll hear the crop is great… if you’re farming in Western Canada. Maybe spring wheat is even alright for New Liskeard, or for the highlands south of Georgian Bay. But for anyone else, the crop is a loser.

Or so you might think.

Ontario has 800,000 acres of winter wheat in the ground this year. How long it will stay in the ground is another matter. Agronomists say some of those acres are in a fight for their lives, due to winter kill and frost heave from a wet planting season and a bitter January.

It puts the complaints about spring wheat into perspective. It’s true that spring varieties tend to have lower yields and are often more susceptible to fusarium head blight (FHB). To an extent, these drawbacks are readily conceded even by spring wheat advocates.

But crop advocates insist that with greater attention to planting dates and with closer monitoring of crops at heading, these concerns can be managed.

Peter Johnson is the first to acknowledge the supposed failings of spring wheat. The provincial average yield on spring wheat is 51 bu./ac., compared to winter wheat at 80.

Yet Johnson maintains that much of that spread is a result of late planting. In 2012, when the planting season started in March, the spring crop posted an impressive 59-bu./ac. average.

“If you track my trend-line yield on spring wheat, it’s terrible,” says Johnson, the cereals specialist for the Ontario Ministry of Agriculture and Food. “It’s a one-third bushel per acre per year increase, and you can’t survive on that. But we’ve also had growers in that area north of Goderich, we’ve had growers in the Harriston area, and we’ve had growers in the Ottawa Valley with 110 bu./ac. spring wheat. Does it potentially have a place? The answer is ‘absolutely.’ But it all comes down to: Can you do the job right?”

Perhaps “doing the job right” also means thinking outside the box, such as frost seeding. Given the wet conditions at planting for winter wheat across much of southern and central Ontario, there were a few growers who wanted a wheat crop planted in the fall 48 country-guide.ca

and who opted for frost seeding. Johnson says several Niagara growers now report their wheat had never gone in better. If frost seeding works for winter wheat varieties, he says, there’s little reason why it might not work for spring wheat.

Aside from the vernalization required for winter wheat, spring wheat behaves in much the same manner. Planting date is critical, and uniform crop emergence is the best management tool against widespread damage from FHB. And spring wheat, adds Johnson, provides a better opportunity for a cover crop.

But, he repeats, the key is planting date.

“It’s a heat thing,” Johnson says. “Our spring wheat varieties simply don’t tolerate heat stress. If you want big yields, you don’t plant on May 10.”

So, is there a hard target date for planting?

Johnson qualifies his answer by acknowledging the sheer size of Ontario, with varied climatic conditions, not to mention dozens of microclimates across the province. In the London area, for instance, Johnson has told growers that if spring wheat isn’t in the ground by April 10, then don’t try. Up around Owen Sound, that cut off is April 20.

“By May 1, my yield is tanking and my fusarium head blight risk is increasing, so I have to be a diehard grower to think that I’m going to be able to get 110-bushel spring wheat on May 1, even at Owen Sound,” says Johnson.

In New Liskeard, by contrast, growers seldom get to the point where it’s too late to plant spring wheat.

Instead, the trick there is to determine whether the crop will mature before the first frost arrives.

Fusarium risks In eastern Ontario, FHB is the biggest concern.

Clare Kinlin, sales manager for MacEwen’s crop division, based in Maxville, Ont., says the disease is almost inevitable for growers planting spring wheat in his area.

According to ministry resources, fusarium is rarely a problem where temperatures climb well above 30 C, a level that stops fungus growth. But most parts of eastern Ontario never get that hot.

“It just does not matter what you do to that crop, the likelihood of having quality issues is phenomenal,” says Kinlin. “If you get a wet year FEBRUARY 4, 2014

PRODUCTION

like we did this year, you get uneven head emergence, and as soon as you get that and it rains, you’re going to have fusarium.”

“We could not get the stuff to dry down this year at all,” Kinlin complains.

“You talk to the elevators who received wheat and it was as long as the corn harvest — six weeks. The guys were still taking wheat in on the first of September, and the quality was awful.”

Kinlin admits it’s great to have wheat in the rotation, but he believes a spring wheat crop in eastern Ontario means less chance of a good cover crop. Protein is another factor that Kinlin encounters. In 2012, when growers were planting crops in April and spring wheats were yielding up to that 59-bu./ac. provincial average, the protein values were lower.

“If you want to be a spring wheat grower, you have to manage it, you have to plant at high seeding rates, you have to split your nitrogen, you have to apply fungicides,” says Kinlin. “Wheat will respond to management, so you need to make your management decisions correctly.”

“But as far as spring cereals making a comeback,” says Kinlin, “it’s going to be tough.”

Options in the south Despite the challenges, Martin Harry believes spring cereals could rebound in 2014. “With corn prices down, there will be more guys considering cereals,” says Harry, marketing manager for SeCan in Eastern Canada.

“I have growers call me from Oxford

County, saying they want barley,” says Harry. “But my first question is: Where are you going to market it? And they say they’ll go to their local elevator. And I say, ‘Have you asked them whether they’ll even take oats or barley?’ They don’t want it at elevators in the south.”

Even if you can find a market, Harry doubts the economics work. When spring cereals do make sense for growers in the southwest, he says, it’s rarely because of grain quality. Instead, they’re looking for straw, or they may want a chance to get a forage crop started.

“The good managers won’t change their rotation,” Harry says. “You have to look at the economics of it.”

The bottom line Economics are also a big consideration for Rob McLaughlin, who believes a key issue with spring wheat is to set the expectations higher. McLaughlin, district sales manager for C&M Seeds, based near Palmerston, Ont., emphasizes setting a crop budget. On their home farm, their spring wheat budget is based on a yield of 65 bu./ac., although they are disappointed if the crop doesn’t hit 70.

“Some guys are going to say, ‘Well, that’s too high.’ Well, I think that if you’re not getting 65 bushels, we have to find a way to get you there,” says McLaughlin. “When you look at it in a crop budget — and mine is a fairly economical one — I can tell you right now that spring wheat pencils out far better than corn, it pencils out far better than oats — and barley — and it pencils

out far better than canola. It just looks very good.”

Nor is he alone. “There have been some huge success stories,” says McLaughlin. Yes, there have been yields in the 50s, but there are also yields over 100 bu./ac. “The thing that seems to be in common with the guys in the 100-bushel range is that they’re putting some sound management practices in place.”

McLaughlin believes in longer rotations. Research has proven that dropping wheat from the rotation could cost a grower up to five bu./ac. in soybeans and as much as 15 in corn. Losing wheat also set the stage for soybean cyst nematode (SCN).

“We need to continue to have a proper rotation,” says McLaughlin.

“The last thing we need to be doing is planting beans on beans.”

Also on McLaughlin’s mind are cover crops and their ability to generate organic matter, whether it’s by growing red clover or a mixture of small grains. Other agronomic practices help too. “We’re almost spoon-feeding the crop,” says McLaughlin, adding that such fertilizer strategies were unheard of in spring wheat, even a few years ago. “It used to be one application in the spring, and let it go. Now it’s coming to the point where you can manage it when you need to.”

Above all, however, McLaughlin agrees with Johnson on getting spring wheat planted early. Otherwise, lower your expectations, he says. “Get it out of the ground quickly and early and even.” CG

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FEBRUARY 4, 2014

country-guide.ca 49

Production

Cr op pr otection

The cheque is in the mail Company loyalty programs are too complicated, driving up the cost of crop protection products and getting in the way of good decision-making

By Warren Libby, Savvy Farmer just received a somewhat unexpected cheque in the mail for $500. It was a government rebate for replacing my furnace. I had forgotten that it was even coming, and while I’m not one to look a gift horse in the mouth, I began to wonder what was behind that cheque.

Apparently the government thought that it would be a good environmental initiative to encourage me to replace my old inefficient furnace. But wait a minute. My furnace was a relatively new high-efficient type when its heat exchanger cracked prematurely.

So my furnace was “red-tagged,” meaning it had to be replaced within 90 days or my gas supply would be shut off. I really had no choice but to replace that furnace, rebate or no rebate. And since that rebate was not tied to the purchase of any particular brand, it did not sway my choice of brands in any way.

Seemed like a waste.

Then I began to wonder what it cost the government to give me that unnecessary rebate. I can only image the bureaucracy required to develop the program, advertise it in newspapers, on radio, in direct mail and on their website. And what about all those fine folks who process the rebate forms, negotiate complaints with applicants, and finally cut cheques?

Plus there are accountants, auditors, and product managers who prepare reports back to the government to tell them what a fine job they did to replace my furnace so that it no longer pollutes our planet.

Then I realized that this was my money that they were taking credit for rebating back to me.

Sound familiar? How many pesticide rebate cheques did you recently receive and wonder exactly what they were for? Of course you remember reading somewhere last spring that if you bought a certain company’s six products in a certain quantity by a certain date you would get a rebate. And if you combined that with the purchase of a certain seed variety, the rebate would be doubled. But if you are like me, reading these program rules is like reading the contract at Avis car rental. It is virtually impossible to figure out exactly what your rebate will eventually be or the net cost of the products you just bought. Well I have a secret to share. You’re not alone. Many of the sponsoring companies gave up trying years ago and now hire outside firms to collect your purchases and figure out your rebate at the end of the growing season. The unfortunate part is that 50 country-guide.ca

when you buy your spring pesticides you never know exactly what they are going to cost until you get that rebate cheque at the end of the year. Even then, you might not be able to figure it out.

If you are like most farmers, while you love getting those somewhat unexpected cheques in the fall, you really don’t understand why the chemical companies do this. You see the millions of dollars spent on advertising and administration of these programs to send you a rebate, and shake your head wondering why they don’t just reduce the price in the first place. Wouldn’t that be simpler?

Let me take you back about 15 years to when the rebates got rolling. That was the peak of the crop protection chemical industry and patents on the really popular products were about to expire. Based on experience elsewhere in the world, companies feared that the Canadian market would be flooded with generic equivalents of their products, but at much lower prices. To make this even more concerning, the government loosened the registration rules making it much easier and faster for a generic to gain a registration and start marketing in Canada. Therefore, to thwart the pending generic threat, rather than simply dropping prices and taking a big hit on profits, they turned to selective rebates which were far less costly than across-the-board price decreases.

These started modestly with a few products where there was an immediate concern about generics. Then the company marketers learned they could “bundle” less popular products with top-selling brands to “encourage” growers to maximize the number of brands purchased from one company. This further evolved to include just about every product in the company portfolio as well as seeds, and rebates were in full swing. Rebates have become big business with some quite substantial savings per acre.

Personally I don’t like rebates. In my opinion they detract from the professionalism of our industry. I believe rebates complicate the decision-making process and encourage growers and retailers to consider products they perhaps shouldn’t. I also believe they add to the cost of pesticides. After all, that advertising and the administration is not free, and the best rebates tend to be on the most expensive products.

Finally, since most rebate programs are so complicated that not even the sponsoring companies can figure them out until the season is finished; they have february 4, 2014

production little impact on the final decision. I also dislike rebates since they force farmers to give up too much of their private information, a very valuable asset they often underestimate. When you sign up for most rebate programs, you must agree to allow the sponsoring company to collect and use your data. Call me paranoid, but giving up this data to a foreign or undisclosed company seems a bit reckless.

So what are the chances rebates will end? It’s unlikely to happen any time soon. Change requires dissatisfaction and right now there is little dissatisfaction within the big chemical companies. Agriculture is robust, as are pesticide sales.

For them, rebates are just a cost of doing business, and if eliminated, they would have to reduce prices across the board.

There would also be no easy way to bundle popular products with less popular ones, or with seeds, making marketing more complicated.

Rebates will continue to be a reality until one of three events happen. The first would be a major downturn in agriculture which would force chemical companies to really tighten their belts. Faced with a need to reduce expenses, most will choose to give the boot to marketing programs like rebates before they fire staff or reduce research. The second event would be an increased tendency by farmers to choose products that are net priced without rebates. There are already several companies that currently offer this option. The third possibility would be if one of the major pesticide companies had the courage to show true industry leadership by eliminating rebates with the expectation that others would follow. But I don’t see any of these events happening any time soon.

So put this magazine down right now, and check the mailbox. There could be a chemical rebate cheque there with your name on it! CG Warren Libby is president of Savvy Farmer, a web-based service for farmers and crop protection dealers.

He previously held leadership positions in several crop protection companies and is the former chairman of CropLife Canada.

Do you have a crop protection issue you’d like Warren to write about?

Send any suggestions to: warrenlibby@savvyfarmer.com.

february 4, 2014

Coming to a farm near you: On-farm seed treatment

By CG staff

T

he Canadian division of Bayer CropScience and a Winnipeg-based grain handling manufacturer are hoping one of your next equipment purchases will be a more accurate seed treater for your farm.

Ag Growth, the equipment manufacturer, announced their plans in late 2013 and recently launched the product. They call the system STORM (Seed Treatment Optimized Rate Metering).

Development of Storm followed meetings between Calgary-based Bayer and growers and retailers at seed treatment application seminars in 2011, at which the company reported hearing what it calls overwhelming concern from growers about their ability to effectively treat seed.

In a media release, Bayer credited one of its Saskatoon-based staff, Danick Bardi, with “developing the framework for a tool that would deliver precision seed treatment application in a convenient, efficient and integrated system.”

The Storm, they said, is meant to be “easier and more convenient to use than any applicator currently on the market.” The unit can be connected directly to a seed bin, with seed treated during the transfer process to another truck or bin.

The Storm, produced by AGI subsidiary Westfield Industries at Rosenort, Man., places a seed treater in-line with a “specifically designed” Westfield TFX2 100-41 auger, which the company said “allows you to finally treat your seed with absolute accuracy.”

Westfield, on its website, says the Storm’s metering conveyor measures seed rate to a margin of error of plus or minus two per cent, and the programming automatically adjusts the unit’s peristaltic pumps to match treatment flow for optimal coverage.

Westfield also describes the unit as suitable for a wide variety of seed types including wheat, barley, oats, peas and lentils, adding that it automatically compensates for differences in seed density and seed type.

According to the companies, by inputting the density of the seed being treated, the system calculates the mass flow rate of grain and automatically applies the correct amount of treatment, removing the uncertainty and waste associated with most applicators.

The Storm, which runs off a 32.5-hp Kohler motor, is listed with a handling capacity of up to 30 bushels per minute, with application capacity of up to 600 ml per 100 kg for its current tip configuration.

The unit also comes pre-programmed to handle Bayer CropScience seed treatment products but can store “additional custom recipes.”

“We are confident that the safety of the closed treater, the metering and accuracy of application will remove growers’ frustrations and uncertainty when treating seeds and will result in a significantly positive impact on their crops,” Paul Brisebois, vice-president of marketing at Winnipeg-based AGI, said in the media release.

The Storm unit is said to work with a range of seed types, including cereals, peas and lentils

country-guide.ca 51

PRODUCTION

#PestPatrol

with Mike Cowbrough, OMAF and MRA Have a question you want answered?

Hashtag #PestPatrol on twitter.com to @cowbrough or email Mike at mike.cowbrough@ontario.ca.

WINTER WEEDS Often, winter wheat gets left to fend for itself with weeds — but glyphosate-resistant Canada fleabane is starting to change the rules of the game

f we do nothing to control glyphosate-resistant Canada fleabane before, during or after the planting of a winter wheat crop, we can easily deposit tens of millions of seeds per acre back into the soil. That’s why, for about half of those who are reading this, I’m going to suggest that you do something that you infrequently do in winter wheat: control weeds.

Informal surveys have suggested that about half of all winter wheat acres are sprayed with a herbicide. This makes economic sense since winter wheat is an incredibly competitive crop and historically, there has been little grain yield response to controlling weeds. If a herbicide is applied to winter wheat, most farmers say their main reasons for doing so are to improve harvesting ease, straw quality and grain sample quality. All are good reasons, but let’s add “reducing glyphosate-resistant Canada fleabane seed return” to the lists of reasons for controlling weeds in winter wheat.

When Canada fleabane seed germinates in the fall, the plant can flower and produce viable seed prior to harvest if left uncontrolled. Recently, the University of Guelph has shown that the active ingredient, saflufenacil (i.e. Eragon), is effective at controlling emerged glyphosate-resistant Canada fleabane. When applied in the fall prior to winter wheat emergence, Eragon at a rate of 29 g/ac. will control emerged Canada fleabane plants, and there is some evidence to show that it also provides residual control of early-spring-germinated seedlings, although there is a possibility that not all springgerminated seeds will be controlled. If an effective

52 country-guide.ca

Canada fleabane control in winter wheat with a preemergence application of Eragon (l) compared to an unsprayed area (r). herbicide cannot be applied in the fall, there are a number of herbicides that can be applied in the spring to control glyphosate-resistant Canada fleabane (Table 1).

Lastly and most importantly, after wheat harvest, you have about four weeks to manage annual weeds that are growing in the stubble before they start to produce viable seed. In one field I surveyed this past fall, at six weeks after harvest, there were roughly 59 million Canada fleabane seeds per acre.

We need to stop these plants from producing seed, whether that be by tillage, a multi-species cover crop or a post-harvest herbicide application that includes 2,4-D. Otherwise we will make it more challenging to successfully control glyphosate-resistant Canada fleabane in the following year, particularly if we plan to grow soybeans. In the next issue, and final instalment in this series of three columns, we will tackle management strategies for that crop.

TABLE 1. Visual control of Canada fleabane with herbicides applied to winter wheat in the spring.

Product

Rate per acre

Visual control (per cent)

2,4-D Ester (660 g/l)

0.52 l/ac.

94

Infinity

0.33 l/ac.

92

Dichlorprop/2,4-D (610 g/l)

0.48 l/ac.

90

Trophy A + Trophy B

0.24 l/ac. + 0.45 l/ac.

88

FEBRUARY 4, 2014

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Always read and follow label directions. Converge® is a registered trademark of the Bayer Group. Bayer CropScience is a member of CropLife Canada. *Based on five trials at three different Ontario locations in 2011. Trials were conducted comparing weed control with pre-emerge herbicides in corn. Trials were funded in part by the Grain Farmers of Ontario. The assistance of OMAFRA through the OMAFRA/University of Guelph Partnership is also acknowledged.

LIFE

A place for women Yes, many women are making progress on the farm.

But not enough women, and not fast enough

By Helen Lammers-Helps omen may have been the first farmers, but it has been a long trek to climb to the top in today’s agriculture. Finally, however, women are making progress.

Census data show between 10 and 20 per cent of farms are operated by women. Plus, on many more farms, women are key players taking on the marketing, accounting, human resources, herd management, and other essential roles.

Advances in technology mean there’s less need for brute strength in farming, and the trend towards larger farm operations is opening up more opportunities for women to take on leadership positions.

But that doesn’t mean the battle has been won.

Too often, women still aren’t able to work to their full potential on the farm, says farm family coach Elaine Froese of Boissevan, Man. As someone who works closely with farm families, Froese sees daughters overlooked as potential successors solely because of their gender. She has also seen cases where women are actively involved in farm operations but their opinions aren’t valued, and she sees daughters-in-law who have no voice except through their husbands.

“And if the husband is passive, then they don’t have a voice at all,” says Froese, who quickly adds

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her core belief: “Everyone involved in the farm should have a voice at the table and work collaboratively.”

Success in farming requires making the best use of farm resources, Froese says, and that includes the human resource, regardless of gender.

Every farmer might agree this is true, yet too often we behave counterproductively without even being aware of the messages we’re sending. For example, the language we use is important, says Lew Bayer, a trainer with the Civility Experts. “Language in the workplace needs to be respectful,” Bayer says. That means not referring to grown women as “girls,” “gals,” “skirts,” or “little ladies” or making disparaging comments about women being “too emotional.”

Bayer recommends following the 4E Philosophy: “Everyone gets Exactly the same respect in Every situation Every time.”

This also means avoiding disrespectful non-verbal signals. These include dismissive gestures such as eye rolling, holding up your hand in a “full-stop” motion or using a condescending tone of voice.

TURNING THE TABLES For women who don’t feel they are getting equal respect, Bayer recommends learning how to assert yourself without being aggressive. Doing nothing is not the solution, she says. “Silence is considered permission.”

Women who want to be taken seriously can sometimes be their own worst enemies, Bayer explains. “If you want to be taken seriously, don’t take brownies to the office or offer to head up the decorating committee.”

Also insist on opportunities to upgrade your skills. This past December, 240 women travelled to Chicago for the third Executive Women in Agriculture conference. The No. 1 thing those women wanted was more information on risk management, says conference organizer, Jeanne Bernick.

FEBRUARY 4, 2014

LIFE

To that degree, it was the same as any general farm conference. But their second choice was different. It was for more information on professional development, particularly leadership skills. “They want to have their voices heard,” explains Bernick.

Not surprisingly, these women are also interested in work-life balance issues, like dealing with aging parents and childcare.

Conference attendance has been growing and Bernick says another conference is planned for 2014.

More and more women are taking on key decisionmaking roles in agriculture, she says. For example, 50 per cent of Iowa farmland is owned by women.

More women are returning to the farm in management roles, she adds, or are continuing to operate the farms after their husbands have died.

YOUR RIGHT TO BE THERE In addition to coaching, Froese farms with her husband. She admits she has found herself as the only woman at an agricultural meeting on occasion.

“Women need to make it inclusive in their head,” she advises. “Don’t let others’ expectations keep you out.”

To help build their confidence as leaders, Froese recommends women take leadership courses, get involved in organizations like Toast Masters or take positions on boards.

Since most women must take on the majority of childcare and housework duties, finding time to be a full contributor to the farm can be a challenge, says Froese. Consider hiring out some of the domestic work, she recommends. Your input on the farm may prove many times more valuable than what you might pay for such help.

Yes, pregnancy and maternity leaves can be an issue on the farm, but having your own business can also create opportunities for balancing work and family, suggests Rhonda Driediger, owner of Driediger Farms, a 160-acre fruit farm in Langley, B.C. “You may be able to have more control of your hours,” Driediger says.

In addition to growing her own raspberries and blueberries, Driediger also buys from other local growers for her instant-freeze processing plant.

Farmers from some cultural backgrounds don’t want to deal with her because she is a woman, but that doesn’t bother Driediger, who says she picks who she buys from and looks for reputable farmers so she can build long-term relationships.

Driediger spent several years in project management with an engineering firm before returning to the family farm and eventually taking it over completely. She sits on several boards including the Raspberry Council and she is chair of the B.C. Ag Council. She highly recommends women get involved in industry boards.

“Industry involvement is key to being a good manager,” Driediger says. “You meet colleagues… get a different perspective and get ideas you can use in your own farm business,” she says. “And it helps you learn to speak up and get your point across.”

One way to shorten the learning curve to success is to find a mentor, adds Simi Valley, California life coach, author and motivational speaker, Mary Morrissey. Morrissey will be speaking at the Advancing Women in Agriculture conference in Calgary in late April.

Mentors are those who are a few steps up the ladder, but who reach down to help you, Morrissey says. “You still have to take the steps but they understand what you need to do.”

To find a good mentor, Morrissey says you need to figure out what area of your life you really want to bring change to. “Then look for people in your industry who have achieved in that area in a practical, measurable way. Be really specific about the result you want,” she advises.

We all benefit when everyone is able to work to their full potential, using all of their skills and strengths, these women say. By developing their leadership skills, women can ensure their voices are heard. CG

Advancing Women in Agriculture conference Looking to develop leadership skills? The Advancing Women in Agriculture conference is sheduled for Calgary, Alta. on April 28 and 29, 2014.

The program features sessions on leadership, communication, money management, networking, work-life balance and mentoring.

For more information, check out the conference website at www.advancingwomenconference.ca.

FEBRUARY 4, 2014

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h e a lt h

The beat goes on (with heart drugs)

By Marie Berry t one time if you had a heart condition such as high blood pressure, high cholesterol, or even heartbeat irregularities, you certainly were not considered healthy. If you had experienced a heart attack or stroke, your outlook was considered grim.

Today, however, there are drugs to prevent and manage many such conditions, so you may now have the ability to treat and even prevent heart diseases.

Unlike most medical conditions, heart conditions have few if any symptoms and you often dismiss them as not getting a good night’s sleep, or even muscle strains or aches. High blood pressure and high cholesterol are considered silent killers because anywhere from half to a third of all people don’t even know that their blood pressure or cholesterol are high. It is important to have regular checkups and to know your risk factors.

Whenever you are prescribed a new drug, ask whether it replaces another or if it is in addition to others you are already taking.

When you see your health-care professionals or are admitted to hospital, your medication may change.

Duplication of medication can occur and naturally you want to avoid this. You may obtain a new medication which is meant to replace one of your previous ones, or alternatively a new medication may be meant to be added to your existing regime.

Heart drugs can be classified into groups, and these drugs have common endings, for example -pril for blood pressure lowering ACE inhibitors, -statin for cholesterol lowering drugs, and -olol for beta blockers used to relax blood vessels.

Some heart drugs, most notably water tablets and alpha blockers, can produce a drop in your blood pressure, especially when you get up from a lying or sitting position. You may not like the feeling of lightheadedness, and your risk for falls can increase. With time your body may compensate for the effect, but if you are still bothered, shake your legs before rising, get out of bed or up from a chair more slowly, or even flex your calf muscles.

Skid-proof shoes or slippers as well as arms on a chair or bed rails will also help.

One significant interaction for heart medication is with grapefruit, both juice and the fruit. With grapefruit, the metabolism of some drugs like statin cholesterollowering drugs and calcium channel blockers is reduced, which means more of the active drug is left in your body.

The result is too high a dose. Avoiding grapefruit is usually recommended. Choosing another juice is ideal.

Many non-prescription remedies can cause problems with heart conditions, resulting in reduced effectiveness of your medications. Decongestants found in many cough and cold products increase blood pressure, which means you will need to read the fine print on packaging in order to identify the ingredients. Ideally they should be avoided. Non-steroidal anti-inflammatory drugs such as ibuprofen and naproxen cause fluid retention, meaning your kidneys must work harder. Acetaminophen is a suitable alternative for aches and pain.

Heart medication regimes can be complicated, but if you take your medication as recommended you will have improved heart health. If you need to take numerous tablets or take them many times each day, ask if there are options that may simplify your routine. Combination tablets which contain two active ingredients or longacting tablets may mean fewer tablets. Compliance packaging which organizes your medication may also help.

Of course medication is important, but don’t forget the non-drug recommendations you may be given, such as weight loss, increased physical activity, and a low-fat, high-fibre diet.

If you are struggling with your heart medications, don’t just give up. It is important to take the drugs in order to keep your blood pressure or cholesterol levels down.

If you experience a side-effect, tell your health-care providers. They will be able to suggest an alternative that will work for you.

You only have one cardiovascular system, so you want to maintain it, just as you would the engine of your car. Prescribed heart medications can help. Use them wisely.

Marie Berry is a lawyer/pharmacist interested in health and education.

Everyone is at risk for osteoporosis, men as well as women, but it is often considered a woman’s disease.

Unfortunately, it is early in life that bone mass is built, which means that later in life when osteoporosis is diagnosed, building bone mass and preventing breaks can be difficult. Several new osteoporosis drugs are available, and you may have seen them advertised in magazines and on television. Next issue, we will look at some of these newer agents, but in the meantime, check to see that you have enough calcium in your diet!

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FEBRUARY 4, 2014

NOW AVAILABLE “What will you say when you meet Nelson Mandela?” It was September 1998. Mr. Mandela was in Toronto for a gathering of schoolchildren at what was then called the Sky Dome. The event would launch the Nelson Mandela Children’s Fund Canada.

I was in Toronto for meetings on the University of Toronto campus. I met Gordon Beardy, an Anglican bishop, in the hotel lobby. Gordon had been chief of his First Nation in northern Ontario before his election as a bishop.

He was leading a group of Aboriginal people who had been selected to meet Mr. Mandela before the children’s event.

Gordon and I chatted over a cup of tea. I put the question.

“What will you say when you meet Mr. Mandela?” He smiled and said he would think it over.

Next morning the First Nations delegation invited me to walk with them to the Sky Dome. As we drew closer, I became aware of a huge movement of people, mostly children, heading in the same direction. They were coming out of the subway, descending from buses and walking briskly. There was a feeling of determination and great expectancy everywhere. When we reached the venue, I said goodbye to my friends and turned back toward the university.

For 20 minutes I walked against the flow of the crowd. It was an astonishing experience. Thousands of children were making their way to see Mandela and to hear what he had to say. They were orderly and excited. Not one child was hurried along by a teacher or chaperon. They knew what the day was about. I wondered if there was another 80-year-old person, anywhere in the world, who could enthrall 40,000 or 50,000 children with their presence and their words.

Mandela loved children. He told the children at the Sky Dome: “You have made me feel like a young man again with my batteries recharged. The greatest joy has been to discover that there are so many children in this country who care about other children around the world.”

Back at the hotel I posed the question to Gordon again.

“What did you say?” He chuckled with typical Aboriginal humour and replied, “I said, ‘Welcome, Mr. Mandela, to Canada’s biggest sweat lodge.’”

Mandela proved that a good idea, a right idea, cannot be silenced by putting a person in prison. CBC television journalist Barbara Frum interviewed him two days after his release from prison. She asked: “In your mind, in your darkest hours, did you think of yourself as Job or Moses?” Job was the biblical figure who asked, “Why me?” while Moses led his people from slavery to freedom. Mandela replied, “It is not proper to think in those terms. That is for others to decide.” He went on to express his hope that all children, black and white, and all people, would live together in harmony and equality.

During the mourning period in South Africa, a nine-year-old girl brought flowers and a card to a memorial. A Canadian reporter asked her what she knew about Mr. Mandela. She replied, “He was a good man. He made everyone in our country equal.”

“No one is born hating another person because of the colour of his skin, or his background, or his religion. People learn to hate, and if they can learn to hate, they can be taught to love, for love comes more naturally to the human heart than its opposite.”

— Nelson Mandela Suggested Scripture: Isaiah 11:1-9, Matthew 5:43-48 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon.

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country-guide.ca 57

ACRES

Leeann Minogue is the editor of GRAINEWS, a playwright, and part of a family grain farm in southeastern Saskatchewan

Up in the air With his parents on a plane to the Caribbean, Jeff gets stuck on the ground... quite a bit of ground eff hadn’t had a full night’s sleep since his parents left for Cuba.

“I decided not to bother getting a cell plan,” Jeff’s father, Dale had told Jeff on the way to the airport on Tuesday morning. “If there’s an emergency, call the resort. Or email.”

“It’s January in Saskatchewan, Dad,” Jeff had said. “Nothing’s going to happen that you’ll want to know about.”

But 10 minutes after Dale and Donna walked through airport security, Jeff’s cell rang.

“The Jacobsons decided not to rent those two sections of land five miles south of your place anymore,” said Greg Mallory on the other end of the line. “Are you and your dad interested?”

The Hansons hadn’t been actively looking for more land to rent. But this was good land. Good soil, and the Jacobsons had looked after it well. Jeff wouldn’t have expected the Jacobsons to give it up.

“Guess you didn’t hear. Fred’s got cancer,” Greg said.

58 country-guide.ca

“That’s too bad,” Jeff said. “But I’m glad you thought of us. Look, my dad’s off on vacation. Can I get back to you in a week?”

“I’ve already got another offer,” Greg said.

“Fred’s cousin wants to farm it. Said he’d pay 28 bucks an acre. I told him I’d get back to him by Friday noon, one way or the other. But I thought I’d give you guys a chance to match that first.”

“OK, Jeff said. “I’ll talk it over with Dad.” “Keep in mind,” Greg said, “I’m looking for a long-term deal — whether it’s you or Jacobson’s cousin. I don’t want to have to look for someone new every two years. And I’d like to keep both sections together.”

“Makes sense,” Jeff told him. “We’ll get back to you by Friday morning at the latest.”

That was easier said than done.

Once he started trying to get hold of Dale in Cuba, Jeff was embarrassed to find himself agreeing with what his grandfather Ed had said when Dale and Donna had first booked their trip.

FEBRUARY 4, 2014

acres

“Cuba?” Ed asked. “Why would anyone take a vacation in Cuba? Do you know how many Cubans have risked their lives to get away off of that island?”

Jeff wasn’t as concerned about Cuba’s history and politics as he was about its lack of Wi-Fi. Jeff sent emails, but Dale wasn’t getting them.

On Wednesday morning, Jeff’s mother Donna had emailed from her own account. “Resort rustic, but beautiful. Internet SLOW on lobby computer. Your dad gave up. I likely won’t check again. Off to beach.”

Jeff tried and tried to phone the resort on Wednesday night. But every time he got through, someone shouted at him in Spanish over a crackly phone line.

On Thursday, Jeff considered contacting the Cuban government, and asking the police to track down his father and force Dale to turn on his cellphone for 10 minutes. Damn the cost.

But then Jeff pulled himself together. He could make this decision.

It was good land. In a great place. If someone else rented it, it might be decades before it came back on the market.

It was a fair price. Lower than some of the neighbours were locked into. Maybe not as low as the market might go if grain prices kept falling. But fair for now.

Jeff wanted to grow the farm. With two kids of his own already, he wanted to make sure he was set up for a strong future. But were the Hansons in a position to expand this much right now?

Two more sections to seed, spray and harvest would put a lot of pressure on the Hanson family.

With their farm in the middle of the Bakken oilfield, they already had trouble finding and keeping farm help. The weather had pushed seeding late in 2013 — if that happened again and the Hansons had two more sections to seed, could they even do it? Jeff supposed they could think about buying another seeder. But even if it made financial sense, who would run it and keep it filled?

Jeff’s mother was trying to become less involved in the farm, if anything, and his grandfather wasn’t getting any younger. Maybe this wasn’t the best time to make the Hanson farm almost 25 per cent bigger.

Two or three years ago this would have been a no-brainer. But canola prices were falling every day, and there was nothing but gloom in the outlooks.

A few good years had driven up input costs. High prices for seed and chemical and low prices for wheat and canola might make this a money-losing prospect. Was it too big a risk?

Jeff asked his grandfather.

“Interesting opportunity,” Ed said. “But I’ve got to go. Wednesday is fish fry at the rec centre, and I’m in charge of the tartar sauce.” Everyone had february 4, 2014

been surprised when Ed had announced in early January that he was buying a motorhome and heading for Yuma. Ed had never shown much interest in leaving the farm before, but now he’d suddenly settled right in to a new life. It was as if he’d been born in a trailer park.

“Let me know what you decide,” Ed said. “And keep an eye out at the post office. I mailed you some pictures of the desert sunset.”

“Sounds good. Watch for fish bones,” Jeff said, hanging up.

Just minutes after Dale and Donna went through airport security, Jeff’s cellphone rang Jeff’s wife Elaine was optimistic. “Prices are low now. They’ve been low before. We need to take a long-term view,” she’d said. They’d looked at the numbers together. With good weather and a little luck, it could work.

On Friday morning, Jeff had made the call.

“We’ll take it.”

Buyer’s remorse set in as soon as he hung up.

“Dad can’t even leave the farm for 10 minutes and I’m acting like a poker player in Vegas,” he told Elaine. “Three generations, and I’m going to be the one who loses this place.”

The week dragged. While Jeff was driving his son to preschool, he rehearsed different ways to tell his father about the deal. While he was filling in for the skip at his curling league, he ran cost-of-production numbers through his head until his rink was down eight nothing. His eyes were bloodshot.

Finally it was Tuesday. Jeff went to the airport alone to pick up his parents.

He pulled up to the door so they wouldn’t have to walk far in their summer coats.

“What’s new on the farm?” Dale asked, as soon as he got the door shut.

Jeff decided to do it quickly. Like pulling off a bandaid. “Greg Mallory phoned,” Jeff started, then took a deep breath and broke the news. He stared straight ahead, scared to look over at his father.

“I figured you’d do that,” Dale said.

“What?” Jeff almost jumped out of his seat.

“Greg called me while we were waiting at the gate last week. I told him to call you. I knew you’d do the right thing.”

“But prices are falling! We don’t have enough help! What if we have another flood? Or more hail?”

“We’ll figure it out,” Dale said. “Now tell us what the grandkids have been up to.” CG country-guide.ca 59

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