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WESTERN EDITION

country-guide.ca

March 4, 2014 $3.50

ALREADY FARMING THE SURPRISING SUCCESS OF NEW FARMERS LIKE BROOKE AITKEN

+PLUS WOULD YOU PASS THIS CEO INTERVIEW? IT’S A BIG JOB TO RUN A FARM SENDING BOTH GENERATIONS TO SAME BIZ SCHOOL MAY UNBLOCK SUCCESSION HUGE PROFITS, BUT THINK TWICE BEFORE INVESTING IN ARGENTINA Publications Mail Agreement Number 40069240


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CONTENTS

MARCH 4, 2014

BUSINESS 8

FUTURE FARM

12

TURN-AROUND

18

TWO SISTERS

24

YOUR CEO INTERVIEW

28

SECOND LOOK

32

CREATE A FARM ADVISORY BOARD

35

BUSINESS AS (UN)USUAL IN ARGENTINA

42

EASING BACK ON THE THROTTLE

44

ARE YOU MARKETING, OR SPECULATING?

61

GUIDE HR — CHOOSING THE NEXT LEADER

62

GUIDE LIFE — BETTER FAMILY MEETINGS

FCC futurist Calvin Mulligan predicts the world that today’s beginning farmers must find a way to prosper in. Noel and Ryan Flitton left their parent’s Alberta farm to build new lives elsewhere. Now they’re back, and thriving. Maybe women farmers are no longer news, but that doesn’t mean the challenges are gone. Answer these 10 questions to see if you — or your son or daughter — could land a job as a CEO. When you build a farm strategy of value adding, new opportunities can emerge overnight — if you’re watching.

COUNTRY GUIDE brings you multiple perspectives on Canada’s next great generation, with farm interviews plus detailed articles on everything from choosing your farm’s next CEO to how to hold more productive family meetings. Our take-away? It’s going to be a great ride — for farmers with their eyes open.

The profits are big, but so are the risks in an Argentina that aims to be the world’s ag powerhouse. The machinery frenzy may be subsiding, but manufacturers are still smiling. Our Scott Garvey tells us why. The difference, says Gerald Pilger, is whether your goal is to reduce risk or to increase profit. Here’s why it matters. Forget your search for a born leader. It turns out, most leadership traits are better when they’re taught. Five minutes chatting in the shed isn’t a meeting. Use these tips from business organizers for better results.

EVERY ISSUE 5

OUR NEXT FARMERS

These farmers have set up their own advisory boards for better business input all through their careers.

MACHINERY GUIDE

2014’s forage equipment is simply better, including mower conditioners and windrowers.

64

GUIDE HEALTH

66

HANSON ACRES

PRODUCTION 48

RESEARCH WHERE IT COUNTS

51

STACKED DECK

54

PHOSPHATE ONLY IN SEED ROW

56

NOT JUST FOR THE BIRDS

58

NEW ERA, NEW TOOLS

60

FIELD NOTES

It’s possible to breathe more easily even if you have asthma. It was Dale and Jeff’s lucky day. Too bad the women found out.

Small-scale research helps these farmers win in the field.

Evolution means weeds will always have the edge over us.

Be scientific about nutrient placement for better canola.

We’re the world’s best, but better canary seed yields needed.

Your doctor may have the answer to glyphosate resistance.

Ideas and insights from the world of research.

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

MARCH 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

They’re getting it right Gary Flitton is up front about it. Through much of his career, he was exactly the kind of farmer that CBC programs such as The Journal loved to interview. “I was the perfect whining farmer,” Flitton tells reporter Angela Lovell in the story Turn-Around in this issue. “What was happening to us was everybody else’s fault. Blame the wheat board, blame the banks, the weather or whatever.” It can seem a distant memory now, although those decades of struggle ended only a mere few years ago. Now Flitton has a different challenge. His sons Noel and Ryan are back on the farm with him — an outcome that at one point he had almost convinced himself to stop hoping for. The sons are bright and capable, they’re highly motivated, and they’re building their own families with a view to possibly extending the family operation another generation. But there are challenges. A decade ago, the challenges that Flitton bemoaned added up to a severe financial squeeze. The pressures now are financial too, but this time they’re about how to survive and grow in an agriculture where management skills will be nearly as critical to a farm’s success as crop yields. Ironically, today’s challenge traces its origin to the fact that Flitton could never have survived the long, difficult years of his mid-career if he had not been a skilled financial manager. The economics of those days rarely tolerated mistakes. 4 country-guide.ca

Skilled as he has obviously been at financial management, however, his sons are skilled too, thanks to their education, their work off farm, and their determination to make the farm an ongoing success. That means the sons don’t always see things eye to eye with Dad. It’s what makes this one of the great stories that Country Guide has ever told, not because it’s unique, but because it captures something healthy that’s happening on farms across the country. Rather than sitting in their respective corners at loggerheads with each other, the Flittons are taking CTEAM training together, despite its cost in time and money. Instead of saying, “I’m right, you’re wrong,” they’re getting better together. I hope you’ll read their story with the big picture in mind, thinking of what it portends for the future of our farms. At Country Guide, I suppose I have a bit of a reputation for ending these editorials with the question: Are we getting it right? There’s no doubt in my mind that the Flittons and thousands of farmers all across the country are getting it right. We’re following you. I hope no one seriously believes that we think it’s the other way around. As I also often say, I only wish consumers could see what I get to see. Am I right? I’m at tom.button@fbcpublishing.com. Let me know what you think.

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. Publications Mail Agreement Number 40069240. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

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

Call toll-free 1-800-665-1362 or email: subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 133 No. 4 Internet address: www.agcanada.com

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.

march 4, 2014


Machinery

By Ralph Pearce, CG Production Editor

If the number of product launches is any indication, there’s a sense of anticipation in forages this year. In this edition of Machinery Guide, you’ll see that mower conditions and self-propelled windrowers make up an exciting segment of offerings from manufacturers wanting to “make hay” in 2014. Check out these descriptions, first, then get ready to spend some time making a few extra rounds, ensuring you cut a little deeper and get more details and specifications on this year’s field of new entrants.

 hesston wr9800 series self-propelled windrowers Introduced at last month’s World Ag Expo in Tulare, Cal., the Hesston WR9800 series of self-propelled windrowers is built to deliver better fuel efficiency, more power and higher speeds. Importantly, the WR9870 and WR9860 also have an improved environmental efficiency thanks to their Tier 4 final engine design. Operator comfort has been upgraded since the 2011 introduction of the WR series, with a smooth and quiet ride courtesy of the GlideRider rear-axle suspension system. Another important feature is the ergonomic control handle, complete with nine user-configured and programmable control buttons, with two standard buttons. That puts all machine and header functions in one easy-to-use handle.

www.hesston.com

john deere w235 self-propelled windrower  Deere’s new W235 Self-Propelled Windrower offers the latest in the company’s line up and features more horsepower to drive on through tough conditions, plus a larger cab for operator comfort. The W235 also offers AutoTrac and the CommandCenter display for fingertip access to all controls, meaning improved efficiency on the job. There’s even greater choice in the W235, configured to a rotary that will be compatible with 994 and 995 heads, and a draper, which will be compatible with the 600D head. It also comes with a 6.8L Final Tier 4 engine, with 235 horsepower, an increase of nearly 18 per cent compared to the previous model.

www.JohnDeere.com

 case ih dc3 series disc mower conditioner Simplifying the path to high-quality hay is the goal of the new Case IH DC3 Series Disc Mower Conditioner, designed to improve drydown for improved hay quality along with higher profits. Case says the new design provides closer and cleaner cuts with a new cutterbar design and wide discs, meaning you get more hay in the windrow and leave less in the field. The new design also simplifies making adjustments, so you won’t even need tools in the field to set the conditioners, swath doors or the swath board. A simplified drive system will also help minimize horsepower consumption, thereby reducing maintenance needs.

www.caseih.com

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new holland speedrower series 

krone easycut b970 mower

High speed and smooth operation are just two of the objectives with New Holland’s Speedrower self-propelled windrower series. The company says the result is a design that will let you get the job done faster while enjoying industry-leading comfort, control, power and performance. The IntelliSteer integrated auto-guidance system can eliminate overlaps, with accurate cutting from one to eight inches. A three-range hydrostatic transmission option translates into a top speed of 24 m.p.h. — billed as the fastest in the industry. Plus there’s independent hydraulic header flotation, meaning an operator can adjust flotation separately for the right or left side without leaving the cab.

Krone is bringing five new products to the market for 2014, along with one of its own apps for hay and forage producers. Especially noteworthy is the EasyCut B970, which allows a grower to adjust the working width with a simple pin-and-hole setting system. A patented pivoting arm on the spring suspension system allows for adjustments to ground pressure, offering optimal flotation in all conditions. Like its predecessor, the Easy Cut B970 is equipped with the Krone SmartCut cutterbar, with quick-change blades and SafeCut hubs for superior cutterbar protection.

www.krone-na.com

www.newholland.com/na

 Vermeer mc series mower conditioners New at Vermeer is a line of mower conditioners designed to incorporate productivity, flexibility and convenience into one powerful machine. Three models of mower conditions are available — the MC2800, the MC3300 and the MC3700 — with cutting widths varying from 9.1 feet to 12 feet. At the heart of this series is the modular, shaft-driven Q3 Cutter Bar, which brings lower horsepower requirements and shear protection, making it more fuel-efficient with minimal gear-to-gear interface. Changing blades or repairing a sheared device is made even simpler — and safer — thanks to the Quick-Clip Blade Retention system and Quick-Change Shear Ring.

www2.vermeer.com

6 c o u n t r y - g u i d e . c a march 4 , 2 0 1 4


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BUSINESS

FUTURE FARM

In the first of three parts, FCC futurist tells our Madeleine Baerg how technology is going to reshape everything you do… sooner than you think By Madeleine Baerg As Farm Credit Canada’s resident futurist, it is Calvin Mulligan’s job to predict the future of Canadian agriculture, and what today’s trends might mean for the industry and its service providers (like FCC). Good foresight stimulates strategic conversations and forward thinking, Mulligan says. “If you know what’s coming around the corner, you are in a position to spot new business opportunities and exercise sound risk management.” Futuring (or the discipline of foresight) is a mix of art and science where you seek to find new patterns and potential disruptors of existing patterns. The big challenge is to connect dots and put seemingly isolated developments into a larger, more meaningful context. The task is much bigger than plotting the growth of a particular trend. It’s also a question of how trends will interact with other developments or cascade onto them. “Linear thinking can be hazardous,” Mulligan says. We start our conversation with Mulligan on the subject of technological change. If you think you’re investing

PHOTOGRAPHY: CAREY SHAW

fast enough in new technology, Mulligan says, it’s time to think again. Agriculture has barely started.

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business CG: What are the big trends we should be watching? Mulligan:

A group of trends are converging to bring us into an era of smart, connected agriculture. The stage has been set over a number of years with the development of micro sensors, cameras, hardware, GPS, RFID tags, readers, analytic software, intelligent agents and a growing harvest of ag data. A picture of the wired farm enterprise nested within wired value chains or networks is emerging. Precision agriculture is an important piece in this larger picture.

CG: Will precision agriculture keep growing, then, moving from the early adopters into the mainstream? Mulligan:

Yes, the case for mainstream adoption is growing. The December (2013) AgPro reported that precision ag market investments by producers and service providers in the U.S. would grow by at least 13 per cent per year during the next five years. That would take it to a level of $3 billion to $3.5 billion. Faster growth is expected outside the U.S., especially in developing B:8.625” economies.

CG: What forces are promoting its uptake? Mulligan: I see a combination of push and pull influences at work. With a moderating of commodity prices, there’s going to be a renewed focus on the bottom line and managing input costs. There’s the ongoing need to increase productivity. And there’s increasing public concern about the need for sustainable, environment-friendly farming practices. In a recent white paper, Rabobank described a necessary shift in agriculture from a focus on yield maximization to a focus on input optimization.

T:8.125”

Continued on page 10

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BUSINESS Continued from page 9

CG: What about agricultural data management? A lot of major companies are investing very significantly in technology that links them directly to on-farm data. Mulligan: Yes, another indicator of where the future is headed in precision agriculture is the pattern of investments in agribusiness. Big agribusiness players are making strategic acquisitions in agricultural data. In Monsanto’s case, it was the acquisition of Precision Planting in 2012 and Climate Corporation in 2013. These acquisitions reflect Monsanto’s belief in the growing commercial value of “big data.” Farm equipment companies and their dealers are entering new partnerships and bolstering their expertise and farm services in agro data management. In terms of enhanced connection, dealers may be looking ahead to what’s described as an always-on-real-time connection with customers, enabling dealers to monitor their customers’ fleets and manage their customers’ data. CG: What does access to “big data” — the management and use of huge volumes of complex, up-to-the-moment information that has never before been available — mean to the players further up the value chain? Mulligan: In marketing circles the vision for big data and predictive analytics is that it provides the basis for a new era in marketing. It’s called context-aware marketing or anticipatory marketing. The idea is that service providers, based on their analysis of large volumes of customer data, will be able to provide their customers with individualized products and services on an anticipatory basis. We’re already seeing that in the retail sector.

Mulligan sees “a new era in marketing” based on data analysis like we’ve only begun to see

CG: For example? Mulligan: For example, by analyzing your online social media communication and purchases, a retailer learns you’re going on a trip in six months. You then receive an unsolicited special offer on luggage, accommodations and local tours tailored to your particular hobbies and leisure interests. So, we can expect more products and services tailored to our particular interests and needs to come our way on an as-required basis. A related development in the grocery sector is experimentation with individualized product pricing taking customer loyalty into account. CG: Handy, and yet… yikes. Mulligan: Yes, it does raise some concerns. At some point, the tracking and targeting of individual customers approaches a fine line between invasion of privacy and enhanced customer services. In general, ag producers are heading toward more intimate information-sharing relationships with their agribusiness service providers.

CG: So what about on-farm? What does “big data” offer individual producers? Mulligan: All types of ag enterprises — dairy, beef, grain, horticulture and viticulture, for example, are potential beneficiaries of the big data-information and communications technology (ICT) revolution. It’s enabling producers to monitor features of the production environment (soil moisture, humidity, fertility, temperature) in real time or near-real time and manage operations at an increasingly granular level. Often, this can occur on an automated basis. Depending on the sector and particular enterprise, the benefits can be more efficient use of resources including labour, increased yields and greater overall cost-effectiveness. The further value of big data and related management services for producers could come down to the size of the database and whether it’s a case of open data or siloed data. That’s something yet to be worked out at the sector or value-chain level among the various players. CG: We’re already seeing that access to information is changing agriculture at every level, and we’re only at the tip of the iceberg. Mulligan: When I was in university, the state of the art in terms of dairy reproductive management services was the herd health programming offered by the veterinarian specialist on contract to the dairy farm. The contracted veterinarian made monthly visits to the customer’s farm, examined his barn charts and prescribed whatever was deemed necessary to keep the breeding program and reproductive performance on track. I visited a robotic dairy operation three years ago and asked the manager how “robotization” of dairy farms would change a dairy operator’s use of herd health services. His reply suggested the empowering nature of technology. He replied that in his case, he couldn’t think of anything a herd health veterinarian could tell him about his dairy herd that he (the operator) wouldn’t already know. CG Stay tuned next issue when we pick Calvin Mulligan’s brain on the big social forces facing agriculture.

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Visit SyngentaFarm.ca or contact our Customer Resource Centre at 1-87-SYNGENTA (1-877-964-3682). Always read and follow label directions. Astound®, the Alliance Frame, the Purpose Icon and the Syngenta logo are registered trademarks of a Syngenta Group Company. © 2014 Syngenta.


business

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BUSINESS

TURNAROUND By Angela Lovell

When brothers Ryan and Noel Flitton signed up for business school with their father, it helped their Alberta farm turn a critical corner

T

he allure of farming runs strong in the Flitton family, so neither Gary Flitton nor his sons Noel or Ryan make any apology for having been drawn for the same reason back to the family’s 12,000 acres of scenic Alberta grain land east of the Rocky Mountains near Vulcan. They want to live a rural lifestyle. Gary grew up on the farm that his parents purchased as 640 acres of bare land in the 1940s, but then in 1961 the family moved to Calgary to allow his sister to explore her musical interests. Gary spent the next 10 years pining to be back on the farm. In 1970 he began farming in the summer and attended the University of Calgary to obtain his B.Sc. in agriculture during the winter. After marrying Bev in 1973 he moved back to farm full time. Then comes a part of the story that is also familiar across the country. Gary quickly realized that his romanticized memories of farming didn’t quite match up to the realities of farming in the challenging ’80s and ’90s. “I went back when I was 20, and it wasn’t nearly as much fun as when I was a kid,” says Gary. “It was tough for a long time.” But fast forward a generation, and in 2009, there was a kind of echo. Ryan, aged 34 at the time, returned to Vulcan after 12 years during which he had graduated from the University of Alberta with a business degree and worked in account management for a packaged goods company based in Kitchener. Continued on page 14

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business Continued from page 13 When Ryan and wife, Jenna started a family, they decided they wanted their sons, now including Jayden (seven), Jace (five) and Beckham (two) to grow up in a rural setting, so they built a home across the lake from the family farm. Ryan also began to develop an interest in farming. “I saw opportunity with the business,” says Ryan. “I think overall the ag industry is primed for a successful future over the long run and I felt that if I wasn’t involved in the farm there wouldn’t be an opportunity for my children to farm, should they ever choose. It’s not a business someone can just get

14 country-guide.ca 22012-04 DAS Simplicity_15.125X6.5.indd 1

into anymore. It’s too capital intensive, and land is too expensive.” There was a bit of irony at work, because just when Ryan was wondering about passing the farm on to his own sons, his father had been wondering whether there would be anyone that he could pass the farm to. Not only had Ryan gone to the city, but Noel also left in 1999 to work with a custom combining crew. But that same lifestyle lure eventually brought Noel back as well. “I came back for Christmas and I was driving west, and as I saw the mountains and the view I decided that I didn’t want to leave for that long again,” he says.

Noel took one last vacation to New Zealand and was back on the farm for good by the end of January 2000, where he has his own home a quartermile east of the farm with wife Amy and 22-month-old daughter Annabelle. Although living a rural lifestyle was a huge factor in all three Flittons’ decision to return to the farm, they all understand that the farm must succeed as a business first if it is going to provide a life. Or, as Gary says, “If you don’t get it figured out that it’s business first and a lifestyle second, you’re not going to have the way of life at all.” Again, there’s some irony here, because for many years Gary had wres-

MARCH 4, 2014


business tled with the idea that if we wanted to make the business thrive, he had to find a way to take control. “I was the perfect whining farmer,” recalls Gary. “What was happening to us was everybody else’s fault. Blame the wheat board, blame the banks, the weather or whatever.” Gary says he whined so perfectly that the CBC often featured him lamenting the woes of farming on their “Journal” or midday programs. “They loved me because I whined wonderfully,” says Gary. “Finally the light started to come on that this wasn’t getting me anywhere. I realized that I had to grab hold of the areas that I could effectively control. After that point I

stopped hiding from what was happening financially, and aggressively grabbed hold of the issues and dealt with them. Whether it was a bill that wasn’t getting paid or a loan that we were going to have difficulty paying, I’d deal with it. It was just decent, common-sense business ethics really, and being self-disciplined enough to try and be a better producer.” But it would be a mistake to underestimate the struggles, either then or now. Today, the family’s Twin Valley Farms is at the point where it’s transitioning to the next generation and, just like thousands of other family-farm businesses across Canada, the Flittons are finding that it’s not an easy undertaking.

Gary is the first to admit that he’s a little stuck in his ways. “You head down this road your way because you’ve finally found this little avenue of success that seems to have worked, and it’s hard to change or to pass your vision on to the next generation,” Gary explains. It’s not about ego. Gary is quick to admit he’s made plenty of mistakes, and although he recognizes the inevitability of change he’s heard too many nightmare stories about farm transitions. “I’m in my 60s and it’s time for me to back out the door, but that’s one of the most difficult things for a farming operation,” he Continued on page 16

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business

Continued from page 15 says. “I remember hearing that only 15 per cent of multi-generational transitions, not just farming, but all companies, are successful and that’s pretty scary.” Frustrating as it can be for the next generation, Ryan has come up with an idea that is helping all three of them with the process. Gary, Noel and Ryan are enrolled in the Canadian Total Excellence in Agricultural Management program (CTEAM) through Agri-Food Management Excellence (AME). Gary was reluctant to take the course at first and only agreed at the insistence of Ryan, who felt their commitment had to be all or nothing. “The reason I wanted all three of us to take CTEAM is because it’s really difficult to bring back ideas and try to implement change when nobody else really has been there and gone through that process as well,” says Ryan. “I was a big promoter of either we all take it, or none of us take it. It’s a pretty big commitment for all three of us to take off but I just knew that it would be a challenge, given our personalities, to implement any change if we weren’t all there experiencing it at the same time.” Ryan’s business experience made him view the farm differently than Gary and Noel. “I saw a business that has had success, was financially viable, and 16 country-guide.ca

was in a good position moving forward. There was real opportunity here. I think we were just at a point where we needed more structure in the business,” says Ryan. “On most farms, everyone is doing a little bit of everything and so that’s just what the structure becomes and as we’ve grown it creates more chaos within the organization if nobody really knows their role and their responsibilities. “My biggest apprehension was working with family,” Ryan says. “We all have very different personalities, and I knew this would likely be one of our biggest challenges. But it was also one of our greatest assets. This is why I believe structure is so important.” A big sticking point for Gary has been the financial management aspect of the business. Over the years, Gary has developed his own financial analysis tools including spreadsheets and cash flow forecasts that have worked really well for him. “Part of what I was trying to transfer over to the boys is my financial analysis tools, but they’re self-evolved and they just weren’t grabbing a hold of them because they weren’t theirs,” Gary says. CTEAM is helping him to rest a lot easier on this point. “Through this process I can see that they’re picking up on the financial analysis tools that we’re using. I could see them working through it and the lights were coming on and I realized I don’t have to MARCH 4, 2014

Photography: Chris Yauck

Different personalities can strengthen the farm, Ryan (l) and Noel believe, as long as everyone has the same clear goals in mind


business worry about this because they’re going to develop their own tools themselves and I don’t have to be so concerned that they get it all from me.” Noel has begun working on ratio analysis and is handling the daily bookkeeping tasks. “I think it has helped both ways, with Dad realizing that there might be a different way for us to do things and Dad’s going to have some confidence in giving up some of his methods,” says Noel. With everyone starting from the belief that the farm needs to function as a business, the Flittons have implemented practical, concrete steps to make sure it does, including building individual offices attached to the shop. “We used to all have home offices,” says Ryan. “Everybody was on board with putting in separate offices to come to work so that home is home and work is work. That’s helped a lot with communications.” They also have a meeting room in the office area with a projector and screen where they can view the financials, crop plans or equipment options. They use it to hold daily meetings, when they’re not hard at it in the fields, with everyone who works with them on the farm, which includes three full-time employees and several seasonal helpers. “It’s a great tool to jointly ascertain priorities, delegate jobs and keep everyone on the same page,” says Gary. “We also have whiteboards with the jobs and priorities written down so they can be stroked off when they’re completed.” For a number of years now the family has held its annual general meetings off farm — this year it was Palm Springs in February — where all the family get together, including spouses of the partners and the non-farming siblings, sisters Rheana (33) and Richelle (30), to make sure everyone is in the loop about the farm where they all grew up. This year they’re also discussing a new vision for the farm that they’re evolving as part of their CTEAM training. Although they’ve only completed module one of the CTEAM program, which involves four, week-long components that are held in different cities throughout Canada over two years, the aim is to evolve a five-year strategic plan that will help guide them through the transition and set a direction for the future of the business. For Twin Valley Farms a big part of that business strategy is developing a value proposition that sets them apart from other farm operations in the area and helps them to build relationships that will enable them to grow the business in a highly competitive environment for land. “In our area there is a huge number of Hutterite colonies so we see our expansion coming through being a preferred renter to different landowners in the area,” says Ryan. Two years ago they began a program called Acres for the Community, where for every acre of land the farm rents from local landowners it donates $1 to a local charity or organization on behalf of that landowner and they also invite the landowner to match the donation. Over the past two years the program has raised over $13,000 for local community organizations. “For me, part of the core value of our business is the MARCH 4, 2014

community that we’re in,” says Ryan. “Acres for the Community is to reiterate that we’re here to support the community. We are a family farm and we’re in the area and we’re here for the long haul and this is where we want our kids to grow up and enjoy being a part of it.” Social responsibility and involvement in the community has always been important to the family, but until they took CTEAM it didn’t occur to any of them that some of the things they’re already doing are value propositions that interestingly also relate back to the very reason they all returned to the farm in the first place: the rural lifestyle. The Flittons know that no one training course can be the panacea to their transition, but CTEAM is helping them to develop a measurable and fully implementable business plan and to take some baby steps towards the transition of the farm. Basic as it may seem, writing down the goals and objectives for the farm has been a huge starting point. “When these things are written down for everybody to understand and everybody has had input it brings everybody on board as to where we’re headed,” says Gary. “That’s where I see the big value for us. Ryan could see that. We have to develop this vision and this plan together.” Everyone is learning something not just about the farm but about themselves and they’ve all realized that self-discovery is just part of the transition process and of building a successful business. “Noel and I have sometimes felt Gary is a little bit of a micromanager, and I think he feels sometimes that we aren’t involved enough,” says Ryan. “My background has been almost 100 per cent hands off. I think in a farming situation you need a blend and I think that I’m learning to be a little bit more involved. My biggest challenge, however, was that I had been gone for 12 years, and I needed to re-learn farming. It’s been a steep learning curve.” Gary has realized that he isn’t, can’t be and doesn’t have to be the source of all wisdom for the farm or his sons. “I realize that we certainly could have done better and taken advantage of other opportunities,” says Gary. “That in itself may be a bit of the key — to objectively analyze what you’re doing and not defend the mistakes you’re making.” Noel has realized how important it is to have everyone on board as a team. Otherwise the diverse personalities of the three family partners can sometimes cloud the direction that the farm needs to take. For him the whole concept of a clear vision and setting core values is foremost. “It’s really important to stick to core values and define what you will do and what you won’t do,” says Noel. “Sometimes we struggle because we’re all different people here and we don’t all have the same world view or ideas. So to put our ideas into a statement that we all have to sign off on means I’ll have to compromise on some things and hopefully everyone else compromises on some things too.” Says Noel: “As long as you are all on the same page, and as long as this company is defined by those values, that creates solidarity and something we can go forward with.” CG country-guide.ca 17


business

sisters Brooke Aitken farms. Her sister Sarah Tkachuk is a farm adviser in the city. Together, they’re the story of a changing agriculture

rooke Aitken wasn’t going to farm. Then, while attending an animal behaviour conference in Australia, she woke one morning and knew she wanted to get back to the farm. “It was something about being halfway across the world, maybe,” says Brooke. It’s the kind of life moment that many farm kids share. Except, of course, Brooke is a daughter, not a son, which is a distinction that still makes myriad differences, large and small, both in her daily life as a farmer, and in how she prepares for the future. Maybe it isn’t as revolutionary as it used to seem. Brooke’s parents, after all, always supported her interest. The youngest of four daughters, she showed early skills with animals, and she was encouraged. “They bought me five ewes for my fifth birthday,” Brooke recalls. It didn’t stop there. Growing her flock, Brooke used the lamb sales to pay for her education at the University of Saskatchewan, and she now holds a B.Sc. in agriculture and an M.Sc. in animal behaviour. In 2010, she finished her studies and returned to the family farm. Today she runs 400 ewes, 100 commercial cattle, and about 200 acres of organic cropland with her parents, John and Sandra Aitken. Her longtime boyfriend, Chris Howard, helps out as well. Loch Lomond Livestock Ltd. is huddled in the Missouri Coteau, south of Eyebrow, Sask., and the Aitkens sell most of their cattle direct to buyers off the farm or through auction marts. Much of the lamb is direct marketed. And Brooke is in the middle of it all. 18 country-guide.ca

MARCH 4, 2014

Photography: carey Shaw

By Lisa Guenther, CG Field Editor


business

A woman’s place An hour and a half east of Eyebrow, Brooke’s sister Sarah Tkachuk is a partner with KPMG Enterprise and Tax Services. Sarah knows every inch of the road back home. Women on the farm have been carving out roles for themselves for decades, Sarah tells me. But even today, she says, young women face different challenges than their male counterparts. Today, though, the challenges are nuanced, and they start within the family, at the heart of most Canadian farms. Managing the family is a challenge that farm women know they will have to face in a way that’s different than for their brothers, says Sarah. “It’s a bit of a deterrent. I mean, farming is not a nine-tofive job. It’s not a job you can take mat leave from.” “In lots of ways, that’s a benefit because there’s lots of flexibility,” Sarah adds. “But at the same time, when I see women in agriculture now, I don’t see the men that are their partners taking on the same roles that the wives would have done in the past.” And of course, there are also the lingering questions about whether women can handle the physical demands of farming and livestock production. Again, Sarah says, “I don’t think this is overt. I think it’s more subtle.”

Although Brooke is just over five feet tall, she’s proven that she’s tough enough to handle livestock. One recent day at the community pasture, as she hauled out a lamb that had slipped into the wrong pen, a man commented, “Pound for pound, you’re probably the strongest person here.” Mentoring can also be a different process for women. “I think women have different relationships with men,” Sarah says. “And because a lot of the people going before you, and the people you learn from, would be men, I think there’s a different mentoring relationship that happens there. “It’s still surprising to see females in agriculture,” Sarah says, “so I think they’re treated differently.” Brooke doesn’t find she gets talked down to. “But I notice when I’m with Chris, people will ask him questions about the cattle, which I find kind of funny because he’s involved, but he’s not up close and personal.” Besides, she adds, women are excelling in ag education, so more and more, they’re the ones who know their stuff. “In my animal science class,” Brooke says, “I think it was usually about 75 per cent women.” Continued on page 20

Three-quarters of Brooke’s fellow animal science students were women.

MARCH 4, 2014

country-guide.ca 19


business

Continued from page 19

Succession planning Despite the specific issues women face in agriculture, when it comes to farm transfer, women and men have to jump the same hurdles. As part of succession, Sarah focuses her clients on communication and the transition process. “Every situation is going to be different, but what we really emphasize is making it about the process, not making it about the individual,” she says. “Making it about the process takes away some of the emotion.” For example, families can hold regular management meetings that include everyone involved in the farm to help plan the crop year or upcoming month. Everyone should have a chance to talk about what’s working, and what needs to be done. Sarah says it’s easier to raise issues at regular meetings than call a special meeting to hash out problems. “Then it’s about the system, rather than the specific situation.” Sarah encouraged parents John and Sandra to think about succession planning shortly after Brooke returned to the farm. The family sat down to talk about wills, ownership structure, business structure, and everything else that goes into succession planning. Communication is often thought a female skill, perhaps especially on the farm. Whether that’s still as true, Sarah is good at 20 country-guide.ca

“spurring us on,” Brooke says, and Sarah has also been careful to declare where she has a conflict of interest. “We definitely appreciate her help,” Brooke adds. Brooke and her father meet informally often. “We’ll sit down over a coffee or over the wood stove in the shop and talk about what needs to be done in the next week or the next couple days. And then we’ll also bring up things that are more longer term.”

Succession will be complex, Sarah says, whether it’s sons or daughters Now the Aitken clan is working to set up regular, more formal meetings. Sandra recently retired from her offfarm career, and will likely take on the marketing. The family also holds an annual meeting where they look at cash flow and big business decisions. Supporting two families with income from one farm can be a challenge, Sarah says. Alternately, the farm may have to support the parents’ exit. “There are lots of financial issues around succession, and sometimes that can drive who can be involved in the farm as well.” Although it can be tough to find enough income from one farm to support two generations, Sandra’s social work career meant

she wasn’t relying on the farm for income. As well, when Brooke first rejoined the farm, she did contract work as a research writer until the farm grew enough to support her full time. And Brooke’s boyfriend, Chris, still works off the farm. Chris grew up on a grain farm, and is chewing over the idea of farming full time. “He definitely figures in because if he’s farming full time as well, then it changes things for sure,” Brooke says. Brooke says they’ve tried to keep nonfarming family involved as well because “it impacts them even if they’re not here.” Sarah says much also depends on “understanding when you’re making a business decision and when you’re making a personal or family decision. “It can create a lot of conflict when people don’t understand where those decisions come from,” she says. Non-farming children might feel they have a stake in the farm, as well, and they might be more inclined to want a piece of the business when commodity prices are good, Sarah says. But generally everyone feels better when the farm can stay in the family. “There’s a sense of legacy there. There’s a sense of history,” says Sarah. Based on her experience, Brooke endorses Sarah’s call for more communication. “Just sitting down and talking through things once in a while can really help.” Continued on page 22 MARCH 4, 2014


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business Continued from page 20

Next generation shakes up the farm

Facilitator enforces succession planning process Although most farm families see succession planning as important, it’s uncomfortable at times. “It’s like talking about your will," Sarah says. Nobody wants to talk about death. Nobody wants to talk about conflict. “Nobody wants to talk about how they’re going to transition the management.” Sarah suggests families find a facilitator to enforce meetings and formal communication processes. “If difficult issues “Because what tends to happen in don’t get dealt lots of families is, if conflict arises or a difficult situation arises, it’s easy with,” Sarah says, for people to walk away from the pro“they rarely get cess or let the process die.” The facilitator’s job is to keep famless difficult.” ilies working through the processes, even if difficult issues pop up. “If difficult issues aren’t dealt with, then they rarely get less difficult,” Sarah says. “And a difficult situation that’s not dealt with can often turn into a critical problem that can really break down the family or the business. Or both, in some cases.”

22 country-guide.ca

The stereotype is of families farming together, where the knowledge flows by osmosis from parents to the next generation. But that’s not the whole picture. Young farmers tend to bring more education to the table, Sarah says. And while farmers approaching retirement tend to be more conservative in their business practices, often younger farmers are more willing to take on risk. They may also challenge the status quo. This can create tension, but it can also be very healthy for the business. “What we know about business is that businesses also go through that life cycle. And a mature, stagnant business tends not to grow,” says Sarah. “So having that element of risk-taking can be very good in enabling a business to look at diversification or expansion or trying different methods.” Brooke’s risk tolerance is on par with John and Sandra’s. But Loch Lomond Livestock has expanded since she came back. The cow herd grew slightly, from 75 animals to just over 100, and the flock quadrupled. Brooke’s return also heralded the introduction of radio frequency identification (RFID) equipment to automate the flock’s record-keeping. They accessed Growing Forward funding, which covers up to 70 per cent of the cost of readers, software, and equipment training. There are other benefits to having different generations involved in the farm, too, says Sarah. The broader the family, the bigger the labour pool. Family members who work off farm, or have held offfarm jobs in the past, bring different skills to the table. Brooke doesn’t have to look further than her own family for many of the resources to run a successful business. Sandra is the strongest communicator, and spurs Brooke and John to invest time in planning where they want the business to go. “She’s pretty good about trying to get us to work together as a team,” says Brooke. John has about 45 years of livestock production experience, and has kept good records on everything from pasture management to finances. Both John and Sandra are financially astute, Brooke says. They tend to plan ahead. And living through decades of rising and falling commodity prices has given them a calm, “been there, done that” outlook. Brooke also has three sisters, including Sarah, and all have university degrees. “We’re blessed,” Brooke acknowledges. “Everybody’s got ideas and tries to help any way they can.” Brooke is no slouch herself, with knowledge and connections from her university education. She is always looking to improve the farm, and is currently evaluating holistic management to better use the farm’s resources. Her research experience has made her comfortable rooting around until she finds an answer. And when it comes to individual animals, she’s got a memory that would put an elephant to shame. “I’m usually the one who knows the whole history of a cow. I’ll look at her and say, ‘Oh, her mother was this cow and her father was that bull. And she’s raised a bunch of good calves.’” Perhaps most importantly, Brooke says she and her family have a healthy respect for each other as well. “You have to have respect for the people you work with,” Brooke says. “Especially when you’re dealing with a farming operation. There are some pretty high risks.” CG MARCH 4, 2014


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business

Your CEO interview Would you pass an interview for your job? Would your son or daughter? Answer these 10 questions to find out By Angela Lovell he makings of a great farm production manager will always need to align with the details of that farm’s crop and livestock enterprises. By contrast, the makings of a great farm CEO will reflect the business, organizational and strategic needs that arise in virtually any business plan that hopes to deliver sustained success. As a generation of mid-career Canadian farmers evaluate how to keep their farms moving forward, and as older farmers simultaneously try to work out whether their children will be up to the job of taking control, it’s a good idea to get as specific as we can about what those crucial business expectations will be. Step one, not surprisingly, is to actually define the family farm as a business. “By the time we get to this discussion, we’re not talking about a small piece of land where there’s one income and one family that can live off the farm,” says Glenn Dogterom, a certified financial planner with Young, Parkyn, McNabb LLP in Lethbridge, Alta. “We’re talking about employment of several people and a significant amount of capital invested. We’re looking at a large business operation. When you start taking a look at the millions of dollars it takes to operate a grain farm, for example, even a modest sized one, a different mindset is needed.”

1. Can you create a sense of structure? It’s not always an easy task to separate business from family in a farm environment. A CEO needs to excel at it, establishing a strong organizational structure, says Heather Watson, executive director of Farm Management Canada. “Create an organizational chart that identifies titles, responsibilities, accountabilities and reporting procedures,” Watson says. “Through this process, you will be able to identify those who are working on or for the farm versus those that are part of the farm by simple association through family.” A strong organizational structure should create a strong and proficient team, says Dogterom. “The farm manager or CEO of the operation is probably one of the key roles, but he or she has to have a strong team to make the operation work efficiently.” With a strong commitment to structure, a CEO will also be able to assess the farm’s current capabilities against the skills it needs for top performance. Indeed, the larger the farm gets, the less likely it is that the manager will possess all those skills, so the manager will need to create a structure for talented people to work together for the greater good. It’s more than team leadership. It’s writing the rules. Not everyone is up to the job.

2. Do you have off-farm experience? Dogterom is a firm believer that any young person who wants to take a business position on a farm should work off the farm for a minimum of two years, especially if it is a family member who has grown up on the farm and has never been otherwise employed. 24 country-guide.ca

“It doesn’t matter where they go. They can work in a farm environment or somewhere else and experience what it’s like to work as an employee for somebody else, and then come back with some skills that they can apply on the farm,” Dogterom says. “It’s a challenge to take somebody and put them into a management position because they are family. They have to earn the respect from employees, and they won’t necessarily receive respect just because of their title.” But don’t only think of the next generation. Working off the farm or on boards and organizations will fire up Mom and Dad too, bringing new ideas to the farm.

3. Can you develop a business strategy? Any good business plan begins with a vision that’s often derived from the core values of the people involved. Begin by assessing how that vision and those values feed into the strategies necessary to move the business toward its goals. “From there you can plan how you will move from where you are today to where you want to be,” says Watson. “You can start to see areas for which you may wish to attend a conference, bring in an adviser, or talk to fellow farmers for their insight.” Strategies need to be realistic enough to work on the ground. Then, link them to your business cycles so you can routinely measure your progress. This will ensure your business plan doesn’t just sit on a shelf, but is a dynamic document. “Annually, you are evaluating current practices against goals, changing realities and industry prospectives, then planning for how you will work on the business and not just in it; evaluating how you did, planning for improvements including MARCH 4, 2014


business knowledge and skills development, and so on,” says Watson. “Have a one-year operational plan that fits within your three- to five-year strategic plan. Together, they comprise your business plan.” It means your CEO must be a strategic thinker who is comfortable talking big picture, but also enjoys detailed study of numbers and forecasts.

4. Can you read the farm’s financials? Financial management is often an area where farm operations turn for outside assistance, which is a sensible thing to do if the principals of the business don’t feel they have the necessary skills to do the job properly. That said, at the very least the manager or CEO needs to be in touch with the figures. Knowing the cost of production and determining which areas of the business are — and are not — making money are essential, says Watson. “From there, the CEO can see which aspects of the business and its people are contributing factors. Is there inefficiency in how long it’s taking an employee to accomplish a task? Is there an opportunity for knowledge/skills development, or is a closer review of the activity and steps required?” When you are managing the finances in-house, make sure you have the tools (such as cash flows and projections) that you are going to need to do it properly. Also ensure that you understand them and the significance of the numbers you’re generating, says Dogterom. “Do you understand financial statements, ratio analysis and how to use it? Do you understand what the bank covenant calculations are? Do you understand what the implications are if the company is offside? What kind of financing is appropriate for the operation? Should you use short term, long-term borrowing and under what circumstances do you choose one over the other?”

5. Can you lead the team? The head of the team must be capable of taking the lead and handling the responsibilities that come with it. “An effective farm manager is somebody who understands the business and is an individual who has a vision for what that business is,” says Dogterom. He suggests writing a job description for the position. “Prepare an ad for the job,” he recommends. It’s a useful place to start, even if you’re only evaluating your own performance. “Decide what you are looking for in that role and what attributes you want the individual to have,” Dogterom says. “Look at the attributes of the candidate and determine if he or she is the right person to lead the organization — minimizing the fact that they might be related.” Choosing the right person to be the team lead is essential, says Dogterom. Realistically, however, it may not be a member of the family, hard as that may initially be to take for some family members, and the person may not be part of the farm’s succession. Promoting family members to a management role can be highly successful if that person has the skills MARCH 4, 2014

Your farm CEO must work smarter than anyone else, and harder too, says farm adviser Glenn Dogterom and experience to handle the job, but the fact that they are a family member shouldn’t be the only consideration if the farm is to succeed. “This is a very challenging process and you need to have a very open and honest discussion about what this person’s going to do,” Dogterom says. “Birth order doesn’t necessarily make you the best candidate for the job. Quite honestly, there’s too much at stake to not get the best candidate you can. When you have other stakeholders (particularly parents or off-farm siblings) who are expecting to derive some kind of income from this operation, you want to ensure that person is capable of actually doing a good job for you.”

6. Can you motivate your team members? Once the business has its team, it’s the responsibility of the farm manager or CEO to develop ways to motivate and effectively manage the people within it. “First of all, ask yourself, who are my human resources?” says Watson. “Human resources encompass those who work on the farm, but also anyone contributing in any way to the farm business. Identify these resources and the role they play in and off the farm.” Continued on page 26 country-guide.ca 25


business Continued from page 25 It’s important to treat people equitably, whether or not they’re a part of the family. “I would argue that all of your human resources working on or for the farm must be treated fairly according to a visible, transparent process in order to maintain a positive working atmosphere with family and non-family members,” says Watson. People skills include being a good communicator and effective facilitator. They also mean being skilled at building relationships. But that isn’t the same as being a nice guy. Remember, says Dogterom, the manager has to fire as well as hire. Two-way communication is also vital to develop and build people’s skills. Will your new CEO react well to appropriate criticism?

7. Can you measure your own performance? The farm manager is responsible for representing the interests of all the stakeholders of the farm business, and must be accountable to them for his or her actions and decisions and the overall performance of the business. “The manager is responsible to the stakeholders to provide them with a return,” says Dog-

Change happens Change is inevitable, so planning for the future is a vital component of the business plan that needs constant attention, something that Trish Fournier could write the book on. Fournier is CEO of Lake Erie Farms, Tillsonburg, Ont., which was in tobacco production for over 80 years and switched to hydroponic, yearround greenhouse vegetable production in 2000. Assessing the future and being flexible enough to take advantage of new opportunities form a key part of the company’s strategy and have helped it cope with such radical change, Fournier says. “You need to have an open mind and be looking at what’s coming at you because if you’re constantly doing the same thing year after year, you’re getting lost in dust,” she says. “You’re going to miss an opportunity. There are going to be new threats that are going to come up and maybe the way you did it in the past won’t work anymore. It’s critical to keep changing.”

26 country-guide.ca

terom. “If I have a million-dollar asset, my expectation is that I’m going to have a return on my investment. In some cases that return may be an equity increase (if, for example, land values go up) but that doesn’t put any cash in anybody’s pocket. So there is usually an expectation of a cash return on the value of the investments as well.” Just as there should be an annual review of all the employees, there should also be a review of the farm manager (which is usually done by the stakeholders). Accountability is really important in a volatile industry such as agriculture, says Dogterom. “We have some very good years, we have some very bad years and it’s not a matter of just managing through the good ones. It’s also being able to cope and deal with the negative years that will inevitably come along.” It’s important to have the ability to use analytical tools to determine what’s being done, how it compares to other farm businesses, how you measure outcomes and how you control them. Part of that process is setting “SMART” goals through the business planning process that are Specific, Measurable, Assignable, Realistic and Time-related. “By setting SMART goals, your accountabilities in terms of people and progress are mapped out for you,” says Watson. “If you don’t achieve your expected results, consider why. Is there a performance issue with the person accountable? Were the goals not SMART in the first place? Make sure you have a means to identify, track and act on performance issues.”

8. How good are you at managing change? Wherever you are in your career cycle a CEO also needs to be focused on succession and continuity issues. “Succession should not be considered an event in the life of a farm business, but rather a process that should be ever-present in management,” says Watson. “Perhaps in an ideal world the farmer decides it’s time to retire and a member of the next generation has been trained to take over the business, and all of the family members agree and understand the process and outcomes, and everything is wonderful. This is rarely the case, but with the appropriate planning, it could be.” Having an established and ongoing process to consider the long-term future

of the business will help you manage, anticipate, plan, respond to and take advantage of change. That long-term view needs to encompass the same things that the business is dealing with today, such as markets, government policy and industry direction. “Having an established process with written documentation helps keep the business grounded, not floundering with everything the industry has to throw at it, while also being flexible enough to encompass change and new ideas to test against the business strategy,” says Watson.

9. Do you understand risk? As every farmer is aware, agriculture is volatile and risk is omnipresent, coming at the farm from multiple directions. Weather, world markets, land values, interest rates, input prices, politics, economics and many other local and global factors can have a big impact upon whether the year-end figures are red or black. On the farm, a manager needs awareness of what the potential risks are, says Dogterom. “We are in a global marketplace, so do you understand what the implications are of a good grain harvest in Argentina and Australia and France? Do you understand how it impacts on your commodities?” It’s crucial that your CEO insist on the farm making appropriate use of the tools available to manage risk, whether that’s risk in the marketplace or financial risk, such as interest rates.

10. Can you work harder and smarter than anyone else? To be a truly successful farm manager, a key attribute of your CEO has got to be a superior work ethic, says Dogterom. “I have examples of young guys that are very good farm managers, but the amount of effort that they put into the process is incredible,” he says. “They understand the market, the machinery and the new technology, when it needs to be replaced, how much they can invest, whether they should be renting, whether they should be leasing, whether they should be buying property, all of those elements. When I meet with them and we have a discussion, they know their business.” “They’re successful because they assess the risk and rewards and then move forward,” Dogterom says. “They work at it.” CG MARCH 4, 2014


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business

Second look

When you value add, say Joe (l) and John Weniger, opportunities can arise overnight… if you’re watching By Steven Biggs

28 country-guide.ca

Fast forward to 2014 Today, Weniger is still growing sweet potatoes. “We’re packing sweet potatoes as we speak,” he tells me on the day we talk. He’s still focused on adding value and still makes flour. The difference today, however, is that a lot of the added value isn’t on crops from their own farm. Opportunity knocked. Now Weniger is using crops from around the world. The Wenigers sell fresh sweet potatoes to Loblaws, independent grocers, and into the foodservice industry. They’ve been told their sweet potatoes are sweeter, look more appetizing, and taste better than imported American product. That quality advantage is important, because their acreage is small compared to bigger American growers. “Definitely the ‘buy-local’ has helped the fresh market sweet potato market,” says Weniger as he talks about the relatively small Ontario sweet potato acreage. “I’m a little boy playing with the big boys,” Weniger says, referring to large grocery chains. Nonetheless, he’s had a good experience working with Loblaws, saying, “You gotta give it to these guys, they’re the only major chain that stands behind the local guys (sweet potato farmers).” Weniger likes big customers because it means he doesn’t have to deal with the logistics of shipping single skids, as he does with smaller stores. On the flip side, with the majority of his harvest going to one company, he knows that he has most of his eggs in one basket. Another reason for having a diverse customer base is that not everyone wants the same thing. Foodservice companies, he explains, take the jumbo sweet potatoes that are too big for the retail market, using them to make fries. And smaller sweet potatoes are used for flour. “Some of the culls that we produce go into the pet food industry,” he adds. Weniger used to sell at farmers’ markets — and still has a few farmers’ market vendors who buy his sweet potatoes to resell — but doesn’t sell at markets nowadays. He liked the direct contact with consumers, but it took too much time. MARCH 4, 2014

Photography: David Charlesworth

hen I first crossed paths with John Weniger, it was 2009, and it was because a contact at a food-service company had told me about Weniger’s sweet potatoes. At the time, Weniger had about 40 of his 300 acres in the crop, and he was selling most of his harvest to grocery stores and the foodservice sector. I decided to put the story on hold. The operation looked like a success, but I wasn’t entirely sure what insights there would be in it that would help other Country Guide readers. After Weniger started talking about adding value to his sweet potato crop using an on-farm mill to grind some of it into flour, however, I scribbled a note to check back in a couple of years. Now that those couple years have gone by, the story is a bit different than I had expected. A former tobacco farmer, Weniger farms near Aylmer, Ont., with his brother Joe. They started growing sweet potatoes in 2001 as part of their exit strategy from tobacco. They’re now up to 60 acres of sweet potatoes, which they rotate with corn, soybeans, and spelt. They’ve been out of tobacco going on seven years — and they’re on the lookout for ways to add value so they can continue to work full time on the farm. The flour isn’t their first value-adding project. Before that, they did a market assessment plus some trials for flash-frozen sweet potato — but decided not to go to market with the idea. It’s very much a family business, says Weniger, who looks after most of the milling and marketing, while his brother Joe does most of the production work, including farm operations. As in many family businesses, though, nothing is cast in stone. “When it comes to planting, if I have time I’ll be there planting,” Weniger says. Their father John, who is retired, does some field work, while their mother, Angela, often helps make up boxes for sweet potatoes, and the family also hires six or seven seasonal farm workers.


business

The first steps It was in looking for ways to add value that six years ago the Wenigers started to dry sweet potatoes and grind them into flour. Today, their Beta-Pro flour is marketed as a source of beta-carotene, vitamin A, iron, potassium, and fibre. Plus it is gluten free and can be used to replace a portion of the conventional flour in baking, as a thickening agent in sauces, a binder in hamburger, or added to shakes as a nutritional supplement. The flour is sold by Bulk Barn across Canada, and is used on a commercial scale by some bakeries. It is also used in a couple of unexpected places, including in brewing, and by a zoo food company that blends it into a feed for crickets (which in turn are fed to reptiles). As the Wenigers grew the sweet potato flour business, they invested in an infrared dehydrator to dry the cubed sweet potatoes before putting them through a hammer mill. From there, the family branched out into a new business, custom drying other foods. While only about two per cent of the sweet MARCH 4, 2014

potato harvest goes into this value-added product, Weniger says it’s a good fit for the operation. “It’s worth it because it complements our line,” he says. Despite lower-priced dry sweet potato from the U.S., he still has a market for his grown-inOntario product. “We have customers who want that,” he says. But the evolution has continued. One of the first things I learn when I check back in with Weniger in 2014 is that the infrared dryer is gone. “We’ve gotten out of the custom-drying business,” he explains. They still sell their Beta-Pro sweet potato flour, and it’s still made with sweet potatoes from their farm. Now, though, they hire out the drying, using a third party. To Weniger, selling the dehydrator made business sense. It freed up time and money to focus on another value-added business, one that they stumbled upon by accident when peddling flour. While the drying business didn’t grow as much as they hoped it would, it paved the way to a new opportunity. Continued on page 30 country-guide.ca 29


business

Continued from page 29

Beyond what you’d expect “We fell into it by accident. We were at a show promoting our sweet potato flour and a vendor came up and said he had a problem with flour from another company,” says Weniger as he talks about getting his first milling order, for a batch of chickpea flour. “It wasn’t exactly what he wanted,” he adds as he talks about his first attempt, which was a bit on the coarse side. A commercial sifting machine was $40,000, so they improvised and made their own. “We just kept milling and sifting, and eventually sent him a product he really liked,” says Weniger. The growth of their milling business was gradual. “It took us years to get where we are now,” he says. He still dumps grain into the mill hopper manually, bags flour, and stacks skids. Today, they mill six different grains, also selling starches, sugars, gums, and a couple other gluten-free flours. “Pretty much everything for the gluten-free baking industry we have,” he says. They mill teff and amaranth from overseas, chickpeas and faba bean from Western Canada, millet from the U.S. Midwest, and quinoa from Bolivia. They also sell sorghum and rice flour for gluten-free bakeries’ use. Along with the hammer mill they already had, they have added a stone mill — and the expensive sifter. “I see a lot of potential in it yet,” says Weniger as he talks about a customer base stretching from British Columbia to Nova Scotia. 30 country-guide.ca

Managed growth Looking back, Weniger says if he were to do things over he might push the milling business more, saying, “I would have marketed myself harder a bit earlier.” He doesn’t regret the cautious approach, however, because they were able to manage the growth as it happened. “It was a slow growth, but it’s something the banks like to see,” he adds. They recently discontinued most of the small, retail-size flour packages (except for sweet potato flour), focusing instead on industrial-size clients such as bakeries and manufacturers. The priority now, says Weniger, is larger customers. They are considering setting up another mill in a separate location to mill grains with gluten, such as the spelt they now grow. On the distribution side, they are investigating warehousing options all across Canada. Weniger explains, “Shipping is a major cost of any product.” For specialty products, customers might pay shipping — “but on products available elsewhere, they won’t.” From flash freezing, to drying, to milling, Weniger isn’t afraid to look at adding value in different ways — forging a worthwhile niche and discontinuing what doesn’t work well. Right now, that means he is rethinking the benefit of selling sugars, which don’t get him much margin. “The flours and the starches are where we’re focusing,” he says. As for milling things that don’t grow on the farm, Weniger isn’t sentimental. “Most of the stuff wouldn’t grow here in Ontario anyway.” CG MARCH 4, 2014


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BUSINESS

Create a farm advisory board Advice is easy to come by. Most times, you don’t even have to ask for it. Good advice, though, is much scarcer, and thrives on planning and structure By Amy Petherick dvisory boards are becoming trendy. Both FORBES MAGAZINE and the HARVARD BUSINESS REVIEW published articles last fall advising small business owners not only on why they should use advisory boards, but also on how best to organize them. You might dismiss these articles as “advice about getting advice,” but the recommendations are serious business, including making sure your board is made up of a diverse group of people you consider to be very successful or admirable, and who are the kind of people who won’t be in it for the financial rewards alone.

“Ultimately, you’ll end up with better ideas and better implementation.” — Steve Laing In theory, the trend appears to be very transferable to farm business. As it turns out, in fact, it’s also proving transferable in practice, at least according to Lee Erickson of Edgeview Farms, who uses an advisory board himself. Erickson farms grain together with his wife in Donalda, Alta., and while his operation is independently incorporated, they pool all their labour and machinery so it will also be used by his son and daughter-in-law for their own farming operation. To facilitate both operations working as one, the four work together as partners, meeting every Monday morning to address management challenges and then to agree on directives communicated to employees on Tuesday mornings. “We are a farm family and a family-run farm, but we look at it more as a business and bring in the family after that,” Erickson tells me. So while the group does seek advice from one another first, unlike on other farms, the buck doesn’t stop there. Erickson refers to their different groups of advisers as pods. Most of their pods are made of 32 country-guide.ca

paid advisers, such as each location’s respective bank managers, the loan managers, and a shared accountant in the financial pod. But Erickson tells me they also heavily rely on at least five individuals who are not paid, which is more in line with the general advisory board guidelines. Erickson says these are people the whole family admires for their respective successes, commonly outside of agriculture. The most active members of this board are in contact regularly and they offer feedback informally, one on one. Then they really shine at the annual business meeting, where these advisers often star as guest speakers. “One of the fellows we’ve used is an owner, semi-retired now, of an aerospace business and he’s talked about the necessity of knowing details,” Erickson offers as an example. “Every business has things that can happen totally outside of their control. When you bring these people in, all of a sudden you realize they’ve faced the same challenges we face and managed sometimes in a totally different way.” Erickson says developing their pod structure for eliciting business advice was a gradual process but it was something he and his wife were inspired to do after they won Alberta’s Outstanding Young Farmer award in 1994. Suddenly, the agricultural community seemed small, and sometimes a little too uniform in its thinking. But they also became keenly aware of the high level of expertise among farmers and recognized a deep well of collective wisdom. This is exactly what Jim Johnston tapped into when he went looking for advice for his farm. Johnston has 700 breeding ewes and some cattle in New Liskeard, Ont., which offered him the opportunity to join a regional beef management club that the Agriculture Management Institute (AMI) helped launch. AMI’s approach is to help peer groups get organized, with the help of a facilitator, and to formalize them as a means of sharing experiences among like-minded individuals. The key in getting a group of 10 beef farmers to work together like this, which incidentally also applies to making an advisory panel work well, is that everyone involved has to be clear about expectations. MARCH 4, 2014


BUSINESS

“As long as everybody is on the same wavelength about what the objectives of the group are, and are willing to throw their numbers on the table, I think the concept is pretty good,” says Johnston. Last year, he says it was pretty easy to agree on what the group wanted to focus on first. “Hay was very scarce and it was very pricey, so our first benchmarking project looked at what we were feeding these cows,” Johnston recalls. Between industry best management recommendations and breed specific practices, Johnston says he always figured he should be feeding 50 pounds of dry matter a day to each cow. But after counting all his bales, weighing them on a shared set of scales, sampling them according to the group protocol, and then sharing results with a consultant who summarized the group’s findings, he’s cut back to 36 pounds and says his cows are just as fat as ever. He’s also continued to weigh his bales, because he’s learned he can have as much as 100 pounds per bale in variation (which he can now work on correcting in the field) and because he believes multiple years of data is important. Having had experience conducting research before he started farming, Johnston has expertise to con-

tribute to the group, but quickly points out he also gains a lot from what other members contribute in their own right. “One of the bigger guys in the group, in terms of cow numbers had a very, very good handle on what it cost to make hay, including depreciation,” Johnston says. “It’s not rocket science, it’s things we all know, but it made us think a little more and this year we’re trying to toe the line.” Here lies the rub, though. A farm management club or an advisory panel is tangible, with real faces who expect you to follow through on their advice and your own good intentions. Employing either of these methods, or a hybrid like Steve Laing of Fiddlehead Farms in Demorestville, Ont., just makes it a little bit harder for business owners to let themselves off the hook when they don’t meet their own goals. While Steve Laing may only farm five acres in Ontario’s Prince Edward County, and this may only be his third year in operation, he talks about the essential role of his advisory board in a way that echoes the feelings of large operator Lee Erickson. Continued on page 34

Lead by

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BUSINESS

Continued from page 33 “I have to make sure an idea is thoroughly researched to present it and answer all the questions everyone else has, and then sometimes we have to bench an idea to come back to it later on or do a trial,” says Laing. “You have to make sure you cover all your bases because whenever you have a hole, they can point at that hole.” Though his is a small market garden and agritourism venture, the management structure on Laing’s farm is sophisticatedly business-like. Laing and his father, a registered accountant, share voting control of the company. However, the board also includes non-voting partners such as Laing’s stepfather, who earned his MBA before retiring from a long career with the Workplace Safety and Insurance Board, and Laing’s partner, a landscape biologist. With so many different value systems, it can be frustrating to operate by consensus, Laing admits, but it also truly tests the strength of his ideas thanks to the variety of perspectives. “Having a bunch of people who overlap a lot isn’t necessarily useful in making well thought out

decisions,” Laing says. “People with divergent viewpoints can help because it requires you to justify your position more and ultimately you’ll end up with better ideas and better implementation.” Laing says his group meets three times a year for overall business-planning purposes, such as approving annual budgets or new marketing initiatives, which is much closer to the quarterly meetings experts recommend for advisory board meetings. Then through the growing season, Laing makes operational decisions within the parameters set by the group, reacting to immediate challenges mostly as he sees fit. But he says the act of outlining the year’s plan of attack helps him keep the farm’s dayto-day progress balanced with reality, and takes much of the emotion out of decision-making for extremely rational results. But unlike Laing, most business owners organize their boards so they don’t have to implement every recommendation their advisers make. For instance, Johnston and Erickson can simply take suggestions they don’t like “under advisement.” After all, they say, even with a great advisory board, advice doesn’t always get easier to take. CG

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MARCH 4, 2014 1/20/14 9:54 AM


Forage

GUIDE

Grassland

Canadian Forage and Grassland Association


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When it comes to forages, the true leaders follow the herd.


Canadian Forage and Grassland Association

Welcome to Forage & Grassland Guide, a new annual publication produced in partnership by the Canadian Forage & Grassland Association (CFGA) and Farm Business Communications and distributed through Country Guide, Canadian Cattlemen and Le Bulletin des agriculteurs. It focuses on issues of importance of forage and grassland to crop and livestock producers across Canada. For more information on forage and grassland management in your area, we encourage you to contact and participate in the activities of your regional or provincial association. Canadian Forage & Grassland Association Ron Pidskalny, CFGA Executive Director 11312 – 57 Avenue NW Edmonton, AB T6H 0Z9 (780) 430-3020 pidskaln@gmail.com canadianfga.ca Manitoba Forage & Grassland Association Wanda McFadyen (204) 475-2241 wanda@mfga.net www.mfga.net Saskatchewan Forage Council
 Leanne Thompson (306) 969-2666    office@saskforage.ca saskforage.ca

Alberta Forage Industry Network Lyndon Mansell (780) 592-2262 info@albertaforages.ca albertaforages.ca Ontario Forage Council Ray Robertson (519) 986-1484 info@ontarioforagecouncil.com ontarioforagecouncil.com Quebec Forage Council / Conseil québécois des plantes fourragères Nathalie Gentesse (418) 563-1104 cqpf@yahoo.ca  cqpf.ca

Ontario Soil and Crop Improvement Association Harold Rudy (519) 826-4217 harold.rudy@ontariosoilcrop.org ontariosoilcrop.org B.C. Forage Council Fran Teitge (250) 267-6522 bcfc@bcforagecouncil.com farmwest.com/bc-forage-council Soil & Crop Improvement Association of Nova Scotia Carol Versteeg (902) 758-3530 carol.versteeg@ns.sympatico.ca scians.org

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Forage & Grassland Guide

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Three overarching issues for forage and grassland in Canada Regional groups across Canada agree on the need for more recognition and research

By ron pidskalny, executive director, Canadian Forage & Grassland Association (CFGA)

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anada has about 33 million acres of cultivated forage crops and an additional 36 million acres of native or unimproved pastures and rangeland. While many think of native pasture as “unimproved,” those with a true appreciation for the value of forage and grassland tend to think of it as “naturally perfect.” These 69 million acres generate almost $5.1 billion in economic activity for Canadians annually. This economic activity does not include the value of the environmental goods and services (EGS) contributed by the forage industry to Canadians in terms of climate change mitigation, erosion control, pollination services, recreation, wildlife habitat preservation, or the regulation, protection and improvement of water resources. A multi-level analysis of Saskatchewan’s forage industry suggested that the indirect value of EGS could be worth over 2-1/2 times as much as the direct economic value — suggesting that Canadians receive almost $13 billion in value from their forage and grassland resources each year. As stewards of Canada’s forage and grassland resources, CFGA met with its forage council and soil and crop improvement association members at its recent annual conference. All agreed that while each region has its own set of unique concerns and areas on which they need to focus, CFGA would speak as the “national voice” on forage and grassland issues. The group identified three overarching issues.

Environmental goods and services (EGS)

CFGA and its member stakeholders recognize that society needs to be convinced of its obligation to support the environmental value contributed through the good stewardship of the forage and rangeland resources of agricultural landowners. We also see that there are a number of independent, well-respected and trusted environmental groups that could help CFGA improve the recognition of the value of EGS. To this end, CFGA, through its environment committee will engage in a selection process to establish a formal partnership with an appropriate conservation organization.

Forage and grassland research capacity

Provincial stakeholders understand that each region has a number of key educational and government research institutions and important pieces of infrastructure that must be protected in order to maintain and improve forage research capacity. These resources include a number of dairy- and livestock-related operations. We also understand that a number of research scientists and academics have moved away from basic and applied research, and into administrative roles. CFGA, in conjunction with its stakeholders, will help target areas in which these losses have occurred and play an important role in the development of a strategic plan to revitalize forage research across Canada.

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Forage & Grassland Guide

Key educational and government research institutions must be protected in order to maintain and improve forage research capacity.

As part of this process, we also need to recognize that industry has research and development capacity as well, and could work in conjunction with the public sector to further forage and grassland research. Canadian research capacity will be important in the development and implementation of a national independent forage variety testing program. Survey results suggest that forage stakeholders, overwhelmingly, would like to see testing at a regional level. CFGA and its provincial and federal forage research stakeholders propose four testing regions: Atlantic Canada, Eastern Canada, the Prairies and British Columbia. Infrastructure is in place and all regions may have the capacity to conduct variety trials, with the exception of British Columbia. The cost of setting up a variety testing program in each region is around $500,000, for an initial setup cost of about $2 million. Some regions and provinces have variety testing programs in place, and will be well served, but CFGA does not have the resources, currently, to set up and maintain a national variety testing program.

The marginalization of forages

A trend that CFGA’s forage council and soil and crop improvement association members find disconcerting, is the displacement of forage crops from better land in favour of higher-value annual crops. As the value of annual crops relative to forages increases, forages tend to be relegated to increasingly marginal and less productive land. Forage seed production is also dropping as seed producers move to annual crop production — and away from the perennial systems required to produce forage for seed. Many also feel that agricultural producers need to make good use of better land to raise forages or the dairy and livestock sector (cattle and sheep, among others) will experience a loss in capacity to extract value from forage crops. Ultimately, we are all in the solar energy business — capturing a renewable source of energy from the sun to produce protein for human diets. n

2014


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Prairie grassland is everyone’s concern Continued fragmentation and degradation bringing solutions forward for producers, governments and conservation interests

By Duncan Morrison

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he prairies of North America have declined 79 per cent since the early 1800s. A 2013 report by Roch and Jaeger on grassland fragmentation in the Canadian Prairies says that by 2003, over 97 per cent of tall-grass prairie, 71 per cent of mixed prairie and 48 per cent of short-grass prairie had been lost in North America. While most of this loss occurred before the 1930s, alteration and degradation continues, with small patches being affected the most. This purge has catapulted grasslands to the dubious distinction of North America’s most endangered ecosystem. There are glimmers of hope. Governments, producer groups and conservation groups are increasingly demonstrating the benefits of grasslands to producers. That was one of the reasons for the Manitoba Forage Council changing its name to Manitoba Forage and Grassland Association (MFGA). “Grasslands are such a critical part of Manitoba’s agricultural scene whether they are native grasslands that are still in place or forages,” says Wanda McFadyen, MFGA’s executive director. “We are dedicated to the development and promotion of sustainable hay, forage and livestock industry and the protection of our land, waterways and wildlife diversity.” McFadyen says that the producers looking for forage and grassland solutions are quick to learn and quick to act once they are up to speed on programs available. “I think more producers are start-

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Forage & Grassland Guide

Grassland Ecosystem Services Disperse seeds

Maintain biodiversity

Mitigate drought and floods

Generate and preserve soils

Cycle and move nutrients

Stabilize climate

Detoxify and decompose waste

Protect watersheds

Control agricultural pests

Pollinate crops and natural vegetation

*Source: The Importance of Wetlands and Grassland on the Prairies: Forage and Grassland Opportunities; Canadian Forage and Grassland Association Conference presentation by Pascal Badiou, DUC research scientist.

ing to understand that with more tools in their tool box to manage the various grassland scenarios on their operation that they are not only seeing diversity in the area of sustainability but economic benefits as well.” McFadyen says the MFGA represents some of the most visionary producers in the province, regardless of crop. They know the markets and they are able to identify best options for the bottom line of their farm. Somewhat surprisingly, despite the recent attention to corn, canola and grain, forages hold their own from an economic perspective.

“A producer’s ultimate motivation to manage grasslands should be profit,” says Glenn Friesen of Manitoba Agriculture, Food and Rural Development (MAFRD). “If producers don’t profit from grasslands, we won’t have producers managing the grasslands. And well-managed grasslands continue to give back to producers and society by providing environmental benefits they are known for.” Friesen says that MAFRD’s marginal returns over total operating costs (net profit) analysis shows that growing and selling forage crops provide higher return on average than

2014


all but winter wheat in Manitoba. He adds that properly grazing grasslands adds additional value to the land base.

Conservation incentive

Conservation groups are also tackling the issue head on. Ducks Unlimited Canada (DUC), Nature Conservancy Canada (NCC), and Manitoba Habitat Heritage Corporation (MHHC) ave a wide range of producer incentive programs aimed at providing more tools for producers to maintain and increase grasslands. “Simply put, grasslands are one of the most threatened habitats in Manitoba. If we recognize that we have similar interest, working together becomes easy,” says Tim Sopuck, MHHC’s chief executive officer. “I believe that the biggest habitat conservation group in Manitoba is cowcalf producers because their operations fit so well with native land conservation, especially native grasslands.” Sopuck says grasslands are “a marvellous reservoir of biodiversity” that can be maintained or enhanced through sustainable grazing practices. DUC has been actively working with producers on the land for years via programs such as grazing clubs, rotational grazing and forage incentive programs. It also has dedicated science to highlight the values of wetlands and grasslands as critical components of the healthy prairie landscape for producers, society and wildlife. “Grassland and wetland loss has had a dramatic effect on water quality, water quantity and soil organic carbon stores across Canada,” says Pascal Badiou, a research scientist for DUC. “If this loss is allowed to continue, past, current and future investments in expensive infrastructure such as water treatment facilities, flood mitigation and climate change mitigation will become increasingly less efficient.” For NCC, grasslands are a high-priority biodiversity target. “Grasslands are one of the most impacted ecosystem types on the globe and provide habitat for many species of risk on the Prairies,” says Kevin Teneycke, NCC’s director of conservation. “Grassland conservation is an effort that requires the collaborative assistance of a number of organizations and individuals at a landscape scale.” Teneycke says his organization is keenly watching the developments around the divestiture of the federal community pasture program in Manitoba. Within each of their own parameters and priorities, MHHC, DUC, and NCC believe that there are significant opportunities for governments, landowners, livestock producers and conservation organizations to work together to maintain intact high-quality grassland habitats and promoting the benefits of forages. Producer groups such as MFGA and CFGA also have important valuable roles to play in the equation. The message, according to MAFRD’s Friesen, should resonate with one group in particular. “Anyone with cattle should be motivated because well-managed grasslands are the lowest cost, nutrientbalanced feed source,” he says. “They can also provide excellent unconfined winter feeding grounds. They capture rain where it lands, providing grazing options during dry times.” n

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Clubs hold informal meetings to acquire information on local grazing issues from expert speakers and researchers.

Sharing knowledge through grazing clubs Ducks Unlimited assists local groups to hold meetings and tours By Duncan Morrison grazing club is a community of producers who work together to improve the grazing management of their pastures. Community knowledge is critical, as is learning from others in the club. Ducks Unlimited Canada initiated the first grazing club program in Manitoba in 1999. “We really are focusing on getting the most out of our pastures and helping producers and landowners make the best decisions they possibly can on the environmental and economic fronts,” says Michael Thiele, grazing club co-ordinator. Thiele says there is growing interest in holistic management — a decision-making process that helps producers make better decisions that benefit the people, the land and the bottom line. Clubs hold informal meetings to acquire information on local grazing issues from expert speakers and researchers. Pasture tours are utilized to provide hands-on exposure to new forages, livestock watering systems, and pasture management techniques. Thiele says the information provided is always well received. “There is a need for good information and producers are looking for new ideas and technologies that better the environment and their bottom line,” says Thiele. “This is one way producers can learn other ways and methods of running their operations.” More information on grazing clubs can be found on Ducks Unlimited Canada’s website. n

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F o r a g e & G r a s s l a n d Gu i d e

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Cutting forages in afternoon yields benefits Research shows starch levels in forages peak 11-13 hours after sunrise

By Hugh Maynard

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f you cut forages in the afternoon you can improve the digestibility of your dairy feed. Higher levels of non-structural carbohydrates (NSC) can promote the synthesis of microbial proteins, lead to a more efficient use of dietary nitrogen (N) and result in a five to 10 per cent increase in milk production. Late-afternoon cutting is one of several factors that increase NSC levels in a variety of forage species, from alfalfa to timothy. Other factors are management of nitrogen fertilization for forage grasses and wilting conditions, particularly laying the cut forages in wide swaths to promote more rapid drying. This is the primary conclusion from research led by Robert Berthiaume, an expert in forage systems at Valacta, the dairy production centre of expertise for Quebec and the Atlantic provinces. He collaborated with a multidisciplinary team of researchers from Agriculture and Agri-Food Canada and Université Laval to look at different ways to increase non-structural carbohydrates in forages for dairy cattle. Plant matter is composed of about 75 per cent carbohydrates, and NSCs are the simple sugars such as glucose, fructose, lactose, sucrose and starch. Increases in NSC levels reduce proteolysis (the breakdown of proteins into amino acids) in the silo and balances the supply of fermentable energy and rumen degradable protein which, in turn, enhances ammonia capture by ruminal microbes. Legumes and grasses with high NSC levels also tend to have lower concentrations of acid detergent fibre and neutral detergent fibre.

Wider swaths

Berthiaume says that the time of cutting has the most effect on increasing the level of NSC in forages, mostly due to the higher levels of starch present in the plant later in the day, which peaks 11-13 hours after sunrise. He notes that cutting the forage into wide swaths also has additional payback. “The wide swathing technique has become more popular because it helps improve sugar levels and the

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Forage & Grassland Guide

Late-afternoon cutting is one of several factors that increase NSC levels in a variety of forage species, from alfalfa to timothy.

quality of the forage, so it has a double benefit,” he says. The research by Berthiaume’s team shows that NSC loss is minimal for late-afternoon-cut alfalfa lying on the ground overnight and the plants will resume photosynthesis the following morning for up to three hours, the same as morning-cut forage. This means that the extra NSC levels accruing from late-day cutting more than offset any losses during the night, weather conditions notwithstanding of course. Nitrogen fertilization is the next most important factor in enhancing NSC levels in forages, particularly for grasses. The key is to balance forage quality and yields. Lower nitrogen fertilization can increase NSC and reduce crude protein concentrations, both of which improve the use of nitrogen in cattle. Too little fertilizer, however, can affect yields, so the trick is to balance the two aspects in order to enhance quality while maintaining reasonable yields. The level of NSC does vary by forage species but Berthiaume’s work indicates there is insufficient research to make recommendations on combinations of legumes or grasses that will enhance NSC concentrations. He notes that recent research in Eastern Canada shows alfalfa has similar NSC levels to timothy but that the types of NSCs present in legumes and grasses are different.

Starch and pinitol are carbohydrates found in legumes, but not in grasses, that contribute to increased NSC levels. On the other hand, fructans, a reserve carbohydrate found in grasses, doesn’t seem to have the same effect. Therefore it’s difficult to assume that red clover mixed with tall fescue, both considered to be the species containing the highest NSC levels for legumes and grasses respectively, make the best combination of plants when trying to maximize NSC levels in the field. Berthiaume notes that genetic selection shows potential for improved cultivars with increased levels of NSC. The U.K. has developed varieties of perennial ryegrass with higher sugar concentrations with the aim of improving forage intake and milk production and their studies show improved breeding can increase levels of available carbohydrates in alfalfa. “We’d like to do more research that can be applied on the farm such as genetic selection for what we call ‘sweet alfalfa.’ We could get practical results faster with genetically modified cultivars but producers don’t want to use them so it will take time through traditional breeding techniques,” Berthiaume said. n Hugh Maynard is a specialist in agricultural communications located in Ormstown, Que.

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Finding the ‘right’ way to inter-seed cover crops An older practice finds new life with growers wanting improved soil stability, reduced erosion By Ralph Pearce, country guide

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raditionally, when one thinks of “cover crops,” what usually comes to mind is red clover following winter wheat. In the past five to 10 years, there have been more cases of growers working with oilseed radish or rye or oats as covers, all with the primary goal of keeping that cereal field growing through the fall season. Within that same time frame, there’s been increasing interest in inter-seeding cover crops into corn, and making better use of those crops in the rotation. In the U.S., some growers are hiring aerial applicators to seed covers into standing corn and soybeans. The move has also garnered some interest in Canada, with some who grow corn for silage, seed corn or those just looking to enhance the long-term impact on the health of their soils. Anne Verhallen, horticultural soil management specialist with the Ontario Ministry of Agriculture and Food (OMAF), is also learning more about the practice. She has several growers who participate in field-scale trials and has been working with Laura Van Eerd at the University of Guelph’s Ridgetown Campus, all in the search for the right choice of cover crops, and just as important, the right timing for seeding into a standing crop. Verhallen has also toured parts of the U.S. and Quebec to see various sites where growers are engaged in inter-seeding cover crops. At the 2013 edition of Canada’s Out-

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door Farm Show, she played host to a demonstration plot for Ontario Soil and Crop Improvement Association, showing cover crops seeded into field corn at various stages of the growing season. And the results have her convinced there’s more to research.

Quantifying benefits

For the past few years, the focus has been on getting growers to include cover crops in their rotation. Interseeding in field corn offers another opportunity. Verhallen says that before they can begin the process of quantifying the benefits — nutrients left behind, or improved soil organic matter — the first order of business is to determine the best types of cover crops and the timing on planting. “It’s a whole systems approach, where you’re building the diversity, you’re building structure, you’re building soil that’s going to be more resilient and responsive, so it’s incremental changes,” says Verhallen. “I think that (Van Eerd’s) work has shown that what we can get out of the cover crops is that it’s not costing us money, it’s a break-even deal, it’s generally not an adverse effect, and that’s not looking at erosion control. And the cover crops that we’re working on aren’t going to generate a lot of nitrogen, unless we are putting in an alfalfa or clovers. But ryegrass certainly isn’t nor is oilseed radish.” Inter-seeding corn isn’t difficult or expensive, says Verhallen. It’s often

a matter of trial and error, and finding what works best. Some growers have built their own seeding units, which she says are not complex or costly. And if growers opt out of interseeding covers, they may be able to dismantle the seeding configuration and make it work for another aspect of the operation. One grower Verhallen has worked with tried four different cover crops seeded at different times of the growing season — oats, rye, ryegrass and alfalfa. “They’re all fairly good at sitting under a canopy, they’re fairly small seeded and you’re hoping you get enough growth out of them to make a difference,” says Verhallen, adding

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1

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 uebec growers are inter-seeding their cover crops earlier in the season, Q around the five- to six- to seven-leaf stage, prior to full canopy. Although they won’t generate a lot of nitrogen, inter-seeding oats, rye or ryegrass as a cover crop will help build diversity and resilience in the soil.

2 that she’s had the best response from ryegrass. “It has a very small seed, it’s good at getting going and spends the first part of its growth pattern in setting down some roots.” However, a challenge with ryegrass is a tendency toward herbicide resistance. That means it will establish well, but weed control can be difficult in wheat seeded after corn.

Seeding date

Verhallen says determining the best time for seeding can be a challenge. At the COFS demonstration plot, she had a wide variety of options on display. In Eastern Canada, that timing is affected by the closure of the canopy. In the U.S., growers are being advised

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According to OMAF’s Anne Verhallen, growers with corn silage would be ideal candidates for inter-seeding cover crops.

to seed well after tasselling as the crop is starting to dry down. Coinciding with a fungicide application would be ideal. That could be between mid-July and early August, but in Eastern Canada, that can be the driest time of the growing season. Also, most cornfields are into full canopy closure come late July. “I think right now that the earlier seeding is going to work better for us, because whatever you’re seeding, there’s a better chance of getting established before the canopy totally closes in,” says Verhallen. “If you walk in to our cornfields in the middle of July, and take a look at the ground and see how much bright sunlight is actually hitting the ground, it’s very low. How-

ever, this can also add a challenge in terms of herbicides and the impact on the germinating cover crop.” Verhallen says Quebec growers she’s followed set an earlier target for their timing in seeding of a cover crop — around the five- to six- to seven-leaf stage. In the U.S., some growers have refined their seeding timing from after tasselling to the point at which the crop begins to dry. Verhallen says there are a lot of details to be sorted out, but the practice is gaining attention. “To me, the real target is the guys who are growing silage corn, where the other opportunity for silage corn is to take silage off, do a manure application and then put in a cover crop.” n Forage & Grassland Guide

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Western meadowlark

Balancing the interests of cattle and birds Selective grazing to leave different vegetation height is the best for protecting nesting birds By Peg Strankman, Barbwire Consulting

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orage and grasslands support a strong livestock industry in Canada, but they also provide ecological services — erosion and watershed management, nitrogen fixation, pollinator habitat, biodiversity, carbon sequestration, oxygen production and of course cultural and esthetic values. These are valuable services, difficult or impossible to accurately value economically or to replace ecologically. One of those values is grassland birds, whose numbers have been declining. This has spurred researchers to investigate how stocking rates, grazing timing and livestock distribution may be affecting them. In many areas the traditional season-long grazing has given way to a rotational system, which is believed to be more productive. It is based on the principle that productivity of native grasses will be improved by livestock nipping off the grass plant just after the three-leaf stage and before it begins to reproduce. The plants are then rested, which encourages more vegetative growth. However, changes to litter depth or vegetation height and density may not be what grassland songbirds like for foraging and nesting. A 2010 thesis by Cristina Lynn Ranellucci evaluated the effects of rotational grazing and

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continuous season-long grazing on grassland bird populations in southwestern Manitoba. It found grazing regimes at moderate and high grazing pressures seem to be more beneficial for grassland birds than lighter grazing intensities. Non-grazed land idle land (shrub encroachment) was the least preferred. Season-long grazing benefited some grassland birds such as bobolinks and Baird’s sparrow and showed higher species richness and diversity. That may be because selective cattle grazing produces a mosaic of height, density and litter in the grass stand suitable for a wider variety of species.

Cattle and bird nests

Writing in Conservation Biology, Barbara I. Bleho looked at the effects of cattle on bird nests. Generally it’s the possible indirect effect of cattle grazing thought to impact grassland birds, for example in the case of a severely overgrazed area where the structure of the grassland is severely altered. But Bleho and her colleagues were interested in the direct effects of trampling and other disturbances on nest survival. While they did find that nest destruction was positively correlated with grazing pressure (i.e., stocking rate or grazing intensity), overall rates

of destruction of grassland bird nests by cattle are low. The cattle producer community is beginning to utilize tools such as Rangeland Health Assessment Guides which ask questions about variables like plant community structure, integrity and ecological status. Having the right information and tools are critical for producers to ensure healthy grasslands support sustainable agriculture production, rural livelihoods and functioning ecosystems. Healthy grasslands also support native pollinator populations. Some may coexist with white or purple prairie clover assisting in nitrogen fixation. Others may ensure milkweed sets seed to reproduce for the next generation of monarch butterflies. Other pollinators make the flight to canola fields, increasing yield by up to 30 per cent. Managing the effects of agricultural production on water, air, soil quality, ecosystems and biodiversity, maintaining rural livelihoods and increasing food production is a challenge. Canadian agriculture is being asked to show consumers we share their values of an integrated conservation agriculture landscape where the provision of ecological services is an explicit objective of agriculture and rural development. n

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Web tool to make forage seed selection a snap Useful to producers as well as to contractors revegetating oil and gas sites BY TAMARA LEIGH

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orage producers in the B.C. Peace Region will have a new tool available to help them select the best forage mix for their growing region. The project will make the B.C. Rangeland Seeding Manual available online along with the added functionality of being able to share the latest information and research on forage varieties. “The manual was a big effort a couple of years ago and a resource providing information on over 50 species of forage and native plants, and the different considerations for what species to grow in certain situations,” says Sandra Burton, one of the authors of the original manual who is working with the Peace River Forage Association (PRFA) to bring the web tool to life. Recognizing that print publications quickly find themselves out of date and on the shelf, Burton and co-author, Allen Dodd, pushed to see if someone would pick the manual up and make it an interactive web tool. The Peace River Forage Association recognized the opportunity and took up the challenge to do a regionally based pilot. “We want to eventually put it on an app or website so if you’re a contractor sitting on a lease or a producer on your tractor, you can look at the conditions and what you are trying to do and the tool will suggest what species are best to plant,” says Bill Wilson of the Peace River Forage Association. “It’s a tool for producers, workers in the oil and gas sector, or anyone with an interest in revegetation of rangeland.” The key, says Burton, is creating an interactive tool that is functional and responsive to the needs of the users. To that end, the team is working with a stakeholder group including forage

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The tool will be used to select the best species and management practices for areas disturbed by oil and gas activity.

producers, oil and gas industry contractors, seed suppliers, and staff from the B.C. Ministry of Agriculture, B.C. Ministry of Forests, Lands and Natural Resource Operations. The tool includes features that allow growers to determine what forage varieties will best suit their geographic location and agronomic needs, perform seed mix calculations, and link people making the seed decisions with the seed sources. “The web platform also makes it very easy to start adding in new information,” says Burton. “Research never stands still, and this tool allows the PRFA to take what it is learning and update it really quickly.” Technical development is being led by Charles Burnett, web developer with GeoMemes, with funding from Enerplus, Murphy Oil, Shell, Peace Region Forage Seed Association, Peace River Regional District, and the Peace River Agriculture Development Fund. The tool will be available to stakeholders in mid-February, and to the public by the end of July 2014.

“The soil conditions on these sites are terrible because a lot of it is subsoil,” says Wilson, who leads PRFA’s forage variety research project. “We want to find species or fertilizer conditions that will help something grow there, and grow quickly to keep invasive species or weeds from getting established, and to prevent erosion.” The association has also been conducting research on seeding techniques, fertility, timing of seeding and other factors that influence successful reseeding, particularly on the berms that surround well sites and compressor stations. The information generated by these projects has resulted in a series of soil and revegetation workshops with the University of Northern British Columbia. The courses are available to University of B.C. students, forage producers, agrologists and contractors and employees in the oil and gas sector. ■

Oil and gas revegetation

The online forage seed selection tool is just one example of how the Peace River Forage Association is working proactively with farmers and the energy sector to address shared issues and make information available to improve practices. To date the oil and gas footprint in the Peace River Agricultural Land Reserve is about 35,500 acres with pipelines, roadways, and well sites. Any investment in research and expertise to help revegetate these sites pays off for all of the users of the land.

The B.C. Rangeland Seeding Manual was to be available online in February.

FORAGE & GRASSLAND GUIDE

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With good management, alfalfa grazing is a money-maker Cattle grazing uncut alfalfa can gain weight at rates comparable to the feedlot,

but many producers avoid it because of the risk of bloat

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hen it comes to bloat prevention for cattle on pasture, timing is everything. Grazing alfalfa in the vegetative state produces gains comparable to those achieved in a feedlot, but many producers are fearful of going that route, said Tim McAllister, a researcher in ruminant nutrition and microbiology. “Bloat is still an impediment to the greater use of alfalfa and tame pasture as a method of increasing the productivity of the cow-calf sector,” said McAllister, who works at Agriculture and Agri-Food Canada’s Lethbridge Research Centre. But the bigger risk is to the bottom line, he said. “When you look at the extra gain and profitability that you can get from alfalfa, and you offset that against the death loss you may incur with bloat, in most instances you’ll still come out ahead.” Although there are many factors at play in causing bloat, grazing cattle on alfalfa doesn’t have to be a gamble, McAllister said. There are many ways to reduce or even eliminate bloat risk, and the greatest mistake a producer can make is simply “letting your guard down,” he said. “If you want that additional productivity with alfalfa, you have to put in more management in terms of monitoring cattle, using rotational grazing, and keeping your risk at the minimum. You can never become complacent.” McAllister recommends grazing alfalfa at the flowering stage rather than vegetative, as the flowering plant is digested more slowly and is less likely to contribute to rapid gas production. Allowing swathed alfalfa to wilt for 48 hours before grazing can also minimize bloat risk, but comes with a cost, McAllister said. “The greatest nutrient value is in the forage while sitting out in the pasture,” he said. “Once you cut it, the plant continues to respire and the nutrient value declines.” Weather can often play a part in bloat risk as well, McAllister said. In bad weather, cattle can spend long periMountainview, a new sainfoin variety, reduces bloat by 95 to 98 per cent in mixed alfalfa stands.

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By rosie templeton

ods of time huddled together without eating. When the weather turns better, they are likely to eat too much and be at a much higher risk of bloat. For that reason, it’s also not a good idea to let cattle out to graze when they are hungry. A common misconception is that frost “burns off” an alfalfa plant and removes the risk of bloat, McAllister said. “The risk of bloat actually goes up after the first frost,” he said, “possibly because of the rupture in the plant cell walls releasing more soluble protein.” The use of bloat-preventing inputs introduced in the last decade can significantly cut risk as well. The alfalfa variety AC Grazeland, developed to have a slower digestion speed, reduces bloat by about 80 per cent, McAllister said. Non-ionic surfactants like Alfasure can reduce bloat risk to zero when properly administered to cattle grazing vegetative alfalfa. “Alfasure is one of the only methods that can bring the bloat risk to zero and still maintain maximum animal performance,” he said. An alfalfa-sainfoin blend being developed at the Lethbridge Research Centre will offer the same 100 per cent bloat reduction without the use of extra inputs. “Sainfoin is palatable, high in protein, and is very effective at preventing bloat,” said Surya Acharya, a forage breeder at the centre. “In the past, producers have been discouraged from growing it because of the cost.” The new sainfoin variety can be seeded at a rate 15 pounds per acre alongside alfalfa at five pounds per acre, he said. “Not only can this variety survive when grown with alfalfa, it is able to grow back for multiple cuts,” Acharya said. The variety, dubbed Mountainview, in mixed alfalfa stands reduces bloat by 95 to 98 per cent, even in high-risk scenarios, Acharya said. Mountainview will be available for purchase for 2016 planting. “In terms of the research going on around the world related to this, it’s probably some of the most advanced,” McAllister said. “And it’s one that could be sustainable at minimum cost since you don’t need to administer an additive.” n

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Silage the latest candidate for yield monitors The technology offers the prospect of tracking not only yield, but moisture and nutrient quality

By ralph pearce, country guide

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ield monitors are now common on grain and oilseed farms, though you’re not likely to find one on a dairy operation. But yield monitor technology for silage corn is now a reality, and it shows promise for adaptation to forages as well. The concept of precision farming was initially adopted with great enthusiasm by some farmers, who used yield monitors and yield mapping to generate many pages of coloured maps and overlays. But that was initially followed by frustration because they were only able to use a fraction of the data the technology could provide. That’s changed, and what’s been learned with grains and oilseeds may allow the evolution of yield monitors for corn and forage silage to come more quickly. Kevin Putnam, a dairy specialist with DuPont-Pioneer in Lansing, New York, says developing a yield monitor for silage came with different parameters. Silage and forage quality have greater specificity than merely tracking yield. For now, yield and moisture levels are still the two most important components in silage corn that can be measured with this configuration, says Putnam. But the technology can also provide higher-quality parameters, including acid detergent fibre (ADF), neutral detergent fibre (NDF), starch and sugar levels, as well as crude protein. John Deere is one manufacturer that has incorporated its HarvestLab and Constituents Sensor technology into its new choppers, while other manufacturers have separate systems that can be added. In most cases, the yield monitor is a separate unit from

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conventional systems, which only makes sense, given the quality parameters in silage. It can even read the moisture or starch levels, and then adjust for cut length, which makes this technology an ideal piece of equipment for growers with corn silage, and also opens the door for use in forage crops.

More precision

The short-term hurdle is the precision in measuring those values. “Right now the constituents aren’t as accurate as we might want them to be,” says Putnam, noting that it’s only a matter of time before those shortfalls are fine tuned. “What we’d like to do in the next year is validate this system, so that we can say, ‘Here’s a plot, and Hybrid 1 was this level, and Hybrid 2 was this level for both yield and starch.’” For the time being, laboratory analysis is still needed to confirm or accurately define those readings, but it will certainly provide an in-field thumbnail sketch of a variety of quality parameters. “And instead of taking one or two samples to the lab from a 300- or 500-foot strip, now I have multiple time points along that whole strip that I can average,” adds Putnam. The real value isn’t for potential plot evaluation, though; it’s for farmers having the ability to compare hybrids across the whole farm, and see which hybrids perform better under certain soil or field conditions. Also, to help find areas where different management strategies can be practised. There are even inoculant application units that tie into the yield monitor so the correct rates of inoculants are applied. Last, but perhaps most important, it’s making sure that forages are the correct moisture for cutting, which also includes testing before harvest. Both can lead to a better quality by ensuring crop maturity and promoting good

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fermentation. With this system, farmers can make better decisions.

Steady adoption

In his area of New York state, Putnam is seeing a slow but steady adoption of the technology. That trend is being fuelled, not only by the functionality of the information it provides, but also through the attrition of one piece of equipment. As farmers upgrade from one chopper, they’re more likely to move up to these new systems that come with a yield monitor. “The yield monitors started coming out around 2008-09 when the price of milk in the U.S. was poor,” says Putnam. “In 2013, the farmers had a good year, and this year, it’s looking as though it has the potential to be even better, and if you look at a lot of the new choppers that came out this year, a lot of those have yield monitors on them.” It’s another example of precision agriculture and the depths of information that can be gleaned from a field, and then analyzed both in short-term and long-term perspectives. A farmer can even take the Constituents Sensor system back to the office and use it to run sampling analysis year round for silage and feed quality monitoring.

View from Canada

In Canada, the uptake has been even slower than that of the U.S., says Dave Petheram, integrated solutions manager at Premier Equipment in Elmira, Ont. The University of Guelph has purchased one of the Deere-built chopperheaders, but Petheram agrees there may be some level of “sticker shock” associated with the units. He concedes that the head units are all the same, but the HarvestLab sensor which is bolted to the chopper, is what he calls “a pricey option.” Still, he’s optimistic about the eventual adoption of the technology. “The challenge with it is that the guys who are buying these are usually custom operators, so it’s going to take some time to push the value through, and get nutritionists on board as to how powerful some of this data can be,” says Petheram. “There are studies out there that have shown that it does result in better feed quality, but you often have to see that work in your area or in your field before adoption starts to take place on a wider range.”

Qualitative monitoring

Despite the use of terms that are well known for corn, soybean and wheat producers, these yield monitors are considerably different, adds Petheram. Yes, they monitor yield, chart populations or high-yielding areas of a field. But the big difference with corn silage — and ultimately forages — is that it’s a qualitative monitoring. “I think if we looked at the adoption rate of yield monitors 10 or 15 years ago, it was the same thing,” says Petheram. “The farmer or the operator of the combine was told that the guys who do custom work are going to pay more money to have this data, yet when they went to the field, they weren’t. They didn’t know what to do with that information.” That’s changed, and the experience with yield monitors for grains and oilseeds should shorten the learning curve for applying the technology for corn silage and forages. n

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John McGregor is extension co-ordinator for Manitoba’s “Green Gold Program,” which has been helping predict alfalfa harvest for nearly two decades.

Monitoring the best time to harvest alfalfa ‘Green Gold Program’ measures relative feed value and relays results to producers

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By Duncan Morrison

iming is everything — it’s a well-used cliché, but one that applies when harvesting alfalfa. John McGregor is the extension co-ordinator for the Manitoba Forage and Grassland Association (MFGA). Part of his role includes overseeing the “Green Gold Program,” which has been helping predict alfalfa harvest for nearly two decades. “Alfalfa producers, dairy, beef and sheep producers have used the program to help predict when their alfalfa is at the optimum stage for their specific use,” says McGregor. “We take samples from the fields Mondays and Thursdays and get them into the lab that same day.” On paper, the rules for harvesting high-quality hay are straightforward — cut it at the perfect time, dry it down as fast as possible, put it up at the optimum moisture level and store it out of the elements. Simple, right? Not so fast. “Deciding on the best time to cut hay can factor on weather, species of plant, intended use and maturity of the stand,” says McGregor. “We specifically measure the relative feed value (RFV) so that producers can cut their fields at the highest value and limit the loss of RFV over the drying process. The Green Gold Program is a management tool for their haying operations.” McGregor says about 500 producers and industry people receive the information from the program. He says the program helps especially in times of unusual environmental conditions such as cool weather, as well as extreme heat in recent years where alfalfa reached optimum quality well before the traditional early-bloom stage saving producers time and money. The Green Gold Program communicates regional results on the MFGA website and media outlets. Results are also emailed to producers twice a week. The Dairy Farmers of Manitoba also sends the information to members. n

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Putting Prairie forages on America’s stage Long days and cool nights make for high quality which is demand in the U.S. and offshore By Duncan MorrisoN

A

t first glance, drought and dairy may not link together. Unless, that is, you are a Prairie forage producer with intentions on selling part of your crop to American producers. Then drought and dairy are intertwined as two main factors in the success of your pursuits. “We have a good relationship with dairy producers in Wisconsin that has been fortified by our annual visit to the World Dairy Expo held there each year,” says Chris Kletke, a Manitoba forage producer who chairs the Manitoba Forage Marketers Group (MFM). “But it’s a unique business that is somewhat difficult to establish customer loyalty as everything is on a need-to-have priority demand basis.” Kletke points to 2012 as an example. Manitoba-grown hay that normally would have been earmarked for dairy farms in Wisconsin was being shipped to beef operations in West Texas as a stop-gap measure to help get those producers through drought conditions. Beef producers in West Texas needed the product and stepped up financially to ensure they received it. It was simply the basic supply-and-demand principle at work. Last February, Kletke was joined by fellow forage producers and marketers Darren Chapman and Jake

Heppner on a fact-finding 10-day mission that took the trio through South Dakota, Nebraska, Kansas and Texas to visit feedlots and beef producers to help build a network for future marketing of Manitoba forages. “It’s always nice to build a network,” says Chapman, who farms near Virden, Man. “They were all in time of need and reaching abroad with interest in our competitive prices. That said, the demand shuts off overnight when the green grass starts growing and showing up in their local regions.”

Prairie reputation

According to the Canadian Forage and Grassland Association website, Canada is the premier supplier of hay, straw and forage products domestically and internationally. Canada exports approximately 600,000 tonnes of forage product annually valued at $150 million, primarily to United States and Asia, with emerging markets in the Middle East and Mexico. The Prairie provinces of Alberta, Saskatchewan and Manitoba are all active on the export front. “Prairie hay has a good reputation,” says Glenn Friesen of Manitoba Agriculture, Food and Rural Development (MAFRD). “Our long days and cool nights are conducive to produc-

Manitoba hay went as far as Texas during the drought of 2012.

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Forage & Grassland Guide

ing forages that increase animal performance.” The fact-finding mission also brought home several key factors for future marketing success. Included in this report was highlighting transportation as the largest factor in any forage-marketing plan. “You need to know your product, stand composition, conditions prior to harvest, stored product condition and storage type,” says Chapman. “But you also have to understand the needs of the buyer before making the deal. Often, this includes transportation. You need to know how you are going to get the product to market or the buyer before you make the sale.” In this regard, Manitoba producers have explored advantages to support their marketing efforts. “Manitoba forage producers use packaging that is more transport friendly,” says Chapman. “Other places sell round bales, which are cheaper but come with transportation issues. Manitoba primarily ships medium square bales. Our most common sizes are 3x3x8 bales, and 3x4x8 bales are becoming more popular, especially in straw. We do ship round bales periodically when supply in the United States is extremely short.” While the proximity to the United States market has developed some strong bonds between Prairie forage producers and their stateside feedlot, dairy and beef networks, there are two international opportunities that the MFM are watching closely. One is CentrePort, an air/road/ rail transportation hub being established just outside Winnipeg. “We are very interested in CentrePort and how that may influence shipping opportunities via Churchill and we are equally interested in Mexico and the accelerated growth of its dairy operations in the world market,” says Chapman. n

2014


Export opportunities for forage producers are increasing China’s bid to double milk production will mean a huge increase in forage imports, By Alexis Kienlen and opportunities abound in the Middle East

I

t’s a good time for forage producers to get into exporting — but there are pitfalls, too, says the chair of the Canadian Forage and Grassland Association’s forage export committee. “One of the things we’re realizing is that good data is hard to find, especially when you are talking about exports to the U.S.,” said Marc Lavoie, who operates Macay Entreprises in the Peace River area. “There are a lot of people that are sending product and it’s not being documented properly, so we don’t have very good numbers on what goes to the U.S.” More than 95 per cent of Canadian hay is used domestically, with most of the rest going to the U.S., the biggest customer, Japan, South Korea and Taiwan, Lavoie told attendees at a meeting of the Alberta Forage Industry Network last March But China’s imports of Canadian forage are increasing, and the United Arab Emirates and Saudi Arabia are developing markets in the Middle East, he said. Niche European markets, like the racehorse industry, are also looking to import quality Canadian hay. The horse industry wants high-end timothy, while lower-quality mixed hays are used by feed stores in the U.S. The dairy industry in South Korea and Japan want high-fibre, rather than high-protein, hays, while the Middle East buys alfalfa or mixed hays with high protein for their dairy herds. Alfalfa, mixed hay, timothy hay and straw are attractive forages for the Japanese beef market, while Middle Easterners want pure alfalfa hays for camels, goats and sheep. Many global markets are also looking for small quantities of hay for rabbits raised as pets or for food. It’s also important to keep an eye on demographics, said Lavoie, noting the population of Japan peaked last year and is now edging downward. “We know that eventually their usage will decline, therefore their forage imports will decline over the next 10 to 15 years,” he said. Eight years ago, half of Japan’s imports of forage came from Canada, but last year that had shrunk to six or seven per cent because of hay shortages here, the rising Canadian dollar and increased freight costs, as well as increased competition. However, Canada’s ample supplies of fresh water is an advantage, said Lavoie. “Our freight costs are still higher than the U.S. but we’re still able to be competitive in certain areas. In some countries, we’re not,” Lavoie said.

Shipping to the Middle East is difficult, especially for producers from Western Canada, and access to containers is also an issue for Saskatchewan and Manitoba growers. Those wanting to export to that region also have to understand what quality is wanted and that Middle East importers want large bales, he said. “These kinds of things are really important, if you’re looking at doing some export,” Lavoie said. The Canadian Forage and Grassland Association has undertaken several fact-finding missions. On a trip to China last year, it learned about the country’s plan to double milk production. “You don’t double your milk production without using double the forage,” noted Lavoie. “China is not able to grow double the forage, so where does it come from?” On a trip to the Middle East three years ago, it looked at how the United Arab Emirates will adapt to a decision to stop using water to irrigate their forages. UAE forage imports hit 1.5 million tonnes last year and are expected to reach 1.8 million tonnes this year. “Saudi Arabia has seven times the population of the United Arab Emirates,” said Lavoie. “If it is looking at importing all its forages, that leaves you with a big number that needs to be filled.” India is also starting to import more forages. “The poorer countries are starting to eat more like the richer countries, which means they are eating more milk and meat, which means you need more forages,” he said. n

“Our freight costs are still higher than the U.S. but we’re still able to be competitive in certain areas. In some countries, we’re not.” marc lavoie

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21


Simple separation doubles effectiveness of manure fertilization System addresses the N:P imbalance by separating manure into two fractions

T

he alternative to buying phosphorus fertilizer may be in your own backyard. Researchers at the Pacific AgriFoods Research Centre (PARC) in Agassiz, B.C. have developed a low-tech system for separating manure into two products better suited to the needs of common dairy forage crops. The result could dramatically reduce the need for phosphorus fertilizer, particularly for corn. “We focused on the dairy industry, where they bring in a lot of feed and fertilizer in order to maximize the production of the farm,” says Shabtai Bittman, one of the lead researchers on the project for Agriculture and Agri-Food Canada. “They buy nitrogen (N) for their grass and phosphorus (P) for their corn in a context where they have as much and maybe more than what they need from the animal waste.” Bittman says the crux of the problem is that manure is not used as efficiently as it could be because the nutrient balance in manure does not meet the needs of the crops. While crops need an N:P ration of 8:1 or 10:1, manure is closer to 5:1. Add to that the fact that nitrogen is easily lost during conventional spreading of manure in the form of ammonia (NH3), and that phosphorus doesn’t always do what you want it to do, and it makes sense for farmers to bring in inputs to optimize crop development. Bittman, along with his research partner Derek Hunt and their team, have found that separating manure into different fractions corrects some of its natural imbalances, and by changing the way that manure is applied in the fields, they are getting results on both hay and corn that equal the production improvements of commercial fertilizers. “Instead of using manure as one product ill suited to grass or corn, the dual-manure-stream concept separates manure into two products, a liquid fraction that is higher in N targeted to the grass, and a solid fraction that is higher in P for the corn,” says Bittman.

Doing nothing

“Manure separation is quite well known, but there have been problems because if you wanted to separate products, you had to get quite technical,” he says. “There is a simple way to separate manure to some extent by doing nothing — that’s the appealing thing about this system.” The researchers have found that the natural separation that happens when manure tanks are allowed to settle, or more quickly in a double-lagoon system, is sufficient to correct the imbalance. When manure sits in the tank, solid particles sink to the bottom and form a sludge or slurry, and a thinner product sits on top. The thin material, called supernatant, is watery, thin, and has a high level of soluble N. Once spread on the grass, the liquid soaks quickly into the soil, reducing the opportunity for N loss to ammonia. “We have tested and found significant improvements in

22

Forage & Grassland Guide

By Tamara Leigh

N efficiency using this technique,” says Bittman. “It’s about halfway between using commercial fertilizer and spreading whole manure.” The liquid can be applied using conventional broadcast techniques, or with improved technology like surface banding — the application of liquid fertilizer in bands or strips on the soil’s surface. The sludge that is left behind after the supernatant is removed has a lower N:P ratio, and becomes a possible source of P for corn. “We know that the farmers are applying all and more of the phosphorus a crop will use as fertilizer, plus manure, and the soil is already testing high,” says Bittman. “Everyone is growing corn using pre-emergent fertilizer. From the standpoint of farmers trying to optimize their crops, it’s the right thing to do, but not from the standpoint of the environment.”

Placement

The slurry has high enough levels of phosphorus to replace commercial fertilizers, but the challenge is placement. It is critical that the seeds are planted within five to 10 centimetres of the P, so it is available when they need it. The trick, they found, was reversing the order of planting and fertilization. “The only way to do it, is to do the manure first and then plant the seed, and plant precisely where manure was banded,” Bittman explains. “Phosphorus in manure is equally available as P in fertilizer. We have tested it, and have very good results that show that there is no loss in production and don’t have to buy fertilizer.” The slurry is applied at the same rate as fertilizer using an injection system with the injectors spaced at 30 inches to match the spacing of the corn rows. The manure is allowed to sit for a few days after application and then plant as close as possible, or even over top of the injection furrow. “It’s something that people can more or less do with equipment they have, with a bit of adjustment,” says Bittman. “From our standpoint, efficiency is the key. It’s about keeping the system going with the minimum amount of inputs. If you can do that you’ll be a good step on your way to nutrient sustainability.” To date, this research has been done on small plots, but this summer Dennis Haak will be leading farm-scale demonstrations in the Fraser Valley, as well as a study of on-farm manure facilities. “There is a lot of variety in how farms manage their manure storage depending on how they are set up,” says Haak. “We have 15 farms that we are sampling and tracking to find out what kind of management systems are more conducive to managing the manure in these separate fractions. If farmers can manage these types of different manure fractions without spending money it will be easier for them to adopt.” n

2014


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business

Business as (un)usual in Argentina As a Canadian ag reporter finds, Argentina is a land of opportunity — if it can only get out of its own way By Kim Waalderbos ou must be from North America,” Federico Boglione answered. I was a bit taken aback. I thought I had asked a straightforward question, like I’d ask in any Canadian interview. “Where do you see your business in five to 10 years?” I asked. But for Boglione, president and co-owner of the Los Lazos group, Argentina’s familyowned agribusiness giant, this was no simple question, and there was no simple answer. “Today I tell my employees let’s go right. Tomorrow I’ll read something in the newspaper and say let’s go left,” Boglione told me. “Argentina moves that fast.” Apparently, I have not only flown from the north to the south hemisphere, I have also leapt from the dull, predictable politics of Canada to a farm environment that is, well, very different. “We can’t make annual budgets,” Boglione patiently explains. “I don’t know what we’ll do tomorrow.” Boglione is used to seeing American and MARCH 4, 2014

even Canadian farmers lured to Argentina by the stories of big profits. Be careful, he tells them. “It is possible to invest and make money here,” Boglione says, “but you need to find the right business partner or you will lose a lot of money.” Four principal problems affect agriculture in Argentina: • Market prices are often lower than the cost of production. • The federal government views exports controls as a key vote-getter. • Climate problems persist, particularly due to uncertain rains. • Taxes are everywhere, claiming up to 50 per cent. Boglione’s own story also reflects how success in Argentina depends on timing, luck, and an amazing ability to change direction based on the latest government whim. A gentle giant with a quick smile and wit, Boglione (46) was frank about sharing the realities of doing business in Argentina Continued on page 36 country-guide.ca 35


business

Continued from page 35 with our touring group of international agricultural journalists. We met him in Nogoyá, a small city of about 23,000 in the province of Entre Ríos, about three hours by car from Buenos Aires. More specifically, we met at S.A. La Sibila, the family’s main powder-processing plant and Argentina’s only facility dedicated solely to producing dehydrated milk products. The plant is one of four main branches in the Los Lazos family business holdings.

Making the Los Lazos group

The problem with Argentina “We are our problem,” admits Argentine farmer Francisco Mihura, referring collectively to the Argentinean mindset and politics. Argentina has been struggling to find its footing for more than a decade as it claws back from a record-setting debt default. In 2002, at the depths of the worst economic crisis in Argentina’s history, the country defaulted on almost $100 billion in international debts. Overnight, the incomes and living standards of millions of Argentines collapsed. Foreign investment fled the country, and capital flow ceased. The country’s agriculture was decimated. The currency exchange rate between the Argentina peso and the U.S. dollar (once fixed at 1:1) was floated, and the peso devalued quickly — leading to a black market for the peso, and a rise in inflation that has since topped more than 40 per cent. Since then, the democratic government led first by President Nestor Kirchner, and then his wife and successor, Cristina Fernandez de Kirchner, has introduced a number of restrictions on business and foreign currency transactions. The policies and meddling nature of Argentina’s first elected female president Fernandez de Kirchner have created major disconnects between the Argentine government and the rural population. The past few years have been rife with soaring inflation, farmer strikes, union disagreements, port blockades and spilled milk in the fields. On one hand the government promotes soybean production. On the other it slaps farmers with a whopping 35 per cent export tax. The same has happened to corn and wheat exports currently taxed at 20 per cent and fresh beef exports at 15 per cent. Both corn and wheat exports are capped, so when these quotas are filled, domestic prices drop. Likewise, beef producers are required to market 2.5 tons domestically for every ton exported — and the price of domestic beef is capped below cost of production. Supported by China’s appetite, it’s no surprise that soy is the preferred crop in Argentina, despite the exorbitant export tax. These agricultural export taxes are used to subsidize the Argentine auto industry — and they help secure election votes from non-farming Argentines. The resulting contrast found throughout the country between dilapidated houses and shiny, new vehicles parked in the driveway is startling. “In some ways Argentina is the most predictable country in the world,” says Federico Boglione, a leader in Argentinean agribusiness. “Every 10 years we make the same mess. We explode in the same exact way.” 36 country-guide.ca

It was Boglione’s great-grandfather who emigrated from Italy, establishing a supermarket and flour mill in Rosario, a city of 1.2 million located nearly 300 kilometres from the Atlantic, but which, because of its position on the Parana River has a busy port, along with railway links, making it Argentina’s secondmost-important city and a gateway for the region’s agricultural products. During the Second World War when oil could not be imported from Europe, the Los Lazos family began processing vegetable oil from sunflowers, and later soybeans. Aceite Patito (a.k.a. Little Duckling Oil) became the second-largest edible oil brand in South America until the 1980s. But in 1989, with Boglione’s father at the business helm, the family sold the oil factory so it could strategically invest in farming instead. The family began acquiring four farm sites. Two farms north of the Los Lazos group headquarters in Rosario focused on dairy and grain production, while two farms south in Buenos Aires province turned to beef and grain production. Together, the four farms add up to 100,000 acres, with 5,500 dairy and 19,000 beef cattle. “This way we put our eggs in different baskets,” Boglione says. “And we can be sure somewhere it will rain.” Precipitation is a major challenge for Argentine farmers. Today, there’s also a fifth farm site, this time in the southern United States where the family also raises beef cattle. “The ranch in the U.S. is predictable income,” Boglione says. “In Argentina we can make 10 times the profitability, but it’s so much more risk.” MARCH 4, 2014


business

Throughout the 1990s as their farms grew, production also expanded but unstable market prices kept a damper on profitability — especially for the dairy herds, which together produced 180,000 litres daily, ranking the operation as the second-largest milk producer in the country.

Nestle loses big

“In Argentina, we can make 10 times the profitability,” Frederico Boglione says, “but it’s so much more risk.”

Meanwhile in Nogoyá, Nestle had just finished refurbishing a milk factory to its world-class standards, only to see the plant shut down because of disputes with unionized workers. Seizing the value-add opportunity, Boglione’s family bought the factory and began processing 500,000 litres of milk per day (then capacity) for their new Purísima brand of milk powders at S.A. La Sibila. As part of the deal, Nestle identified the names of challenging union employees, which effectively enabled the Los Lazos group to selectively rehire for S.A. La Sibila, says Boglione. “Nestle made a big mistake (by selling),” Boglione says. Because the factory was in excellent, turnkey condition, Nestle sold “the know-how: their quality” to a farming family that Nestle underestimated, thinking they wouldn’t be able to master the processing challenge. Ultimately, however, the Boglione’s milk powder products would compete with Nestle for space on mostly unrefrigerated Argentine grocery store shelves. “Without investing a penny in marketing,” Boglione says they grabbed 40 per cent of the country’s thirst for dairy products — matching rival Nestle in national market share. Today, the S.A. La Sibila factory receives milk from 220 farms raising 60,000 grass-fed dairy cows in total, all located within a 300-kilometre radius. Interestingly, not a single farm is on contract — farmers negotiate on price monthly, and that’s the way Boglione prefers it. He also prefers dealing with 10 smaller farms instead of one larger farm because it reduces the risks of farmers jumping around. Even so, only a handful of farmers switch between processors, and in the past year, S.A. La Sibila paid farmers on average 2.1 pesos per litre (C$0.40). Continued on page 38

MARCH 4, 2014

country-guide.ca 37


business Continued from page 37 Boglione says while the domestic market was profitable for their powdered milk (subsidized by Argentina’s government so all citizens can access milk) export prospects were dismal thanks to government intervention with high tax rates. “Our export powder was fetching US$5,000 per tonne, but we were left with the peso equivalent of $2,100 after going through the Argentinean government.” (See sidebar: The problem in Argentina)

An export roller-coaster Boglione began looking abroad for other opportunities, when a contact introduced Boglione to China’s “4-2-1” phenomenon. With its one-child law, there were millions of families with four grand-

parents, two parents and one child. “All the money is spent on that baby,” the Chinese contact said. “They don’t care about the cost of infant formula.” The Boglione family invested $60 million to boost production capacity at S.A. La Sibila, establishing lines for raw infant formula ingredients. The ingredients are then exported for other companies to use in their formulations. “We contribute ingredients for 95 per cent of the final product. Other companies add the final five per cent of vitamins and minerals — and use their brand’s label,” says Boglione, noting this helps protect the S.A. La Sibila brand in an ultra-demanding marketing. As he explains, “You cannot make a mistake in infant formula because you can kill a baby.” Today, the state-of-the-art S.A. La Sibila plant is

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38 country-guide.ca

MARCH 4, 2014


business the most modern of dairy factories in South America, and it is situated in the heart of Argentine dairy country. The facility blankets a 15-hectare site and it spray dries its way through 1.2 million litres of milk daily, generating 145,000 kilograms of powdered product. Meanwhile, S.A. La Sibila, which by the way is the city of Nogoyá’s main employer, also exports under four owned and another dozen private labels to more than 50 countries worldwide. However, the ratio of domestic versus export volumes depends on the latest government rules, Boglione says. “Some years we’re 70:30 export versus domestic, the next year could be reversed,” he says, adding if you’re involved in processing you need to move quickly with new government rules. The S.A. La Sibila factory in Nogoyá is supported by a second former-Nestle facility some 375 kilometres away in Córdoba with capacity for turn-

Argentina is completely predictable, says Boglione. “Every 10 years we make the same mess. We explode in the same exact way.” ing 1.45 million litres daily into powdered milk, anhydrous milk fat, and butter oil. More recently, the family has added a new production line making Argentina’s first sugar-free energy drink. “It puts us into a completely different channel from milk,” says Boglione. “We’re still in supermarkets, but we’re now also tapping 7/11 convenience stores with it.” Continued on page 41

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country-guide.ca 39


business A sea of soybeans Argentina believes it can be the brightest spot on the world’s agricultural map, mainly thanks to its phenomenal capacity to grow 50 million acres of soybeans When the world thinks of Argentina and agriculture, it may drool over slabs of grilled beef big enough to fill any plate. But when Argentina thinks of agriculture, it thinks of something even bigger — the soybean. Argentina is becoming a dominant global player in farm production, says Gustavo López, a market research consultant for Agritrend based at Rosario, and driving that growth is its soybean production. Farmers have latched on to the oilseed like no other agricultural commodity, López says. Production has quadrupled from 11.5 million tons grown on 12.5 million acres in 1990, to 50 million tons on 50 million acres in 2013 — and there’s no sign of slowing. Despite a 35 per cent export tax levied on soybeans by the Argentine government, shipments are booming, says López. Last year, soybean exports topped $26 billion — making it the No. 1 export for the country, and miles ahead of cereals, automotive and petrochemical exports. Argentina’s exports fuel 60 per cent of worldwide biodiesel use, and they supply more than 40 per cent of global trade in soymeal and soy oil. The country is also a leader in producing secondary soy products including lecithin and glycerine. The nation is pinning its future on continued soybean expansion. Aside from the export taxes generated, soybeans are “Argentina’s most important source of foreign currency,” says Lorenzo Basso, secretary of agriculture, noting the stability the oilseed has brought during Argentina’s recovery from economic crisis. While soy oil and soymeal are sought by India and the European Union, respectively, China is — and will continue to be — Argentina’s main customer, says Basso. The United States Department of Agriculture predicts Chinese soybean imports will grow from 71.6 million tons in the coming season, to 102.9 million tons by 2022. Argentina has multiple competitive advantages that solidify its position as a leading supplier to China. Soybeans are cheaper to grow than wheat and beef, which makes the crop more attractive to farmers in a country where credit access is limited. Argentina’s farmers are also quick to adopt technologies ranging from no till to new traits. Plus, its soybean production is geographically efficient. In the region surrounding Rosario City — Argentina’s agricultural hub 40 country-guide.ca

— more than 50 per cent of the nation’s soybeans are grown. Supported by an 80-kilometre up-river system, Rosario’s port is the gateway for 98 per cent of all Argentina’s soybean exports. It’s no surprise then that Rosario is the second most important city in Argentina, after the capital, Buenos Aires. “Argentina is highly concentrated,” says Rogelio Ponton of the Rosario Board of Trade, adding more than 85 per cent of transport in the region is by truck, and 12 per cent by rail. “We used to have a great rail system until it became state owned in the 1990s.” Ponton says Argentina’s typical soybean travels less than 300 kilometres from field to port or crushing facility. This is a stark contrast to production regions in Brazil and the United States where soybeans can log upwards of 2,000 kilometres in transport, he says. “It’s hard to find a competitor with this efficiency in other countries,” adds López. Argentina’s soybean-crushing facilities are second only to China in modernization, but lead the world in efficiency — and are not yet producing at full capacity, Ponton says. With only 41 plants, the country has an impressive daily crushing capacity of 195,000 tonnes. Compare this with China’s 190 plants at 350,000 tonnes daily capacity, and Brazil’s 109 plants at 150,000 tonnes daily capacity. Yet, the situation isn’t all rosy. In addition to the 35 per cent export tax on soybeans, Argentina’s farmers face other challenges. Logistically, López says, Argentina’s rails, ports and roads ranked 82nd, 88th and 89th of 139 countries assessed in a World Economic Forum ranking infrastructure and logistics in 2010-11. “We are working on improvements, but there are still a lot of problems,” López says, adding crop storage is also scarce. Soil quality is an issue too. “We need to find different mechanisms to improve crop rotations and fertilizer use,” López says, adding this is particularly difficult considering that 50 per cent of Argentina’s cropland is rented — often under short-term agreements. Looking ahead, López is encouraging Argentinean farmers to become more sophisticated, joining forces with other South American suppliers. “We’re competing with ourselves,” López says. “We need to get together with our Mercosur region (which includes Brazil, Paraguay, Uruguay and Venezuela) so we can compete for the first time with the U.S. and EU.”

Argentina at a glance Population: 42 million (10.5 per cent are rural) Total farmers: 276,500 Size: 2,780,400 km2 — eighth-largest country in the world (Canada is 9,984,670 km2) Cropland: 34 million hectares Agriculture and the economy: Eighteen per cent of Argentina’s GDP, 57 per cent of its exports, and 36 per cent of its employment all come from agriculture. This nation of 40 million produces enough food for 400 million people worldwide — and is expected to handily produce for 615 million people by 2030.

Argentina’s rank in worldwide exports Soybean oil, soybean meal, biodiesel, fresh pears, fresh lemons, lemon juice, honey

#1

#2

Sunflower oil, corn, sorghum, sunflower meal, olives

#3

Soybeans, apple juice

#4

Milk powder Beef, wine, wheat

#6

#7

Poultry meat

MARCH 4, 2014


business Continued from page 39 When the Los Lazos group saw the need for betterquality feed, the family built a processing plant that’s now the leading feed company in Argentina, producing 12,000 tons per month — strictly for cattle. The group has also expanded into the cattle genetics business. In total, Los Lazos supports 750 employees starting at a base salary of 6,000 pesos per month (~C$1,200). Boglione holds an accounting degree from the University of Rosario. “The public school system is free, but you get what you pay for,” he says. Boglione credits his father for teaching him about the family business, a process that was hurried along during their first year together by his father’s cancer diagnosis. “My uncle, a doctor, said he had a five

per cent chance,” Boglione says. “I don’t like cancer, but I’m glad my father had it because it forced us to make the most of our time together.” His father did in fact survive 17 more years, and saw their infant formula exports take off. Today, Boglione is in partnership with his mother and two brothers. One brother lives in the U.S. and is in contact with Boglione monthly. “He tells me ‘don’t make a mistake,’” Boglione says, describing the level of business involvement. The youngest brother is handicapped and unable to participate in the business operations. A family man, Boglione hopes his children might one day be involved in the family business. For now, B:8.625”joining him on short flights to visit the they enjoy farms.T:8.125” “They’re like their dad,” he says. “They like the cowsS:7” the best.” CG

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business

Easing back on the throttle Is farm machinery still selling? According to sales stats, it all depends on where in the world you farm

Industry experts from around the world discussed the global market for farm equipment at a press conference in Hannover, Germany in November.

he opening line was right on the money. It was at this winter’s Agrievolution Alliance conference in Germany, and it was the introduction to a report on global farm equipment markets: “The manufacturers of tractors and agricultural machines are satisfied with their current business situation.” There’s a good reason why equipment manufacturers are “satisfied.” Agrievolution Alliance is a global network made up of the world’s leading agricultural machinery associations, and its member companies only need to look at their latest sales figures to smile. By the close of 2013, worldwide sales of farm equipment were expected to have increased by a full seven per cent over 2012, driving the total value of all the iron rolling out of the world’s ag equipment factories to roughly C$144 billion. And, of course, 2012 was better than 2011, which was better than 2010, which was better than… well, you get the picture. The question now is whether that “are satisfied” appraisal is about to become a “were satisfied.” By late summer, North American equipment industry executives were seeing a significant cooling off in demand for new equipment. Still, expectations in corporate boardrooms are mixed. North America isn’t the only market on Earth, and not every CEO is forecasting a decline in their 2014 bonus. “In October, we asked our 250 member companies around the world about their market conditions,” said conference chair Gerd Wiesendorfer of VDMA, the German Engineering Federation.

42 country-guide.ca

According to that survey, which was published by VDMA in a report entitled “Market Perspectives: 2014,” a full 45 per cent of manufacturers expect yet more growth for their brands in the first six months of this year, while 37 per cent expect to see demand remain exactly where it is now, and only 18 per cent are pessimistic, expecting sales to slip. “Our industry is still in a good mood,” Wiesendorfer said. “But the future expectation has become a little more cautious compared to April (of 2013).” Strangely, the most optimistic companies are the firms doing business in the U.S., where measured restraint was dominant just a few months ago. “When we asked the companies about their turnover in their own market over the past three months, we came to the conclusion that markets have grown about five per cent over the last quarter,” said Wiesendorfer. “It was quite a surprising development.” Indeed, most manufacturers expect sales to grow in the first half of 2014, Wiesendorfer said. But the VDMA report suggests the year’s sales figures are bound to be highly variable, depending on what country you look at. Der Eilbote magazine in Germany, recently cited a survey that showed net farm income in that country shot up last year, with the average farmer raking in a respectable 62,900 euros (about C$94,350). “That’s a good six per cent more than the previous year,” reads the article. And those farmers have been spending some of that money on new gear. A survey conducted of visitors to Agritechnica in November reveals at least half of all German farmers intend to continue that spending. Next door to them, French farmers, too, have been busy buying equipment. “France’s comparatively large agricultural sector is flourishing, and, at the moment, the country is Europe’s locomotive regarding demand for agricultural machinery,” reads VDMA’s report. Across the English Channel, however, difficult growing seasons have made the situation quite different. 2013 spending on farm equipment in the U.K. was down roughly four per cent, according to a report in Farmers Weekly. Registrations of new tractors over 50 horsepower, it notes, dropped 10.4 per cent. Back to the east, things aren’t too rosy in Russia, either. According to the Agricultural Equipment Manufacturers’ Association, sales there have tanked. By the end of November, sales of four-wheel drive tractors were in free fall, plummeting 30 per cent from the same time period a year earlier. Combine sales fell 34.4 MARCH 4, 2014

Photography: Scott Garvey

By Scott Garvey, CG Machinery Editor


business

per cent, and rigid-frame tractors above 100 horsepower dipped 25.2 per cent. VDMA’s report blames much of the trouble there on a continuing credit crunch. As well, foreign brands there are facing another problem. Combine imports into Russia had been subject to a stiff 27.5 per cent tariff levied in February. By July, that duty was suspended, but it is expected to be replaced by an import quota this year. Couple that with a 15 per cent subsidy paid to some farmers who purchase equipment built in the Russian Federation, and imports have suffered. Speaking at an awards ceremony during Agritechnica, a representative of VDMA boldly called the tariffs and subsidies the most striking violations of WTO rules he’s ever seen. Still, politics are less of an issue in other markets. “Political conditions in very many regions of the world are very positive right now,” said Charlie O’Brien, another member of the Agrievolution panel chairing the press conference. Back on this continent, things were astonishingly good, especially in the U.S., where sales of rigid-frame tractors above 100 horsepower grew another 17.6 per cent and combines by 9.8 per cent. However, the VDMA study puts a big caution sign on those numbers. “It is assumed that the long-standing, agricultural machinery market-boom phase in the U.S., which exceeded all expectations, will be over by 2014,” it reads. “Dramatic downturns, however, are not expected.” Here, in Canada, farmers were a little more cautious with their spending last year, but the sales curve MARCH 4, 2014

was still trending upward, with 13 per cent more rigidframe tractors finding homes on farms, while combine and four-wheel drive tractor sales both eased by a hair. For next year, though, manufacturers with a global footprint are still counting on sales in China to prop up big dividends for shareholders. “The growth in China continues,” said Wiesendorfer. “Only for 24 per cent of the companies have their sales gone down in China. For the other companies, sales went up. Agricultural machinery markets (in China) have gown 20 to 30 per cent each year in the past five years. Now, we see a moderate growth; the opinion of the Chinese (manufacturers) association was 10 to 15 per cent growth (this year).” “Also, Japan is quite amazing,” Weisendorfer said. “The agricultural machinery market in Japan has gone through a deep recession in the last six to seven years. In the next one and one-half years we expect to see some upswing in the market.” Most notably, Brazil turned out to be the runaway market for manufacturers in 2013. There are five million farms in that country, and 85 per cent are family operations with an average size of 40 acres. A government support program has helped many of them to buy their first tractor, leading to a surge in demand for models under 75 horsepower. An incredible 65,000 tractors were sold there in 2013, a 15 per cent jump over the previous record. Combine sales soared by 56 per cent. Those numbers aren’t expected to continue into 2014, but they point to an increase in mechanization across the country that is bound to sustain higher equipment sales volumes in the future. CG

A recent survey reveals most manufacturers expect their assembly lines to be just as busy this year as they were in 2013.

country-guide.ca 43


business

Are you marketing, or speculating? University of Minnesota’s online Commodity Challenge can be a great place to improve your marketing skills By Gerald Pilger his year’s drop in grain prices, together with many producers’ inability in the West to deliver contracted grain, has left farmers scrambling to maximize revenues and even to generate some cash flow from last year’s production. Many seem to be jumping into new marketing strategies. But first, they should ask themselves, their grain buyers, their marketing advisers, and their commodity brokers (if they have one) the most important question of all: “Am I marketing or speculating?” It’s not that there is anything wrong with speculating, providing you realize that what you are actually doing is speculative, and as long as you understand the risks associated with your actions. However, it isn’t always easy to understand such things, especially in farming.

“There is no such thing as a zero-cost, zero-risk marketing strategy.” — Regan Espeseth, RBC Dominion For instance, Neil Blue is a marketing specialist with Alberta Agriculture who has spent much of his career teaching farmers how to use marketing tools such as hedges and options to reduce pricing risk. Blue points out these are the very same tools that speculators use to try to profit from the market. Even so, Ed Usset, grain marketing specialist at the University of Minnesota, says there is a fundamental difference between marketers and speculators, and it can be simple to put it into perspective. “Speculators use futures and options to take a risk to make a profit,” Usset says. “Marketers use futures and options to reduce and manage price risk.” While Usset’s distinction seems clear in theory, it can still be a bit fuzzy in practice. For instance, most farmers using futures probably consider their actions as marketing. As well, more and more farmers are using strategies that are bordering on speculation. Examples of strategies which may be more speculative than risk-reducing include Texas hedges (short selling), selling wheat call options, and playing the spreads. In fact, Regan Espeseth, investment and commodity futures adviser with RBC Dominion Securi44 country-guide.ca

ties, points out that holding unpriced grain in the bin could also be considered speculative. “It is tricky to say where marketing ends and speculation begins,” Espeseth says. “No strategy is wrong if you know what you are doing and how to do it. In today’s markets, farmers will have to get more creative in marketing their production. They simply cannot wait until it (the harvested grain) is all in the bin. Learning to use marketing tools like futures and options is very important.” Espeseth tells producers that marketing strategies must be looked at as a piece of their farm operation. “Don’t be afraid to spend some money to hedge grain,” Espeseth says. “There is no such thing as a zero-cost, zero-risk marketing strategy.” Aside from holding unpriced grain in the bin, the most common speculative strategy that farmers regularly use is selling the grain and then replacing those stocks with futures or options contracts to capitalize on higher prices expected later in the year. Espeseth says farmers doing this, or considering replacing actual production with paper, need to be asking themselves: “How much am I willing to risk to get market exposure back?” Blue, Usset, and Espeseth agree that a critical step is learning how price risk management and marketing tools work and how you can use them on your farm to enhance your business’s success. Each of the experts also recommends that farmers take marketing courses that focus on hedging and options. Our experts also believe that the most important thing to remember when marketing — regardless if you are hedging or speculating — is that your primary focus must be on your risk. Risk management must come first! While the basics of hedging, options, and reducing price risk can be taught in a classroom setting, the real learning happens when a farmer actually places a hedge or purchases an option position. Keep in mind, therefore, that the best marketing courses usually incorporate a simulation that allows you to put into practice the information you learn in the course. Your provincial agricultural department or a brokerage office may be able to direct you to a futures and options course being held in your local area. For anyone seeking to increase their knowledge and experience in futures and options but who is Continued on page 46 MARCH 4, 2014


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Rules for speculation Dr. Michael Best teaches an agricultural marketing and futures course at Tennessee Tech University. In the course, he compares hedging and speculation. Best estimates fewer than 25 per cent of all speculators are successful. Because of the risky nature of speculation, he and Dr. Joe T. Davis compiled a list of rules producers should consider before speculating. Here is their list as presented in online slides to TTU students: • Use money you can afford to lose • Know yourself • Don’t overcommit • Don’t trade too many commodities • When you are not sure, stand aside • Block out other opinions • Trade the most active contracts • Never put your entire position on at one price • Never add to a losing position • Cut your losses short • Let your profits run • Learn to like losses • Use stop orders • Get out before contract maturity • Learn to sell short • Don’t reverse your position • Avoid picking tops and bottoms • Take a trading break • Buy bullish news, sell the fact • Act promptly • Don’t form new opinions during trading hours

46 country-guide.ca

unable to attend a marketing course, you might want to consider Commodity Challenge. Commodity Challenge is a unique futures and options trading simulation game developed at the University of Minnesota to teach commodity marketing skills to both students and farmers. The biggest difference between this simulation game and those offered through many marketing courses is that Commodity Challenge is open to everyone and there is no cost to participate. You do not need to enrol in a class or course. Anyone can join an ongoing simulation game anytime. Second, Commodity Challenge follows the actual, real-time cash, futures, and options quotes as provided by GeoGrain, DTN, and the major U.S. commodity exchanges. The trades you make in the simulation on any day would exactly mirror your results if you had actually bought or sold futures or options that day. Unlike most other simulation games, this one limits speculative trading. Participants assume the role of an actual grain producer and they are limited to trading two times the production on their simulation farms. This level reflects the trade volume needed to place and close a hedge position. It ensures participants focus on learning how options and hedges work in managing price risk, and that all economic benefits arising from using these tools come from managing risk rather than profits (or losses) from speculative trading. The final advantage of this game is that a group of farmers, students, or like-minded individuals can easily create a private group within the game. This feature allows a small group to learn together how hedging and options work, and it enables group members to compare the results of their marketing strategy with actions that other members of the group took. Simply emailing Ed Usset, the game administrator, and providing him with a list of participants, your location, the intended start and ending date for your group, as well the crops you want included (corn, soybeans, HRW, SRW, HRS wheat), is all that is needed to set up your group. The only drawback to Commodity Challenge is that your crop choices are currently restricted to wheat, corn, and soybeans, and it only follows the U.S. markets. However, the principles for hedges and options are the same for these crops as for other Canadian crops including barley and canola. Also, since there is a strong correlation between the barley and corn markets as well as the canola and soybean markets, paying more attention to the corn and soybean markets in the U.S. while playing Commodity Challenge may actually improve your knowledge of the real barley and canola markets. Usset says Commodity Challenge was introduced more than a decade ago and last year more than 1,500 people in 12 states played the game. In the past he has had a number of Canadian farmers participate. He has even had an expression of interest in offering this game in Australia if an Australian market could be included as an option. If interested in playing Commodity Challenge, go to www.commoditychallenge.com. CG MARCH 4, 2014


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Production

Research where it counts Small-scale research helps these farmers win on the issues that matter most to their operations By Julienne Isaacs ow do you know your key crop production decisions are the right ones? You make these decisions every season — what varieties to plant, where to plant them, how to rotate them, what crop protection products to use and what sort of fertility package to apply. They determine your farm’s productivity and profitability and over time will make the difference between success and failure. But too often, these decisions are basically a shot in the dark, having to be based more on instincts, guesstimates and watching your neighbour, when what you are really looking for is solid data. In 1995, Carman, Man. farmer Brent VanKoughnet helped start Agri Skills, a consulting, training and field research company. Eventually, he bought the company and embedded it in his home farm operation. As a result, he now uses precision agriculture tools and concepts to compare everything from new varieties to the efficacy of fungicides — comparisons that are meaningful to farm management

“If we hadn’t tried it, we would have been skeptical that we could make it work.” — Franck Groeneweg decisions. The data he collects is useful in two ways. First, it increases the productivity and efficiency of VanKoughnet’s operation. Then, it also helps other growers, because VanKoughnet negotiates contracts with organizations such as grower groups to generate data of value to them. VanKoughnet believes farmers often assume they are making the right farm management decisions, without having the data to back it up. “If I put 120 pounds of nitrogen on a field and don’t compare that to 100 pounds or 150 pounds, how do I know that was the right choice at the end 48 country-guide.ca

of the season? I think in some of the places where we’re spending a lot of money we’re making some fairly large assumptions that we’re doing it in the most profitable way,” says VanKoughnet. There’s an obvious solution to this problem, according to VanKoughnet, and it requires growers to ask just one question: “If there’s some uncertainty when I’m making assumptions about input choices or variety choices, how can I use my own farm to give me evidence that one strategy worked better than another?” Other growers across Canada are asking the same question. Franck Groeneweg, owner of Edgeley, Sask.based Green Atlantic Farms, has conducted similar onfarm research trials for years, and has found that the benefits far outweigh the drawbacks. Groeneweg says that there is lots of research to consider, but if he feels he doesn’t have the right information about whether or not to implement something on the farm, he’ll give it a try on a small-scale basis. Over the last several years, Groeneweg has grown faba beans over several acres, testing out the limitations of the crop and its marketing opportunities. He’s also done on-farm variety trials to determine if a promising new product fits their operation. “This year we had a canola side-by-side trial with Bayer’s variety L140P, and it gave us the opportunity to assess (the variety),” Groeneweg says. “We do the majority of our acres in straight cuts, and by working with Bayer we have one year of information to see if that variety is a fit for our farm, with the equipment we use.” Based on the results of the side-by-side trial, Groeneweg says that despite the price increase for this variety, it’s a good fit. “If we hadn’t tried it we would have been skeptical that we could make it work,” he says. While one of the weak points of doing on-farm research trials like these is that it takes time away from everything else, Groeneweg says it’s worth it, not only because the results arrive more quickly than they would from a research station, but because the answers are anchored in his farm’s specific characteristics. “The added benefit of results that are pertinent to my farm gives me enough to take the plunge. But research is not always to figure out winners, it’s also to figure out losers,” Groeneweg says. Continued on page 50 March 4, 2014


production

Getting started with on-farm research Brent VanKoughnet, owner of Carman, Man.-based Agri Skills consulting company, says that farmers can fine-tune their investments in inputs by considering the impacts of management decisions one-by-one. According to VanKoughnet, the first step is to figure out where the money is going. “Take the low-hanging fruit first. Where are you spending the most amount of money, and are most concerned about whether or not it’s doing what you want it to?” Once you’ve identified the research concern you want to focus on, says VanKoughnet, you’ll have to figure out how to integrate the study into your operation in the way that slows you down the least. Next, ensure everyone on the farm is on-board with pursuing the trial to the very end, VanKoughnet advises. “Make sure everybody on the farm has bought into asking and answering this question this year. You have to have a concerted effort to say, ‘This decision may mean $50,000 to us, so the extra hour we might take at harvest time to stop and weigh those strips of treated and untreated crops is worth it.’” VanKoughnet cautions against taking on too much at once, for fear that the effort will be overwhelming or become diluted. At the same time, however, he says the quest for better knowledge shouldn’t be finite.

This photo depicts a pea-canola-lentil intercropping system on Colin Rosengren’s operation. March 4, 2014

“Pick the important (experiment), do it well, and when you’re confident with it, move to the next one. Be inquisitive, be questioning, and ask what you really want to know. Those people who have an insatiable appetite to know, really begin to love doing this because it gives them confidence in their decisions.” country-guide.ca 49


PRODUCTION

“If you observe the fields for yourself, you’ll get a better understanding through detailed site-specific observation.” — Colin Rosengren Continued from page 48 That clarity is worth something, because it can’t always be found in scientific research. One of the strengths — and weaknesses — of the scientific method is that researchers are frequently very reluctant to make definitive statements, favouring disclaimers and calls for more research. Says Groeneweg: “Scientists will not say outright, ‘This was a loser of a trial.’ They’ll try to find a way to make it positive when they could serve farmers by saying, ‘This didn’t work. Absolutely do not do this on your farm.’ But that could save farmers a lot of money.”

Unconventional trials Colin Rosengren, of Midale, Sask., is one of “Three Farmers,” a small group of Saskatchewan growers who are “passionate about growing natural and healthy food and dedicated to providing that personal connection between consumers and producers.” On Rosengren Farms’ 5,000 acres, he experiments with intercropping using variable-rate technology across every field. The basis of Three Farmers’ business is marketing camelina as a culinary oil, but Rosengren says they are expanding into other products. Rosengren Farms, he says, always has research trials underway. Most recently, they’ve experimented with intercropping with camelina and lentils, which has been successful. Camelina is disease-susceptible, which has a negative impact on yield. “By growing it with lentils, the mixture resulted in better disease control and improved yields,” says Rosengren.

Additionally, camelina can be difficult to harvest when grown on its own, because the pods break in half and the seeds are difficult to clean out. Harvested with lentils, the lentils themselves naturally clean the camelina pods out as the seeds are sifted together. The other “two farmers” grew camelina on its own this year, but Rosengren grew all of his in an intercropped system. “I did all of mine intercropped, with the exception of some monoculture checks for comparison, so I took a bit of a risk,” Rosengren says. “But with our experience intercropping over the last eight to 10 years I was confident it wouldn’t be a disaster — and it worked out better than we’d hoped.” The key to on-farm research for Rosengren is that farmers are more successful when they are more invested in observing the conditions of each field. The first step for farmers hoping to begin their own on-farm research, he says, is to “make sure you get out of your truck and get off the approach and spend more time in the field making these observations. “The yield monitor of trucks to the elevator is pretty crude, and awfully tough to prove,” Rosengren says. “But if you observe the fields for yourself, you’ll get a better understanding through detailed site specific observation.” CG

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production

Stacked deck Weeds have put millions of years of evolutionary experience to work against just a handful of weed killing chemicals. The results are predictable By Gord Leathers n the mid 1990s a team of computer engineers came up with a new way to plug devices into computers and called it a USB port. It was different from the old ports so it wasn’t compatible with older peripherals and they became useless. Computer companies called this progress but many users called it a big pain in the neck. Plants sometimes do this with crucial enzymes. An odd gene mutation may change them slightly, so older herbicides can’t bind to the active sites and older formulations become useless. Biochemists call this targetsite mutation, but farmers call it an even bigger pain in the neck. Everyone calls it herbicide resistance. “Plants are very, very, clever and they’ve evolved all sorts of mechanisms to overcome herbicides,” says Stephen Lindell of Bayer CropScience in Frankfurt, Germany. “There was a guy called Charles Darwin who predicted what we should have predicted. If you have a big selection pressure, plants will evolve to live and cope with it.” And so it goes. Before there were herbicides we controlled weeds through tillage and rotation. This certainly kept weeds at bay for 10,000 years but we suffered the occasional civilization crash as the relentless cultivation degraded the fertile soil. Herbicides appeared after the Second World War and seemed like a miracle. Now we could put land into continuous production without breaks for summer fallow. Later, even zero till became possible with the development of glyphosate. Then 50 years later, a nasty little problem arose in the fields where herbicide treatments left increasing numbers of resistant weeds behind. When we started using farm chemistry, the weeds responded by calling on 70 million years of experience shuffling genes. They showed their cards and we started losing. This shouldn’t surprise anyone with a passing understanding of how plants behave genetically. Every biology student gets an elementary grounding in genetics that, for the sake of simplicity, deals with diploid species. Diploid means there are two sets of chromosomes in total with one set March 4, 2014

coming from each parent. Dominant and/or recessive genes line up on the chromosomes and then wrestle for control of protein production within the cell. While diploid animals, such as ourselves, are relatively simple beasts, angiosperm plants, the most evolved so far, are a three-ring genetic circus. Some are diploid with two sets from each parent, but many are tetraploid (like canola) with four or even hexaploid with six (like bread wheat) or beyond (like triticale). They’re referred to as polyploid, and considering that plants exchange gammetes (pollen) via the wind or carried by insects such as bees, it’s not surprising that there would be some strange crossing going on out in those fields. Many such crosses don’t live, but some do survive and thrive in spite of polyploidy’s big disadvantage. With that much genetic information in the nucleus, dividing it perfectly several billion times confers a greater chance that something will go wrong. It’s a cumbersome and risky process, so mutations will happen and this is why we animals don’t like to do things this way. On the other hand, if the local surroundings are not to our liking, we animals can get up and move somewhere else. Plants have no such luxury so they must endure what’s thrown at them. In that scenario, the more genetic resources you have, the more likely you’ll have some trick up your sleeve that will get you through a crisis. If those extra chromosomes give you a slightly different active site that keeps a marauding herbicide from jamming your crucial enzymes, you survive. You pass on that gene and your offspring are immune. That’s why we’re losing the game right now. We’re playing poker with an octopus and we can’t bluff. It’s a big numbers game and if we want to win we have to see how he plays it, what cards he has and what’s up all those eight sleeves, because he has no reservations about cheating. “At the end of the day it’s all down to genetContinued on page 52 country-guide.ca 51


Production

Continued from page 51 ics, isn’t it?” Lindell says. “If you have a selection pressure on plants you’ll always see resistance, the plants will always find a way. We will come up with new technologies but if we continue as we have done in the past, resistance will develop.” One of the tricks that our card shark octopus plays when we’re not looking is called target-site mutation. If you could actually look into a DNA strand you would see what looks like rungs in a

“Plants are very, very, clever and they’ve evolved all sorts  of mechanisms to  overcome herbicides.” —Stephen Lindell, Bayer CropScience 52 country-guide.ca

ladder. These would be the base pairs and, to put things simply, 1,000 to 1,500 of them line up in combination to create a gene. If one of those base pairs changes, this can bring about subtle changes to the structure of the gene, so the coding changes. “One base pair can change, and this results in the target enzyme of one amino acid changing too,” Lindell explains. “That’s typically in the active site, and what that means is that this new amino acid sticks out a bit more, so that the herbicide no longer binds. Since the herbicide is no longer binding to the enzyme, it can no longer exert its herbicidal activity.” It’s not restricted to one base pair either. It might involve more than one base pair or even more then one gene. When combinations of things within sets of billions start shuffling, it becomes very difficult to find. Not only that, it seems our octopus has friends to help him cheat. Target-site mutation is probably the most common way a plant population develops herbicide resistance. Some populations of plants can develop what’s called enhanced metabolism. Some weeds survive spraying because they can ramp up their ability to metabolize the herbicide and detoxify it. For example, Palmer amaranth in the southern U.S. cotton belt overproduces the ESPS synthase enzyme, so when glyphosate gums it up, there’s still enough to continue running the shikimate pathway. The plant continues to live, and its offspring continue to survive the annual glyphosate dousing. “Some plants delay germination so that they lie in the soil longer and wait for the herbicide effects to be gone before they germinate,” Lindell says. “Or when resistant giant ragweed sees glyphosate all of the leaves drop off so it stops the herbicide from getting down to the roots to kill the plant. Then it just grows new leaves, and away it goes again.” Genetics is still a relatively new science and agriculture has been one of our grander experiments in genetic selection. From our deliberate attempts to husband super organisms as crops and livestock to our accidental successes with super organisms as pests, we’ve seen many of these processes first-hand. As we learn more about the rules, we’ll have to use our chemistry in conjunction with biology and play a much more complex and subtle game. Otherwise some very valuable herbicides will become impotent. “It’s a fascinating science and it’s a science which I think has a very important application in society and in agriculture. But the results from this science need to be preserved, taken care of and fostered a little bit,” Lindell says. “I really feel that we need to introduce more diversity into agriculture. We can’t be just using up herbicide modes of action and going on to the next one, because we’re starting to run out of next ones.” CG March 4, 2014


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Always read and follow label directions. AgSolutions is a registered trade-mark of BASF Corporation; AgCelence, and TWINLINE are registered trade-marks of BASF SE, all used with permission by BASF Canada Inc. TWINLINE should be used in a preventative disease control program. © 2014 BASF Canada Inc.


Production

Phosphate only in seed row Fertilizer burn in the seed row causes hidden and costly damage in many canola fields, contributing to lower seed survival. Phosphorus is the only nutrient that shows any net benefit in the seed row with canola when soil levels are low By Jay Whetter anola is very sensitive to seed-placed fertilizer. We don’t know what percentage of canola seeds are lost to fertilizer burn or toxicity, given that many factors influence seed mortality, but generally, the more fertilizer placed with the seed, the more seeds and seedlings that will die. “Non-viable seeds and seedlings are a lost opportunity of input investment, and could seriously curb the yield and profit potential of canola,” says Shawn Senko, Canola Council of Canada agronomy specialist. “Putting only phosphate at safe amounts with the seed, and putting all other fertilizer away from the seed row is one proven way to increase seed survival.” Two recent canola research studies reinforce this recommendation. Cynthia Grant, research scientist with Agriculture and Agri-Food Canada, led a study FIGURE 1. Seed-placed sulphate and phosphate fertilizers can reduce canola stand density 0 kg S ha-1

Stand density (plants m2 )

120

9 kg S ha-1

18 kg S ha-1

110 100 90 80 70 60 50 40 0

10

20

30

40

50

Phosphate (kg ha-1)

This graph, based on a recent AAFC study, shows how 18 kg/ha of ammonium suphate (black line) reduces canola stand, even with 0 kg/ha of phosphate. Ammonium phosphate is much safer at the same rate. The gold line (phosphate alone) does not reach that same level of stand density reduction until rates of 40 kg/ha. Keep in mind that AS did improve yield compared to canola with no AS, but the safer place to put AS is outside the seed row. Shawn Senko, a Canola Council agronomist, says only limited amounts of phosphate fertilizer should be seed-row applied in canola. 54 country-guide.ca

into the effects of two common seed-placed fertilizers: ammonium sulphate (AS) and mono-ammonium phosphate (MAP). The study concluded that canola stand density is significantly reduced when phosphate and sulphur fertilizers are used in combination in the seed row, with more damage attributed to AS. (Note: AS benefits canola yield, but is more safely placed outside the seed row.) Figure 1 shows that even with no MAP, a rate of 18 kg/ha (roughly 20 lb./ac.) of AS reduces canola stand density by about 25 per cent (115 plants per square metre down to less than 90). MAP alone (the gold line) results in a more rapid loss in plant density with rates higher than 20 kg/ha of phosphate. Liquid forms did not change the result. A summary of the study stated that about half the site years showed seedling toxicity with excess rates of MAP plus AS or with liquid forms ammonium polyphosphate and ammonium thiosulphate in combination. “In all the work I have done, the liquid (whether P source or N source) was as damaging as the granular,” Grant says. The second recent study, also led by Cynthia Grant with AAFC, compared various rates of seedplaced phosphate. “Seedling damage occurred with high rates of applied phosphorus (P) unless soil conditions were very wet, with damage being particularly evident with liquid P. Damage occurred with P rates of 40 and 80 kg/ha of phosphate,” the study concluded. Note that 44 kg/ha of phosphate is roughly 40 lbs./ac., which is why the lower rate of 20 lbs./ac. seed-placed phosphate is generally recommended. If the 20 lbs./ac. rate is not enough to meet your fertilizer prescription, the rest can go with the other nutrients outside the seed row. This second study also compared various phosphate fertilizer products, including controlled release and other specialty formulations. Results showed little difference among phosphate sources in their effects on canola seed yield, but where seedling damage occurred, polymer-coated MAP reduced the risk. March 4, 2014


production

“Non-viable seeds and seedlings are a lost opportunity.” — Shawn Senko, Canola Council How about no P with seed? The Canola Council of Canada’s Canola Watch newsletter had a Twitter question recently asking whether taking all fertilizer out of the seed row would be an even better approach. This can work in high-P soils and warm soil conditions, but in general, some P in the seed row is advised. “On highly P-deficient soils, efficiency tends to be better when P is placed in or very near the seed row,” says AAFC researcher Cynthia Grant. “This becomes more important with cold soils and with the degree of P deficiency.” The other consideration in this case is root avoidance, which can decrease the benefits of placing all P outside the seed-row in the same band as the full rate of nitrogen. “Roots will not enter the band to access the P until the band mellows. This may lead to a delay in plant access to the P,” Grant says. “This will not necessarily be a big deal on high-P soils, especially with late seeding, but may be an issue on low-P soils, especially if the crop is seeded early.” Don Flaten, soil scientist with the University of Manitoba, researched this issue in the 1980s. The research showed that “placing P in the same band as 70 lb./ac. of N led to a delay of several weeks in fertilizer P uptake,” he says.

Feed the crop but protect the seed “You can’t put all fertilizer in the seed row, so adjusting blends and systems to put fertilizer in a separate band is just part of canola production,” Senko says. Canola needs three to 3.5 (lbs./ac.) of available nitrogen, 1.25 to 1.5 lbs./ac. of phosphate, 2.3 to 2.5 lbs./ac. of potassium, and 0.55 to 0.8 lbs./ac. of sulphur per bushel of yield. A 50-bu./ac. canola crop, for example, must have 150 to 175 lbs./ac. of available nitrogen, 62.5 pounds of phosphate, 125 pounds of potassium and 30 to 40 pounds of sulphur. Some of this will be available through soil reserves and mineralization. “The rest will come from fertilizer, and we stress that all of this fertilizer — except for the 20 lbs./ac. or so of seedplaced phosphate — should be placed outside the seed row,” Senko says. The 20 lbs./ac. seed-placed rate of phosphate is low enough for seed safety but high enough to ensure good proximity between seed and fertilizer prills or droplets in the seed row. 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 and follow @CanolaWatch on Twitter. To read summaries of the two recent Cindy Grant studies, see the Canola Digest Science Edition 2013 here: www. canolacouncil.org/canola-digest-past-issues/. Look for studies 2.1 and 2.4. March 4, 2014

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.

Not just for the birds Promising new research is exploring a whole new human food market for canary seed, a minor crop that Canada’s farmers play a major role in By Clare Stanfield id you know that Canada is the world’s largest supplier of canary seed? “Canada accounts for 75 per cent of the world trade in canary seed, with exports worth $50 to $90 million annually,” says Pierre Hucl, a professor in the department of plant sciences and crop development centre at at the University of Saskatchewan. Not bad for a crop that’s grown on roughly 400,000 acres, mostly in Saskatchewan. Currently, canary seed has one end use, mixed birdseed, which is a fairly finite market. That could be about to change, and Hucl’s WGRF-funded research will play a key role in helping Canada meet new market demands. Efforts to get canary seed accepted for human consumption are well underway, and the market potential could be enormous. In fact, applications have already been submitted to Health Canada for novel food use, and to the U.S. Food and Drug Administration for GRAS (Generally Recognized as Safe) status. Both are expected to come through, maybe even this year. The problem at the producer end is that canary seed is an unpredictable crop. “Canary seed yields are lower than those of other spring cereals,” says Hucl, adding they are 50 per cent to 60 per cent less, on average, than CWRS wheat. “As well, yields are highly variable. In fact, they can vary 20-fold from year to year at the same site, and roughly 10-fold from site to site in the same year.” 56 country-guide.ca

Why this happens is something of a mystery, and Hucl is pursuing a few of lines of inquiry to find some answers. “If canary seed becomes eligible for human consumption, stable production will be required,” he says. While new markets are exciting, the need to stabilize canary seed yields is important for growers meeting existing demand now. “The highly variable yields make input management difficult,” says Hucl. “With increasing input costs, understanding the underlying causes of yield instability and, if possible, reducing the huge swings in yield variability will be worthwhile, regardless of where it’s marketed.” To this end, Hucl has two major lines of inquiry that are receiving funding from the Western Grains Research Foundation. The first is trying to find out if canary seed has a vernalization response, and the second encompasses a number of other aspects of canary seed production such as disease control and cultivar development. The concept of vernalization is not new to winter wheat growers. At its most basic, it means a plant requires some exposure to cold temperatures in order to grow and mature properly. If you planted winter wheat seed in the spring, for example, it wouldn’t produce a crop. “There is virtually no published information on this topic,” says Hucl. But research conducted a decade ago by Agriculture and Agri-Food Canada (AAFC) at Swift Current compared canary seed, barley and CWRS wheat and revealed that delayed MARCH 4, 2014

WGRF E


PRODUCTION seeding (end of May) resulted in delayed canary-seed maturity, compared to wheat and barley. It was the merest hint that early seeding into cooler soils just might help improve yields. “In our study, we’re evaluating a series of canary seed lines for vernalization response,” Hucl says. The research will be conducted in controlled environment chambers, and wheat and oat cultivars will be included as controls. Seeds are imbibed at a low temperature (in this case, 7 C) and the plants are grown in different temperatures and day lengths to see how they develop and mature. Plant leaves are numbered and, at flag emergence, the final leaf number (FLN) on the main tiller is recorded. “Vernalization is complete when an additional cold treatment fails to cause further reduction of FLN,” says Hucl. “And vernal saturation is established by determining when the lowest FLN is reached. “We want to establish benchmark information for the growth and phenology of canary seed,” says Hucl, explaining that knowing more about how canary

“If canary seed becomes eligible for human consumption, stable production will be required.” — Pierre Hucl, University of Saskatchewan

seed grows is key to figuring out better in-crop management strategies as well as optimal seeding dates. In other words, knowing how seeding date influences phenomena like the number of leaves that occur on the main stem, how much time passes between each leaf’s appearance as well as days to heading, can help researchers get a better handle on what growers need to do to achieve stable, and potentially higher, yields. “Under average conditions, canary seed tends to have a low harvest index,” Hucl says. This is the ratio of grain to total dry matter, and when it’s low, it’s an indication that too much energy is going into non-productive parts of the

plant. Hucl points to how wheat yields were improved with the introduction of shorter straw, or semi-dwarf, cultivars and he’s looking to achieve similar results with canary seed. Project co-investigators, Randy Kutcher, associate professor at U of S, and Bill May, crop management agronomist with AAFC in Swift Current, are also looking to assess the impact of septoria leaf mottle, a disease that has been found to contribute to yield variability. And Ravi Chibbar, fellow U of S professor and Canada research chair in crop quality, has his lab focusing on the development of new molecular markers to be used in future canary seed breeding efforts. CG

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

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in new funding to crop research over four years

More than

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Research

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Leveraged to $30 million by co-funding

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Weed Management

Blackleg & Clubroot in Canola

Improving Oat Nutrition

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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.

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2013-09-12 8:34 AM


Production

New era, new tools Selection pressure and an ever-increasing list of glyphosate-resistant weeds mean we’re in a new era. Herbicide researchers are reacting by tapping the biomedical world for new tools for a new challenge

By Gord Leathers hen most people think of 1973, they think of world changing events such as the Arab oil embargo and the end of the Vietnam War. What they don’t think of is the introduction of a world-beating pesticide that not only changed the way that farmers would come to think about weeds, but also fundamentally altered the face of the globe. This was the year that Roundup first appeared on suppliers’ shelves and in farm fields, where it created a new standard for herbicide performance, and over the next few seasons, tinkerers, dreamers and inventors in Saskatchewan, Manitoba and North Dakota perfected the first practical system to produce tillagefree annual grain crops. The effects were enormous. The erodible dark summer fallow disappeared, conservation tillage became conventional, and spring ditches ran clear. The West’s windblown dark skies lived only in the memories of Dustbowl veterans. Glyphosate kept weeds at bay for the next 30 years, and a golden age of weed control prevailed. But all golden ages come to an end, and we’ve seen more and more weeds become capable of quietly shaking their spring dose of glyphosate. The list of such weeds keeps growing, just like the annual list of resistant weeds compiled from all over the world. The once-mighty glyphosate has fallen to Australian rigid rye grass, American amaranth pigweed, Canadian kochia and many others. Nor do we have anything to replace it with because, after a fashion, herbicide research has also been a victim of glyphosate’s excellence. “There’s been a real reduction in the intellectual effort going into herbicide research because of the prevalence and the tremendous success of glyphosate,” says herbicide chemist Stephen Lindell of Bayer CropScience. “Whereas, 20 years ago, there were about 40 companies involved in herbicide research, there are now perhaps a dozen.” Lindell recalls a time when all those companies 58 country-guide.ca

and all those chemists presented a tremendous source of inspiration. Reading each other’s patents kept the creative juices flowing. Those patents were awarded, some of them were improved and new chemistries were formulated and tested. There are fewer patents these days, partly because there are fewer people working in the field, but there are other factors as well. The regulatory hurdles are higher. The emphasis on both public and environmental health is more important than ever, and new pesticides must conform to tougher standards than their predecessors. Further to that, some say that we’ve picked the low-hanging fruit and we’ve made the more obvious discoveries. From here on in, finding new chemistry is going to be more difficult, and getting from the lab to the field is a much rockier road. “Now we’re a lot fewer and we can’t rely on our old sources anymore so it’s very difficult to find new chemistries,” Lindell says. “But we’re looking at new ways and there are a couple of approaches which we’re using to find new products, and we do this by targeting new modes of action.” This is a new way of doing things that the agrochemistry people borrowed from their colleagues in the pharmaceutical industry. At first companies looked at inventories of different chemical compounds and simply tested them on plants to see if they had herbicidal properties. In time we’ve learned more about both the chemistry of the herbicide as well as the biochemistry of plants, so we understand how some chemical compounds can confound a plant’s inner workings. A herbicide is like a chemical monkey wrench that you throw into a plant’s metabolic gears to shut it down, and we’ve developed several different wrenches for as many different gears. Glyphosate was our last great wrench, and to understand how it works you have to ease your way into the realm of the biochemist and use terms like amino acid, shikimate pathway and EPSP synthase. The first is a molecule, and everyone knows what those are, while the second is a metabolic pathway, March 4, 2014


production

a procedure by which a cell takes molecules, breaks them apart and then reassembles them into different molecules. The last is an enzyme, which is a molecule that starts a chemical reaction, rides it through and then pops out as the finished product moves down the line. Then the enzyme goes back and starts the reaction again, repeating this step several times before it burns out. In this way, raw materials go in, enzymes go to work and finished products come out. The cell makes proteins and the plant uses them to build tissue. Even the name glyphosate itself is like that because it comes from glycine, an amino acid, and phosphonate, a family of chemical compounds including phosphonic acid or phosphonate salts. These terms were pulled apart and then bashed together into the name glyphosate, a molecule that pretends to be glycine and jams the shikimate pathway. An amino acid is one of a family of about 20 compounds made up of an amine (nitrogen with two hydrogens — fertilizer) bolted to a carboxylic acid (carbon, two oxygens and a hydrogen — organic matter) and then adorned with one from a distinctive group of side chains. It’s sort of like the Mr. Potato Head toy where you have the standard potato body (the combination of the amine and carboxylic acid) with a variety of different accessories (the side chain). Since amino acids make up proteins, and proteins make tissue, biochemists will tell you that amino acids are the basic building blocks of life. Under normal circumstances the cell takes glycine and moves it onto the shikimate workbench where it’s disassembled and the parts are recombined with other molecules. At one point the enzyme EPSP synthase drives an important part of the reaction where various fragments are put together into three different amino acids, phenylalanine, tyrosine and tryptophan. These three are absolutely crucial to the growing plant. If you drop a molecule of glyphosate in there, the cell mistakes it for glycine but instead of breaking apart and helping to build the big three, it simply jams the pathway by binding to the EPSP synthase enzyme. And it won’t let go. The enzyme is disabled, the whole system shuts down and the plant dies. The EPSP synthase enzyme activates what biochemists call the active site, and this is the set of “gears” that glyphosate jams. Different herbicides interfere with other sites and shut down different systems. This is called the “mode of action” and different herbicide groups are defined by their different modes of action. Glyphosate is Group 9, the EPSP synthase inhibitor. Group 4 are growth regulators such as 2,4-D which pretends to be auxin, a broadleaf growth hormone. Lindell’s team is looking at Group 27, a pigment synthesis inhibitor that goes after the HPPD enzyme. The HPPD enzyme produces carotinoids, compounds that act like a light filter for the chloroplasts. Chloroplasts only need a narrow band within the light spectrum, so the carotinoids filter out certain March 4, 2014

wavelengths and this keeps the chloroplasts from overheating and burning out. The Group 27 HPPD inhibitors rip back the curtains exposing the chloroplasts to the sun’s full power, effectively reducing them to charcoal. “We are hoping to use new approaches to produce or discover new compounds targeting that enzyme,” Lindell says. “Inasmuch as we’re looking for new chemistries, we believe that they will not show cross-resistance with any existing HPPD inhibitors.” This new approach is called Fragment Based Lead Discovery. Instead of throwing a series of complex compounds at a group of plants to see what kills them, the researchers look for active sites within the plant’s metabolic pathways where they could exploit a potential weakness. Then they look for simple molecules that will bind to the site. “Now, the thing with the fragment-based approach is that you take much smaller molecules, in fact very small molecules, because statistically the chance that you’ll find one that fits within the enzyme is much much higher,” Lindell says. “The trouble with this approach is that because it’s such a small molecule, it’s unlikely to have all of the

“We are hoping to use new approaches to produce or  discover new compounds.” — Stephen Lindell, Bayer CropScience enzyme or molecular interactions that are required to make a good inhibitor or a good herbicide.” That’s why it’s called a lead fragment. Once we’ve found that, we can start looking at the “accessories,” the add-on parts of the molecule that will make the new herbicide potent and effective. This really is a new way of developing pesticides, pharmaceuticals or any type of commercial biochemistry. It’s not a simpler method. In fact, it’s more complicated than the older approach, but it promises to be a more accurate way of doing things in a more complicated age. As the plants develop slightly different sites of action we can find other leads, so there is some potential to deal with evolved resistance a little faster. “But it’s still a long, time-consuming process to discover new molecules, and we really do need to protect what we’ve got,” Lindell says. “We need to have real crop rotations with different herbicides. We need to have different modes of action, and they have to be modes of action that are active. Herbicides are a great resource, but if we lose them, then we’re really back to steel. We need to preserve them.” CG country-guide.ca 59


Production

field notes

New seed flow lubricant only option Corn and soybean growers who have used seed flow lubricants when planting seed treated with neonicotinoid pesticides will have only one option this spring. Health Canada’s Pest Management Regulatory Agency (PMRA) has rolled out new guidelines for corn and soybean planting which will permit only the use of Bayer CropScience’s new “Fluency Agent” as a seed flow lubricant when planting seed treated with any of the “neonics.” Talc and graphite, previously used separately or together as lubricants for neonic-treated seed, are now “not permitted” as seed flow lubricants for corn or soybean seed treated with those products, PMRA said in a notice on its website. Treatments used on corn and soybeans have been known to cause stickiness in seed, which hinders seed flow through planters and, until now, has been handled using the talc and/or graphite lubricants. However, abrasion from the treated-seed coatings has been known to create dust made up of lubricant and pesticide, which can then be released from a planter’s exhaust system. According to the U.S.-based Corn Dust Research Consortium, research has shown such “fugitive dust” represents a route by which bees may be exposed to pesticides, “even where suitable sticking agents are used and seeding equipment vents downward.” PMRA’s new rule applies only to those corn and soybean growers using a lubricant to help with seed flow through their

planters. Growers who haven’t used lubricants in the past aren’t required to start using the Fluency Agent. The Fluency Agent, made of a polyethylene wax substrate, is to be applied at rates of no more than 1/8 of a cup per 80,000seed unit of corn or 140,000-seed unit of soybeans. Grain Farmers of Ontario, the commodity organization for Ontario corn, soybean and wheat growers, noted on its website that only the recommended amount should be used. The Fluency Agent is billed as reducing the amount of active insecticide ingredient released in treated seed dust during planting by 65 per cent, “therefore reducing the risk of exposure to non-target insects, including bees,” Bayer CropScience said on its website. The new product was rated as “equal to or better than other seed flow lubricants,” the company said. Growers who require graphite to lubricate a planting mechanism, such as a finger planter, may continue using graphite, GFO said. PMRA’s new Pollinator Protection and Responsible Use of Treated Seed guidelines include a list of label changes and recommendations to reduce risk to bees and other pollinators from the use of neonicotinoids for spray application and seed treatment. The products to which the amended labels apply include Bayer CropScience’s clothianidin seed treatment Poncho, Valent Canada’s clothianidin treatment NipsIt Inside, Syngenta Canada’s thiamethoxam-based Cruiser seed treatments, Bayer’s imidacloprid-based Gaucho insecticides, and Mana Canada’s imidacloprid product Sombrero 600. AGCanada.com CG

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March 4, 2014


hr

Choosing the next leader The longer you delay, the harder the choice will get By Pierrette Desrosiers, work psychologist, business coach, and author

hey have never gotten along,” a farmer I’ll call Bill is telling me. “I know that I have to think about a succession plan and that I have to choose one of them, but I don’t know what to do,” Bill says. “Each of them has their strengths and weaknesses, but does either of them have what it takes to run the farm?” For years Bill, age 69, has avoided the question of his succession plan. When his spouse or children have tried to broach the topic, he has always avoided the discussion. Why? Choosing a son or daughter to be the next leader of the business is one of the greatest challenges that a family business owner has to face. As a result, many will procrastinate on this crucial matter, neglecting the preparation of their succession plans as if their retirement will never come. They worry whether or not one of their children is the right candidate to lead the business to future prosperity. Do they possess the experience, abilities, and character to take over? Do they have the commitment it will take? Is this fair for the whole family? Can siblings who have had conflict for years learn to work together, and to be partners? Why is it so hard to choose the next leader in a family business? The biggest reason can be summarized in one big word: “emotions.” In addition to the complex issues that all the companies face, many experts recognize that family businesses must also deal with emotional and relational issues, both for parents and children. This can manifest itself in questions of succession. It is hard to distinguish between personal love and professional decisions. As a result, sometimes a successor can be chosen because he or she is the oldest child, or because the business owner is afraid that one of the children might throw a tantrum or cut ties if they are not picked, or because one of them seems like the only option still around. Instead, if long-term business sustainability is the goal, competence, work ethic, and integrity ought to be the deciding factors. This often requires distance from your emotions about the people you love. Poor leadership can result in damaged client relationships, inappropriate risks, and the disengagement of key staff. But is it more important to you to pass the farm on to your child, however ill-prepared, or to see it thrive under more competent leadership? MARCH 4, 2014

Here are six key ideas to consider as you make the decision of whether your successor will be your child, and which child it should be: • Know what your role requires today — identify and talk about the knowledge, skills, and abilities your successor must have to fill your role effectively. Remember that the leadership abilities that will be required in the future may be very different from those that have served you well in the past. Envision the future of your business and plan accordingly. • Set aside your emotional attachments. Assess the skills and abilities of your offspring just as you would any leadership candidate. Ask yourself, “Would I choose him or her if they were a perfect stranger?” If this is difficult (being both a parent and boss can be straining) look for external objective evaluation. • I dentify and address skill gaps that must be resolved before any transition. However, be realistic. While training, formal coaching, or onthe-job experience may patch some holes, your successor is not going to be a carbon copy of you. Consider hiring someone else whose skills complement your successor’s strengths. • Prepare yourself with the knowledge that if there are too many gaps in abilities or flaws in character, discipline, or work ethic, you are probably better off choosing another candidate. • Consider a trial run of your new leader. Be clear about expectations, roles, and responsibilities. See it as an opportunity to validate your choice. • Remember that procrastination never helps. The sooner you plan your succession, the better. A business owner’s ability to make tough decisions, confront fears, and foresee the impact that the successor will have both on the business and on the family long after your own retirement or death constitute the critical traits that will ensure the farm’s sustainability beyond your own leadership. CG Pierrette Desrosiers, MPS, CRHA is a work psychologist, professional speaker, coach and author who specializes in the agricultural industry. She comes from a family of farmers and she and her husband have farmed for more than 25 years (www.pierrettedesrosiers.com). Contact her at pierrette@pierrettedesrosiers.com. country-guide.ca 61


life

Better family meetings Increasingly, the best way to thrive as both a family and a family farm is to hold structured, effective meetings By Helen Lammers-Helps

ith bigger farms, communication among everyone on the farm team gets more critical every year. These are multi-million dollar businesses, after all, and it is becoming painfully clear that our farms need to give serious thought to how they operate, just like other businesses that generate the same kinds of receipts. “We can’t just wing it,” says Gordon Colledge, a farm adviser in Lethbridge, Alta., who advocates for what he calls “professionalizing the farm business.” Without good information flow, sometimes even small misunderstandings can escalate into big problems, warns Colledge. But there’s another concern too. Without good farm communication, it isn’t just that bad things might happen, it’s that great things can’t. “Meetings help to keep everyone onside,” Colledge says. “People are more likely to get on board.” Maybe there was a time when all it took was a conversation around the dinner table. But those days are gone, especially when several families are farming together, says Elaine Froese, a farm family business coach in Boissevain, Man. “Formalized family business meetings are important because they help members separate personalities and emotions from business decisions that must be made,” Froese says. Formalized meetings also give the younger generation an opportunity for input into the decisionmaking process, says Gerry Friesen, a farm family coach in La Salle, Man. Sometimes the older generation is reluctant to consider new ideas, so a meeting gives the younger generation a platform where they can lay out their thinking, Friesen says. It’s an example of why even small farms benefit from more formalized communication, says Friesen. Friesen, who worked in farm debt mediation for many years, says he has seen too many cases where the left hand didn’t know what the right hand was doing, which led to disaster. The very word “communication” can seem namby-pamby to farmers who are used to making hard decisions about very real things, and who already have very full days. But, warns Friesen, communication is just as real. “Too often, a lack of communication is the downfall of the farm,” he says. If you are already meeting over coffee, you may find it boosts your efficiency simply by taking things 62 country-guide.ca

to the next level with a set time, an agenda and some informal notes or minutes, says Colledge. By setting a schedule you make sure it happens, adds Friesen, who likens it to using an exercise machine. “If you make it a habit, it will get easier.” Colledge recommends holding weekly meetings at the same day and time each week, except during the busy seasons. In his experience, Wednesdays and Thursdays work well for meetings. “If you have an 11 a.m. meeting for an hour and then follow it with a one-pot lunch, everyone can be back to work by 12:30 p.m.,” he says. Then once a month, there could be a longer meeting to delve into financial reports and income and expense statements, Colledge says. However, Colledge is quick to say there is no cookie-cutter solution to business meetings that works on every farm. The frequency of meetings really depends on the type of farm and the players involved, he explains. On one farm with five partners, Friesen recommended daily meetings to keep everyone in the loop. At the opposite end of the scale, Reg Shandro, a farm adviser in Lacombe, Alta., often recommends monthly meetings for non-production issues. Regardless of how often meetings are held, there are some necessary elements in effective meetings. Agendas are important and should be circulated a couple of days in advance so everyone can come prepared, says Colledge. The agenda should include a discussion of the minutes of the previous meeting. “It’s important to record the issues discussed, the decisions made, who is to act, and by when,” says Froese. Then at the next meeting you can check to see what progress has been made. Some of the other items for the agenda might include reports on crops, land, machinery, buildings, livestock, and finances. This is also a good time to discuss vacation schedules, adds Colledge. Sometimes an industry expert may be brought in to provide information on an issue that’s currently being discussed. To stimulate good discussion there should be no disruptions during the meeting, says Shandro. Meetings should be held in a separate space, not in the milking parlour, he says. “Phones should be turned off and the curtains closed.” If no one on your farm team has the skills to chair the meeting, Colledge suggests bringing in a MARCH 4, 2014


life

farm adviser or facilitator to help. This person can be asked to sign a confidentiality agreement, he says. “Bringing someone in because your team lacks the skills is not a sign of weakness. It’s just a lack of experience,” stresses Colledge. Team members can gain experience chairing meetings by getting involved in commodity or breed organizations, municipal boards or other associations to see how effective meetings are managed. Everyone, even the quieter people, should be encouraged to participate in discussions and have their voices heard, continues Colledge. “Everyone should feel like their voice matters… is respected and validated.” “Sometimes people are reluctant to talk about what’s really on their minds,” says Shandro. A trained mediator can read the body language and draw comments out of them, he says. Farm teams will need to decide in advance how decisions will be made, advises Colledge. “Will it be by consensus, or by vote?” Who attends the meetings will depend on the purpose. In Froese’s opinion, the people who understand what’s going on, the people with the power to make decisions, those who will carry out the decisions and those affected by the decisions taken should be there. One obstacle to good meetings may be generational differences. Baby Boomers (born between 1946 and 1964) tend to like to follow protocol for every decision, which seems crazy to Generation X (born between 1965 and 1980) and the Millennials (born between 1981 and 2000), says Randy Weigel, an extension specialist at the University of Wyoming. “The Gen Xers say, ‘Just tell me what to do and let me do it,’” Weigel says. On the other hand, the Millennials have matured in a world of short cuts, technology and convenience. They are used to finding the answer with the click of a mouse, but may be less able to critically think through a problem. MARCH 4, 2014

While older workers have learned to be patient with the details of business meetings, younger employees are often easily bored and may play with apps on their smartphones or send text messages, continues Weigel. The solution, Weigel says, may be to have fewer, but better meetings in order to help keep younger workers engaged. Also make sure that meetings have a clear purpose, a focused agenda and stay on track, he advises. Weigel has one more piece of advice. While it’s important for younger generations to know the history of the farm, he discourages founders from starting too many sentences with “I remember when…” This can be a sure-fire way to make yourself irrelevant to younger workers, Weigel says, especially if they have no idea what you’re talking about. Many farms would benefit from formalizing their meetings. By putting effort and planning into regular meetings, our experts agree, your farm business can reap the rewards of improved communication and decision making. CG

Tips for better meetings* • Have a written agenda and stick to it. • Come with a good attitude. • Start on time and end on time. • Maintain focus. Don’t let the meeting get sidetracked. • Only one person speaks at a time. • Everyone should be encouraged to speak on an issue and to listen actively. • No shouting and no personal attacks. • Turn the cell phones off. • Take notes. This will prevent disagreements over what decisions were reached. Keep notes in a three-ring binder for future reference. • Always start and end on items that unite the family and the meeting. *Resource: Boring Meetings Suck: Get More Out Petz (John Wiley & Sons, 2011).

of

Your Meetings by Jon

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h e a lt h

Breathing easier with asthma By Marie Berry ore than three million Canadians have asthma, and the number seems to be increasing. This increase may come from improved diagnosis, or perhaps people are more likely to seek help for their breathing symptoms these days. An increase in our exposure to allergens or airborne particles may also be to blame, however, triggering more asthma symptoms. Asthma is characterized by shortness of breath, chest tightness, wheezing, cough, and generalized difficulty in breathing. In childhood, asthma affects more boys than girls, but by age 30 everyone is affected equally. If you think of your lungs like trees, the bronchi are the branches and the alveoli are the leaves. In asthma, the bronchi are more responsive to stimuli, and they react by narrowing the airways. The bronchial smooth muscle contracts, and a thick, sticky fluid is also secreted, which makes oxygen intake in the alveoli more difficult. Asthma is classified as either allergic or idiosyncratic. Obviously, if you have allergic asthma, avoiding stimuli or allergens that cause the symptoms is key, for example plant pollen, feathers, animal dander, moulds, environmental pollution, dust mites, or even cold weather. Idiosyncratic asthma does not seem to be linked to any specific allergen. In general, if the onset of asthma is early in life, it is more likely to be allergic in nature. Later in life it is more often idiosyncratic. Some factors can increase your risk for asthma. A family history of asthma and a medical history of other allergies such as hay fever are risk factors that you usually cannot alter, as are eczema, sensitivity to non-steroidal anti-inflammatory drugs like ibuprofen, and urban living. However, you may be able to control other factors, such as smoking, including second-hand smoke, workplace exposure, obesity, low birth weight, history of heartburn or sinusitis, low vitamin D levels, and chronic respiratory infections. The first step that is always recommended in treating asthma is to remove or avoid any allergens that cause asthma attacks, such as dust, animal dan-

der, plant pollen, foods, mould, and dust mites. An asthma symptom diary can help you identify these offending stimuli, although the difficult part may be in avoiding them! Respiratory infections and stress are also implicated in some attacks. Thus you will want to remain healthy and manage any stress. When you breathe in allergens, it is your immune system that triggers the asthma response. Mast cells in your immune system rupture to release substances such as leukotriene and histamine, which in turn cause your airway obstruction. Oral medications including leukotriene inhibitors (such as montelukast and zafirlukast) and antihistamines (such as loratadine and cetirizine) are taken to prevent symptoms. But remember, you need to take these regularly so they will be circulating in your body ready to prevent the immune system response. Inhalers are the mainstay of asthma treatment because they deliver medication directly to the site of the breathing problem. Inhaled corticosteroids reduce inflammation and need to be used regularly to keep inflammation under control. Beta-agonists quickly reverse airway constriction, with the most commonly used agent being salbutamol. If you use both types of inhalers, you want to use the broncholilator (such as salbutamol) first to open the bronchi, followed by the corticosteroid which then will be able to penetrate deeper to more effectively reduce inflammation. A variety of inhalers exists, ranging from the “bootshaped” ones which use propellants to expel the active ingredients to breath-activated designs which use your own breath to draw in the medication. With asthma, breathing easier is possible, but remember to check and ensure your inhaler technique is correct. If you can’t draw in a suitable breath, consider using a spacer with your inhaler. An asthma plan which gives you a game plan for managing your symptoms is also an excellent idea. You can download a sample from the Asthma Society of Canada at www.asthma.ca. Now, take a deep breath! Marie Berry is a lawyer/pharmacist interested in health and education.

As we are all getting older, some of us are reaching the demographic that has an increased risk for dementia. Even if you are not yet in this age group, you may have family or friends who are, or you may have an increased risk for memory issues. Next month, we’ll look at managing dementia symptoms, including some of the newer memory-enhancing games.

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MARCH 4, 2014


NOW AVAILABLE “Innovation is doing something in a new way and implementing the discovery.” A display entitled “Fueled by Innovation” opened recently at the Western Development Museum in Saskatoon. Speakers described innovative ways of powering vehicles including wind, steam, straw gas, electricity and biofuels. They identified unique sources of energy. Sugar cane could provide energy in Brazil and corn is a source of energy in the U.S., while canola is grown in many countries. The display includes a bicycle powered by steam and a car energized by wind. A Saskatchewan teen, Kerry Bartlett, captured wind using scoops created from oil drums. He was stopped by the Mounties, not because he was speeding but because they were curious to see his contraption. A straw-gas car attracts attention because of a large balloon mounted on top. In 1918, two professors from the University of Saskatchewan drove a similar vehicle through the streets of downtown Saskatoon. The energy source was gaseous vapour produced by heating straw that was abundantly available from threshing machines. The straw-gas car was limited to short distances at slow speeds and did not catch on. I reflected on this while wandering through the Crop Production Show at Saskatoon in January. Tractors, combines, sprayers and other farm equipment sold today are enormous. I watched a farmer and his wife climb the ladder to the cab of a new combine. They appeared to be two storeys high. When they came down, their animated discussion was beyond earshot, but I could imagine what was said — “You want to spend how much money… !” Man is a curious creature, constantly moving from one place on the planet to another. We have been doing this for centuries, but methods of transportation have changed enormously in recent decades. My grandfathers farmed with horses. When manufacturers began producing small tractors, they had to persuade farmers to buy them. John Deere marketed tractors that produced about 20 horsepower. They advised dealers to promote sales by telling farmers, “This tractor will do the work of five horses.” In the 1920s, a woman was alone on the farm. She wanted to go to town, but she did not know how to harness the horse and hitch it to the buggy. Demonstrating innovation, she looked up harnesses in the index of her Eaton’s catalogue and used the display to harness up. Richard Branson, a British entrepreneur, knowing that turbine engines will operate on a variety of fuels, powered a Boeing 747 airplane with jet fuel and oil from 150,000 coconuts, and from babassu palm oil which grows wild in Brazil. Other airlines have powered airplanes with refined waste cooking oil from fast-food restaurants. The experiment worked but pilots, flight attendants and ground crew complained that the airplane “smelled like a McDonald’s restaurant.” A farmer in the 1930s hitched up his team of mules for a trip to the hardware store in town. His wife kissed him goodbye, handed him the grocery list and asked when he would return. “Should be back about four,” was the reply. As supper hour approached, she became anxious. About 10 p.m. he rolled into the yard. “What happened? What took you so long?” Well, he explained, “I met the preacher at the edge of town and he asked me for a ride. After that, those blankedy-blank mules could not understand a word I said.” Suggested Scripture: Psalm 32:8-11, 1 Corinthians 3:10-15 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. MARCH 4, 2014

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ACRES

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

Their lucky day Busily unloading grain, the three grumbling men couldn’t know the women were nearly so close eff, his four-year-old son Conner, and his father Dale were out in the shop, taking a quick break so Jeff and Conner could warm up before they went out into the cold again. “Conner, stop chasing that cat,” Jeff said for the third time. “Elaine’s coming home today, right?” Dale asked, hopefully. With Jeff’s wife, Elaine, away, almost everything was taking a little longer than usual. Dale loved his grandson, and Jeff enjoyed spending time with his young son. But a four-year-old boy was almost never as much help as he thought he was. So far, since his after-lunch nap, Conner had accidentally hit the dog with a snow shovel, spilled a pail of sample wheat on the floor of the cleaning plant, and dropped a handful of bolts into the snow. Nobody would call Conner a bad kid. But they also wouldn’t accuse him of being overly quiet and obedient. “Could be worse, Dad,” Jeff said. “At least she took the baby with her.” 66 country-guide.ca

Since Elaine had joined the policy committee for a provincial ag group, she’d been spending more and more time in Saskatoon. “I’m learning so much,” she told Jeff. And she was — information she brought home was helping them make some good decisions on the farm. And she was building a good reputation among the men on the committee. “They’re listening to my ideas,” she’d said the last time she came home from a meeting. “The chair even took notes while I was talking!” Jeff was glad to see Elaine happy, taking on more responsibilities, meeting new people. He just wished today was a playschool day, so he could get a little more work done without Conner underfoot. “It’s just our luck to have Mom away, too,” Jeff said. Usually when Elaine was away, Dale’s wife Donna was happy to spend time with her grandson. But she was away too — with friends, on a threeday trip to a women’s camp in North Dakota. “Becoming an Outdoor Woman,” Dale said. “Ha. She could’ve done that here.” Dale was still skeptical about this outing, but Donna had been MARCH 4, 2014


acres

excited. “We’re going to make our own snowshoes!” she’d said. “And try geocaching! And we even get to go dogsledding.” Dale had gotten used to Donna trying new things since she’d given up doing the books for the farm, but now he was grumbling about it. “‘I want to learn new skills,’ she said. ‘I want to get some exercise,’ she said. She could do all that right here. Fixing the brakes on the old grain truck. Shovelling snow off the weigh scale. Heck, I should start charging busloads of women to come out here and hang out with me for the weekend.” “Good luck with that plan, Dad,” Jeff said. Then Blaine Martin pulled into the yard with his semi to drop off some seed to be cleaned. Jeff shovelled the last of the snow off the weigh scale and Dale grabbed Conner’s hand to keep him safe. When the truck stopped and the door opened, Conner squealed with delight. Blaine’s young son Jake was along for the ride. “No playschool today,” Blaine said, nodding at his son. “Yup,” Jeff said, watching the two boys run through the snow together. “Wife’s at work,” Blaine said. “Poor kid’s stuck with me for the rest of the afternoon. Maybe I should’ve married someone who doesn’t have a job.” “That wouldn’t help,” Dale said. “Donna doesn’t have a job, but she’s off looking at a husky dog’s butt.” Blaine looked confused, but he didn’t ask. “And the worst of it is,” Dale kept on, “they don’t even trust us to do it right!” Blaine picked up the thread. “You’ve got that right! This morning my wife gave me a 10-minute lecture on making sure the boy has his snowsuit on right!” “I’ve been there,” Dale grumbled. “Two kids of my own, now two grandkids, and Donna still doesn’t think I know how to feed them. Sure, the kid might get a little dirty by the end of the day. But that’s good for them.” The three men kept up their complaints while they dumped Blaine’s grain, then they moved on to talk about canola prices, and which companies might still buy wheat before September. When his truck was empty, Blaine pulled out of the yard, waving goodbye. Dale and Jeff got back to work. Dale went back to work in the shop, fixing the truck brakes. Jeff checked the cleaning plant setting and made sure Blaine’s wheat was cleaning up nicely. Jeff checked his watch. Almost time for Elaine to come home. Maybe he should take Conner in for a snack. Then Jeff looked up. “Dad!” he screamed, running. Dale came out of the shop. “Where’s Conner?” Jeff gasped. First, they checked both their houses, hoping the MARCH 4, 2014

boy had snuck inside to watch TV. But there was no sign of Conner. If he wasn’t in the house, he could be anywhere. Jeff and Dale were living every farmer’s worst nightmare. “At least the dugout is frozen too hard for him to break through,” Dale said, running by Jeff on his way to look in the trees behind the shop. Jeff ignored his ringing cellphone. He’d call whoever it was when this crisis was over. If it was ever over. The yard had never seemed so huge. There were so many places for a small boy to go. And in this snow… If Conner took off his mittens, or worse, his coat, it wouldn’t take long… Jeff couldn’t stand to think of it. He cursed. “Elaine looks after him all the time. And I can’t watch him for two days!”

The truth is, a four-year-old boy is almost never as much help as he thinks he is Jeff was looking for fresh footprints behind the bins when he saw Blaine Martin’s semi pull back into the yard. While Dale and Jeff both ran toward the semi, Blaine opened his door and got out, then went around to open the passenger door. Jeff and Dale were both sick with relief when Conner climbed down. “Sorry Jeff,” Blaine said sheepishly. “I was halfway home when I realized I had a stowaway back in the sleeper.” “Oh! Conner,” Jeff shouted. “The boys must’ve climbed in there to play while we were unloading. I tried to call, but you didn’t pick up, so I thought I’d better bring him back here right away in case you guys were worried.” Jeff knelt on the ground in front of Conner and put his arms around the smiling boy. “I rode in the truck with Jake!” Conner said. Jeff was too relieved to care about the cold snow under his knees. He didn’t feel his hot tears running onto Conner’s fuzzy blue tuque. Nor did he hear his wife’s SUV pulling up the drive, or Donna’s car behind it. Years later, when the Hansons reminisced about this at family dinners, they would remember it as the most unlucky timing in Hanson history. Unlucky for Jeff and Dale, anyway. “If those women had come home 10 minutes later, they’d never have known a thing,” Dale would say with a sigh. Jeff would add, “Other than that, we were great babysitters.” CG country-guide.ca 67


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