Cgw140204

WESTERN EDITION

country-guide.ca

February 4, 2014 $3.50

TOUGH CHOICE

YOUNG FARMER DUSTIN WILLIAMS SEARCHES FOR LAND HE CAN AFFORD

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CONTENTS

FEBRUARY 4, 2014

BUSINESS 8

BLOOD, SWEAT AND DEALS

12

TOO YOUNG TO GROW?

19

STICKY LAND RENTAL RATES

22

AT THE HELM

26

THE OTHER ENERGY BUSINESS

30

FOOD FOR THOUGHT

34

AN AGRITECHNICA PhD

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.

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.

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

Can you be a farmer and a food processor too?

Our Steve Biggs goes looking for the answer in Quebec.

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

36

GUIDE HR — A QUESTION OF CHARISMA

37

‘BETTER’ MARKETING!

40

THE WORLD’S NEXT BREADBASKET

64

IT’S A VERY DIFFERENT MARKETING YEAR

66

68

70

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.

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

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

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

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.

GUIDE LIFE — A PLACE FOR WOMEN

PRODUCTION 48

NEW RULES

50

LEARNING CURVE

54

MORE PLANTS MEAN MORE PROFIT

56

BIGGER BANG THEORY

58

THE CHEQUE IS IN THE MAIL

60

WHEAT BELLY

62

KEEPING BEES

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

EVERY ISSUE 5

PG. 12 THE TOUGHEST QUESTION

MACHINERY GUIDE

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

Will an updated plant breeders’ rights attract more research?

Precision ag still has a long way to go to become mainstream.

Jay Whether shows why canola stands need to get denser.

WGRF seeks more research across the West.

Pull the plug on company programs, writes Warren Libby.

GUIDE HEALTH

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?

This best-seller says wheat is bad for you. Hmmm…

Seed treatments are in the crosshairs, but don’t pull trigger yet.

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: Gord Gilmour Cell: (204) 294-9195 (204) 453-7624 Fax (204) 942-8463 Email: gord.gilmour@fbcpublishing.com Maggie Van Camp (905) 986-5342 Fax (905) 986-9991 Email: bmvancamp@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Andrew Winkels (204) 954-1414 Cell (204) 227-5274 Email: andrew.winkels@fbcpublishing.com Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.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 0847-9178 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

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12/4/2013 2:54 PM

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?

By Angela Lovell

s land prices ride high across Canada, it’s a struggle for young and midcareer 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 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

singing the praises of Canadian farmland, and financial advisers are encouraging more of their clients to become absentee farm landlords.

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 FEBRUARY 4, 2014

Photography: Sandy Black

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

business

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 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.

FEBRUARY 4, 2014

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 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.”

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

Continued on page 14 country-guide.ca 13

business

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 relationship 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.”

14 country-guide.ca

Dustin and Laura Williams are watching for their chances, building relationships with retiring farmers, but they know the odds are long Continued from page 13 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.

“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 south-central 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 FEBRUARY 4, 2014

business

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 who is looking at it FEBRUARY 4, 2014

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.”

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.

Continued on page 16 country-guide.ca 15

Photo: Basil Holewka

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

BUSINESS Continued from page 15

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 farm company took his operation over,” says Williams. “In the end we purchased his company outright and now have a landlease 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 own-

ership 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 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

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BUSINESS choose to make interest-only payments to improve cash flow or principal-plusinterest 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

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business

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

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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.

22 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 23

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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.

26 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 28

FEBRUARY 4, 2014

country-guide.ca 27

business Continued from page 27 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.

28 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

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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

30 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.

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

Lambert lowers his voice as if he’s about to tell me a secret. “There are no cows here.”

“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 fulltime. 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.”

“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

PHOTOGRAPHY: www.fromagescharlevoix.com

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.

Continued on page 32 FEBRUARY 4, 2014

country-guide.ca 31

business Continued from page 31 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

32 country-guide.ca 22012-03 DAS Simplicity_15.125X6.5.indd 1

from pies to meats to preserves. Lambert says 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.

february 4, 2014

Photography: www.fromagescharlevoix.com

business In 2010, for instance, the company installed a facility to convert the 15,00020,000 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

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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 Münch34 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 35

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 emo36 country-guide.ca

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.

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 38 country-guide.ca 37

management Continued from page 37 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.

38 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

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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.

40 country-guide.ca

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 42

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 41

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.

42 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 41 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 46

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 43

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business

“ 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 43

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?

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.

46 country-guide.ca

FEBRUARY 4, 2014

business

“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

FEBRUARY 4, 2014

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. country-guide.ca 47

Production

New rules Ushering in a new era for plant breeders’ rights in Canada

By Ron Friesen

proposal to update Canada’s laws governing plant breeders’ rights to bring the nation into compliance with an agreement that was struck more than 20 years ago is rekindling heated debate.

Ottawa has promised amendments to its Plant Breeders’ Rights Act to bring it into line with the International Union for the Protection of New Varieties of Plants (UPOV 91). Canada is one of the few developed countries which has signed but not implemented the 1991 convention, although Ottawa does belong to its predecessor UPOV 78.

Federal Agriculture Minister Gerry Ritz says that, once ratified, UPOV 91 will enhance the scope of plant breeders’ rights in Canada and encourage more private-sector investment in plant breeding.

“The main effect will be to draw investment and new varieties, level the playing field so that international plant breeders and Canadian breeders can work in concert and see reward and return from their labours, and offer Canadian farmers the best,” Ritz told a December news conference in Winnipeg.

Breeders and the seed industry hailed the move, saying it will open doors to greater varietal development in Canada by expanding the scope of their property rights and giving breeders increased ability to recoup investments in plant breeding.

“ It’s going to improve the intellectual property environment and plant variety protection in Canada.”

— Rob Duncan, University of Manitoba canola/rapeseed breeder

48 country-guide.ca

“It’s going to improve the intellectual property environment and plant variety protection in Canada,” says Rob Duncan, a University of Manitoba canola/rapeseed breeder. “It should ultimately improve cultivars in Canada and be the best for breeders and farmers.”

But some groups, notably the National Farmers Union, call UPOV 91 potentially dangerous because it could restrict what farmers do with their seed.

“Amending the Plant Breeders’ Rights Act to align with the requirements of UPOV 91 instead of UPOV 78 will devastate farmers’ ability to save, sell and reuse seed. At the same time, greater corporate control over every aspect related to seed will mean farmers pay much higher seed prices,” said Jan Slomp, NFU president, in a statement.

What’s all the fuss about?

It’s generally accepted that, as governments move away from variety development, the private sector will play a larger role. To do that, the Canadian Seed Trade Association, representing 130 seed companies across Canada, argues breeders need more ability to generate a return on developing new varieties.

CSTA notes that the private sector in 2012 invested nearly $100 million in plant breeding and variety development. That’s an increase of 77 per cent over five years. But nearly 90 per cent of that investment was in canola, corn and soybeans, which are covered by forms of intellectual property protection which include contracts, patents and technology use agreements. These enable breeders to generate a return on their investment. Private-sector investment in breeding cereals, flax, pulses and special crops is very low because of breeders’ limited ability to protect their new varieties. All they have is plant breeders’ rights, which is not the same as a patent.

As a result, improvements in wheat yields are so slow that some analysts wonder if wheat could eventually become a marginal crop on the Prairies as higheryielding corn and soybean crops expand their acreage.

“Wheat yields have not risen nearly as fast as those of corn, or even canola. And they are not expected to catch up any time soon. The problem

FEBRUARY 4, 2014

production

is a lack of research funding,” Murray Fulton, a University of Saskatchewan economist, told a national agricultural policy conference in Ottawa in January 2013.

That’s where ratifying UPOV 91 could make a difference, says Patty Townsend, CSTA’s chief executive officer.

“This sends a signal that Canada is taking steps toward creating an environment that will allow for and foster innovation, both domestically and internationally, in our crop sector,” Townsend says. “It opens another door for us to be able to show very clearly that we’re open for investment.”

In its literature, CSTA goes to great lengths to dispel “myths” about what UPOV 91 will and won’t do.

According to CSTA, UPOV 91 requires a breeder’s authorization (which can include paying royalties) for: producing or reproducing seed of the protected variety; conditioning seed for propagation; offering, selling or stocking seed for sale; and exporting or importing it.

Under UPOV 91, breeders are able for the first time to collect royalties on harvested seed. Previously, those could only be collected at point of sale.

However, CSTA says royalties on harvested material will be collected only if the breeder has not had the opportunity to collect on seed when it was sold.

There’s no double dipping — collecting royalties first when the seed is sold and later when the crop grown from it is combined.

UPOV 91 also extends breeders’ rights to hybrid varieties. If you use protected parental lines to produce a hybrid for commercialization, you have to get authorization from the breeder who holds the rights to those lines.

“If the breeder can prove that I used his variety and derived something that’s identical to it, then I have to have their permission to sell it,” Townsend says.

One of the criticisms aimed at UPOV 91 is that extending breeders’ rights will limit farmers’ ability to save seed from crops they have grown. “This upsets thousands of years of normal agricultural practice, whereby farmers always saved seed for their next crop,” says Terry Boehm, NFU past president and member of the organization’s seed and trade committee.

But CSTA and the government both insist UPOV 91 contains clear provisions for a “farmer’s exemption” to save, condition and reproduce seed.

Offering, selling and stocking for sale, as well as exporting and importing, still require the breeder’s authorization.

It’s that last provision which concerns Doug Chorney, president of Keystone Agricultural Produc-

FEBRUARY 4, 2014

“ It opens another door for us to be able to show very clearly that we’re open for investment.”

— Patty Townsend, CSTA ers, Manitoba’s general farm organization. He worries end-users may be disinclined to purchase grain from a farmer unless it was planted with certified seed, despite the farmers’ exemption provision.

“When you go to sell your grain, they won’t buy it if you’ve saved it from farm-grown seed. They’ll only buy it if you have purchased certified seed at the beginning of the season to grow that crop,” says Chorney, who farms near Selkirk, Man. “If we see a pattern where end-users stipulate varieties must be from purchased certified seed, the farm-saved seed provision isn’t as much value as the government purports it to be.”

It will take a long time before the effects of UPOV 91 are felt even after the current legislation is amended and regulations are written, says Richard Gray, professor of bioresource policy and economics at the University of Saskatchewan. For example, Australia began introducing plant breeders’ rights and end-point royalties in 1994. Gray says it took the Australians 16 years to generate enough revenue to support a breeding program.

Today, however, Australia has gone from not having enough royalties to fund the system to having a surplus which could be paid back to shareholders. It’s important to structure Canada’s system to encourage research without giving someone an unexpected windfall, Gray says. “If the government thinks this is a solution and says, OK, now Ag Canada can get out of breeding, I think they’ll be in big trouble.”

Gray suggests farmers could control their own destiny by implementing more producer-funded research programs with checkoffs. He admits the cost to producers would be high, but says growers would be less beholden to companies for expensive seed, as is the case now with canola.

“Farmers have to decide,” Gray says. “Are they going to try to get skin in the game now and take some control, or are they just going to wait for the government to let this hand play out?” CG

country-guide.ca 49

Production

Learning curve Precision agriculture is still in the middle of the adoption phase, despite recent advances in technology

By Richard Kamchen

armers have dabbled with forms of precision agriculture before the term even existed.

If you think of precision agriculture as treating smaller tracts of land differently, instead of using a one-size-fits-all management style for the whole, then it’s been practised since time out of mind, when growers spread manure on a specific area like a hilltop or sliced deeper into the earth in certain areas than others.

The concept of more modern precision agriculture came with the advent of better information management systems and mapping solutions such as GPS and GIS. But despite their great promise, they’re still in their evolutionary phase, as farmers and agronomic advisers learn the ins and outs of these new systems.

“ Agronomy has lagged behind the technology.”

— Ty Faechner, Agricultural Research and Extension Council of Alberta It brings to mind the adoption curve of another recent agricultural revolution — zero till. It too was once the preserve of tinkerers and dreamers.

That is, until they worked the kinks out while at the same time low prices forced many to look for newer and better ways to produce their crops.

“I think the big driver with zero till was the drop in the price of glyphosate,” says farmer and University of Saskatchewan engineering professor Ross Welford. “Once the economics made sense, it just took off.”

Probably three-quarters of prairie farmers by now have gone to minimum or no till, says Rick Atkins, manager of Alberta Agriculture’s Technology and Innovation Branch.

“From a cost-per-acre point of view, it’s very cost-effective, and that’s been the primary driver going from conventional seeding equipment to air seeders and air drills. You don’t have to work the land or prep the land as much to seed into it,” Atkins points out.

When farmers can see the profitability of an 50 country-guide.ca

emerging technology, they’re willing to invest in it and try it. For example, Alberta producers devote $700 million to $800 million in technology and equipment each year to capture the edge they feel they need to be competitive, Atkins says.

If anything, good times have helped spur farmers to embrace precision agriculture, for the simple reason it pays for the equipment, Atkins says.

Farms also tend to grow along with greater returns, creating the need for more and larger equipment to handle the extra acres.

“And quite often now when you’re upgrading, there’s a lot of these newer technologies incorporated right into the machines right from the factory,” adds Welford.

But while growers are more inclined to invest in equipment when they’ve got the funds, it’s tighter prices that encourage them to more actively investigate what they need to gain an edge, says Ty Faechner, executive director of the Agricultural Research and Extension Council of Alberta.

While variable rate technology (VRT) is becoming more mainstream, Faechner doesn’t believe more than 25 per cent of Prairie producers are using it. And it may be lower than that, even though two-thirds to three-quarters of farmers possess VRT-capable equipment, he says.

“Agronomy has lagged behind the technology,” explains Faechner. “More recently, the agronomy side is starting to catch up, but we still have quite a ways to go, quite frankly.”

Welford sees different levels of the adoption of precision agriculture in Western Canada, starting with guidance and auto steer, to mapping and information gathering.

“I think why there was such a rapid uptake of GPS for auto steer was just because of the improved efficiencies and being able to reduce overlap and driver fatigue,” says Welford.

“I’m not sure you can buy an air seeder or air drill these days without GPS on it,” says Atkins.

“And the guidance system has definitely saved producers a lot of money in reduction of overlap, making sure there’s no skips, and optimizing the amount of seed and fertilizer you would want on a given field.”

Variable rate applications of nutrients, seeds, Continued on page 52 february 4, 2014

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2014-01-03 9:50 AM

Production Continued from page 50 and/or fungicides are the next step on the adoption curve, according to Welford. He believes the trend isn’t necessarily economically driven as it’s not always easy to see a dramatic return on the investment.

“Sometimes there seems to be other things, such as evenness of maturity, reduced lodging, etc., that you can’t really put a dollar value on, but seems to be a selling (point for) a lot of producers,” says Welford.

Determining the ideal prescription maps is complex, as consultants’ opinions can vary depending on their philosophies and the size of their soil sample zones. On his farm, Welford has been working with different agronomy consultants for about three years. He feels justified in spending $10 to $15 an acre, partly because it’s a learning experience, but also because he’s getting agronomy expertise he doesn’t himself possess.

“ It’s still got a long ways to go before we’ve got the magic recipe for every location or every type of soil and the crops you’re seeding.”

— Rick Atkins, Technology and Innovation Branch, Alberta Agriculture “There are a number of crop consultants across the Prairies who are working with farmers to develop prescription maps based on yield maps, soil sampling, etc., but it’s still got a long ways to go before we’ve got the magic recipe for every location or every type of soil and the crops you’re seeding,” says Atkins.

Another VRT challenge is the growing size of the equipment itself. Atkins has been involved with air seeders since 1979 and helped with their development over the years. Over a 15-year period, he witnessed dramatic improvements in uniformity.

But that was based on 40- to 45-foot equipment, which has since grown to 65, 80 and 100 feet.

“There is a concern that we may have lost some ground as far as some of our distribution uniformity, which would negate anything you’d want to ever do with variable rate technology,” says Atkins, calling the accurate placement of seed and fertilizer “a real challenge… So if you had the ideal prescription map and a really wide air seeder, I’m not so sure you could do it now. That’s an emerging issue that we need to get a handle on.

“I think we’ve got a ways to go in terms of just getting the variable rate on a solid foundation and the majority of producers working with that on their farms,” says Faechner. “It’s almost like we’re 52 country-guide.ca

trying to figure out how we adapt and adopt the technology to our conditions in Western Canada.”

Some are taking matters into their own hands.

As the newer equipment comes out and the technology is just sitting in the cabs, farmers feel compelled to try it out.

“And there’s ways to use it without spending $10, $15, $20 (an acre) on a consultant, because an individual farmer probably knows his land better than anyone else, and could do some very basic things as a way to get started to use that technology without requiring a consultant,” says Welford.

There remains the problem, however, of whether growers know how to use the technology to their best advantage, Welford says. “I know students in my class — a lot of them are fairly large farmers — and they talk about having all this equipment, but not really using it to its maximum potential.”

You don’t need to be an engineer to make it work, Atkins assures growers. Dealerships are offering decent technical support, using a model of offering one or two experts to serve a region that contains, say, four or five dealerships.

But spurring adoption growth will still depend on more concrete economic proof: “Companies will make the claim you pay us so many dollars an acre and we guarantee you’ll get that money back.

But I think until there’s more success at them being able to show that, it’s going to be the early adopters that’ll keep trying it,” says Welford.

Welford adds there’s still a need for improved technology to sense what’s needed in the fields.

Some innovators are using reflectance technology to determine nitrogen requirements as the crop is growing, trying to apply what the crop needs at that time rather than guessing based on the soil.

It’s on-the-go soil and crop sensing and variable rate application based on that up-to-the-minute data that’s the next stage of precision agriculture adoption, Welford says.

But while he sees the opportunities, Faechner doesn’t think Western Canada is at that point to adopt it in large numbers yet, since much of the research has been done in the U.S. and Europe, not the Canadian Prairies.

“I know a lot of time, especially nowadays, it seems like the innovative producers are leading the charge on quite a bit of this, and the research and agronomics follow along after,” Faechner says.

A culmination of events has led up to this, not the least of which are reduced levels in agronomic research in Western Canada that have come with the loss of government programs, investment and staff.

That’s created a paradigm shift, a subtle one that’s occurred over the last five to seven years, but one that will get accelerated in the gutting of government resources.

Says Faechner: “(Farmers) have become much more of a player in helping solve some of these issues and concerns than has been the case in the past.” CG february 4, 2014

production

Field Notes

Can plants think?

Author and noted food critic Michael Pollan (Omnivore’s Dilemma) reports in a recent issue of The New Y orker magazine that scientists are slowly beginning to re-evaluate whether plants can “think.”

That’s not to say what they’re proposing is an update of the quack science of the 1970s that saw green thumbs around the world talking to their plants and playing them Mozart.

Instead, said the magazine said in a recent news release, Pollan investigates the field of plant neurobiology and the evidence for plant intelligence.

Pollan spoke to a “loose, interdisciplinary group of scientists working on plant intelligence,” the magazine said, none of whom claim that plants have brains, possess “telekinetic powers,” or “feel emotions.” Rather, in the scientists’ view, intelligence in plants may resemble that exhibited in insect colonies.

One of the scientists Pollan spoke with is Stefano Mancuso, an Italian plant physiologist described by Pollan as “the poet-philosopher of the movement.” At the International LaboraFEBRUARY 4, 2014

“ Plants can learn, remember and feel,” says Pollan.

Does that mean they’re intelligent? tory of Plant Neurobiology, outside of Florence, Italy, Mancuso and a handful of collaborators are working on experiments to measure plants’ reactions to air pollution, their ability to be “taught” to ignore shadows, and their chemical emissions — or, in Mancuso’s words, their “chemical vocabulary.”

Pollan writes, “The central issue dividing the plant neurobiologists from their critics would appear to be this: Do capabilities such as intelligence, pain perception, learning and memory require their existence of a brain, as the critics contend, or can they be detached from the neurological moorings?”

The full article is available online: www.newyorker.com/reporting/2013/ 12/23/131223fa_fact_pollan.

Chopstick irrigation Internationally, the agriculture industry spends a lot of time thinking about how to feed China, and about how the booming Chinese market is expected to create a lot of prosperity for North America’s farmers in coming years.

Often overlooked, however, is how China and other developing countries are beginning to make their own agronomic advances so they can at least partially feed themselves.

A recent story by the U.S. public broadcaster Public Radio International tells the tale of businessman turned inventor Zhu Jun, who had the idea for a breakthrough in irrigation technology after dipping his chopsticks in a bowl of water.

“I found if I put the chopsticks in water, and took them out, there was a little water going up between the chopsticks,” he told PRI. “And if I hold the chopsticks higher, the water goes higher. And I realized, that’s actually the capillary force that I learned in the textbooks in primary school. And maybe that is a good way for irrigation.”

Capillary action refers to molecular attraction that’s so strong it can defy gravity, pulling water upward with no outside power source. In this case it’s the roots of the plants themselves that do the pulling, stopping when the plants have drunk their fill.

The source of the water is a pipe that runs along a foot or deeper in the soil.

The pipe gets narrower until it’s like a thin straw a with tiny shower head, with little white threads running out of it. It’s from these threads that the plants drink.

The system is similar to, but more efficient than, drip irrigation systems. The inventor says the key difference is under his new capillary action system, there’s a more or less constant flow of water, making plugged pipes much less likely.

Chinese agronomists who have worked on the system say it’s a dramatic change from some of the most common irrigation systems in that country, which involve surface watering and raised beds.

Researchers also report less fungal disease and lower overall input use.

Zhu says his system saves 70 per cent or more water compared to surface irrigation in China, and 30 to 50 per cent compared to drip irrigation.

country-guide.ca 53

Production

More plants mean more profit Cutting seed costs can have a ripple effect through the whole canola season, and will often reduce overall profits

By Jay Whetter anola yields across Western Canada averaged around 40 bu./ac. in 2013.

This is very good — the best ever. But we know that some growers regularly get 50 bu./ac., and often much higher.

Some canola growers are to the point now where 40 bu./ac. is a disappointing yield.

This is proof that the genetic potential of canola is much higher than 40 bu./ac. One way to capture more of this potential is to establish a strong

Figure 1. uniform stands yield more, especially at lower plant densities Seed yield (kg/ha)

3,000

High-yielding sites

2,500 2,000 1,500

Uniform

Low- to average-yielding sites

1,000

Non-uniform

500

0

20

40

60

80

100

Plant density (plants m2)

120

Recent research led by Yantai Gan with AAFC in Swift Current, Sask., found that canola yield increased with more plants and with a more uniform stand.

Figure 2. Not enough plants Crop density (per sq. ft.)

Per cent of surveyed fields

>19

100 90 80 70 60 50 40 30 20 10 0

2000 MB

7.1 to 19

2001 MB

5.1 to 7

2002 MB

2003 MB

4 to 5

<4

2010 MB

2012 MB

Julie Leeson with AAFC in Saskatoon surveyed canola fields in Alberta in 2010 and Saskatchewan in 2012 and found that too many were at or below the bare minimum five plants per square foot needed to reach yield potential. Manitoba results from earlier surveys are included for comparison.

54 country-guide.ca

and competitive crop with enough plants to use the water, nutrient and light resources available.

That means seven to 10 plants per square foot.

That’s the target canola growers want to achieve every year on every acre — and ideally on every square foot. Scientific evidence supports this.

In 2009, Steve Shirtliffe, professor and researcher with the University of Saskatchewan, scanned the results from 35 canola studies, and found that canola growers seeking to maximize returns should target populations greater than five plants per square foot. “Plant populations lower than this will almost always have yield loss,” Shirtliffe says.

The Canola Council of Canada recommends seven to 10 plants to reduce the risk of missing out on yield potential, providing some measure of security in case plants are lost to insects, disease or other factors.

A recent Agriculture and Agri-Food Canada (AAFC) study emphasizes the importance of a uniform stand. Yantai Gan, a research scientist with AAFC in Swift Current, Sask., found that stands with a consistent number of plants per square foot across the whole field yielded significantly better than fields with variable plant densities, based on stands of fewer than 60-80 per square metre (six to eight per square foot). (See Figure 1.) The same study also supported Shirtliffe’s meta-analysis results, concluding that as plant populations climbed from 20 per square metre (two per square foot) up to 100 per square metre, yield also increased. (See Figure 1.)

Yet many growers are not achieving these stand numbers. While Gan was doing his work, Julia Leeson with AAFC in Saskatoon did plant counts in canola fields in Alberta in 2010 and Saskatchewan in 2012. More than 40 per cent of surveyed canola fields in Alberta and more than 50 per cent in Saskatchewan had overall stand densities at or below the threshold considered the minimum for canola to reach its yield potential. (See Figure 2.)

Leeson also talked to the growers and found that many used a seeding rate of five lb./ac. This suggests that the current standard seeding rate of five lb./ac. is often not enough to achieve the necessary stand.

“We know canola is a “plastic” crop that can compensate for thin or uneven establishment, to FEBRUARY 4, 2014

production

“ This investment will more than pay for itself in higher yield, higher quality, and lower input costs over the long term.”

— Autumn Barnes

Canola Council of Canada agronomy specialist Autumn Barnes says canola profitability increases when the crop gets off to a good start. That includes an ideal stand of seven to 10 plants per square foot. some extent,” says Autumn Barnes, agronomy specialist with the Canola Council of Canada. “But why treat a high value crop that way? Canola pays the bills on a lot of farms, and it pays a lot more bills when it gets off to a good start.”

Higher yield is not the only profit-making factor. A uniform canola crop with at least seven plants per square foot can also reduce crop protection costs and improve quality.

Weed control is hugely important to canola profitability. Elwin Smith with AAFC in Lethbridge performed a financial analysis on an earlier AAFC study that ranked the most important inputs for canola yield. Weed management stood out as key. A summary of Smith’s study said that in a barley-canola rotation, the primary input that influenced yield was weed control. When weeds are left uncontrolled, the addition of higher genetics, a higher seeding rate and nitrogen fertilizer had no impact on net return.

“Herbicide tolerance is a highly useful tool that has bailed out the yield potential for many thin canola crops, but a thicker stand can reduce weed control costs and potentially extend the life of those HT traits,” Barnes says. Thin stands are not competitive, and second herbicide applications are often needed to get canola established and ahead of the weeds, she adds. “These extra applications also increase the risk of selecting for weeds that are not controlled as well by HT products, or for weed populations that could be resistant to those products.”

A dense crop could also reduce the need for insecticide sprays if it means, for example, less damage per plant by a fixed number of flea beetles. As long as overall leaf area loss is under the 25 per cent action threshold, on average, a flea beetle spray is not economically viable. With more plants, flea beetle losses are less likely FEBRUARY 4, 2014

to reach this overall 25 per cent average. Fewer acres sprayed with insecticide will also strengthen the population of beneficial insects, which can further increase long-term sustainability and profitability.

Finally, canola crops with more plants per square foot also tend to mature earlier and more evenly, which reduces the risk of quality losses (green seed specifically) at harvest.

“Canola growers have many reasons to strive for a plant population of seven to 10 plants per square foot, but we understand that this does require an investment as well,” Barnes says. “It means a higher seeding rate or taking more time at seeding to improve seed placement. It may require both of these. But we think this investment will more than pay for itself with higher yield, higher quality and lower input costs over the long term.”

An overall average of 50 bu./ac., or more, is certainly within the genetic potential of canola. Acrossthe-board improvement in plant population and stand establishment is one key step in achieving that next threshold. CG Jay Whetter is communications manager with the Canola Council of Canada, and editor of the free Canola Watch agronomy newsletter. Sign up at www.canolawatch.org. To read summaries of the Gan, Leeson and Smith studies mentioned in this article, see the Canola Digest Science Edition 2013 here: www.canolacouncil.org/canola-digest-pastissues/.

Keys to a good canola stand 1. Set a target plant density of seven to 10 plants per square foot to give you the most consistent chance of hitting 100 per cent yield potential.

2. A ssess and record plant emergence. This will tell you how good you are at hitting your target density.

3. S eed slowly enough to get consistent shallow placement of seed, and good separation of seed and fertilizer.

country-guide.ca 55

PRODUCTION

Western Grains Research Foundation (WGRF) is a farmer-funded and directed non-profit organization investing primarily in wheat and barley variety development for the benefit of western Canadian producers. Through investments of more than $57 million, WGRF has assisted in the development and release of more than 100 new wheat and barley varieties over the past decade and a half, many of which are today seeded to large portions of the cropland in Western Canada. WGRF also invests in research on other western Canadian crops through the endowment fund. In fact, since 1981 the WGRF endowment fund has supported a wealth of innovation across Western Canada, providing over $26 million in funding for over 230 diverse research projects.

Bigger bang theory WGRF partners with other stakeholders on funding model

By Clare Stanfield

bout this time last year, the Western Grains Research Foundation (WGRF) announced $3.5 million in new project funding with more to come. Well, true to its word, more has come.

“Research investments by the endowment fund will grow to nearly $7.5 million a year by 2015,” says Garth Patterson, executive director of the WGRF. But who gets funded? From the researcher side, applying for funds can be a hodgepodge of forms, departments and agencies. So, since 2012, the WGRF has collaborated with Manitoba Agriculture Food and Rural Initiatives (MAFRI), the Saskatchewan Ministry of Agriculture (SMA) and the Alberta Agriculture Funding Consortium (AFC) to review more than 400 letters of intent and almost 150 full crop research proposals.

“This process makes better use of everyone’s expertise and time.”

— Garth Patterson, WGRF “Rather than do a separate WGRF direct call for proposals, this process makes better use of everyone’s expertise and time,” says Patterson, adding that the WGRF is the only producer-led organization that sees all these proposals.

56 country-guide.ca

That collaboration has led to the WGRF approving more than 80 new research projects that show potential to improve the profitability and sustainability of farmers in Western Canada, money for which will come out of the endowment fund.

The endowment fund is aimed at crop research projects that will benefit all producers through improved agricultural systems, technology and agronomic practices.

“That is very important to us because this kind of research benefits all producers in all crops, including minor crops,” says Patterson. “So when we look at, say, harvest management techniques, or better grain storage systems, that knowledge helps all growers.”

A bigger bang for the buck Co-funding partnerships are key for the WGRF. That $3.5 million announced last year, for instance, was part of a co-funding partnership between the WGRF and the Agriculture Development Fund (ADF) in Saskatchewan, and went to support 25 crop-related research projects.

“In 2013, we conducted an informal survey of Canadian producer groups from coast to coast and found that these organizations expected to invest $32.4 million in research by the end of that same year,” says Patterson.

“These organizations are more than willing to collaborate with other funders, like us, government and private industry, so that they can do the research their membership wants,” Patterson says, adding that the capacity to do good agronomic research must be supported if Canadian producers are to stay at the forefront of global markets

FEBRUARY 4, 2014

WGRF E

PRODUCTION

WGRF is also providing $100,000 to assess agronomy research capacity in Western Canada.

“We and other producer-led commodity groups have started the discussion to ensure we develop and maintain that capacity in Western Canada,” says Patterson. “And producers have a big role to play in leading the effort to find solutions.”

Investing in future researchers The WGRF endowment fund is contributing to the future of agriculture in another way, too.

“In 2011, WGRF started putting $100,000 per year into graduate scholarships, on a rotating basis, at the University of Manitoba, the University of Alberta and the University of Saskatchewan,” says Patterson. The scholarship money is open to students working in some aspect of crop research, and the receiving institutions can choose to fund one PhD student ($33,000 per year for three years), or two master’s degree students ($25,000 per year for two years).

Most recently, in 2013, the U of S took the lat-

“This kind of research benefits all producers of all crops, including minor crops.”

ter route, funding Colleen Redlick, who is working on an integrated weed management strategy for lentil producers struggling with herbicide-resistant weeds, and Andrea De Roo, who is looking into the biological attributes of six distinct cleaver populations in Canada and how those characteristics influence the weeds’ competitiveness.

Says Patterson: “Investing in today’s agricultural students can only strengthen our research competitiveness tomorrow.” CG

Cultivating Growth Increasing Endowment Fund expenditures for the benefit of western Canadian crop producers

$15 million

in new funding to crop research over four years

More than

100 new projects

Research

priorities identified by producers

Leveraged to $30 million by co-funding

New research funding examples:

Weed Management

Blackleg & Clubroot in Canola

Improving Oat Nutrition

Pulse Disease Management

Graduate Student Scholarships

Fusarium Resistance in Cereals

WGRF is committed to utilizing the Endowment Fund for the benefit of western Canadian crop producers by managing and investing the fund in order to provide future long-term benefits to producers. To find out more, visit us online.

www.westerngrains.com WGRF Endowment Fund Half-page Ad_final.indd 1

2013-09-12 8:34 AM

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 58 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 59

PRODUCTION

FA C T C H E C K

WHEAT BELLY THE bestseller that says wheat is bad for you is, well, bad for you

By Gord Leathers

he story goes that there was a travelling salesman covering his territory in southern Saskatchewan just after the Second World War. He came out of the general store in a town somewhere west of Midale, nodded to the two old boys who were playing checkers on the front porch, and then got into his car.

About two miles out of town the engine quit, so he got out and opened up the hood and while he was looking inside, an unexpected voice drifted in. It told him, “It’s probably your carburetor.”

Startled, the salesman looked toward the road, but he was alone. On the ditch side, over the fence stood a white horse with his nose pointed toward the engine. The horse looked at him and repeated, “Like I say buddy, it’s probably your carburetor.”

The salesman leaped in panic and sprinted all the way back to town where he ran right down the main drag and stopped in front of the store where the two old boys were still playing checkers.

“You won’t believe this!” he panted. “My car stalled about two miles out of town and some old white horse told me it was probably my carburetor!”

The two old boys looked at him, looked at each other, and then started to roar with laughter in the way that only locals can at an uninformed outsider.

“That old white horse,” one of them guffawed.

“He don’t know nothin’ about carburetors.”

And so it goes. If an old white horse tells you it’s your carburetor, you’d probably go to a mechanic for a second opinion. On the other hand, if a medical doctor writes a book based on the notion that eating wheat is dangerous, it becomes a NEW YORK TIMES bestseller.

WHEAT BELLY, by Dr. William Davis, was published in 2011 and according to the flap inside the jacket: “North Americans have steadily and inexorably become heavier, less healthy and more prone to diabetes than ever before. Cardiologist William 60 country-guide.ca

Davis came to the disturbing conclusion that it is not fat, not sugar and not our sedentary lifestyle that is causing an obesity epidemic — it is wheat.”

Imagine that! Conventional wisdom had us believing that it was increased caloric intake (eating too much) along with decreased energy output (exercising too little). All this time it has been wheat, the principal ingredient of bread — the Staff of Life.

So far, Davis’s book has sold 300,000 copies, so someone’s buying it and, by extension, someone’s buying his premise. If you visit his website you can find all kinds of testimonials from people who cut wheat out of their diets and lost significant amounts of weight. That would seem obvious. If you stop eating cookies, cakes, pies and any manner of fast food, your calorie counts go down, and your weight goes down too. It just happens that a lot of high-calorie confections contain wheat.

You’ll also find quite a library of videos from interviews done on the talk show circuit, plus another page of testimonials about the efficacy of removing wheat from the menu. I wonder about the ones who don’t eat wheat and don’t lose weight. You don’t hear from those.

Another thing you might find on his website is a hissing email from one of his disciples aimed at Julie Jones of the American Association of Cereal Chemists. Jones is on the faculty of food science and nutrition at the University of Minnesota and she actually does know what she’s talking about when she speaks of wheat.

Jones was good enough to read his book, but impolite enough to write an article slamming it for the journal CEREAL FOODS WORLD. It took her about 10 pages to lay waste to WHEAT BELLY… in fairly plain language.

She starts with the weight loss claims.

“In his patient population he recounts numerous occurrences of rapid weight loss simply by elimination of wheat from the diet,” Jones writes.

“Rapid weight loss often occurs to any weight loss FEBRUARY 4, 2014

FA C T C H E C K

diet in the short run. Studies and testimonials of weight loss abound, especially when the diets are low in carbohydrates. They do not result in greater weight loss over time and result in more dropouts than other diet types that are more balanced and do not eliminate entire food groups.”

“Oh yeah?!” replies the doctor. Modern dwarf varieties of wheat are genetically very different from previous strains of wheat. There are proteins in there that don’t show up in either parent.

Jones responds: “Plants can only express proteins they have the DNA code to produce. Creating a unique protein requires a mutation of the DNA or RNA. Environmental conditions can cause or inhibit the expression of certain proteins but it cannot code for proteins that are not in the genome.

Hybridization of wheat does not create unique proteins.”

The doctor rises and asserts that when wheat is digested it breaks down into “peptides” that act as exorphins and interact with opioid receptors, modulating food absorption and stimulating appetite. The more you eat, the more you want to eat.

But the chemist points out that a lot of other food proteins do that too. It’s not unique to wheat — the doses are very low and they might be important to our physiology anyway. More study is needed.

I got a copy of Davis’s book and managed to get through the first three chapters. Chapter 3 talked about the strange new genetics of the plant and I smelled something funny.

During my years as an ag writer, I’ve talked to a lot of wheat breeders and I’m certainly aware of how different bread wheat is from its wild ancestor.

The same is true of any crop species.

When I got to the fourth chapter I read the opening sentence: “Addiction. Withdrawal. Delusions. Hallucinations. I’m not describing mental illness or a scene from “One Flew Over The Cuckoo’s Nest.” I’m talking about this food you invite into your kitchen, share with your friends and dunk into your coffee.”

PRODUCTION

So modern bread wheat causes delusions and hallucinations? I closed the book, opened it again, and that bit about delusions and hallucinations was still there. How can anyone believe that a cereal grain that we’ve been eating for thousands of years suddenly makes you obese within the last three decades and causes delusions and hallucinations?

He certainly does state what seems obvious when he says the proliferation of wheat products parallels the increase in waist size. But Jones replies, “Although the association may be true, this is an example of the misuse of correlations to imply causation. Many correlations can be made. Increasing waist size is associated with increased use of chewing gum, increased sales of running shoes and the proliferation of high-fat ice creams as well as any number of other products.”

The really important point that Jones makes later in the passage is about the big jump in average calorie intake between 1985 and 2000 without a corresponding increase in the level of physical activity. She cites this as a prime reason for the increasing North American waistline, although it’s still something we don’t want to talk about. It’s easier to find one villain to blame so we tack it on wheat and not the recliner.

What it comes down to is William Davis makes all the cardinal mistakes any scientific author can make. He starts with a faulty premise. He manages to misinterpret reams of studies, and then weaves them together into a weird pathology of symptoms that very few, if any of us, actually show. And we believe him, and ruthlessly criticize Julie Jones because she knows what she’s talking about. Only in ignorance is there truth.

I disagree. If an old white horse tells you that wheat is the cause of all your problems, don’t buy his book until you consult a cereal chemist. That old white horse don’t know nothin’ about carbohydrates.

Jones’ article may be found at: http://www. aaccnet.org/publications/plexus/cfw/pastissues/2012/ OpenDocuments/CFW-57-4-0177.pdf. CG

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country-guide.ca 61

Production

Keeping bees Neonicotinoid pesticides are under the spotlight following bee kills — but it’s not all doom and gloom

he southern Ontario spring of 2012 was an early one, and corn growers got busy as soon as they could get their planters out into the fields.

Beekeepers got their troops mobilized early too, but high hopes for a good season quickly evaporated as the body count started piling up around the hives. It turned out the culprit may have been the insecticide from the corn seed.

“It’s seeded with a neonicotinoid — either thiamethoxam or clothianidin,” explains Dr. Maria Trainer with the industry group Croplife Canada.

“When the Pesticide Management Review Agency and the Ontario Ministry of Agriculture and Food investigated, they confirmed that those residues were found in about 70 per cent of the dead bee samples and their conclusion was the bees were exposed to dust that was released during the planting of the seed through the planter.”

There’s been a lot written in the popular press about neonicotinoid pesticides along with their potential effect on honeybees, and the news sounds grim.

The Europeans suspended the use of neonicotinoids and there’s a lot of pressure from various environmental lobbies to do the same thing here. What doesn’t show up in the popular press is how long farmers have

The real question is: Can we use the chemistry better? been using neonicotinoids without major bee kills.

Neonicotinoids were first used in Canada back in the late 1990s with the registration of imidacloprid, and farmers across the country have used them on a wide variety of crops including soybean, corn and canola. They work by blocking an enzyme that regulates the transmission of impulses over the bridge between two nerve cells. With impulses jumping the gap completely unchecked, the insect goes into convulsions and burns out.

Neonicotinoid chemistry is tuned so that insects are quite sensitive to it but mammals, such as wildlife, livestock and us are, much less so. Although it can be applied as a foliar spray, it’s often put on the seed as a coating, which has a number of advantages.

“They’re safer for the user because they’re applied off-site at a controlled facility, so you’re not having to get your arms into the planting equipment and get 62 country-guide.ca

exposed to those chemistries,” Trainer says. “They’re better for the environment because the amount of insecticide used in a seed treatment is significantly less, about one per cent of what you would use in a broadcast application.”

Seed treatment also helps to zero in on target species, such as flea beetles in canola or rootworm in corn, making the application much safer when done according to the label instructions. The spring bee kill in 2012 wasn’t a typical event and shouldn’t have happened.

“In 2012 we had an exceptionally warm spring,” Trainer says. “Flowering weeds were up early so the bees were out foraging in areas where they wouldn’t normally be foraging, adjacent to fields during planting.”

The seed is coated with a number of different treatments such as fungicides, insecticides and a lubricant to make planting easier on both seed and machine. It’s the lubricant, or fluency agent, that actually caused the trouble in an air seeder. The combination of talcum and graphite doesn’t stick to the seed as well as it might, so when planting corn, there may be a cloud of insecticidal dust that drifts off the seeder. It was this dust that seems to have produced the bee body count.

There’s no doubt that enough exposure to an insecticide is going to kill bees, but to maintain yields we’re stuck using chemistry. Farmers understand that there’s no trade-off here, we need bees as much as we need insecticide, not only for the honey they produce but also for the pollination they provide. It’s an old relationship that a full 70 per cent of the world’s top 100 food and fibre crops still remember from their wild past. One of every three mouthfuls any of us eat comes courtesy of an insect pollinating a plant.

The real question is: can we use the chemistry better? Can we develop products and management practices to keep the bees away from the seed treatments so we can have both? The first answer revolves around new coatings that keep the insecticide on the seed where it’s needed rather than in the air where it’s hazardous.

The company that marketed the original talcum/ graphite fluency agents, Bayer CropScience, is working on the next generation of seed coatings. Bayer began using a polyethylene wax treatment and has run field trials in both Canada and the United States.

Feedback from farmers has been very good, and early results show the lubricant performs at equal or even better levels than the older mix, while significantly decreasing the amount of dust generated.

FEBRUARY 4, 2014

Photography: Gord leathers

By Gord Leathers

production

The PMRA is making the new fluency mixture mandatory for the 2014 growing season and this is the first of their four new requirements. Another is to open the channels between beekeepers and farmers and get them talking to each other. Beekeepers need to know when farmers are planting or engaging in any kind of action that may put bees at risk. Farmers need to know where the hives are and what kind of range foraging bees have. Both need to be aware of what the weather conditions are because this often dictates what both farmers and beekeepers do.

The third is labelling the products with updated seed tags so that farmers know what they’re buying and have a good set of instructions. For the longer term, CropLife Canada and the PMRA have developed a set of best management practices for the use of treated seed. The risk is greatly diminished if bees and insecticides don’t mix.

If farmers can simply minimize the amount of dust generated during seeding that should go a long way to minimize bee mortality and still keep an effective insecticide on the roster.

In the short term, be aware of where hives are located and consider the weather conditions during seeding. Make sure planting equipment is in good working order and that treated seed is handled properly to minimize the amount of dust. Excess dust within the bags should stay there instead of being shaken into seeding equipment and the bags should be properly disposed of.

In the longer term the seed companies will develop better coatings that increase the efficacy of their FEBRUARY 4, 2014

product while reducing the amount of dust generated.

Equipment manufacturers are working on seeders.

One of the problems there is the air exhaust that vents too high. Reworking the exhaust systems so that they vent close to the ground is a solution for the long term, and retrofits that redirect the air exhaust downward is in the works for older machinery.

“PMRA has investigated and according to the interim report they’ve released their conclusion that direct exposure due to dust during planting was an issue and this needs to be addressed ahead of next year’s growing season,” Trainer says. “In response to what happened, both the PMRA and EPA have put the three main neonicotinoids under re-evaluation and have released a pollinator risk assessment framework that is now guiding internal pollinator risk assessment.”

The spring of 2012 may have had unusual consequences because of that early warming but it was typical of many mishaps. A small change in circumstances can bring about a disaster of sorts but there is a silver lining. We know more about the behaviour of those seed coatings and we’ve been able to improve on them.

We know more about the equipment we use and how we can make it better. We know enough to refine the procedures and we can make the products work better.

“We are very supportive of that approach and for Canadian agriculture we think it’s very important that the transparency and predictability of the regulatory system remain intact,” Trainer says. “We also support ongoing research into the various factors that affect pollinator health of which insecticides one of the factors. CG country-guide.ca 63

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.

64 country-guide.ca

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.

Febuary 4, 2o14

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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

66 country-guide.ca

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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©2013 Farm Business Communications

country-guide.ca 69

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.

70 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 71

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