Cgw150217

country-guide.ca

Western edition

February 17, 2015 $3.50

food fight get that

MiDAS Touch

how the u.s. is winning, and sometimes losing its biggest battle Pg. 20

OYF president Jack Thomson joins our panel on top farm traits Pg. 30

+PLUS build an advisory team for your farm CROPS GUIDE ďƒ¨ which special crop is right for your farm in 2015?

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Contents

february 17, 2015

BUSINESS 8

ciao bellissima!

Italy’s farms were failing. Today, more are on a solid business footing, with little government help. Here’s how they’re doing it.

12 reading the basis

Our final column in this series with market analyst Errol Anderson looks at basis marketing, and how it can help in 2015.

16 team work

The Tilstras wanted a succession plan to strengthen their family, not jeopardize it. Now, their advisory-team strategy is helping.

19 Guide HR — doctor, give me some ritalin for my husband!

Entrepreneurs are at four times the risk of ADHD among adults.

20 food fight

Our associate editor Gord Gilmour talks to top Americans in the winner-take-all debate over the ethics of food production.

26 tipping point

It can seem the Americans supersize everything, including their farms, but there are signs the trend to big is slowing.

29 FINANCE METRICS — OPERATING EFFICIENCY

Run these numbers on your farm, with help from AME experts.

35 EXECUTIVE PRIVILEGE

In industry at large, the proof is in. High CEO pay often leads to poor decision-making. What about on the farm?

37 HUMAN RESOURCES — THE NEW FRONTIER

Every farmer wants better HR results. Here’s how to start.

40 WHO NEEDS EQUIPMENT?

Fiete Suhr crops 7,000 acres in Ontario with only a pickup truck and a cellphone. The rest is custom — and it pays.

PG. 30 Unleash your midas Touch Our panel of Jack Thomson, Jerry Bouma and Rob Saik talk to associate editor Maggie Van Camp about the common traits they see in top farmers. What emerges may be your checklist for improved farm performance.

44 MORE TO MARKETING THAN PRICE

When our Gerald Pilger set out to find who is marketing Canada, not just selling grain, he wasn’t impressed by what he found.

48 MANUFACTURING TALENT

Here’s how machinery makers are growing their own leaders.

64

g uide life — LIVING WITH DEMENTIA ON THE FARM

No one wants an Alzheimer’s diagnosis, but do see your doctor.

EVERY ISSUE 6 MACHINERY GUIDE

They don’t seed, spray or harvest, but these tools can boost your farm efficiency.

63 GUIDE HEALTH

Everybody gets a nosebleed. But when is it more serious?

66 HANSON ACRES

Dale takes his grandson to the rink. But that’s only half the story.

CROPS GUIDE 50 STACKING THE DECK

A new generation of stacked herbicide traits is on the way to prevent resistance and control more weeds.

56 THAT SPECIAL FEELING

With grains and oilseeds falling from their market highs, the spotlight is back on special crops. Is one right for you?

58 BREEDING BASICS

Genetics is a key driver of cereal and oilseed productivity.

The question is, are our breeders on the right track?

60 THE RIGHT TIME FOR SOYBEANS

The one variable that must be controlled in western soybeans is planting date. Late seeding is simply too much risk.

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february 17, 2015

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: mvancamp@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Dan Kuchma (204) 944-5560 Cell (204) 290-5419 Email: dan.kuchma@fbcpublishing.com Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com

Tom Button is editor of Country Guide magazine

The point of the telling I’m reminded of the old story of the preacher who learned a valuable trick very early in his career, although it was a trick that he thought was a bit unchurch-like and that he was careful never to reveal.

When he started his sermon each Sunday, this preacher would sneak his hand into his pocket for a cough drop, and discretely slide the cough drop under his tongue. That way, when the cough drop was finally gone, he knew it was time to wind up his sermon so everyone could get home just in time for lunch.

As tricks go, this one worked exceptionally well, except for that fateful last Sunday.

The preacher began his sermon as usual, but lunchtime came and lunchtime went, and then the afternoon came and the afternoon went, and even suppertime came and suppertime went, and still he kept talking.

And he talked and he talked until 9:07, when the congregation was suddenly awoken by a loud crash, and there lay the poor preacher, dead in the pulpit where he had talked until he had dropped in a heap.

It wasn’t until they got him to the undertaker’s that the quizzical discovery was made, for in the preacher’s pocket they found a cough mint, and in his mouth a button.

I know I should apologize for telling such a story, especially because it builds up such a great sense that somehow there’s some great insight or some powerful meaning at its core.

If there is a point to its telling, how4 country-guide.ca

ever, it’s only that you can get anyone to listen to almost anything if you put it inside a narrative. How else would I get you to listen to me talk about church life 75 or 100 years ago?

And it’s also that narratives are the way we understand the world.

In agriculture we’ve started to embrace the idea of looking at budgets as the narratives of our farms. In agriculture too, we see the arcs of each other’s careers in terms of family narrative.

But the secret behind the picture that associate editor Maggie Van Camp portrays so well in her story “Unleash your Midas touch,” is that today’s top farmers understand this better than any of the rest of us.

It’s a commonplace but it’s nevertheless true that if you can visualize where you want to go, you vastly increase your odds of getting there. And you increase those odds all that much more if you can articulate the story of how you can do it.

The stories of these farms are incredible, and I urge you to read Maggie’s story slowly, always looking for quotes that you can ruminate on through the day. Here’s just one, this time from Jerry Bouma when he is talking about how this next generation will prove to be a generation to watch. Says Jerry, “Their objectives are a lot bigger, grander than we ever could have imagined a decade ago.”

This issue of Country Guide is packed with stories. Are we getting it right? Let me know at tom.button@fbcpublishing.com.

Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562 Advertising Services Co-ordinator: Sharon Komoski Fax (204) 944-5562 (204) 944-5758 Email: ads@fbcpublishing.com Designer: Jenelle Jensen Publisher: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com President: Bob Willcox Glacier FarmMedia Email: bwillcox@farmmedia.com Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 13 times per year by Farm Business Communications. Subscription rates in Canada — Farmer $41 for one year, $61 for 2 years, $87 for 3 years. (Prices include GST) U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50.

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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. 134 No. 3 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.

february 17, 2015

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Machinery

By Ralph Pearce, CG Production Editor

With spring on the horizon, Country Guide is providing a quick update on new equipment that doesn’t plant or harvest, or haul or spray. Even so, these are innovative designs that can prove just as valuable in the broader scope of all that’s happening on the farm these days. So have a look, and if you’re interested in learning more, check each manufacturer’s website included at the end of each entry and, as always, be ready to do your homework. It will pay.

Bobcat S450 Skid-Steer Loader  Billed by the company as “one tough animal,” the new Bobcat S450 skid-steer loader pledges to improve performance with a nondiesel particulate filter (DPF) engine that nicely complements a narrower width (under five feet) and a 20 per cent boost in auxiliary hydraulic pressures. With its 49-horsepower engine and enhanced capabilities, it’s easy to see why the S450 is replacing the K-Series S130: there’s just more the S450 can do on the farm. Not only that,

6 country-guide.ca

but operators won’t need to spend that time cleaning or replacing the filter or engaging in the regeneration process — and the engine still conforms to the Tier 4 emissions standards. Among its other attributes, the S450 comes with a low operating weight and a better reach, whether you need to load and unload items or materials, or move that soil back in against a foundation. There’s even an optional two-speed drive, capable of 10.4 kph (6.5 m.p.h.) in the low range and nearly 15 kph (9.2 m.p.h.) on high.

www.bobcat.com

February 17, 2015

Sunflower (AGCO) 6631 Series Vertical Tillage System  With corn yields now well above 200 bu./ac. in many parts of Canada, there’s growing concern about the amount of residue left on fields by that high-density, high-intensity management. Sunflower Manufacturing, part of AGCO, offers up a durable vertical tillage unit capable of managing heavy residues. The 6631 series boasts seven new models, in widths from 20 feet, five inches to 34 feet, nine inches. Featured at the 2014

Canada’s Outdoor Farm Show, the 6631 series combines its exclusive Saber Blade disc blades with a staggered offset disc configuration which enables the unit to easily slice through heavy corn residues, cutting them down to size and knifing them into the soil. For farmers with uneven fields, the 6631 series maintains Sunflower’s unique design, with 22 degrees of wing flex (10 up and 12 down) meaning better, more uniform coverage. The frame is also longer, enhancing the system’s ability to do everything it’s supposed to — without clogging.

www.sunflowermfg.com

Yetter 5000 Stalk Devastator 

Brandt 16HP Swing Away Auger

It’s one thing to have an aggressive implement that can knock down those corn stalks, but it means even more when it’s adaptable to as many as 10 different combines. That’s the advantage that Yetter brings to the field with its 5000 Stalk Devastator, originally launched in 2012, but now capable of fitting more corn heads. The corn stalks on today’s hybrids are more durable than ever, and can be a real threat to tire life. But the Yetter 5000 Stalk Devastator bends, pushes and breaks the stalks, allowing tires and tracks to roll over them with less damage. Quick and easy to install, the Devastator can work on Case IH eight-row combines, John Deere 16-row corn heads, Gleaner and Gleaner Hugger, Massey-Ferguson and Challenger six- and eight-row heads and Claas/Lexion eight- and 12-row corn heads. It also fits on Drago and Geringhoff folding corn heads.

Brandt’s new 16HP Swing Away auger will be available for the 2015 growing season. With lengths of 85, 105 and 125 feet, this new model can handle up to 23,000 bushels per hour, the company says.

At 16 inches in diameter, this auger has the power and capacity to empty a Super-B trailer in just minutes. That means the trucks can spend more time doing what they should be doing — moving grain, not waiting to unload. The 16-horsepower auger comes with a reversible 1,000-rpm gearbox and a constant velocity PTO, so it can handle the pressure of a busy harvest and large volumes of grain — and do it fast. With its square connections, a four-inch core and a chain coupler, there’s also less stress on the components, meaning longer, smoother and more durable performance.

www.brandt.ca

www.yetterco.com February 17, 2015

country-guide.ca 7

business

Ciao bellissima!

Italy’s tiny farms are clinging to life as tenaciously as they cling to their hillsides. Now it appears they may have found their road to success

By Marianne Stamm he road to the farm called I Cianelli runs out of the seaside resort of Andora, Italy, through the basil fields behind it. Narrow at first, the road curves up the stony hillside to a ledge overlooking the Mediterranean Sea, for it is here, from an impressive limestone house surrounded by native brush and olive groves, that Stefano Trevia and Rosanna Baggetta operate their small farm and agritourism business.

At just under nine acres, I Cianelli is among the 73 per cent of Italy’s farms that are under 12.5 acres.

Only five per cent of Italian farms are over 75 acres, although together they account for over half of the country’s nearly 20 million arable acres. Most of those larger farms, however, are in the Po Plain in the north, producing rice, wheat, corn and sugar beets.

The rest of Italy consists largely of hills and mountains, but it is here that Italy’s famous wines and olive oil are grown, plus tomatoes and other vegetables and fruit.

8 country-guide.ca

Liguria itself is a narrow strip of mostly sparse and stony pine, oak and chestnuts hills that fall steeply into the sea. Every small bay hosts a coastal resort town, among them such better-known destinations as San Remo or Savona. Except for these towns, it’s wild country, not prime farming by any description, except for the small plain behind Albenga where greenhouses cover the landscape with a flourishing floriculture.

The western section of Liguria is home to a much smaller plain centred around Andora on what is called the Italian Riviera, and it is here that, according to locals, the basil for the world’s best pesto is grown. Beyond that plain, however, the remaining farms hug the steep hillsides, terraced and planted with mostly olive groves and a few vineyards.

This is the home of I Cianelli, a farm that takes its name from the dialect word for the extra-wide terraces unique to that area.

Stefano and Rosanna came to farming late. In 2007, in their early 40s, they left their comfortable

February 17, 2015

business

With views of the Mediterranean, I Cianelli finds a way to value add with its stony ground. jobs as auto mechanic and gym instructor and took over Stefano’s father’s farm.

Had they not, I Cianelli might have given up, as one-third of Italy’s farms did between the years 2000 and 2010.

Coming to the farm was a risk — Rosanna and Stefano knew the land base wasn’t enough to pay their bills. But, they thought, “Let’s try it.” The government was offering incentives for agritourism — holidays on the farm. With that help they built a new house with room for 12 guests, offering breakfast and a full dinner of traditional Ligurian food cooked to perfection by Rosanna.

The small vineyard produces 1,000 bottles of wine annually of the local Pigato grape. Most of the farm is in olive groves, about 1,000 trees in groups of 100 to 200 trees, and 200 fruit trees including cherry, peach, apricot, pear and apples.

Stefano works full time on the farm where he is responsible for all the cropping. Rosanna’s job is to look after the guests, especially the kitchen, although during the quiet winter season she continues to work as a gym instructor in Andora.

Ligurian olive oil, produced from the Taggiasche olive, has a good reputation.

The oil is lighter, with a milder flavour than that of southern Italy, and is wonderful with fish dishes. 2014 was a poor year for olive production. The last two years were too wet, unusual for this norFebruary 17, 2015

mally arid region. It rained during flowering, reducing pollination.

Recently an Asian pest has been troubling them too — the olive fly, which lays eggs in unripe olive fruits. Stefano opens a shrivelled black olive exposing a tiny white larva. “In this last year the olive harvest was terrible,” he says. “I only got 170 litres of oil.”

At 10 euros (C$14) for a one-litre bottle, that’s not much return on a year’s work, he knows. Normally the total would be around 1,000 bottles.

Stefano prefers organic pest control, even though he’s not a certified organic farmer. Depending on the weather, he’ll treat the olive trees with up to two applications of insecticide. He’s researching an organic solution for the olive fly with kaolin, a white clay, but it washes off with rain, and is quite expensive. Another option is the Dow AgroSciences product “Spintor Fly” which is mixed with water in bottles and hung in the trees as traps.

Small farms survive by offering a premium product to customers with whom they have a close relationship. Stefano is particular about the processing of his crops. The friend who processes his olives owns an old stone press but also a modern one that can manage the temperature very precisely. Olives should be pressed at a low temperature for best quality — preferably 17 C but not more than 30 C. They need to be pressed within 24 hours

Rosanna welcomes guests who come to linger over I Cianelli’s homegrown food and wine. of picking, faster is better, to reduce the chance of fruit overheating or fermenting. Particular care must be taken with hygiene to produce a premium oil without a trace of rancidity, which can happen if equipment is not kept absolutely clean.

I Cianelli’s grapes are pressed in the wine cellar of a friend in Imperia, a nearby town. It’s these relationships, knowing those who will do the best job, that are so important to Stefano.

The olives and grapes thrive in the arid climate, but the fruit trees are irrigated. I Cianelli’s small well cannot keep up with the water necessary so Stefano supplements it with a rainwater pool.

The house is supplied with council water from an aqueduct.

It’s the agritourism which pays over half the bills. Passionate about their business, Rosanna and Stefano have built up a name. I Cianelli is open year round, and summers are always totally booked out. Breakfast, a wonderful affair with Rosanna’s whole wheat bread, jam from the fruit trees, local cheeses and a Moka pot of thick black Italian coffee with hot milk, is served on the patio with its lovely view over Andora’s hills and the Mediterranean Sea beyond. Dinner is taken at the large oak table inside.

Only environmentally friendly materials were utilized in the construction of the Continued on page 10 country-guide.ca 9

business

At just under nine acres, I Cianelli is an average-size farm, worked mainly by hand.

Continued from page 9 house. The plaster is of natural hydraulic lime with no trace of cement. Woodwork and furnishings are of solid oak. Rosanna takes care to source and use local organically grown products whenever possible, such as the wheat for her whole wheat bread and foccacia, and the cheeses for breakfast. The majority of vegetables come from her parents’ garden.

The European Union’s support for agritourism is part of a strategy to halt the exodus of youth from the farms.

Unemployment for youth under 25 in the Andora region, which is heavily dependent on tourism, was at an alarming 47 per cent in October 2014 and the national average wasn’t all that much better. The EU programs are geared to younger farmers in poorer rural regions, like Liguria.

Through agritourism, value is added to farm produce by serving it as meals or processing into oil, wine or jams sold to the guests.

Even so, to qualify for the agritourism label, farmers must spend more hours working on the farm than on tourism. Food must also originate primarily from on-farm produce or local sources, and traditional culture and food must be promoted.

The concept took hold quickly among Italians, for whom foods cooked with local products have long been highly valued. Food for Italians is not just about eating — it is about relationships, both to the people sharing the food and to those growing and marketing it.

These relationships are on display at 10 country-guide.ca

“ This past harvest was terrible,” Stefano says. “I got only 140 litres of (olive) oil.” At C$14 per litre, he knows they need the inn the local market where housewives seek only the best-quality products. It’s also on display when guests eat at I Cianelli. Dinner is not to be quickly eaten at Rosanna’s.

It’s a leisurely affair prepared with love, beginning with an antipasto, followed by the primo and second courses enhanced by a glass of I Cianelli’s wine. The meal ends with dessert, maybe Rosanna’s olive cake dipped in Limoncello. By now everyone is too full and it’s too late to drive the curves down to Andora’s nightlife!

Now, Rosanna and Stefano are evolving toward a vegetarian menu, although it will still incorporate eggs and cheese, with fish and meat reserved for specific events. This change, along with I Cianelli’s concern for the environment and the warm hospitality of its owners, provides the agritourisimo with a strong advantage.

Rosanna offers personal fitness lessons and Stefano mountain bike tours. Both are eager to recommend hiking and biking trails off the beaten path, plus day trips to one of the borgos (villages) tucked into the

hills, such as the medieval town of Zuccarello, or Castelvecchio di Rocca Barbena crowning the top of the mountain.

Their 20-year-old son Simone is home for a year. He studied accounting but has plans to become a chef, the kitchen being his passion. Stefano and Rosanna hope he will take over the farm. There is room to grow — land is available next door.

Stefano would expand the vineyard and add a processing and bottling plant. He talks of greenhouses for vegetables. But he’s 50 now, and unless he knows Simone will come back to the farm, he’s not willing to work harder than he already does.

The steep hills leave little room for machinery. Most of the work is hand labour — weeds are controlled with the string trimmer or rototiller. The olive trees and grapes are pruned by hand.

Not all of the 1,000 trees get pruned every year. Stefano is fit — he’s an avid mountain biker. But it’s still hard work.

Their marketing could be improved, Stefano admits. “Ligurians don’t market themselves well.” He says they are not as aggressive as the people in the Tuscany, who advertise in the newspapers and on the Internet. Rosanna says Ligurians are more reserved. She thinks it comes from their past, when Ligurians were continually attacked by pirates and armies. They learned to retreat, to say nothing, although they are very friendly when spoken to.

“It was a big change for me,” Stefano says of becoming a farmer. For 25 years he was used to waking early and going to work. One big challenge for him was the winter, especially the rainy days when he couldn’t go outside. Now he’s adjusted. “The lifestyle is far more relaxed and rewarding,” he says. The income is not as secure or as high, “but it is worth it.” Rosanna loves the farm and particularly enjoys the agritourisimo. “The guests become friends,” she says. “They send emails: ‘Ciao, Rosanna,’ they write in English, French, Spanish and Italian.”

Stefano and Rosanna are aware that their business depends heavily on tourism. Subsidies don’t contribute much to their income. Italy’s volatile economic and political situation worries them, but they hope to increasingly draw foreign tourists too. “I hope the economic crisis will be better the next year,” says Stefano, noting that next October they will build a swimming pool and add two more rooms. “I want to survive.” CG February 17, 2015

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business

reading the basis Of all the signals the market is always sending you, the clearest can be the basis. Here’s how to put that to better use in your farm’s 2015 marketing strategy

By Gord Gilmour, CG Associate Editor If there’s a market signal farmers obsess over, it’s the basis. Not only can it make the difference between profitability and red ink, it’s also set by your local grain buyers, so theoretically it’s the signal you should hear the loudest.

But is the basis really well understood? Is it ever entirely clear why it’s moving the way it’s moving?

Often farmers scratch their heads, with the futures and basis seeming to scatter in different directions.

For this final column in our series with Calgary-based market analyst Errol Anderson, we look at what the basis might be trying to tell you, and just what it could mean for your marketing success.

Country Guide: Let’s start right at the start, with Marketing 101 because I’m not sure I clearly understand all its intricacies. What exactly is the basis?

Errol Anderson: The basis is clearly a delivery signal for producers. The simplest definition is that the basis is the difference between the futures market price and the local cash price at various grain delivery points.

And because it can swing due to supply and demand, basis levels can be viewed as either strong or weak. It is made up of a number of factors including transportation cost, buyer margin, storage costs and market risk. Local buyers use it to either encourage or discourage deliveries for any commodity. Generally, basis levels are quoted as “under the futures” or a negative basis. But in times of a market supply squeeze or buyers caught needing to cover a cash sale, basis levels can turn positive and surge “over the futures.” An example of this may be a unit train spot that could create temporary hyped-up buyer demand.

This can trigger quick localized basis improvement until the product is sourced to meet that particular sale.

Let’s say canola futures price is $400 a tonne, and the local cash price is $430 a tonne. That’s a positive basis of $30 a tonne over the futures. A 12 country-guide.ca

negative basis reflects a cash bid under the futures.

Let’s say the futures remain at $400 a tonne, and the local grain delivery point is now offering $370 a tonne. That’s a negative basis of $30 or what is called $30 under. So, for example, a local grain buyer may not have much room left in their facility and their next movement is not known. They may adjust their basis wider or weaker to discourage immediate farm deliveries. On the flip side, they might have a train arriving in a couple of days and be a bit short. Buyers may begin to strengthen their basis in order to attract grain deliveries to fill that train.

Basis levels can vary significantly and the main difference is the cost of freight, whether truck or rail. Changes in the Canadian dollar can have an impact too. For instance, the basis for No. 1 canola delivered to an exporter fob Vancouver is really the starting point for basis levels across the Prairies.

When supplies are abundant, exporters and buyers have added bargaining power over basis levels.

When supplies are tight, sellers or producers have more impact on basis levels. So the strength or weakness of basis offers important marketing signals to the producer. february 17, 2015

business

CG: So the basis is local demand, and futures is global demand?

EA:

That’s probably the simplest way to think of it, and those signals tell different stories, for different reasons. The futures are impacted by weather, government policies and geopolitical tension that can trigger aggressive speculative buying or selling. Commodity fund activity, which is primarily speculative in nature, can push futures contracts either too low or too high during a market correction or heated rally. And a market that is becoming overbought is one where the actual cash market is not following the price firepower of the futures. This can cause excessive futures price volatility. But this volatility can offer producers excellent pricing opportunities.

The key, though, is being able to recognize these opportunities when they occur.

A basis, on the other hand, reflects local conditions such as local supply issues, delivery space and rail movement, for example.

CG: You’ve mentioned on several occasions that basis is one of the strongest signals for farmers trying to make a marketing decision, if you understand what it’s telling you. Can you run us through a few scenarios?

EA: There are four key market situations that producers face when it comes to futures and basis. For example, say you have a situation with strong futures and strong basis — what’s that telling us, and what should farmers be doing? When you have a strong futures and basis it usually means something has happened to spark the futures and local buyer interest. It’s the best of both worlds — for example, it’s what we saw in 2012 during the U.S. drought. The grain futures screamed higher and buyers were begging for farm deliveries. That’s a cash market sellsignal, all day long.

Under these circumstances, you don’t have to be a particularly sophisticated marketer because everything is running in your direction, and it’s easy to price grain profitability. However, that’s not to say there aren’t common pitfalls to avoid. It’s possible to make major errors even in the best of markets, and the most common one under these circumstances is inaction.

You’ll often see producers holding out for more, simply waiting too long. It’s a natural instinct, but it’s also a case of letting emotions cloud what should be an unemotional business decision. The truth is, no one knows where the peak is until it’s in the rearview mirror.

And when bull markets are exhausted, prices drop and drop quickly, just like an elevator. A helpful way to think about it might be to accept that you’re climbing stairs up to that peak, and then riding the elevator down to the valley. february 17, 2015

CG: So then, what are the market signals when you see strong futures and a weak basis?

EA: That’s a lot like what was happening with wheat late this past year. We saw U.S. futures surge, while the local basis weakened. The global cash wheat market just didn’t reflect the strength of the futures, which translates into a weakening basis. In this scenario, this is your selling hedge signal. The market is telling you now might be the right time to lock in the futures, and worry about the basis later.

This could be through a futures-only or deferredbasis contract with your local buyer, or selling a futures contract or by purchasing put option contracts through a brokerage account. You can then lock the basis later, once basis levels improve and narrow.

One of my favourite strategies in a heated futures rally and widening basis levels is a scaled-up put purchase program. As the futures move higher, producers can gradually scale-in and buy protective put options. During weather markets in particular, no one knows where a market top lies. All one knows is that a market peak is near. Once the market finally peaks and begins its steep descent, all the put options regain their value and begin their job of protecting prices. Put premiums increase as the market declines.

And there is no risk of margin call and no physical delivery commitment. This can be an excellent strategy during a raging bull market.

CG: What about when futures are weakening and basis is strengthening?

What’s that telling us?

EA:

This is a signal to sign a basis contract. An alternate strategy is to sell grain on the cash market to inject cash flow, then replace the cash sale with a long futures position or call options to open up the price upside. This strategy can allow the grower to pay some bills plus take advantage of any rise in the futures, should it occur. I prefer the use of call options rather than futures ownership as the holder of the call option is only at risk of losing the value of the premium should market prices not recover.

Both of these strategies basically let you accomplish the same thing, in different ways. This decision may largely depend on the producer’s need for cash flow.

What you want to do is capture that strong basis, which represents the local market calling for delivery.

But the lower futures represent the global market, and if you’re expecting prices to rise in the future, you want to be able to participate in that upside.

If you sign a basis contract, you lock in the strong basis now, but have the futures portion unpriced, waiting for an increase in value. A basis contract has the advantage of being relatively simple, and you Continued on page 14 country-guide.ca 13

business Continued from page 13 don’t have to open a commodity trading account, since you do it through your local grain buyer. A commodity trading account is a more sophisticated approach, but it can offer more pricing flexibility without tying the grower to physical grain delivery.

CG: What if both basis and futures are weak?

EA: This is the worst of both worlds. There is absolutely no signal to sell there, although of course there are always other considerations than price, such as the need for cash flow in order to meet debt payments, for instance, or a need to clear out some bin space.

Really all you can do, if you have the option, is to continue to store your grain on farm, waiting for an improvement in either the local or global market. It’s under these conditions that you make your grain bins pay for themselves.

CG: We sometimes hear people express surprise — and sometimes stronger emotions — when, for example, the futures price is strong and the basis is weak. These producers are wondering if they’re getting ripped off. Are they?

EA: Yes, I occasionally hear the same things, and to me that tells me they need to understand how futures markets work and what they represent, and what the basis is and what it’s trying to tell them.

These price signals diverge for reasons, and when they do, they’re telling you something.

If you understand them, you can understand what they’re telling you and make better marketing decisions.

It’s not a buyer conspiracy to rip them off, or anything like that. It’s just the market itself stating its need or lack of need for

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february 17, 2015

business a particular product and grade. But the bargaining power can also shift toward the grower with buyers offering tremendous basis levels and pricing opportunities.

CG: To manage risk, what about pricing crop through production and delivery contracts with grain buyers?

EA: Good point. To me the very first step in a new crop pricing program may be use of a deferred delivery contract.

Here the key is balance. You can’t pre-price too much new crop before it’s in the bin, because of the unknowns of weather.

If weather deals you a bad hand, meeting cash contract commitments might be a risk.

Payout penalties are never fun. So it is important that growers only contract up to their comfort level.

Beyond this, the use of tools such as put options can guard the downside. A grower could lock up to 100 per cent of their expected production without a delivery obligation just using puts. It all comes down to the grower and their risk tolerance.

CG: Any other important issues that should be noted?

EA: I think farmers should be salespeople. Show off their product. Then stay in touch with buyers, offer samples, and let them know what you have in stock.

Too often I think farmers assume they’re the only customer in these transactions when, in fact, they’re the ones selling a product and the buyer needs attention as well. A little salemanship can go a long way in garnering you better opportunities and ultimately, better prices. CG

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business

hen Ted Tilstra imagined his retirement, he knew that he wanted it to continue to include having a coffee around the kitchen table with his brother and nephews.

Tilstra Bros. have been running their parents’ dairy farm in Dunnville, Ont., for nearly 25 years.

Together Don and Ted are milking 100 purebred Holstein cattle and have often been scoring among their county’s top 10 dairy herd managers. With their wives contributing by working out and their kids amicably involved in the farm’s routine, it’s a picture of family harmony now and into the future.

But Don and Ted have been around long enough to be wary anyway.

“You see so many farms and farm families trying to make the transition, where the wheels fell out of the family affair trying to make the transition, and where they won’t talk to each other anymore,” Ted says.

So when Len Davies of Davies Legacy Planning Group stood up two years ago to talk about multidisciplinary advising at a workshop in Vineland, Ont., the Tilstra family was listening. “If you’re in a farming operation, you use your accountant, feed nutritionist, vet service, and agronomist,” Davies reasoned. “You’ve got to use people who look at your business with a different perspective than you.”

For the Tilstras, it was a process at first to hire a succession planner, but in addition to hearing from Davies in Vineland, two of Don’s sons had also heard him speak while they were attending Ridgetown College. Then there was Ted and Karen’s own son, who was starting to show a keen interest in farming himself. “Over time, we’ve watched the kids, where their interests are, how they’re educating themselves, integrating themselves into the farming community, and they want to farm,” Karen says. “So it’s become important to us that we get them started reasonably young, when they have lots of energy to work hard, because it’s a long haul.”

The whole Tilstra family agreed to meet with Davies in the early spring of 2014 to start talking about how Don, Jeanette, and their three boys might possibly farm with Ted and his son, and if they should be shopping for neighbouring dairy barns, or

16 country-guide.ca

By Amy Petherick building another facility completely and splitting the milk quota the farm already had.

“I think you need to feel connected to the person you choose, and we felt connected to Len,” Karen says, “and we liked the idea of multi-involvement from everybody.” It wasn’t long before the whole family was sitting down at a table, working out the early stages of a big plan, with Davies, their lender Derek Emond, and accountant, Connor Keuning, all weighing in as they went along.

Making it work While graduating in 2013 from the Sauder School of Business at the University of British Columbia, Davies was introduced to the concept of multidisciplinary advising, which advocates having all of a family business’s key professional advisers work together in planning activities.

The concept wasn’t developed for agriculture, but Davies, a member of the Canadian Association of Farm Advisors, immediately sensed a potential fit. Having worked in the farm community for over 45 years, he’s seen how complex the business has become, and he believes team advising produces the best possible results.

“You’ve got the synergies of the team working for you,” Davies says. “Individually, advisers may not think of everything, but as a team, one says something that gets another one thinking.”

Davies says his role is to “quarterback” the efforts of the team and ensure everyone assembled plays well together.

“You can have a very smart accountant who is going to sit there and say nothing, but that’s no good to you on a team,” Davies says as an example. So he uses his best discretion to either work with the advisers his farm clients have a history with already, or they call in additional team players who will strengthen any team weaknesses.

When assembling these teams, Davies says there really are a number of qualities to look for. “You’ve got to be an out-of-the-box thinker,” he says.

“You’ve got to be able to look ahead at where the industry’s going, to be a kind of a futurist. You’ve got to express yourself. And you’ve got to leave your ego at the door.”

Fortunately, by all accounts, ego isn’t an issue

February 17, 2015

Photography: DEW Imagery

Team work

Getting their advisers to meet and work together as a team is helping drive the Tilstras’ succession planning

business

with the team working for the Tilstra family. Keuning tells me that he’s had the opportunity to work with Davies before and still hasn’t experienced a case where one adviser decided to be a hero. In the Tilstra case, he welcomes the opportunity to work closely with their lender rather than shy away from someone who may question his financial statements. Instead, he finds it feeds his ideas.

“You just have more brain power working for you, coming from different angles,” Keuning says.

For instance, if Keuning asks a question like: “What is the maximum loan this operation could get on quota?”

Emond, as a lender from Farm Credit Canada, can immediately answer them because he’s on top of that discipline.

Adds Keuning: “Bankers also have other analytical skills that are constantly being updated and they know about policies that change all the time, so I think it’s good to have an individual like that on board.”

As long as there’s mutual respect between the professionals at the table, Keuning believes the approach is very effective.

Similarly Emond, who has been the Tilstras’ lender for 18 years now and is very familiar with Keuning’s work, appreciates sharing the table with the farm accountant. “I find now, because so many families are incorporating or doing different structures or implementing new creative ideas, I don’t like to make a move without talking to the accountant first,” he says.

Sometimes logistics prevent face-toface meetings at the kitchen table, but technology makes it easy to copy in the whole team. The beauty of all this transparency, Emond tells me, is that the clients always know what’s going on and there are no surprises. Davies and Keuning know exactly what he’s doing, Emond adds, “so if they see something wrong, I’m hoping they poke a hole in it and say, ‘Derek, you can’t do that,’ or, ‘Derek, this doesn’t make sense from our end.’”

But when everyone does get together at the table, they all come prepared. “I come in with the cash flows, Len’s doing

For Ted (l) and Don Tilstra, building an advisory team was key to their goal of creating a harmonious, smart succession plan that works for the whole family.

February 17, 2015

Continued on page 18

country-guide.ca 17

business

Critical to the success of the advisory team is that it kept final control squarely in the hands of Ted and Karen (l) and Don and Jeanette.

Continued from page 17 the family dynamics side of things, and Connor’s looking at this from a tax perspective,” Emond says. “We each have our own expertise and we respect that.”

The farmer in charge Davies says this sort of role definition is critical to making the team atmosphere work. His job is also to maintain sight of the fact that at the end of the day, the Tilstras are the ones in charge here. “I make it quite clear that the advisers throw the stuff out, but you as the manager get to choose what you want to do.”

It’s the job of the advisers to look for any holes in the plan, as well as to suggest better ways to achieve the farm family’s objectives, and also to explain overall how the plan could be implemented.

For the Tilstras, it was important to outline the goal, making it clear that they wanted to be able to start the next generation off in a way that would keep everyone still happy to see one another at Christmas. That in turn soon led to a plan for Ted to cash out some of his shares in the dairy business so he and Karen could build a house and chicken barn to get their son started in broilers.

The suggestion that the brothers’ cur18 country-guide.ca

rent operation could afford that much additional debt, without cash-strapping the existing business, became a real eureka moment for all of the family, and came directly out of a meeting with the advisory team. Emond says it was a contribution he was really proud to make.

“There’s nothing personal in this for me other than seeing these people I really like succeed,” Emond says.

“They recognize each other’s strengths and weaknesses, they each have their own specialty on the farm, and they’re very courteous to one another, whether it comes down to allowing one another to take vacation time, or do their own stuff separately, but they really respect each other.”

Keuning says he has observed much the same, and although this succession isn’t complete, he’s very optimistic about it. He looks forward to one of the final tests to the plan they’re generating, which is when the Tilstras present everything for legal preparation.

“I’ve not been in a case where there was a lawyer in place early on, but I find they work as a sober second thought,” Keuning says. “They come in at the end and put it together, and do a lot of double-checking on things.” Because their area of expertise is so different from the other advisers on the team, he expects

any lawyer who’s on the ball will have some more good suggestions.

Ted assures me the Tilstra succession plan is far from complete, so their story is far from over. They are, after all, only a handful of months into what Davies tells me is a multi-year process with an incoming generation that’s still in school or only recently graduated.

But this is largely contributing to the family’s conviction that Davies’ multidisciplinary approach was the best decision they could have made.

“Len knows how to pull what he wants from the kids,” Ted chuckles.

“You don’t have the knowledge to ask the questions the way he would to get the answers about their expectations and where they want to be.”

Karen is quick to agree. “I’ve been in business all my life, and Len just had that next level of understanding about business and farming,” she says.

When they started, they had no idea that the process would be leading them away from the dairy business, would see them potentially move off of the family farm, and what’s more, be comfortable with that prospect. They couldn’t have asked for more though, especially looking forward to the day Ted sits down to have a laugh about it all, over coffee, with his brother and farming nephews. CG February 17, 2015

hr

Doctor, give me some Ritalin for my husband!

Entrepreneurs are four times more likely to suffer from ADHD

By Pierrette Desrosiers, work psychologist, business coach, and author

n order to be successful, entrepreneurs need many qualities, including an adventurous spirit, creativity, innovation, high energy levels, and resilience. In addition, they generally need stimulation, and they are willing to take risks. All of these traits are more often present in entrepreneurs than in the rest of the population.

However, what if these characteristics also trend towards ADHD? Attention deficit hyperactivity disorder (ADHD) is one of the most common childhood disorders and can continue through adolescence and adulthood.

Symptoms include difficulty staying focused and paying attention, difficulty controlling behaviour, and hyperactivity (overactivity).

Everyone knows a child who uses Ritalin because of ADHD. Among affected children, 60 per cent will continue to have some of the symptoms after they reach adulthood. In fact, four per cent of the adult population are affected to some degree.

But what happens when the ADHD adult is at the head of a company?

“He runs like a dog chasing its tail,” says a spouse who contacted me. “He starts something and never finishes. He is scattered, has difficulty concentrating, and suffers from insomnia. In addition, he consumes more and more. I think it is to calm the nerves.”

Although some features of this condition can contribute to an entrepreneur’s success (creativity, great energy, overflowing passion, resilience in difficulties, risk appetite), the same phenomenon may also contribute to loss or to great difficulties in the entrepreneur’s life.

Looking at the trio of issues often associated with ADHD (impulsivity, irritability and attention), problem behaviours are more frequent and more apparent.

The person has difficulty organizing and planning.

They are scattered in their thoughts; their actions and their environment look like a battlefield. They are always looking for things (because they never put them in the same place), the bills are stacked or lost and thus constantly paid late, they are often late and lack the ability to plan and prioritize. They also tend towards procrastination, yet they also have a propensity to continually introduce new tasks that they never finish.

As you can see, it can be difficult to make sound management decisions and run a business when ADHD is untreated.

February 17, 2015

Here is a short list of symptoms with ADHD: • Frequent forgetfulness and delays; • Difficulty concentrating; • Low self-esteem; • Irritability, difficulty controlling anger; • Impulsivity; • Relationship problems (conflicts); • Mood disorders (30 per cent); • Substance abuse (25 to 50 per cent); • Bipolar disorders (eight per cent); • Anxiety disorders (30 per cent); • Behaviour disorders (eight per cent).

Because impulsivity is usually present, the risk of accidents on the farm also increases. As well, because ADHD adults can act without considering the consequences, they often compulsively spend.

In adults, ADHD often goes unnoticed because the person says it is their personality. When left unchecked, however, it threatens the survival of the farm.

In addition, our modern life and the abundance of information (Internet, email, texting, smartphones…) coming at us from all sides tends to amplify ADHD in those who already have a predisposition.

Many great business people have had ADHD (Andrew Carnegie, Malcolm Forbes, Henry Ford). They were able to seize the moment in the marketplace, see things that others couldn’t, follow their instincts, and reject “common sense.”

Yet many entrepreneurs do struggle and need treatment, and in certain cases medication is warranted. Unfortunately, the diagnosis is often made when the person is looking for a solution to another problem, so damage has already been done. If you believe you might be affected, see a doctor or psychologist. It may save your marriage and your business. Entrepreneurs can learn coping strategies: how to slow down, relax, ask for help, and take advice.

They have to learn to get organized, make a plan and stick to it… well, most of the time. By doing this, they can take back their lives and their business. 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 19

business

Food fight Your business could soon be caught up in a public relations battle. Based on what we’re seeing south of the border, are you ready?

By Gord Gilmour, CG Associate Editor tsunami seems set to wash over Canadian agriculture. No, the seas haven’t suddenly shifted inland. This dangerous wave is made up of public sentiment about the way you conduct your business.

Just like a tsunami, you might not like it, you probably won’t welcome it, but trying to resist it is going to be futile.

Anyone who wants evidence of what’s coming only has to take a look at our neighbours to the south. Over the past few years, the U.S. food industry has found itself under the microscope like never before.

From a push for GMO labelling to calls for the end to “factory-farmed” livestock, the old way of doing business is under siege.

Suddenly, bestselling books are deconstructing meals. Entire television channels stoke a “foodie” culture. And New York Times opinion makers are writing about the evils of antibiotic abuse in large-scale livestock operations.

Plus, of course, there are those hidden-camera videos that go viral from inside livestock facilities, highlighting alleged abuse.

Canada isn’t there yet. So far nobody’s using their bully pulpit in the Globe and Mail to regularly beat up farmers — but there is a growing list of American farmers who are more than ready to tell us, based on their experience, that we’d be fools to think we aren’t on the same path.

A&W is suddenly promising their customers hormone-free beef in their burgers. The Canadian egg industry is rapidly moving toward an enriched housing model, spurred on by their customers in the fast-food sector who don’t want to be accused of bundling animal cruelty up into that breakfast sandwich. Plus, P.E.I. residents are watching pesticide applications on the island like a hawk. Some of the first “undercover” animal videos have hit the airwaves. The list goes on.

Can Canada’s farmers do anything about this?

Should they even try? To answer those questions, 20 country-guide.ca

Country Guide recently spoke to Americans on both sides of the chasm about why they feel the way they do, whether common ground is possible and what the future might hold.

Good neighbor On paper, George Zittel should be farming in the middle of a war zone.

Zittel is a fifth-generation farmer mainly growing vegetables both in the field and in greenhouses, and he’s one of about 300 farm families in a 25-square-mile chunk of upstate New York that’s traditionally been an agriculture centre. That number includes a significant contingent of dairy farmers, so it sounds like a pictureperfect American idyll.

Except these days, Eden, N.Y. has become a bedroom community populated by about 8,000 urbanites who work in the city of Buffalo, just 20 minutes down the road.

It definitely sets the stage for a life full of conflict.

But an unexpected thing has happened. Zittel and other farmers embraced the growth of their local town. They got active in everything from the local volunteer fire department to the chamber of commerce, and they got elected to the town board.

They were determined to fly the agriculture flag.

Zittel says by doing so, he and other producers in the area have managed to prevent the emergence of an us-versus-them mentality on either side. And while he freely admits it’s far from perfect, he insists that by doing so, he’s become not “that farmer down the road” to his neighbours, but instead is a real person named George, someone they pick the phone up and call if they’ve got an issue or concern.

In an era of heightened activist interest in food and farming, that relationship may even eventually serve as their first line of defence if outsiders decide to try to stir up trouble, he says.

Continued on page 22 February 17, 2015

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business Continued from page 20 “I really do think that if someone from outside began to attack us, they would defend us,” Zittel says of his neighbours.

“As a town board, we’ve done a lot of work, everything from surveys to setting up an agricultural board, and we know they like having farming around, they like to see it, they like that connection to it, even if it’s just driving by the fields and seeing the crops.”

Zittel says there are two key elements to the defence of farming in this challenging environment. One is a potent right-tofarm law, that clearly delineates just what farmers can and cannot do. In the case of New York state, those limitations are very clear-cut, Zittel says.

“There are two things it has the power to stop — if there’s a health issue or a safety issue,” Zittel says. “If it’s just a bit of dust or noise, or the inconvenience of slow-moving equipment, they legally can’t stop us.”

That’s the stick the local agriculture industry holds, but Zittel cautions the industry won’t get far just swatting people with it. After all, it only exists because politicians — and by extension voters — have granted it. Elections still happen, politicians can get fired by voters, and if agriculture plays it too cute, it could find itself losing its most potent defence. This is where the carrot comes in, Zittel says. It’s in actually listening to complainants, rather than simply dismissing their concerns.

The farm strategy was to build bridges.

“We set up an agriculture committee for the town, and when there’s a problem, it’s their job to go out, talk to the people involved, and try to resolve the issue,” Zittel says. “The people on this board are farmers themselves, but it’s important that they take these concerns seriously. We can’t just give them lip service.”

Frequently the issues aren’t all that challenging, and the solution actually comes from a bit of dialogue between both parties.

A neighbour might not object to manure spreading from a dairy operation, for example, but just not want it to happen right before the big picnic they’re planning on Sunday afternoon.

When solutions aren’t possible, the issue goes before the town council, and this is where the right-to-farm law comes in. But that’s a last resort.

“We encourage our neighbours to communicate with us, to tell us about things like a picnic they have planned,” Zittel says.

22 country-guide.ca

The activist

Matt Rice, director of investigations, Mercy For Animals.

For many in the agriculture industry, Matt Rice could be a poster boy for all their objections about animal activists.

He’s director of investigations for Mercy For Animals, the activist group perhaps best known for going undercover at animal agriculture operations to shoot hidden-camera footage of animal abuse.

Rice is an urbanite who lives and works in Los Angeles, with an office on the famed Santa Monica Boulevard in Hollywood. He and the organization he works for aren’t shy about harnessing the star power of nearby Hollywood to push their viewpoint. He’s even a vegan.

What he doesn’t have are horns and a tail, and anyone who’s expecting a scatterbrained hippie is going to be sorely disappointed. He’s also a U.S. Marine Corps veteran, and he marshals both passion and logic when the topic of animal agriculture comes up, saying it would be a mistake to simply brush him and others like him off as irrational radicals, especially since most of them used to be customers of the industry.

“The truth of the matter is that most of us used to eat meat and eggs, and enjoy them,” Rice told Country Guide during a recent conversation. “It was only after we encountered information about how they were being raised that most of us made the conscious decision not to consume them, because we didn’t feel we could morally support how it was being done.”

There’s little doubt Rice and others like him aren’t popular in the agriculture industry, garnering everything from straight-up criticism for presenting brief seconds-long video snippets out of context, to a push for tough “ag-gag” laws that make their tactics illegal. Despite this, however, Rice says the industry is likely to find itself on the losing side of history if it continues its current tactics of wrapping itself in the image of the kindly, stereotypical farmer in overalls when they’re in public, but then treat livestock as nothing more than cogs in a machine when they’re in the barn.

Rice paints a picture of a business that’s so convinced it and it alone is right, it won’t even take the time to bother to listen to its critics, preferring instead to “educate” the public rather than engage it in a constructive dialogue.

This, Rice says, is a crucial error, especially since the reality on the farm is so far removed from the perception most Americans have in their minds — a perception that the agri-food industry itself has been known to promote when convenient. This growing disconnect is fuelling greater interest and oversight into how food is produced, Rice says.

“Seventy years ago, half the population of this country was living on a farm, and I suspect the number wasn’t much different for Canada,” Rice says. “Now it’s less than two per cent. For most of us the agriculture industry is out of mind. Then in the past few decades, animal agriculture in particular has moved indoors, increasingly out of sight.”

As that’s happened, production practices have changed dramatiContinued on page 24 February 17, 2015

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business Continued from page 22 cally, and some practices that the general public finds offensive have crept in, Rice says. He cites things like farrowing crates or other close-confinement housing as something most simply won’t accept.

“The pork industry has a problem because it’s keeping very intelligent animals in crowded conditions that have no enrichment. They’re treating pigs like machines, not animals.”

Clearly, farmers have a different perception, and they resent being portrayed as heartless when in fact they are the ones with the best insights into animal well-being.

Still, it seems another instance of a trend any industry watcher knows too well. Agriculture can be tone deaf. Or perhaps it’s fairer and more accurate to say, agriculture can find itself sitting in a corner of a room where everyone is talking, and not know how to get its voice heard.

Rice also takes issue with those who attempt to paint animal rights activists such as himself as uncompromising ideologues, saying that when you toss such accusations, you shouldn’t be too surprised to find the other side calling you an uncompromising ideologue too.

Plus, says Rice, the industry may not be helping itself by trying to always defend everyone and every practice.

Mercy for Animals has, on occasion, spent a lot of time and effort looking to work with the animal agriculture industry to find a middle ground, only to be disappointed in the end because the industry closes ranks, and takes an “edge of the wedge” approach that views even the smallest concession as too much.

“Everyone has an agenda,” Rice says.

“Frankly I think it would be a mistake to underestimate the level of knowledge and intelligence we have on our side of this debate.”

Because they have met stiff resistance on the policy front, especially at the state level where legislators have been loath to legislate animal welfare, Rice says the animal rights movement has taken the debate public.

On some occasions that’s meant releasing damning video. On others its meant pressuring large corporate entities like quick-serve restaurants into imposing their own standards that go beyond existing legislation.

Rice isn’t apologizing.

24 country-guide.ca

Defenders of the faith If there’s a polar opposite of Matt Rice, it would be Kay Johnson, president and CEO of the Animal Agriculture Alliance, an industry group dedicated, in its own words “… to advocate for producer interests and help the public appreciate modern science-based practices.”

Country Guide recently spoke to Johnson by telephone from her office in Arlington, Virginia, just across the Potomac River from Washington, D.C. From there, she frequently criss-crosses the U.S. for speaking engagements, meetings and other activities in her role as industry spokesperson. Doing so causes her to have a lot of airplane conversations with seat mates, and she mostly finds they are actually very interested, rather than hostile, when they find out what she does for a living.

“I find most people are actually very interested in the industry, and they might have concerns, but they’re willing to listen,” Johnson says. “In the end I always remind myself that less than three per cent of Americans have a vegetarian or vegan diet. The other 97 per cent, they want meat, eggs and milk and other products of animal agriculture.”

For Johnson the problem is twofold. The industry needs to be prepared to talk to the public and present what it does fairly and without shying away from the fact that it’s a business that has evolved well past the mental image most have of it. Ignoring this fact will only have the industry out of touch with current trends, she says.

Kay Johnson, president and CEO, Animal Agriculture Alliance.

Times have changed, Johnson says.

Today, the riskiest ag strategies are silence and inaction “We have definitely seen an increase in interest in how food is produced,” Johnson says. From food television to celebrity chefs and food bloggers, food isn’t just fuel anymore, it’s also become intertwined in fashion and personal politics and broader social trends. It’s something that’s only likely to increase in the future as well, since it’s something that appears to resound most strongly with the millennial generation, who are just coming into their own now and will increasingly drive and influence culture.

But she also says it would be a mistake to get drawn into debate with people who already have strongly held views they’re unlikely to be moved from. Better, she says, is to engage members of the remaining 97 per cent of people and show them what the agriculture industry does and why.

“Farmers aren’t going to just be able to rely on associations like ours to do it, either,” Johnson says. “They’ll need to do it themselves. It’s the farmers people want to hear from.”

That may mean anything from holding open houses at farms, to simply getting out into the community and becoming community February 17, 2015

business

leaders like New York’s George Zittel, she says. One interesting effort her organization has been behind lately is bringing leading food bloggers to a large-scale animal operation to let them see what happens behind the closed doors, then trusting those bloggers to fairly present the information.

“It was a risk,” Johnson freely admits. “We couldn’t guarantee what they would say. But once they visited the farm and saw what was being done, they all actually gave us very favourable coverage.”

It all boils down to accepting that times have changed, Johnson says, and these days the greatest risk appears to be silence and inaction, which allows others to frame the issue and sets up great challenges for the future. Taking a more active approach is going to be time consuming, but necessary.

Just two per cent Back in New York, for George Zittel it all boils down to simple electoral math, both at home in Eden and at the state and federal level. Farmers just don’t have enough votes, and they’re currently outnumbered by even vegans and vegetarians, and Zittel says there’s no way he can see that trend reversing any time soon.

“There are so few people farming now,” Zittel says. “You say it’s about two per cent. I’ll be honest, I’m actually surprised it’s that high. It certainly seems lower to me. And if you’re just two per cent of the population, boy, you’re not going to win much at the ballot box, if it comes down to that.” CG

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country-guide.ca 25

business

Tipping point Can American farms keep getting bigger?

Now, even big farmers have their doubts bout three hours north of the Gulf of Mexico, Louisiana Delta Plantation was the largest U.S. crop farm, working 100,000 acres. But that was only until 2005. Then the farm was broken up and sold.

During a decade of its dizzying climb, Eddie Davis managed up to 34,000 acres for the company. It was easy to buy into the philosophy, Davis now says.

Economy of scale means a farm’s cost to produce a bushel of grain should drop as the farm gets bigger.

Partly, that’s from more efficient operations.

Partly too, Davis tells C ountry G uide , that’s

“ When things go right on a very large scale, it can be very good,” Davis says.

“But when things go wrong…”

26 country-guide.ca

By Amy Petherick

because of bulk buying. “When farming operations get to a certain size, they can buy implements more cheaply… sometimes much more cheaply.”

A large farm also seemed to have built-in sustainability that would carry it through times of low grain prices, Davis says. “Even with small profits, across large acres they add up.”

But economies of scale work both ways, Davis says, and it turned out that their Achilles heel was one they hadn’t anticipated. It was human resources, both at the senior and at the field level.

“The ability to find a manager who will manage within their parameters might be a challenge,” Davis says. “It may not be too troubling to go out and find five good employees, but to find 10 good employees may be three times as difficult.”

But there were other issues too. If you expand too much and outgrow your suppliers, you can quickly find yourself in a mess, Davis says. Take an equipment dealer as just one example. A mid-size farm might have a great relationship with a local dealer so they get excellent, fast service. When the farm outgrows the capabilities of the local dealer, however, it either has to invest in its own shop, or start looking for a dealer farther away. So even though you get a volume break on the cost of the equipment, keeping it in the field can introduce all sorts of new costs.

“There are efficiencies of scale, and there are also inefficiencies of scale,” Davis says.

It’s enough, Davis adds, to threaten the sustainability that the large farm was supposed to provide.

“When things go right on a very large scale, it can be very good. But when things begin to go wrong on a very large scale, it can begin to be very bad, very quickly.”

Davis now believes many more farmers across the U.S. are approaching a similar tipping point, or rather, a series of tipping points. Things look good now, he says, but as the number of acres goes up, any of these tipping points can very quickly eliminate the benefits of a bigger operation, especially tipping points centred on human resources management.

In fact, there’s already a question about whether the American race to bigger and bigger farms has begun to show the first signs of cooling off.

Despite the popular image of the U.S. as a country where everything about agriculture is supersized, including its farms, most operations there are incredibly small.

It’s a story that’s familiar in Canada, where the February 17, 2015

business squeeze is on mid-size farms. Most U.S. farms are tiny and essentially non-commercial, generating under $1,000 of annual farm sales. The only thing big about these and other small American farms, according to the USDA’s most recent census in 2012, is their number.

Of the more than two million farms in the USDA’s 2012 Census of Agriculture, 55 per cent had under 100 acres each.

Another 30 per cent of farms had between 100 and 500 acres which, depending on region, made them small to mid-size.

Either way, however, the two groups that accounted for a whopping 85 per cent of U.S. farms actually farmed only about 20 per cent of the country’s farmland.

By contrast, farms with more than 2,000 acres represented fewer than four per cent of farms, but they controlled 56 per cent of the farmland.

So although, the average size of a farm in the United States is 434 acres, the overwhelming majority is either much smaller or much larger.

While the number of very small census farms continues to grow, James MacDonald, chief of the USDA’s structure, technology, and productivity branch tells Country Guide that the general trend across the United States continues to be toward larger farms.

“Production has been shifting steadily to larger farms in just about all commodities, and all parts of the country,” MacDonald says. As a result, a small number of farms now accounts for a huge percentage of agricultural production.

In 2012, the top 1.6 per cent of farms accounted B:8.625” for 50T:8.125” per cent of all sales, and the top 5.7 per cent S:7”

Continued on page 28

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business

Half of all American farm sales are generated by a mere 1.6 per cent of the country’s farms

Continued from page 27 produced 75 per cent. This is particularly evident in pork and cattle production, MacDonald says. Of more than 900,000 farms with cattle and calves, 42 per cent of sales came from 0.1 per cent of farms, which boasted over 5,000 head per herd.

At the other end of the scale, farms with fewer than 100 cattle made up more than 80 per cent of the total number, but generated just 10 per cent of sales.

Likewise, 4.8 per cent of farms with over 5,000 pigs held 67.7 per cent of all U.S. hogs and generated 65.4 per cent of sales.

In all, small commercial farms with gross incomes under $250,000 accounted for 41 per cent of farm sales in 1982, but then fell to 14 per cent by 2007.

In some regions in the U.S., this is partly due to the land itself, MacDonald says, because it’s simply become easier to farm on a large scale. “In the east, hill country, you really can’t get or put together a field with 150 acres that is all flat so you can run giant pieces of equipment over them,” says MacDonald. “Typically in the high plains, farms are much larger.”

Todd Kuethe is an assistant professor at the University of Illinois and has spent a lot of time studying the USDA census data, which he says is really the best way to get an overall snapshot of farm sizes and the impact of economies of scale. “The most recent census that was released last May, points to something that’s really interesting,” Kuethe says.

“We all think of large farms dominating the ag sector generally, which is true, but we’re seeing this bifurcation where you have a lot of small-acreage farms, and also the consolidation of larger farms.”

But when he studies the size of farms and their ownership, Kuethe says he finds there hasn’t been a great structural change over the course of the last 15 to 20 years. “There hasn’t been drastic change in farm size or number of farms,” Kuethe says.

One of the implications is that there’s a significant number of non-farming landowners who are controlling farms in the U.S., who are likely becoming more removed from their agriculture roots.

28 country-guide.ca

But there has also been real growth in valueadded and niche production.

“These folks who are operating in niche markets, with small farms that are finding ways to target these markets, really seem to be growing,” Kuethe says. Very small farms can also be very profitable. Of farms under 100 acres, four per cent had annual revenue over $100,000, and about one per cent reported over $1 million. Something that’s very high-value on a few acres, like strawberries for example, can be very high in revenue but also low in acreage.

Kuethe says these operations also seem to have staying power. He points, for example, to a herb farm he toured recently, which is demonstrating remarkable earning power on a tiny land base.

“They sold to places like Whole Foods and directly to restaurants,” Kuethe says. But it wasn’t always simple, he adds. “It was very labour intensive, and those plants are way more delicate than soybeans.”

Still, Kuethe sees a good future for operations that are conveniently located close to urban areas, whether selling mushrooms, herbs, or targeted livestock breeds. Small-acreage farms, considered to be less than 10 acres, with sales over $500,000 are most often specialized, single-stage livestock producers, usually operating under contract to a larger company. In 2007, 75 per cent of small-acreage farm sales were in poultry and eggs, hogs and pigs, or greenhouse/nursery and were produced on only 15 per cent of small-acreage farms. Other very lucrative small operations included just 25 shellfish farms with combined sales of more than $36 million and 50 mushroom farms which sold over $147 million of produce.

MacDonald agrees. The future of mega-farms may be uncertain, but the future of mid-size commercial operations seems altogether clear. “Forty years ago, you might have made a living being a corn and soybean guy with 400 acres plus raising some hogs,” MacDonald says. “That’s really what’s shrinking fairly rapidly.” CG February 17, 2015

A M E - ma n a g eme n t

Finance metrics you may not have thought of — operating efficiency

By Larry Martin and Heather Broughton n good times or bad, there are some basic financial tools that allow farmers (and other managers) to gauge their operating efficiency, diagnose where they have problems, and measure the financial risk they are bearing or are about to undertake when they make a substantial investment.

We find, however, that we hear very few people talking about these tools or how to use them.

This is the first of a three-part series that will address some of those basic tools. Because of space restrictions, we need to limit the amount of accounting definition that’s included. Be sure to get detailed information when you try this at home.

pare different years and, when appropriate, benchmark against other producers who may have very different debt structures than ours.

After deducting depreciation and interest we get earnings before taxes, and then we deduct taxes to give net income after taxes.

The next-to-last line is an interesting one. This is where you put all that stuff really not related to your core farm operation. This would include government payments, payments for driving a school bus, custom work if it’s not core, and the expenses incurred to soup up your pickup truck for racing on Saturday night (as well as the prize money that you win!).

EBITDA

Operating efficiency

The financial measures discussed in these articles are based in whole or part on the concept of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). This is a long-winded way of describing operating income, or what you have left after you pay your operating expenses and before you deduct your cost of capital. For some reason, this measure, used constantly in business in other industries, is not talked about very much in agriculture. It’s a pity, because it’s so useful.

Below is a 14-line representation of a farm’s income (operating) statement. We divide costs into six categories. Subtracting direct crop and livestock expenses from gross revenue gives gross margin. Then subtracting operating costs such as labour, machinery operating expenses and land rent gives what we call contribution margin. Then, by subtracting the farm’s overhead expenses, we get EBITDA. Gross Operating Revenue (-) Crop and Livestock Expenses (=) Gross Margin (-) Labour, Machine Operating Expenses, Land Rent (=) Contribution Margin (-) Management, Office and Overhead Expenses (=) EBITDA (-) Depreciation/Amortization (=) EBIT (-) Interest (=) Earnings Before Taxes (-) Taxes (=) Earnings After Taxes (+/-) Non-Core Income and Expenses (=) Net Income Notice that all of the expenses deducted to get to EBITDA are operating expenses; they don’t directly include the cost of capital. We want to separate them completely from capital expenses, so we can com-

This approach makes it relatively easy to standardize financial statements using the definitions of the cost categories. Often with farm data, we can get good benchmarks for well-managed farms. What is “well managed?” It is an operation that is efficient at generating operating income. This gives rise to a very useful ratio to measure “operating efficiency.”

If we simply divide EBITDA by gross operating revenue, the ratio measures how many cents of operating income are generated by the farm per dollar of gross revenue. Lots of data from both Canada and the U.S. shows that for most crop and livestock farms, the ratio should be 35 per cent or higher (usually averaged over a number of years). In other words, after paying all operating expenses, the farm should have $0.35 left per dollar of gross revenue.

Work done several years ago by Al Mussel at the George Morris Centre showed that there is huge variation in this measure among Canadian farm tax filers, but that the ranges aren’t much different whether they are beef, hog, cash grain or dairy farms, or whether they are large or small operations.

The average was 22 per cent, far lower than our benchmark. At the same time, all groups had a number of farms which were at or above the benchmark.

Farms chronically below 25 per cent are generally not growing and not overly successful. Those with ratios below 20 per cent are often in difficulty.

For farms that do not achieve the benchmark, there are some further benchmarks to help diagnose what the problem is. We will focus on these in the second of this series of articles. CG

february 17, 2015

Larry Martin is co-owner and lead instructor in AME’s management training courses. Heather Broughton is co-owner and president of AME. country-guide.ca 29

business

Unleash your Midas touch Adopt these seven habits of Canada’s top farmers

By Maggie Van Camp, CG Associate Editor Does it seem some farmers just have that touch? Anything they start turns into gold. Is it just timing?

Genius? Luck? Or do these farmers regularly do things that enable them to excel? Or do they cultivate skills that the rest of us don’t?

Country Guide asked Jack Thomson, president of the Outstanding Young Farmer organization, Rob Saik, CEO of The Agri-Trend Group, and Jerry Bouma of Toma & Bouma Management Consultants to share their insights on the things that top modern farmers do that explain why they’re ahead of the pack.

Their list of seven top practices gives us a peek into a future where attitudes and aptitudes will come

1. Start every day with positive attitude

2. Plan, think and act like a CEO

These days, the stars are just starting to make way for the sun to rise when Jack Thomson from Antigonish, Nova Scotia comes in for breakfast. He milks 120 cows starting at 3:30 a.m. so he can share breakfast with his four children, and so they can also have their evenings together.

Despite the schedule, Thomson’s energy and enthusiasm vibrate through the telephone when he talks about the common denominators he sees in the participants in Outstanding Young Farmers (OYF).

OYF nominees come from across the country and from all sectors, but what Thomson sees in all of them is positive attitude. “They are passionate, and driven not just by profits but also by something more,” Thomson says. “They want to make a difference, to make things better for their businesses, for their families and for their communities.”

“They wake up and they go to bed always in this right state of mind,” Thomson says. “If the situation is not so good, then they turn it into an opportunity.”

Thomson knows about surviving challenges. In 2007, right after they had just finished remodelling their barn and had remortgaged to do it, lightning struck and the resulting fire consumed everything, except 80 cows. And no… they hadn’t yet put into place insurance for the remodelling.

They started over, slowly rebuilding the 120-cow milking herd, West River Holsteins. Then, three months later, an electrical fire destroyed their home, right before Christmas.

“You are going to run into a challenge in this business,” Thomson says. “If you are not optimistic, you are not going to make it.”

Top farmers today focus on strategy and on their goals, and on ensuring the resources are in place to achieve these goals, says Jerry Bouma. In 2005, Bouma and his partner wrote a summary of research called Best Management Practices of Leading Farmers. The 158 leading farmers they interviewed in Western Canada were fundamentally good managers and were market focused.

The top farmers today are still good managers, and they understand marketing and risk, but today’s leading farmer is more process oriented.

“They set the direction of the farm but they also develop ways to achieve their goals,” Bouma says. “These gifted managers have a systematic approach.”

They build or access systems, including agronomic information and custom services. They’re strong on planning and strategy, but they’re also strong at finding people to do the production work and at setting production plans. For example, to manage risk, they have marketing plans and hedging strategies. These producers set expected margins, and from there, they create clear plans to make it happen.

Today’s younger successful farmers are more likely to come to their work thinking about business strategy and business principles, says Bouma.

And, says Bouma, this is going to be a generation to watch. “Their objectives are a lot bigger, grander than we ever could have imagined a decade ago.”

Bouma also says that two very diverse systems are currently operating in farming, with small intense producers focused on local food production and larger commercial crop and livestock farms.

Yet both require CEO-type of leadership.

30 country-guide.ca

February 17, 2015

Photography: john david photography

together to drive farm success as never before.

business

For OYF president Jack Thomson, the key is to understand risk.

“I’d rather be stabbed in the front than in the back.”

When Rob Saik, CEO of The Agri-Trend Group, works with top grain and oilseed farmers, he finds they have short- and long-term plans for their farms and for themselves. These plans are written down, and the plans give the farmers confidence in their decision-making, in addition to giving their bankers more confidence too.

“They plan where they want to go, and they set strategies using outside help,” says Saik.

This is more involved than writing mission and vision statements. It’s setting financial goals and developing specific projects and production plans.

Importantly, says Saik, these farmers also coordinate complex businesses by preplanning for potential hiccups, threats and growth opportunities.

This is thinking like a CEO. February 17, 2015

3. Have a new set of boundaries Today’s top farmers have burst through the traditional physical boundaries of farming and have a whole new view of the limits of their farm, beyond geography.

In the past, farmers were very spatially bound, but that’s simply no longer the case, says Bouma. It’s not unusual now for the CEO farmer to be farming lands or raising livestock across a wide geographical area.

It used to be 3,000 or 5,000 acres was a big grain farm. Today some farmers work 10,000, 15,000 or 30,000 acres. To do it at that scale, they rent the land, they lease equipment, they hire staff and custom work, says Bouma.

Continued on page 32 country-guide.ca 31

business Continued from page 31 However, it isn’t just the scale of the farm.

It’s their approach to resources. These farmers have worldwide connections at their fingertips for everything from production to marketing, and they leverage those connections. For example, they text an engineer in Ireland about how a TMR mixer works.

But perhaps most importantly, they also have a new way of looking at their assets. Low interest rates and more aggressive leveraging have stretched their financial boundaries, says Bouma. The limitation is what can you obtain — what you can rent, lease or buy.

The boundary is no longer what your bank will lend you.

“Farms today can be operated under totally new boundaries — or, perhaps more accurately, the lack of boundaries,” says Bouma.

And they have their eyes on the future. With so many Canadian farmers in their 70s, huge numbers of deals are going to go down in the near term, says Saik. “Very large farms of 30,000 acres are going to be able to move to 50,000 acres fairly quickly.”

4. Network, network, network Today’s top farmers network with other CEOs from other farms and other businesses. Their diversified networks help them understand how to expand and how to find financing. “This is not about size, this is the ability to accept knowledge and put it into motion,” says Saik. “They (top farmers) seek a lot of outside help and are not scared to put it into play.”

The top farms today are more complicated and bigger, so farmers recognize they can’t do it all. Over the years, Saik has seen that top farmers know how to hire good people.

Saik was packing his suitcase while talking with Country Guide on his ever-buzzing cellphone. This guy’s the definition of busy. However, he is never too busy to learn, and every 90 days for the last 21 years he has hopped on a plane to attend a workshop on business strategies. He’s the only aggie in the room, and he invariably learns from the other participants.

More farmers are adopting similar strategies.

It’s all about being open to learning. Saik describes today’s top farmers as being “coachable” and says the ability and desire to learn is what divides the top third of farmers from the lower two-thirds.

For Jack Thomson, one of the benefits of being involved with OYF is interacting with the nominees.

Consistently, they’re intelligent, they’re never afraid to ask questions, and they are open thinkers.

A side benefit to this sharing of ideas is that it’s extremely motivational. In the decade since Thomson and his wife, Rhonda MacDougall, won OYF nationally, they’ve stayed connected to the group because of the energy and inspiration of the other participants.

32 country-guide.ca

Rob Saik, CEO of The Agri-Trend Group.

“ This is not about size,” Saik says.

“This is the ability to accept knowledge and put it in motion.”

“Not only are they good business people, they have compassion and understanding,” says Thomson. “We (OYFs) all care. That’s what binds us.”

The need for networking goes beyond the farm gate and social time. Top farmers are deeply connected to their markets, adds Thomson. With help from their networks, they gain insights into the markets and their trends.

5. Understand risk “If something’s going to go wrong, I’d rather be stabbed in the front than in the back,” says Thomson. “At least then, you can see it coming.” Although open to new ideas, top farmers look hard at whether their finances and management can handle it.

Generally, younger people have a greater appetite for risk than older ones. Even though the OYF nominees are brimming with optimism and passion, they measure what difference any change is going to make, and they understand that it’s got to be beneficial for their life and the family and not just financial.

Part of making good choices is understanding risk, says Thomson. You have to believe in your decisions and not be consumed by the potential of mistakes. “Risk is what you can’t control,” he says. “And you just try to mitigate exposure to those factors.”

Continued on page 34 February 17, 2015

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Continued from page 32

6. Experiment Saik sees farms moving toward formalizing research. With variable-rate technology it’s possible to do strip trials in live field conditions. Yield monitors and well-designed strip trials allow for statistically significant data results. These long skinny strips can be revolutionary, says Saik.

Besides, farmers can claim their research and development budgets through SNRD credits.

“There’s no better data set for a farmer than what happens on their own farm,” says Saik. “These are ground truths.”

7. Use big data effectively Many of today’s leading-edge farmers are taking data use to the next level, says Saik.

They use and integrate the data they collect, linking production and financial.

This information needs to move seamlessly between growing the crop, selling the crop and managing the farm business. Historically, we had very disparate information from yield monitors to elevators to grain-trading companies to personal accounting programs.

Some of today’s top farms have a way to hook all 34 country-guide.ca

their production information together in one place so they’re able to see their whole farm. “Data is the largest opportunity for farmers,” says Saik.

As farmers gather more data years for their farms, their decision-making become more accurate, says Saik. Eventually they can make production decisions based on this data on the fly, and to do that, he believes it’s imperative that farmers should own and control their own data.

Back on the farm, Thomson isn’t fazed by the onset and integration of technology. In the last 10 years, the flow of information has sped up and it has become important for farmers to learn how to sift through and manage it.

Access to information is also mobile, so Thomson can stay connected. But that means he can also get sidetracked by data. “Farmers are farmers for God’s sake, and you can get too much information so you end up churning in it and it turns into nothing,” says Thomson.

The important thing, Thomson finds, is to remember the purpose of information — to keep improving.

“Top farmers in my father’s time —and now — know what they are looking for,” says Thomson.

“They have the goals of trying to be the best farmers we can be, to be involved in the community, to make it a better place.” CG February 17, 2015

business

Executive privilege The management performance of corporate CEOs falls when they are overcompensated. Does the same apply to farmers?

By Scott Garvey, CG Machinery Editor here is one undeniable fact underlying farm equipment sales all around the world. When farm incomes rise, machinery sales numbers rocket right along with them. Higher farm profits are reinvested, with producers willing to spend money and even take on debt, especially on equipment.

Farm fleets do need to be regularly updated, of course, but record farm incomes since 2008 have fuelled unprecedented spending on new machinery, just as they have also pushed farmland values and land rental rates to record highs as well.

But farm commodity prices and farm incomes are notoriously fluid.

So the question is, do those periods of high incomes create a kind of euphoria or recklessness that induces farm managers to make long-term financial decisions that could seriously reduce profits in future years, especially if revenues fall?

A recent study suggests it may.

Michael J. Cooper of the University of Utah, Huseyin Gulen of Purdue University, and P. Raghavendra Rau of the University of Cambridge in the U.K. looked at the link between the compensation packages paid to CEOs and their company’s performance. They co-authored a report and published their findings in October, 2014.

The researchers surveyed 1,500 major corporations, analysed their financial performance and correlated that to the amount of money their CEOs pocketed in a year.

Granted, most farmers aren’t CEOs of structured multinationals, but all farmers get their compensation package based on the performance of their operation, and they are the ones making investment decisions. So there is a strong parallel.

And to add to that similarity, in recent times most CEO compensation packages have been linked directly to the performance of their company’s stock. The thinking is that this creates an incentive to perform. The better their management decisions and the higher dividends that stockholders see, the better the CEO’s paycheque.

It sounds logical, but apparently there is a risk. When you overpay CEOs, they start to make investment decisions that negatively affect the future performance of their firms.

“We find evidence that chief executive officer (CEO) pay is negatively related to future stock returns for periods up to three years after sorting on pay,” reads the report. “Our results appear to be driven by high pay-related CEO overconfidence that leads to shareholder wealth losses from activities such as overinvestment and value-destroying mergers and acquisitions.”

Forbes annually surveys the top-earning CEOs in the United States. It not only tallies up the pay packets each executive takes to the bank, it also looks at Continued on page 36

Lower-paid CEO’s, including Berkshire Hathaway’s Warren Buffett consistently outperform CEOs with the biggest total incomes, new study finds.

February 17, 2015

country-guide.ca 35

business

What ag equipment CEOs are worth

36 country-guide.ca

Continued from page 35

Photo: AGCO Corporation

One of the most controversial topics in the relationship between corporations and their shareholders in recent years has been the compensation packages awarded to senior executives and, most significantly, CEOs (chief executive officers).

With so many CEOs now raking in incredibly large pay packets, a few investors have asked if the term “corporate raider” should take on a whole new meaning.

When it comes to ag equipment manufacturers, we took a look at the majorbrand CEOs to see where they land in the world of executive compensation.

Starting with Samuel Allen, CEO of John Deere, the company’s 2013 proxy filing with the SEC (U.S. Securities and Exchange Commission) shows his total compensation package for that fiscal year, including wages, benefits and stocks, netted him US$19,148,372. The other four top executives whose salaries were declared in the filing picked up in excess of US$4 million each.

According to glassdoor.com, a website that lists pay scales, a middle-of-theroad engineer at John Deere gets paid an annual salary in the mid-US$70,000 range. So in one year Allen makes an amount equal to the combined annual earnings of about 255 of his engineers.

Looked at another way, in one year Allen makes the same amount that seven engineers would earn in their entire careers (at that constant pay rate).

To his credit, according to the Wall S treet J ournal , Allen actually asked for a 25 per cent reduction in his cash bonus this year because of a tightening up of market conditions. That dropped his annual earnings by about US$1.8 million.

Despite that, his 2014 earnings still hit US$20.3 million.

The paper cites a proxy filing by Deere in mid-December as the source of that information. That filing wasn’t yet on Deere’s investor website at the time of this writing.

Over at AGCO, its SEC proxy filing notified investors of a stockholder meeting held in April of 2014, in which shareholders would be asked to approve, among other things, CEO, Martin Richenhagen’s 2013 pay packet. All totalled, his full compensation for fiscal 2013 fell in at $11,742,360.

That proxy filing contained a summary of the brand’s “(executive) compensation

Earning $11.7 million in 2013, AGCO’s Martin Richenhagen is far from the top. philosophy and program design.” Here is how the company says it structured its senior executives’ compensation program. “(It) is intended to support the company’s business strategy and align executives’ interests with those of stockholders and employees (i.e. pay for performance)... The company believes that as an executive’s responsibilities increase, so should the proportion of his or her total pay comprised of annual incentive cash bonuses and long-term incentive compensation, which supports and reinforces the company’s pay-forperformance philosophy.”

That has become a relatively common approach for major corporations.

Finally, CNH, which includes the New Holland and Case IH brands. It’s part of the Fiat Industrial group of companies. Its 2012 SEC filing shows CEO Sergio Marchionne took in “renumeration” of approx.

C$4.06 million and equity renumeration with a “fair value” of C$8.72 million in that year (making a total of C$12.78 million with exchange rate at press time).

Despite the enormity of these numbers, the three ag equipment brand CEOs actually earn modest incomes, relatively speaking. They don’t even come close to the top of the Forbes survey of highest paid executive salaries. Fashion icon Ralph Lauren, No. 2 on the Forbes list, pulled US$66.65 million out of his company in 2012. Even the head of Starbucks doubles Allen’s numbers.

the performance of the company under that person’s leadership, measuring it against similar firms, and then giving the CEO an efficiency rating.

The problem is, the pay and efficiency rates on the Forbes scale don’t exactly mesh the way that the compensation theory would lead you to expect, which seems to lend support to that study on pay versus performance.

Here’s an example.

In Forbes’ 2012 top earners list, the No. 1 wage-earning CEO was John H. Hammergren of McKesson (a health care and pharmaceuticals company). He collected an eye-watering US$131.19 million. But the efficiency rating Forbes gave him based on his company’s performance was a decidedly middle-ofthe-road 121.

On the F orbes scale 1 is best and 206 is the worst.

In contrast to that, you have to leaf through to number 495 on the list to find Warren J. Buffett, CEO of Berkshire Hathaway. Buffett — if you really haven’t heard of him — is considered by nearly everyone to be an investment genius.

Buffett’s corporate compensation package totalled a measly US$490,000 in the year of the survey. Of course, at the time he owned what F orbes estimated was more than US$44 billion in company stock, but either way, he gets an impressive efficiency rating of 33, despite finishing nearly last on Forbes’ top 500 earners list.

That CEO compensation study should provide producers with a new metric to consider when they evaluate their own management performance this winter, especially after we’ve just gone through a few years of record commodity prices — at least in the grain and oilseeds sector. How have higher incomes affected their decision-making? Have they taken more high-risk financial gambles? Have they overinvested in machinery, land or anything else that will drag down future profits? How would they rate on something like Forbes’ efficiency scale? CG

February 17, 2015

business

Human resources

the new frontier

These HR concepts will help you develop and execute an HR strategy for your unique farm

By Helen Lammers-Helps armers have been very good at improving their productivity by getting the most from their land, animals and machines. Now, as farms get bigger, farm advisers say more farmers are looking to put that same attention on maximizing the people side of their businesses.

Human capital is often one of the biggest expenses on the farm, yet it receives the least attention, says Michelle Painchaud, CEO of Painchaud Performance Group in Winnipeg, Man. “Farmers spend a lot of money sourcing the best equipment and ensuring they have the best vets, nutrition, etc. for their animals,” Painchaud says. “But what about the people?”

As farms have grown, their human resources component has often been overlooked, agrees Kevin Kirkwood, a consultant with Backswath Management Inc. in Melville, Sask. Farmers are entrepreneurs who are good at growing crops but may not have a lot of experience managing people, he says.

Business leaders in the ag industry are beginning to recognize the importance of being able to attract, engage and retain talent, says Painchaud. “Who would have ever used the phrase ‘engage talent’ on a farm before?” she asks. And more farmers are now realizing it’s prudent to spend money on the hiring process, says Painchaud. “A bad hire costs you money.”

Investing in your HR program can also have intangible benefits on the farm by creating a more positive work environment and reducing stress levels for all, says Kirkwood.

As many farmers have discovered, finding good people willing to work the hours required on the farm can be tough. Farmers will need to work at finding good employees, says Kirkwood. “It’s a competitive market out there, and there aren’t enough good people.”

In order to attract the best employees, Painchaud says farmers should first create an Employee Value Proposition (EVP) to market their businesses to potential employees. The EVP explains how your farm business is unique and why an employee would want to work for you.

Kirkwood agrees. When you understand your farm culture, your brand and your mission, you’ll be able to hire like-minded people who fit the operation.

“You’re selling your farm as a business to attract professional career-minded people,” says Kirkwood.

February 17, 2015

Writing a job description that outlines the employee’s duties and responsibilities helps ensure you hire the right candidate and also avoids duplication.

When it comes to advertising for the position, Painchaud encourages farmers to be more targeted with their advertising instead of taking out an ad in the local newspaper. She recommends making use of websites devoted to agricultural jobs such as AgCareers or AgriStaffing. (A list of websites is found in the resources section at the end of this article.)

Social media is a good way of attracting the 20to 30-year-old crowd, says Kirkwood. “LinkedIn is becoming a useful tool for hiring.”

Farmers shouldn’t be afraid to get creative with their advertising, says Painchaud. Get a table at a trade show or put an advertisement in an association newsletter or conference program. “Or put a sign out at the road,” she says.

And always be on the lookout for potential employees, continues Painchaud. Have an open house at the farm, for instance, and keep your eyes open for potential candidates among the visitors.

One of Painchaud’s farmer clients found someone while waiting in a restaurant.

After attracting the best potential candidates, the next step is the interview process. Painchaud stresses that farmers need to treat the interview like a real interview. In the past too many farmers took short cuts. “If you liked them, you hired them,” she says. When interviewing, she recommends asking open-ended questions that will require the potential employee to elaborate on their experience rather than asking questions with “yes” or “no” answers.

Many farmers could benefit from HR training, says Kirkwood. Some farmers have very little experience with the interview process. For example, if they worked all of their summers on the family farm before returning to work on the farm fulltime, they may not have been through any job interviews themselves.

Even after making the effort to hire good employees, farmers are often disappointed with employee performance. Painchaud says this may not be the employee’s fault.

Continued on page 38 country-guide.ca 37

business Continued from page 37 When there’s a poor performer, you need to look at their manager, says Painchaud. First of all, does the employee have clear expectations, she asks. “If the employee doesn’t know what to do, then they will do what they think they are supposed to do.”

Painchaud had one client who had been through five farm managers. When she contacted the former farm managers to find out what the problem was, she discovered all of them said the same thing. “The expectations weren’t clear and they didn’t feel appreciated.”

Another question farm managers

should ask themselves is whether their employees have the skills and resources to do their jobs, continues Painchaud. A lack of training for employees is a problem on many farms. “Some farmers don’t recognize that they need to explain to employees what they need to be doing,” she says.

Painchaud sees an analogy to sports where every aspect of a player’s performance is continuously measured. “If you have a B player, you either train them or get rid of them,” she says. “You want a team of top performers.”

What does your team need? Do they need coaching? Do they need better tools? Or should you get rid of them?

Sometimes what’s needed is a change

YOU WON’T FIND

in leadership style. Painchaud says one of her farmer clients was much more successful once he changed his own behaviour, but first he needed to understand what he was doing wrong.

On some farms there is a lack of consequences (positive or negative) for employee performance. If an employee isn’t performing well but there are no consequences, what is their motivation to change, queries Painchaud. On the other hand, farmers are also famous for not giving praise when it’s warranted, she adds.

One way to get feedback from employees is by conducting a survey. When the number of employees is small, this can take the form of an informal discussion on

BETTER VALUE OR A GRASSY WEED.

business a rainy day, says Painchaud. She suggests asking employees what they like and don’t like every six months.

One farm Painchaud worked with had about a dozen employees, and it started having Monday morning meetings.

Employee retention went up drastically as employees felt more valued and had more exposure to the owners.

When managers ask employees for their opinions and input, employees feel valued and will take more ownership, says Painchaud. Gen Y talks with their feet, adds Kirkwood. “They’ll move on if they are not happy.”

Work-life balance has become increasingly important to younger generations.

“They work to live and their vacation time is very important to them,” continues Kirkwood.

With farm employees often working long hours, it helps if managers take the time to show their appreciation by celebrating milestones, such as an annual picnic or barbecue, says Painchaud.

Many farms would benefit from better HR management. As one dairy farmer quipped, the cows are often treated better than the people on the farm. Maybe it’s time for that to change.

Job descriptions may be the right place to start. They're among the pillars in a developed HR program, Kirkwood says. “Understanding everyone’s roles

and responsibilities not only provides direction for your employees but it will make succession of the farm go a lot smoother,” adds Kirkwood. CG

Resources Websites for advertising farm jobs www.agristaffing.com www.agcareers.com www.careersinfood.com www.agcallhr.com www.manitobacooperator.ca www.jobbank.gc.ca (Federal Job Bank)

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business

40 country-guide.ca

February 17, 2015

business

Who needs equipment?

The Suhrs are making it pay to crop 7,000 acres with only a pickup. The rest is all custom

Photography: David Charlesworth

By Ralph Pearce, CG Production Editor ome people look at conventional farming and organic production and they see oil and water. The two just were not made to mix.

Not only are their production methods about as different as they can be, so too are their markets.

Fiete Suhr assures anyone who holds that outlook that not only is it possible to combine the two, he’s been doing it successfully for nearly 15 years.

What makes this story even more remarkable, however, is that on the conventional side, he’s been doing it all with custom operators. He doesn’t own any of his own equipment.

Suhr farms on different parcels of land in Bruce County, with his home farm located between Port Elgin and Paisley, Ont. along the Saugeen River. It’s a parcel of 100 acres that he purchased in 2000 after the farming operation he worked for went into receivership.

“For what we were looking for, it had everything,” says Suhr, who grew up on a farm in Germany and then emigrated to Canada in 1983. “It had water, a bush and beautiful cropland, and we found it with a nice house on it. So we bought that as a starting point.”

At first, Suhr and his wife, Irene Kollmann considered starting a community-supported agriculture (CSA) farm, where shares in the operation could be sold and crops would be grown to meet the preferences of the shareholders. For a small farm, Suhr says, a CSA approach can be a good fit, but it’s also a lot of work requiring a lot of organization.

Almost immediately, however, an opportunity came up to rent 4,000 acres of land through some investors Suhr had worked with from Europe. So instead of developing a CSA, they headed into 2001 with a decision to start cash cropping.

Through the years, he’s had a lot of help from Irene, who acts as Suhr’s sounding board and counsel on the crucial decisions pertaining

February 17, 2015

to the farm. Irene studied agriculture in Vienna, Austria, and finished with her doctorate, so she’s usually the first person he turns to for advice.

During peak times in the growing season, she also helps with the day-to-day operations.

“With my previous job, I had a lot of connections to custom operators who could farm it for me, because I didn’t want to invest millions of dollars in capital without being sure that I’d have the land long term,” says Suhr, adding that he is now at 7,200 acres of rented land and 700 acres of land that is owned and dedicated to organic production.

And on the conventional side of the operation, the only equipment he owns is his pickup truck, and his phone.

As for soil types, Suhr says three-quarters of the land he works is clay-loam, with the rest being silt-loam or sandy-loam. About 30 per cent of the land in total is systematically tiled, and that can raise some challenges from year to year.

In terms of cropping, Suhr’s mainstays on the conventional side are corn, wheat and soybeans — all grown under identity-preserved (IP) conditions, so he plants no genetically modified hybrids or varieties. Occasionally he’ll also plant edible beans — usually white but he’s also tried Continued on page 42 country-guide.ca 41

business Continued from page 41

The challenges

black beans and adzukis in the past. And he’s grown spring and winter canola as well as spring wheat.

“On the organic side, it’s a little different: I grow corn, soybeans, spelt, oats, sunflower, peas, some flax and hay and as much as I can, utilize cover crops, as well,” says Suhr, adding that from a machinery perspective in the organic side of the operation, he owns his tillage and weed management equipment. “And I do have a small sheep flock with about 100 ewes.”

He’s trying to match the livestock component to the acreage for the organic production, adding that he may need to expand in order to meet those nutrient needs. He’s also purchasing organic compost until he has the flock built up.

Farming on its own is enough to create some rather imposing challenges. But mixing conventional production with organic — and then adding a reliance on custom operators to that combination — would seem to risk a nightmare of complications.

Yet Suhr takes these in stride, crediting his experience as a farm manager on an operation which was also based on custom operators.

“I’ve built that relationship over 20 years,” Suhr says, adding that he deals almost exclusively with one custom operator. “I have a long-term relationship with them that’s built on friendship and trust, and they’ve built up to meet my needs, so it’s a win for both of us.”

Business plans can reflect the farmer’s strengths, Suhr believes. With his background in economics, his plan is based on managing the numbers

From an organizational perspective, Suhr doesn’t believe relying on custom work to be any more difficult than buying the equipment and hiring the staff he would need to operate it for him. He suggests it might even be a little easier, as long as you can create a relationship with a custom operator who is reliable.

If he owned half of his acreage and knew the long-term outlook, Suhr says he would definitely have his own equipment. But such decisions have to be carefully calculated.

There’s the potential disadvantage that if he supplied his own machinery, he could be building equity, rather than simply writing cheques. For now, though, he’s content to maintain his current business model.

“The main challenge is the co-ordinating — that’s No. 1,” says Suhr. “It’s the same with the big cash croppers.”

Looking forward, marketing is another potential issue, “especially since there’s more uncertainty in the market now than there was maybe 20 years ago,” Suhr says. “The fluctuations are higher, the demand is changing so much quicker — with China coming on so strong — and the uncertainty is increasing.”

Attitude adjustment Suhr sees opportunity in those marketing and organizational challenges.

In fact, he sees it as a core management trait to search for the opportunity side of situations as they evolve, and then to adapt production and marketing to take advantage.

For Suhr, you might think this would be more difficult because of his reliance on custom work. After all, if he is paying custom for much of the work he needs, then he has some limits on his ability to totally manage his cost of production. (Of course, Suhr might respond that no one has absolute freedom. If you are leasing, or if you have title to the machinery, you still need to make the payments.)

But the bigger point may be this.

From his point of view, Suhr’s management system enables him to diversify his cropping between organic and conventional, which in turn spreads his risks and creates new opportunities to be proactive.

“It’s opportunity, that’s the biggest challenge,” says Suhr. “The organic gives me some risk management — a second leg to stand on. It acts differently than 42 country-guide.ca

February 17, 2015

business the conventional market, and it gives me some flexibility and risk protection.”

One of the strengths required for production of this type, he adds, is patience, especially working with custom operators. There will be the odd day, he says, when he really wants to get the crop harvested, yet the combine might not show up on schedule because the custom operator is a field or two behind. That means it’ll be there the next day, and Suhr needs the patience to work with that.

“I can be patient because I know these people who are working with me are doing their best to accommodate me, and it’s a great relationship that has been grown,” says Suhr. “I am patient with them and they are patient with me — it’s a give and take.”

The other unique quality that Suhr brings to his farming operation is this oneof-a-kind business blend. With his experience in both conventional and organic production, he’s impossible to pigeon-hole as one or the other, because he’s both.

“I learn a lot — I go to all of these conferences as much as possible, and I go to

the same on the organic side, as much as possible,” he says, noting it’s not a matter of one or the other; there has to be room for both. “There are strengths on both sides, and it’s a synergy that helps me, and I think it’s better because you get some of the good of the conventional and some of the good of the organic.”

On a personal note, Suhr views the organic system as a better plan to follow, in the long term. At the same time, he’s not judgmental about that perspective.

The future will tell farmers which way is the best, he says, and the voice of the consumer telling growers what they want will create a sense of direction.

Whether it’s a consumer base that demands an end to gestation crates in sow barns or the end of neonicotinoid insecticides in corn and soybean production, farmers need to be more open to whatever kind of production practices consumers demand, Suhr says. The only stipulation is that farmers must be paid for that value-added management.

“As a consumer, if you want to have an impact on agriculture, buy or ask for what

you believe in,” says Suhr. “Don’t just complain and still buy what’s provided.”

Should other farmers go this way?

Asked if he advocates other farmers trying his approach, Suhr responds that success lies not only in diligence and attitude, but in your own skilset.

His background is in economics, so he likes working with numbers. But other farmers have their own individual strengths, and those strengths have to be woven into their business planning.

Above all, says Suhr, there has to be a drive to succeed that creates an attitude that success is achievable, if not inevitable.

“You sit down, you make your business plan, and see what works for you,” says Suhr. “The key is you have to believe in what you’re doing. As long as you believe in it and the numbers work out, that’s the way you should go.”

“You need a strategy,” Suhr says.

“Then follow it and do it, and you will be more successful, as long as you do it and do it with passion.” CG

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country-guide.ca 43

business

More to marketing than price

By Gerald Pilger ithout a doubt, the biggest fallacy about Canada’s grain producers is that they are good marketers.

I would argue instead that few grain growers actually have real marketing expertise, and even fewer actually market what they produce.

Grain producers who have spent many hours or days attending marketing groups, courses, and seminars along with the many farm advisers, brokers, market specialists, and educators who offer them will disagree. So will farmers who are inundated with market information via online sources, from newsletters, subscription services, direct mail, on-air radio broadcasts and even person-to-person contact with buyers, brokers, and advisers.

It’s also true: most growers do follow the “market” closely. Successful farmers understand and probably employ a host of marketing tools including storage, contracting, futures, basis, targets, options and deferred delivery. A percentage of producers even sell and replace the physical commodities with paper under the guise of marketing rather than realizing they are actually making an investment or speculating (which is what such actions actually are, and what they should be evaluated as).

The problem is that nearly all this effort is focused almost entirely on capturing a price. But price is only one part of marketing.

In fact, some business gurus argue that price setting is the least important component of marketing.

Your product’s qualities, how you make it available to your customer and how they perceive your product are likely more important than price for longterm profitability.

True marketing consists of ensuring you are offering the consumer the right product, in the right place, at the right time, at the right price. Marketing requires not only the setting of a price, but also understanding and responding to the wants and needs of the customer.

Is your farm business — and is the Canadian agricultural industry — actually offering the right product in the right place at the right time at the right price? How well are we as farmers and as an industry actually marketing what we grow and produce?

Branding commodities Unfortunately, nearly all Canadian farm production is in undifferentiated commodities. Farmers tend to perceive little difference between a bin of a specific crop that they grow and a bin of the same grain of a neighbour, or of the same crop grown in the U.S., Brazil or Australia, for that matter. Wheat is wheat 44 country-guide.ca

and corn is corn after all. They are relatively easy to grow worldwide and similar types are used for the same purposes no matter where they are grown or where they are processed.

Unfortunately, producers of undifferentiated commodities have very few marketing tools they can use to compete for sales and market share. In a free and open market with a large number of sellers, price becomes the primary way to market a commodity. As a result, commodities are defined by prices continually trending down because producers not only compete on low prices but also increase production and supply in an attempt to compensate for lower prices.

But growers have another option. Rather than staying on the commodity treadmill and continually chasing prices lower, it is possible to differentiate a commodity.

According to Dave Dolak, a marketing expert from Charlottesville, Virginia, “The answer lies in first identifying or devising ways to create unique attributes and unique promises of value offered solely by you and your product offering.”

That sounds like a mouthful.

When asked if it is possible to do this for a commodity crop such as wheat, Dolak replies: “definitely!” He points to coffee as an example of a crop where companies and countries have used differentiation and branding to increase their market share and price. Columbian coffee and Kona brand coffee have become recognized brands, and consumers look for those labels when purchasing.

Dolak has written a short e-book entitled “How to Brand and Market a Commodity” which gives a step-by-step process that commodity producers, companies, and countries can use to differentiate a commodity and compete for market share on something other than price. The e-book is available through Amazon.com.

“Commodity marketers are often very surprised to learn from customers that price is not the most important factor — let alone the only factor,” Dolak says.

Canadian wheat A useful case study is Western Canadian wheat.

Dr. Rex Newkirk is vice-president of research and innovation at the Canadian International Grains Institute (Cigi) in Winnipeg. He explains that Cigi has been instrumental in the development and maintenance of export markets for Canadian grain for many years by providing buyers of Canadian wheat with technical training on the milling, processing and utilization of that wheat.

Cigi’s work was complemented by the analysis and assurances of wheat quality provided by the Canadian Grain Commission and the identification February 17, 2015

business of market and export opportunities by the Canadian Wheat Board. Together these three organizations created a brand for Western Canadian wheat. That brand identified Canadian wheat as very high quality, safe, clean and wholesome grain, and it assured customers that wheat from Canada would meet or surpass their expectations.

The effort succeeded, Newkirk says.

“Canada had a strong brand for its wheat.”

However, the change to the CWB in 2012 has had a negative impact on that brand. There may have been expectations that the private trade would ensure our brand is maintained, but there have been problems. Buyers have reported being disappointed with cleanliness and quality in a number of shipments. They had even bigger concerns with the shipping delays last winter. In a world of just-in-time delivery, our brand was degraded by the inability of companies to deliver on time because of their difficulties in sourcing the specific quality requested by a buyer, rail movement problems, and delays in loading vessels.

In order to rebuild the tarnished wheat brand, Newkirk says, Team Canada was developed. Cereals Canada, provincial grain commissions, exporters, and individual farmers are now joining Cigi and CGC in actively marketing all grains. It is hoped by including people from every level of the value chain on trade missions to importing countries, we can assure buyers in those countries of the quality and value of Canadian grains.

Lynn Jacobson, a farmer from Enchant, Alta., took part in the Team Canada mission to Asia last fall. He was very direct in his comments about Canada’s wheat brand. “Over the last few years, no one had been branding Canadian wheat. Canadians had not been making visits to millers and they (the millers) were not happy about this.

You cannot sell wheat with just a phone call… Skype is not a face-to-face meeting.”

Adds Jacobson: “U.S. Wheat Associates, the Australians and the Russians are meeting with Asian buyers regularly, and we have to go there too if we are to compete in those markets.”

Even more importantly, it is hoped the Team Canada approach will provide better feedback of what our customers are demanding.

Jacobson brought back an extremely important message for producers. “MillFebruary 17, 2015

ers are now complaining about quality of Canadian wheat,” he reports. “The only advantage Canada has is our wheat’s quality. If we ever go away from quality we will lose markets. If we don’t have quality, even the U.S. market will disappear. We will become a residual seller of wheat if we do not supply what the customer wants.”

As an example, Jacobson notes that buyers have been concerned about the gluten strength of our wheat for the last few years. He notes gluten strength varies between varieties, yet some of the most popular varieties we grow have low gluten strength. Even so, we continue to grow these varieties because of their agronomics and high yields.

The fact that these varieties are not meeting the needs of our customers is feedback that farmers must get and act upon.

Jacobson hopes the Team Canada approach will deliver this feedback to farmers.

Canada has worked hard to build a very favourable brand for our wheat.

Until recently our wheat could be considered as Perrier compared to tap water.

But to maintain that image will take a lot of work, especially by producers.

We cannot expect multinational grain companies to spend money to tell buyers that Canada has the best wheat in the world when they are also trying to sell wheat from other wheat-exporting nations. Branding of wheat ultimately falls on the producer, and it will be the effort that producers put into true marketing that determines whether Canadian wheat maintains its differentiation as the highest quality in the world, or if we lose this positioning to lower-cost producers.

Interestingly, Dolak also points out that countries like China, Korea, and India are increasingly using branding techniques to differentiate and market the commodities that they produce. It would be a real shame if Canada and Canadian producers lose our Canadian wheat brand to other countries because they are better marketers than us.

Make no mistake, using all available pricing tools to lock in a price is a critical, necessary skill for farmers. But this alone is not marketing. As farmers and industry, we must do more to actually market our grains rather than just price them. CG

The 4 Ps Business theory breaks the job of marketing into four components, referred to as the Marketing Mix or the 4 Ps. These components are product, place, promotion, and price.

Any business which does not address all four of these components is setting itself up for failure in the long run.

If you are truly a good marketer you should also be addressing all four of these sectors, and you should be able to answer the following questions for whatever you produce:

Product • What does the customer want and need from what I produce?

• What specific features add value to what I produce?

• How will the customer use what I produce?

• What quality or factor is missing or lacking from my production?

• How is it different than what my competitors are producing?

Place • How can a customer see and know what I am producing?

• How will I deliver what I am producing to the customer?

• Are there alternative delivery channels to get my production to the customer?

• Who will be my sales force and how will they meet with the customer?

• How are my competitors approaching and selling to customers?

• Can I provide better service or delivery than my competitors?

Promotion • How will my production be promoted to customers?

• When will I promote my production?

• How do my competitors promote their production?

Price • What is my cost of production, delivery, and service to customers?

• What is the value of my production to my customer?

• How will my price compare to competitors’?

• What impact will a small increase or decrease in price have on sales?

country-guide.ca 45

Ag Outlook 2015 Understand the trends, see the opportunities

Economy

Commodities

Weather

Boost your management knowledge at this half-day event with industry experts.

Hear the latest on economic trends, weather patterns, commodity markets and farm management issues, and make more informed decisions for your business.

Thursday, March 12

1:15 – 4:30 p.m.

Vic Juba Community Theatre

Lloydminster

Ag Knowledge Exchange has over 100 events that anyone with an interest in Canadian agriculture can attend, free.

Presented in partnership with Country Guide.

Seating is limited – register for free today.

fcc.ca/AgOutlook | 1-888-332-3301

J.P. Gervais FCC Chief Agricultural Economist

J.P. Gervais has over 15 years of experience in domestic and international analysis of agricultural policies and markets. He’ll provide insight into major economic trends that shape the Canadian agriculture industry today. Learn how they could impact your farm in the coming year.

Appearing at: Regina, Medicine Hat, Lloydminster

Drew Lerner President, World Weather Inc.

A favourite among the agriculture industry, Drew’s daily assessments of crop and weather expectations support commodity market trade and help many companies make better agricultural business decisions. Hear how weather trends and global climate change could affect your operation in 2015.

Appearing at: Regina, Medicine Hat

Mark Robinson Meteorologist, The Weather Network

Mark has been storm chasing since 2000, sending on-the-ground reports to The Weather Network. He has intercepted 15 hurricanes and over 30 tornadoes across North America, including the most destructive hurricane in U.S. history, Katrina. He will discuss the weather trends we could expect to see in 2015.

Appearing at: Lloydminster

Mike Jubinville President, Pro Farmer Canada

Mike is lead analyst and president of Pro Farmer Canada, an independent market analysis and advisory service he started in 1997. Benefit from his experience as he explains current and future trends in agriculture, the current state of commodity markets and what we can expect next.

Appearing at: Regina, Medicine Hat, Lloydminster

Lyndon Carlson FCC Senior Vice-President, Marketing

Lyndon has 30 years of experience in several areas of agribusiness and marketing. He’s been named the Canadian Agri-Marketing Association’s Agri-Marketer of the Year and presented with the Queen Elizabeth II Diamond Jubilee Medal for his contributions to 4-H Canada. He’ll help you see where Canadian agriculture is headed and provide insights to improve your farm management skills.

Appearing at: Regina, Medicine Hat, Lloydminster

machinery

Manufacturing talent Executives at the major equipment manufacturers know their brands can’t succeed without the right people on the payroll

By Scott Garvey, CG Machinery Editor mong the Big Four farm equipment brands, John Deere owns the largest slice of the North American market, and the bosses at its world headquarters in Moline, Illinois, have no intention of letting that change any time soon. In December they revealed their updated, long-term corporate strategy to investors, outlining how they intend to keep the green brand out in front of the pack.

That strategy includes the usual. It promises to keep inventory costs down, to keep earnings ratios up, etc., etc., etc.

But it also includes a core focus that might not seem so expected, i.e. recruiting, developing and retaining the right people.

Nor is this just a tip of the hat to make the company’s workforce feel valued. Instead, it is a plan, and the objective to “grow extraordinary global talent” couldn’t be given higher profile, being identified as one of the four key factors that John Deere must score big on in order to achieve its overall long-term strategy.

Deere isn’t alone. In fact, if you talk to any senior executive at any equipment brand, you’ll find they are working as hard at innovating how they recruit and develop the skills of top-notch employees as they do with their machinery. They all know that no business can succeed without talented people from the factory floor to the executive boardroom.

Still, Deere is a good example, and its CEO, Samuel Allen, even devoted a considerable portion of his February 2014 shareholders’ meeting speech to the need to grow the company’s human resources. Here is what he said, in a longer extract than Country Guide would normally print because of the insight it may give farmers into how such a company thinks about the kind of HR issues that are increasingly affecting farmers, both in terms of their hired and family staff: “There’s nothing that will have more impact on John Deere’s future than a supremely talented, committed and motivated workforce, such as our 65,000 employees and leaders. Everywhere we operate, we seek to attract the best talent, then to develop and deploy that talent for the ultimate benefit of our cus-

Abe Hughes, vice-president New Holland, North America.

48 country-guide.ca

February 17, 2015

machinery

Finding talented employees, grooming and retaining them to work in positions all the way from the assembly line to key executive positions are key priorities for ag equipment manufacturers.

Photo: AGCo

tomers and investors. We’ve adopted disciplined processes to accomplish this aim and exacting metrics to stay on track.

“There’s always room for improvement, of course. But we’re making further progress in categories such as hiring preferred candidates, finding challenging developmental assignments, and building employee engagement. Engagement is a particular priority, because it is a key driver of performance, innovation and growth — all essential to carrying out our strategic plans.

“We also stress developing the right kind of leaders, those who share our values and have the drive and determination to help fulfil our mission of serving those linked to the land. That’s why we take leadership development so seriously and do everything possible to assist our people in making the most of their skills and realizing their potential.

“Among other steps, we’ve added rigour to our succession planning processes to ensure we have talented leaders in place throughout the world for our present and future needs.

“A major objective is developing indigenous, or regional, talent to help manage our non-U.S. operations and extend the John Deere brand to a wider global audience. I’m proud to note that, partly as a result of this emphasis, Deere has an increasing number of extremely capable nationals serving in key management roles across Asia, Europe and South America.

“The way we see it, bringing more February 17, 2015

diversity to our workforce, including our leadership ranks, makes our business goals that much more attainable. It fosters a richer global mindset and helps us achieve a deeper understanding of our customers — a group that itself has a wider range of backgrounds and needs than ever before.”

At New Holland Then, when I spoke to Abe Hughes, vice-president of New Holland North America last July, I asked him not only how he finds candidates with the right combination of education and experience to take a position on his executive team, but how he allows them to develop.

Again, this is a longer transcript than we would normally include. But again too, the insights that it reveals into how to make an HR goal actionable are impressive.

“It’s a very complicated question,” Hughes said. “It’s a good question. It’s hard to get people in a rural economy. A lot of people will leave the farm, go get a college education and they won’t come back. We need people that are college educated for this business.

“What we’ve got to help us with that is, No. 1, we’re trying to build our brand early on. We have partnerships with colleges and students. We have a pretty robust internship program we’re running. We want to get engineers and people from ag economics, pull them in and get them accustomed to our business. See them for a couple of years and then give them an offer.

“And then once we’ve got them in,

Samuel Allen, CEO of John Deere. once they’ve been working with you for five or 10 years, how do you keep them?

So I’ve created here a talent development program, where we identify our 12 or 15 stars every year. Then we’re deliberately putting them through a six-month program where we tell them you’re a star, you’re valued here. Then we get them into specific skill development. And then they have to work on a key problem we want to solve. They work on this together as a team, so they develop teamwork skills.

“Then out of those groups there are some keepers. We take those guys and we are deliberately putting them in key assignments to take them to the next level. It’s experiential, you know.

“But you’ve got to find the right people that probably come from a farm background that are doing ag economics or ag engineering and then develop and foster them from there.”

Even though Hughes says he’s looking for candidates with ag backgrounds, he doesn’t restrict his recruitment to the traditional agricultural colleges in the big ag regions, even recently hiring a Harvard graduate who had other job offers from competing industries.

“With that guy we had to compete with Wall Street and the Internet companies, we had to convince him he could have a wonderful career here and be around the things he loves,” Hughes explained. “He wanted to work in this (ag equipment) business. I mean, who wouldn’t? It’s fun being around farm equipment.” CG country-guide.ca 49

CropsGuide

By Richard Kamchen

stacking the deck Next-generation herbicide stacks are on their way to help fight not only weed resistance, but more weed species too number of next-generation herbicidetolerant crops are in the pipeline for soybean and canola growers, but the offerings won’t include any magic bullets. Instead, what we’re likely to see first are more stacked tolerance traits.

It’s because life science companies have their own kind of stacking to deal with. Their new traits are lined up, waiting for the green light from government regulators before they can be released to eager farmers.

Monsanto is among the companies working to get a new soybean offering into the marketplace.

“We are certainly hoping for sales in the fall of 2015 for seeding of Roundup Ready 2 Xtend soybeans in the spring of 2016,” says Joe Vink, weed management technical lead with Monsanto Canada.

Monsanto Canada has received full regulatory approvals in Canada, and got U.S. approval in January, but the launch of the new technology will depend on completing the regulatory process in key export markets.

Roundup Ready 2 Xtend soybean is tolerant to both glyphosate and dicamba, and Vink says its value will be in how those two herbicides complement each

other in controlling tough broadleaf weeds. The addition of dicamba could be particularly useful for weeds that glyphosate has traditionally been a little slower to control, like lady’s thumb and wild buckwheat.

Two modes of action on broadleaf weeds also represents good herbicide stewardship, Vink says.

“The goal is to minimize the selection for glyphosate-resistant weeds or herbicide-resistant weeds in general. When you have two highly effective modes of action like glyphosate and dicamba together, that goes a long way in keeping these new tools for farmers available for many years to come.”

Just as important is the fact that dicamba has residual activity in soil, Vink adds. “If you have the two together in a pre-emergence or pre-seed application, for example in a no-till-type of situation, we observe short-term residual on broadleaf weeds, like lamb’s quarters, pigweed, and several other broadleaf weeds as well.”

Getting soybeans off to a good start free of earlyseason weeds maximizes yield potential. Monsanto has run the same experiment at nearly 40 test locations over seven years and says it has found an average 2.4 bu./ac. yield advantage when dicamba was

“ When you have two highly effective modes of action like glyphosate and dicamba together, that goes a long way in keeping these new tools for farmers available for many years to come.”

— Joe Vink, Monsanto Canada

included in early weed removal timing compared to glyphosate alone, Vink says.

“Dicamba is not a full-season residual herbicide, but there’s potential for it to provide enough residual activity on broadleaf weeds so that you can buy yourself some time,” Vink says. “If it is raining or you have a lot of acres to cover, those extra days are a big difference in the spring for many farmers.”

Continued on page 52 50 country-guide.ca

February 17, 2015

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Confused yet about stacked technologies?

By Richard Kamchen

W

ith an influx of stacked herbicide-tolerant technologies in the offing, there’s the potential for confusion among farmers and advisers.

“Certainly, more education and awareness of growers by both the private- and public-sector researchers and extension specialists is required to minimize any confusion,” says Hugh Beckie, a research scientist with Agriculture Canada and professor at the University of Alberta.

Oilseed specialist Murray Hartman at Alberta Agriculture adds there could be some confusion over herbicide modes of action, best timing, specific weed strengths and weed resistance.

“I suspect that initially industry will take the charge on educating, since governments tend not to focus on management of individual products,” Hartman says.

“A lot of it is going to depend on the extension effort,” adds Robert Gulden, professor in the University of Manitoba’s plant science department. “There are venues where that information could be relayed. Certainly, academics have their role to play in that, as does industry, as do provincial extension services.” It’s a topic that will come up at winter meetings, especially as these products get closer to release dates. “And there’s going to be a learning curve,” Gulden says.

Christian Willenborg, a professor at the University of Saskatchewan’s department of plant sciences says that the more traits that are present in a variety, the more likely it is to add confusion.

“Having said that, the extra confusion comes with added benefits, namely improved pest management of some form. So growers will have to weigh the cost of acquiring new information about stacked traits versus the benefits they confer in the field,” Willenborg says.

There could be an impact on stewardship if growers aren’t fully aware of the science governing the utility of the traits and the requirements surrounding their use, Willenborg says. “A breakdown in stewardship could lead to increased pesticide resistance if traits are not used properly.”

Willenborg believes it’s incumbent on growers to familiarize themselves with the technology they’re using in their systems, but adds it’s also critical agronomists and

52 country-guide.ca

industry personnel work with them to manage the technology and encourage stewardship of the traits.

“No one knows their fields like a grower does, and they are aware of the specific problems and should therefore choose their seed accordingly. However, a more concerted effort on the extension front is required as seed technology evolves into a more complicated array of traits,” says Willenborg, adding this will require a joint effort between industry, government extension personnel, and scientists.

Agricultural technology has advanced at a dramatic pace over the last decade, and Willenborg believes public institutions need to invest more in extension efforts to address growers’ issues. Still, he adds that during the same 10 years “exponential growth” of highly qualified agronomists has occurred, and they’ve been able to share their knowledge with farmers on technical and practical levels.

Gulden stresses that even with these new technologies, farmers are still going to have to think about integrated weed management.

The systems will present opportunities for greater herbicide use, herbicide mixtures and using a broader array of herbicides within a crop — which theoretically are good management tools to mitigate herbicide resistance — but “we need to think bigger than that with all technologies that we use in terms of weed management, and strive to aim for more of an integrated approach to suppress weeds.”

Gulden adds that while stacked traits open opportunities for more than one mode of action, that doesn’t necessarily mean farmers need to spray all the herbicides a seed is resistant to in one year.

“Weed spectrum and weed control needs should drive some of that, and not just a blanket application of everything all the time,” Gulden says.

Another concern may be that a doublestacked HT in the best genetics could become so popular that a couple of varieties would dominate the marketplace, says Hartman.

Not only would that limit market competition, but it could also limit diversity in farm fields and thus make them more prone to biotic or abiotic shifts.

Monsanto plans to offer the stacked trait in a broad maturity range for East and West. While waiting for export countries’ approval can’t be counted as a boon, Vink says it’s giving the company more time to test its germplasm pool.

Meanwhile, Eastern and Western Canada will also get a soybean — and corn — offering from Dow AgroSciences with its Enlist Weed Control System based on new traits and a new herbicide called Enlist Duo, which will include a blend of glyphosate and the new 2,4-D choline formulation.

“The system will allow the farmer to continue to grow corn and soybeans, with an additional herbicide mode of action which is an effective tool to manage hard-to-control and resistant weeds, especially the broadleaf weeds,” says Enlist marketing leader Jeff Loessin.

In Eastern Canada, that will mean effective control of all biotypes of Canada fleabane, common ragweed, giant ragweed, and waterhemp, along with activity on weeds like lamb’s quarters and pigweeds that are difficult for glyphosate to control. In Western Canada, Enlist will be effective on key weeds like volunteer canola, wild buckwheat, smartweed, lady’s thumb, lamb’s quarters, and kochia. “(Lamb’s quarters and pigweeds) are a couple of weeds in Eastern Canada that if you spray straight glyphosate on them, the control is sometimes less than perfect. Same as wild buckwheat in Western Canada, plus smartweed and even lamb’s quarters,” says Loessin. “Just having that additional mode of action with the 2,4-D in the Enlist Duo herbicide boosts the level of control.”

Dow AgroSciences continues to monitor approval of the Enlist traits in importing countries, but it expects to launch Enlist soybeans in 2016 in Eastern Canada and 2017 in Western Canada, while Enlist corn is targeted for release sometime in 2015 in the East and 2016 in the West.

“The differences between Eastern and Western Canada are based on the breeding programs, and availability of hybrids and varieties,” says Loessin.

Another stacked herbicide-tolerant trait will be coming from Bayer CropScience and MS Technologies, which collaborated to develop Balance GT. Balance GT soybeans will be tolerant to both glyphosate and isoxaflutole, Continued on page 54 February 17, 2015

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CropsGuide

Continued from page 52 the active ingredient in the new Balance Bean herbicide. The herbicide’s intended targets are broadleaf weeds and grasses, including eastern black nightshade, waterhemp, ragweed and Canada fleabane. Balance Bean also provides a reactivation feature for coverage from application through canopy closure.

“The Balance GT soybean performance system will give growers a new herbicide mode of action and resistance management option in soybeans, especially for glyphosate-resistant and hard-to-control weeds,” says David Kikkert, business operations manager for soybean seeds and traits.

Balance Bean is registered for use in Eastern Canada and B.C. only, and Balance GT is expected to be available for planting in Canada by mid- to late mid-decade.

The companies are planning to provide additional herbicide trait stacks in the future to allow growers to use three modes of action on one soybean, the first of which will provide tolerance to glyphosate, Balance Bean, and Liberty.

By the end of the decade may come MGI soybeans, which provide pre-emergence exposure to herbicides mesotrione and isoxaflutole, and post-emergence tolerance to Liberty.

Bayer and Syngenta are co-developing MGI, which they consider an important new tool for producers facing challenging weeds like waterhemp, Palmer pigweed and lamb’s quarters.

New for canola Another Monsanto product focuses on canola. TruFlex Roundup Ready allows farmers to apply Roundup WeatherMAX rates at about double those of first-generation systems, and offers better control of annual weeds and tough perennials like dandelion, foxtail barley and wild buckwheat, plus a wider spectrum of weeds including yellow foxtail, biennial wormwood and common milkweed.

The application window will also extend past the six-leaf stage to the first 54 country-guide.ca

“ I think it’s safe to say the industry is somewhat perplexed with the China regulatory approval process for biotech traits. It’s gone from being quite predictable to being more unpredictable and so we are incurring some delays with China’s approvals.”

— Neil Arbuckle, Monsanto Canada flower, or 10 to 14 days longer than current technology.

“TruFlex has a higher application rate with a wide application window to provide growers with more flexibility,” says Neil Arbuckle, Monsanto Canada’s strategy lead. “It just provides more flexibility for farmers to ensure that they’ve got good weed control.”

Farmers can use existing applications rates, but as the window gets larger and weeds grow, they have the option to increase the spray rate.

Right now, Monsanto is working through the global regulatory process, and Arbuckle says Monsanto has approval from Canadian regulatory agencies, as well as the U.S., Korea, Japan and Mexico, but is still awaiting approval from Europe and China.

“I think it’s safe to say the industry is somewhat perplexed with the China regulatory approval process for biotech traits,” Arbuckle says. “It has gone from being quite predictable to being more unpredictable, so we are incurring some delays with China’s approvals.”

T h a t ’s n o t u n i q u e t o c a n o l a , Arbuckle says.

Arbuckle hesitates to put a date on when TruFlex will be commercially available, as previous estimates have come and gone. “Let’s just say we hope to be in the marketplace within the next few years. Ideally before 2020.”

Looking ahead, there’s also work being done on both the existing Roundup Ready trait stacked with Liberty as well as a TruFlex Liberty Link option. Beyond

that, Monsanto has plans to stack dicamba tolerance with TruFlex.

A non-stacked product will be coming from DuPont Pioneer, which plans on introducing Optimum GLY canola in the next few years.

“DuPont Pioneer anticipates commercialization of this trait later this decade in key canola-growing geographies, specifically Western Canada and Australia, pending key regulatory approvals from export markets globally,” says spokesperson Tara Moir.

The glyphosate-tolerant canola is intended to provide farmers greater marketplace choice, a wider application window, and increased rate flexibility due to higher crop tolerance, Moir says.

In November, Cibus Global and Rotam announced their U.S. launch of non-transgenic SU Canola, which is resistant to Group 2 herbicide sulfonylurea.

“SU Canola offers farmers a new alternative for weed control in canola that will provide sound stewardship options to deal with the management of glyphosate weed resistance,” Cibus’s vice-president of commercial development Dave Voss said in a statement. “SU Canola is an optimal fit for rotation with glyphosatetolerant soybeans, reducing weed pressure caused by volunteer glyphosate-tolerant canola in soybean fields.”

The product also addresses growing demand for non-transgenic food ingredients, Voss said. But it might not make a widespread commercial splash in Canada for several years due to ongoing regulatory hurdles. CG February 17, 2015

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CropsGuide

By Gord Gilmour, CG Associate Editor

That special feeling For a few years specialty crops were a tough sell to Prairie farmers. Now with lower grain prices, there’s a renaissance in interest igh grain prices send a very clear signal. Basically, it amounts to “get in while the getting’s good.” Nobody knows how long those high prices will last, and everyone is loathe to leave dollars on the table.

In the field, it means a lot of inputs and crop protection products get applied where they might not be in a year of tighter margins. Rotations also get squeezed just a bit tighter to take advantage of favourable market conditions. And rotations get simpler too, in favour of efficiency and productivity.

So it’s no surprise that in the last five years, we’ve seen more canola and wheat, and fewer special crops, including big-acreage crops like some of the pulses.

Take the case of field peas in Saskatchewan. In 2008 (the year grain prices really began to spike) that crop saw over three million acres seeded. By 2011, it had sunk to 1.7 million. Other crops show similar patterns, though, of course, they vary a bit in the details.

But that was then. Now, wheat and canola prices have fallen and, suddenly, interest in special crops has rebounded as farmers start to do some hard penciling to find profitability.

“ The phone has definitely been ringing,” says Manitoba Harvest’s Clarence Shwaluk.

“I really think we’re going to see more interest in some of these more minor crops.”

This past season saw field peas in Saskatchewan leap in popularity, with an estimated 2.6 million acres going in the ground, a 21 per cent increase over the year before, according to StatsCan. Those same estimates showed the trend continuing to the west in Alberta, where the crop was covering just over 1.2 million acres for a 25 per cent increase over a year earlier. Likewise Saskatchewan, the biggest lentil producer by far, saw an estimated 2.8 million acres of that crop sown, a jump of 21 per cent.

Clarence Shwaluk knows this first-hand. This winter his phone has been ringing a lot, and at the other 56 country-guide.ca

end are farmers interested in learning about opportunities to grow one of the region’s newest specialty crops, industrial hemp. The calls themselves are nothing new, says the director of farm operations for processor Manitoba Harvest. They’re typical of the time of year when growers ponder their seeding options. What’s a bit atypical for a processor like Manitoba Harvest, which has a solid grower base that’s remained largely stable over several years, is who’s on the other end of the line.

“The phone has definitely been ringing a bit more, as it does every year at this time, but I am getting more cold calls from producers wondering if they can get into hemp production,” Shwaluk says.

“I really think we’re going to be seeing more interest in some of these more minor crops.”

In the end, Shwaluk says, it’s economics driving that interest. At the same time, Manitoba Harvest specifically and the hemp industry generally are beginning to enjoy the first benefits of critical mass.

The company and others have clearly established an end-use market for the product, and in Manitoba Harvest’s case, they have also built a brand with growing popularity, providing growers with a stable outlet, something that’s not always possible with small-acreage emerging crops.

Meantime, growers have also done their job, tackling many of the most thorny production questions for the crop, serving to both increase production and make it more stable. In fact, it’s this success that Shwaluk says may limit opportunities for new entrants for a season or two. Plainly put, the company doesn’t want to oversupply the still-developing marketplace, and there’s a clear trend towards higher yields as growers really figure the crop out.

“I think at least part of any growth in demand will be met from increased production through higher yields from established growers,” Shwaluk says. However, he’s quick to add he expects this to be a short-term blip in what he sees as a longer trend towards higher hemp acreage and more growers in the coming years.

Another observer says this heightened interest in special or new crops is definitely happening. Scott Chalmers, an agriculture diversification specialist with the province of Manitoba, says he’s seeing growing interest in all sorts of new and emerging crops — including some like corn and soy that are, February 17, 2015

specialty crops of course, only minor crops in the Western Canadian context.

“There seem to be emerging crops that are competing with spring wheat and canola,” Chalmers says. “It has to do with wheat and canola prices in this area, with a bit tougher times.”

In particular, the emerging dynamic appears to see soy replacing canola, especially in areas that are prone to wetter conditions and flooding. Soybeans tolerate wetter conditions and bounce back more readily from them.

Add that to their lower production costs, mainly because the crop fixes its own nitrogen, and you have a potent combination that growers have a hard time ignoring, Chalmers says. There’s also the benefit of a break in the disease cycle for some common crop ailments.

“It increases the rotation options and the length of time between canola and wheat crops, which helps with disease pressure for things like fusarium in spring wheat and blackleg in canola,” Chalmers says. He also notes that while clubroot isn’t a major concern yet, growers are well aware of the threat and view soy-

beans as a potential alternative crop that would help prevent the problem, or cushion the blow if it does crop up.

Chalmers says corn is also another crop that many cereal farms are eyeing with interest as it begins to creep out of the Red River Valley, where growers have a long history producing it.

How big could this production get?

Nobody’s sure, but one champion of these crops says they could become a big deal on the Prairies. Monsanto Canada is predicting between eight and 10 million acres of corn, and six to eight million acres of soybeans in Western Canada by 2024.

With Manitoba soybean acres sitting at 1.3 million in 2013, however, that’s going to be a tremendous growth curve.

Chalmers also cites hemp as another crop with elevated grower interest, noting that conventional contracts provided the potential for profitability and organic contracts looked particularly tempting, given lower prices for other crops.

“Organic production contracts are ranging around $1.50 a pound,” Chalmers says.

With the best organic growers reliably getting 600 to 800 pounds of seed an

acre, those numbers have drawn considerable interest, he says.

Other crops being eyed for acreage expansion include flax, which saw nearly 1.5 million acres sown in Saskatchewan in last year’s StatsCan estimates. (Final figures will be released later this winter.) Despite that increase in acres, prices stayed solid at around the $11 mark.

Yellow and oriental mustard are getting some interest because prices have held up, but oversupply has pressured brown mustard prices downward.

Both Shwaluk and Chalmers say that for growers, it’s going to boil down to a combination of biology and economics, as anyone who’s been paying attention to the industry probably already knows.

Growers select crops over time that can do two things for them: thrive under local growing conditions, and reliably return a few dollars to the operation.

The tough times in the ’80s and ’90s generated game-changing new industries like canola and lentils, with more and more farmers noting the success of early pioneers of these crops.

Are we starting another cycle? CG

What’s on the horizon in agriculture?

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February 17, 2015

country-guide.ca 57

CropsGuide

By Gord Leathers

breeding basics Plant breeding is a key driver of crop agriculture — but it’s even more complex than might first appear he Italian pasta industry sent a ripple through Canadian agriculture a few years back when they changed the way they dry their noodles. Traditionally, pasta makers had hung the noodle for 15 hours or more at temperatures between 60 C to 70 C. Although this produced world-class spaghetti, it also took a fair amount of time, so Italy’s pasta sector sped up the process in the 1990s when they adopted high-temperature drying at 60 C to 120 C. The noodles were ready to go in just two to 10 hours. But there was a catch. It only worked with semolina that had the gluten strength to withstand the higher temperatures.

Italy is Canada’s biggest customer for Western Amber Durum, so when their protein requirements changed we responded by changing durum’s protein content. The old stalwarts such as Stewart, Hercules and Wascana were no longer up to the job, so Canadian wheat breeders went to work and developed Avonlea, Navigator and Commander.

In 2004 they released Strongfield, a variety with high gluten strength and a low cadmium uptake. Its agronomics also pleased the growers, and the Italian pasta industry was happy with the quality.

Thanks to plant breeders, Canadian farmers continued to deliver a product perfectly in tune with its market.

But it’s not an easy fix. Developing a new variety is a time-consuming and complicated business that involves rejigging a plant’s genetic makeup so that it performs the way we need it to. To do this, a breeder first takes a long look at what we demand of that plant from the time it germinates to the time it’s swallowed by a satisfied diner.

“It’s all about goal setting,” says Agriculture and Agri-Food Canada wheat breeder Ron DePauw.

“That revolves around gathering intelligence from the entire value chain, the producers, the consumers, the pathologists, the entomologists… and all of that information has to feed into what is the ideal plant for meeting the requirements of that value chain.”

Even then, it’s a tricky job to get one plant to satisfy so many different players. First the new variety needs to make the cut with farmers. The ideal plant must grow quickly over the summer and be ready for the combine before the first frost. It needs to be thrifty with nutrients, too, and resistant to lodging. It also should compete with weeds and cope with disease and insects, producing a profitable yield.

Next it must please the processor. The key here is that this year’s crop should go through the mill, the press, the bakery or the factory the same way it did last year, with a minimum of recalibration. Most important, what moves from there to the grocery store has to cook, feel and taste exactly as it always has, even though it came from a new strain of plant. If the consumer won’t eat the product, it’s right back to square one.

“ You cross the best with the best and you hope for the best. But now you need a sterile lab facility with the artificial ability to grow cells and you also need the ability to isolate DNA, clone it and purify it.”

— Peter McVetty, University of Manitoba 58 country-guide.ca

February 17, 2015

Plant breeding innovation parental line development streams, one for the female stream and one for the male. It’s a continual process — you’re always developing new female lines and new male lines with all the desirable traits and then crossing those to see what hybrid progeny they produce.”

This gives us the first crossed generation, which breeders refer to as F1. If the mature plant fits the requirements of the ideotype, then we move onto the next step, the evaluation and assessment.

tion will be highly variable, but if he plants enough of them, there’s a very good probability that he’ll find something in there that he can use. Since his sample size is related exponentially to the variability, his sample population gets pretty big pretty fast. In order to find “The One,” he has to sort through thousands of plants every year, which requires an eye for detail, tremendous focus and a good nursery.

“You’ve got to have super good nurs-

“ All of that information has to feed into what is the ideal plant for meeting the requirements — Ron DePauw, AAFC of that value chain.”

There’s nothing new about this.

Today’s plant breeder follows in the footsteps of the very first farmers who learned that productive offspring rise from two productive parents. As the yield and quality increased, the early farmers started trading their surplus seeds, which means the selection and breeding continued on a larger and larger scale.

Thousands of years later, pioneers like Henry Wallace and George Harrison Shull took plant breeding to the next level and began developing the high-power hybrids that farmers use today. Crop breeding moved out of the field and onto the research plot where we apply modern techniques to develop the next generation of seed.

“You still cross the best with the best and you hope for the best,” laughs University of Manitoba senior scholar Peter McVetty. “But now you need a sterile lab facility with the artificial ability to grow cells and you also need the ability to isolate DNA, clone it and purify it.”

Today’s breeder starts by drawing up an ideotype, the ideal form of what you’re developing. This ideal plant should satisfy all demands put on it by all the players in the value chain. Once that’s established, a breeder looks at different genetic lines and decides what may go together to produce the ideotype. The trick is to find or develop two parents whose genes will come together and complement each other.

“In terms of a hybrid crop you have to develop the parental lines,” McVetty says. “There are two parents used for every hybrid, and you need separate

February 17, 2015

“And when you’re doing that assessment, you’re looking at whether or not it’s suitable for release,” DePauw says. “If it’s not, then you have to go into this whole cycle of hybridization, evaluation and selection, and I would say that’s the loop where the vast majority of breeding effort sits.”

The F1 generation is bred to the next or F2 generation. Wheat self-pollinates but that doesn’t mean that it’s cloning itself. There’s still variation within all that pollen and seed and it expresses itself in the F2 generation.

This leads to the fundamental problem that breeders have with genes — they don’t stay put. Organisms like to shuffle them around so that subsequent generations are made of different gene combinations. This makes sense in a wild ecosystem, where an environmental change may favour one combination over another so the more suitable type will survive and pass on its genes.

In agriculture we’re not interested in variability. We like uniformity, and one truckload of durum from Midale, Sask. had better be like another truckload from Pipestone, Man. That Italian factory wants consistency. Domestic plants may be tightly bred to produce uniform offspring but early in the breeding cycle their wild heritage will out. The next generation or F2 is where the fun begins.

‘That’s the generation at which you have the greatest variation and you start practising selection,” DePauw says. “Every plant in that group will be different.”

DePauw knows that the F2 genera-

eries as well as top-notch technical support to run a good nursery,” DePauw says. “If you don’t run a good nursery, you’re not going to find the genes.”

These nurseries serve another important purpose. They act as an agronomic “sieve” where breeders subject their developing varieties to the hazards of the commercial farm field. This is where they’re subjected to diseases and insects, with DePauw selecting the best survivors.

They’re the ones that jump the next hurdle and contribute their genes to the next generation. All the while that same hybridization, evaluation and selection keeps going until the plant breeds true and the progeny are uniform. This usually takes until the F6 or F7 generation. As soon as they have a “meritorious” generation they can prepare it for commercial release.

Plant breeders sometimes lament the fact that 99 per cent of their cultivars will never end up in a commercial field. On the other hand, when they win, they win big.

Canadian agriculture has quite the list of successes such as sawfly-resistant Rescue wheat and Strongfield durum.

Breeding is a cat-and-mouse game.

When a new industrial process demands different protein content, the genetics must be adjusted. When a new strain of rust appears on the horizon, the genetic resistance must be found or production may fall. The changing face of agriculture and the new curveballs that both Nature and industry throw at us will keep plant breeders busy for as long as we’re growing crops. CG

country-guide.ca 59

CropsGuide

By anne cote

The right time for soybeans If there’s one thing soybeans won’t tolerate, it’s late planting he optimum seeding time for soybeans throughout most of Manitoba is the end of May. It isn’t a date you want to miss, but you’ll also want to get the right seed. Whether you’ve grown soybeans before or are planting them for the first time, you’ll have the most success if you choose carefully among the different varieties that are available from your seed dealer, says Dennis Lange, farm production adviser at Manitoba Agriculture Food and Rural Development (MAFRD).

“First and foremost is variety selection,” Lange says. “If you plant a short-growing-season variety in a short-season zone, you can maximize the yield potential of that variety,” he explains. “If you plant a long-season variety in a short-season zone, then that variety doesn’t have the opportunity to reach its potential yield and full maturity… Know your zone.”

Kristen Podolsky, production specialist at Manitoba Pulse Growers, looks at days-to-maturity as the single most important factor when choosing a seed variety. The short-season zone in Manitoba is in the southwest and northwest, both areas where acreage for soybeans is expanding. The long-season zone is generally in southeast Manitoba, south of Highway 23. In between those zones is classified as mid-season.

With soybeans, these zones are rated on heat days rather than sunlight hours, rainfall or soil type. It means that if you choose a variety simply for its yield potential without paying attention to the number of days to maturity, you’ll put your crop at risk of fall frost damage.

But if you’re running out of time to get those acres in, it is possible to plant the long-season varieties on the first seeded acres and a mid- or short-season variety on the last acres, says Lange. Optimum planting times in Manitoba are between May 10 and May 30 with the soil at 10 C. At this temperature the seeds will take two or three weeks to germinate. If the temperature rises to 13 C or 15 C, seeds will germinate in as few as seven days. But if the temperature is below 10 C, the seed will sit in the ground and when it finally emerges, the plants won’t be as vigorous as those planted at the warmer temperature.

The length of time between planting and maturity (i.e. when 95 per cent of the pods are brown), varies between 113 days in short-season varieties up to 121 days in mid- to long-season lines. Lange says once the plants have reached maturity, frost isn’t a major issue but a heavy frost before then can damage the yield.

Lange says that’s why it’s important for growers to know their region, their capabilities and the weather outlook. Flexibility is key. When the weather and calendar are working against you, he suggests planting the long-season varieties on the first fields and then using the mid- and short-season varieties on subsequent fields.

Flexibility extends to equipment as well. Lange says it’s a matter of choice but a first-time soybean grower can use the same planting equipment they have for cereal crops, whether it’s a planter or air seeder. He says there’s no reason to go out and buy additional equipment when you already

Trait Stewardship Responsibilities Notice to Farmers Monsanto Company is a member of Excellence Through Stewardship® (ETS). Monsanto products are commercialized in accordance with ETS Product Launch Stewardship Guidance, and in compliance with Monsanto’s Policy for Commercialization of Biotechnology-Derived Plant Products in Commodity Crops. Commercialized products have been approved for import into key export markets with functioning regulatory systems. Any crop or material produced from this product can only be exported to, or used, processed or sold in countries where all necessary regulatory approvals have been granted. It is a violation of national and international law to move material containing biotech traits across boundaries into nations where import is not permitted. Growers should talk to their grain handler or product purchaser to confirm their buying position for this product. Excellence Through Stewardship® is a registered trademark of Excellence Through Stewardship.

ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Roundup Ready® crops contain genes that confer tolerance to glyphosate, the active ingredient in Roundup® brand agricultural herbicides. Roundup® brand agricultural herbicides will kill crops that are not tolerant to glyphosate. Acceleron® seed treatment technology for canola contains the active ingredients difenoconazole, metalaxyl (M and S isomers), fludioxonil, and thiamethoxam. Acceleron® seed treatment technology for soybeans (fungicides only) is a combination of three separate individually registered products, which together contain the active ingredients fluxapyroxad, pyraclostrobin and metalaxyl. Acceleron® seed treatment technology for soybeans (fungicides and insecticide) is a combination of four separate individually registered products, which together contain the active ingredients fluxapyroxad, pyraclostrobin, metalaxyl and imidacloprid. Acceleron® seed treatment technology for corn (fungicides only) is a combination of three separate individually-registered products, which together contain the active ingredients metalaxyl, trifloxystrobin and ipconazole. Acceleron® seed treatment technology for corn (fungicides and insecticide) is a combination of four separate individually-registered products, which together contain the active ingredients metalaxyl, trifloxystrobin, ipconazole, and clothianidin. Acceleron® seed treatment technology for corn with Poncho®/VoTivo™ (fungicides, insecticide and nematicide) is a combination of five separate individually-registered products, which together contain the active ingredients metalaxyl, trifloxystrobin, ipconazole, clothianidin and Bacillus firmus strain I-5821. Acceleron®, Acceleron and Design®, DEKALB and Design®, DEKALB®, Genuity and Design®, Genuity®, RIB Complete and Design®, RIB Complete®, Roundup Ready 2 Technology and Design®, Roundup Ready 2 Yield®, Roundup Ready®, Roundup Transorb®, Roundup WeatherMAX®, Roundup®, SmartStax and Design®, SmartStax®, Transorb®, VT Double PRO® and VT Triple PRO® are trademarks of Monsanto Technology LLC. Used under license. LibertyLink® and the Water Droplet Design are trademarks of Bayer. Used under license. Herculex® is a registered trademark of Dow AgroSciences LLC. Used under license. Poncho® and Votivo™ are trademarks of Bayer. Used under license.

All other trademarks are the property of their respective owners.

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February 17, 2015

production have reliable planting equipment on the farm. Lange notes growers all have their own preferences on what’s important on their field and most are great at modifying the equipment they have to meet their needs. “Once you figure out what place soybeans have in your crop rotation, it always comes down to the nut behind the wheel. By that I mean the person driving the equipment,” Lange says.

Lange says row spacing is also a matter of individual preference. Wider rows require less seed than narrow rows. In a 15-inch or eight-inch row, the target is to get 200,000 to 210,000 seeds in the ground to ensure 170,000 plants develop. With 22- to 30-inch rows, it’s possible to seed 180,000 plants and still have as many as 160,000 reach maturity because the germination rate is usually higher in these rows. There’s really not a significant yield difference between row choices but weed control is more difficult and takes more attention in the wider rows while quicker row closure in the narrow rows can reduce weed control work, he says.

“Ideally, if you have between 140,000 to 165,000 plants established… you’ve got the ultimate range to maximize your yield,” Lange says. Even if early damage on seeds reduces the final plant count to 80,000 plants, it’s not a crop failure, just more weed control work. The important thing at this stage is to have a good hard look at what caused the low germination rate and learn from it.

Podolsky says seeding rates for soybeans should be calculated by determining the risks for failure to emerge including germination rates, presence of soil pathogens, possible insect damage, and damage to seed that may have occurred due to handling and seeding equipment. She says to achieve a target plant stand of 150,000 plants per acre, for example, the seeding rate should reflect the expected survival rate of the seed once all the risk factors have been calculated.

Manitoba Pulse is conducting onfarm studies to create a data base that will provide growers with more precise information on these risk factors, Podolsky adds. “In the past three years, over 60 on-farm research trials have been conducted and some of these trials have looked at seed survival rates in air seeders and planters.”

Plus, adds Podolsky, “There’s a 65 to February 17, 2015

75 per cent seed survival rate with an air seeder… not as high as we’d like to see.

That’s just what the reality is.”

Lange notes the reduced germination rates when seeds are planted with an air seeder is likely due to damage on seeds that are already dry.

“ First and foremost is variety selection,” says MAFRD’s Dennis Lange.

“Know your zone.”

However, Podolsky says, there’s a higher survival rate with planters — 72 to 82 per cent. Another benefit to using a planter is improved seed placement and depth control. The target plant stand of 140,000 to 160,000 or more plants is the same across row spacings.

But soybeans are adaptable so using an air seeder and adjusting the seeding rate from that of other crops is feasible.

“Many studies show the yields on narrow rows planted with a drill or seeder are the same or higher as those done with a planter,” Podolsky says.

Proper inoculation to induce nitrogen development in the soil is another factor vital to the health of the soybean crop, Lange adds. Over time he’s noticed some growers lay a granular inoculant down through a separate tube, placing it a bit over from the seed to provide a little extra yield insurance.

The granular inoculant becomes available later in the growing season when the pod is filling and can make up for deficiencies earlier on.

Both Lange and Podolsky note the number of acres given to soybeans in Manitoba has been expanding in recent years. Podolsky says the Red River Valley has been growing soybeans for a little more than a decade, but the acreage has doubled in the past four years with most of the expansion coming from the mid- and short-season zones. CG

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w e at h e r

Changeable Occasional snow

S ra ca Mild in tte / s re no d w

MILDER AND DRIER THAN NORMAL

NEAR-NORMAL TEMPERATURES AND PRECIPITATION

NEAR NORMAL

Oc Co ca ld sn sio ow na

MILDER THAN NORMAL

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COLDER THAN USUAL NEAR- TO BELOW-NORMAL SNOWFA LL

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S at torm Sn tim y ow es / ra in

COOLER THAN NORMAL

February 22 to March 21, 2015

BRITISH COLUMBIA

Feb. 22-28: Variable from cool to mild.

A few highs could hit double digits in the south. Windy at times. Generally fair other than intermittent rain on the coast and occasional snow inland.

Mar. 1-7: Seasonal temperatures with a couple of milder days bringing thawing to higher elevations. Occasionally blustery.

Fair apart from a couple of wet days in the south, snow in the north.

Mar. 8-14: A disturbance threatens to bring heavier precipitation to many areas with rain on the coast and snow mixed with rain elsewhere. Blustery with fluctuating temperatures from mild to cool.

Mar. 15-21: Moderating temperatures boost readings to double digits in the south and well above zero in the north on most days.

Fair with periodic rain in the south, rain to snow in the north.

ALBERTA

Feb. 22-28: Seasonal temperatures but a few mild days bring melting to southern regions. Bright skies at times but snow or rain in the south on a couple of days, heavy snow in the north. Blustery.

Mar. 1-7: Temperatures vary but end up near normal. Windy with thawing taking place in many areas. Fair overall, aside from intermittent heavier snow or rain on a couple of days.

Mar. 8-14: Look for changeable conditions this week as sunny, pleasant days alternate with occasional rain or snow. Chance of heavy precipitation in places. Seasonal to mild at times.

Mar. 15-21: Temperatures swing from mild to cool through several windy days.

Some highs could hit double digits south.

62 country-guide.ca

Sunshine interchanges with occasional heavier snow to rain.

SASKATCHEWAN

Feb. 22-28: Seasonal to cold this week although some thawing occurs in southwestern regions. Fair and bright but with a couple days of snow, drifting and higher wind chills. Often blustery.

Mar. 1-7: Disturbances bring a variety of weather ranging from bright, mild days to snowy, colder days. Chance of heavy snow or rain in the south changing to heavy snow in the north. Windy at times.

Mar. 8-14: Temperatures vary with some highs well above zero in the south but with sub-zero lows. Sunshine interchanges with heavier snow, risk of rain in the south.

Windy. Cold east and north.

Mar. 15-21: Seasonal to cold but with thawing at times in the south and west.

Sunny on many days but periodic heavier snow on a couple of occasions. Chance of rain in the south. Often windy.

MANITOBA

Feb. 22-28: Brisk winds bring drifting snow and changeable temperatures this week.

Seasonal to cold with some higher wind chills. Several bright days exchange with some snow. Blustery.

Mar. 1-7: Unsettled as disturbances bring snow, drifting and higher wind chills on a couple of days this week. Chance of heavy snow and a risk of rain in the south. Seasonal to cold. Windy at times.

Mar. 8-14: Temperatures lean toward the cold side although some melting takes place in southern regions. Sunny days alternate with periodic snow and a chance of rain in the south.

Mar. 15-21: Temperatures vary from ing to sub-zero lows in the south. windy. Sunshine alternates with heavier snow or rain in the south. snow and cold in the north.

thawOften some Some

February 22 to March 21, 2015 NATIONAL HIGHLIGHTS Longer days will combine with milder southerly winds to lessen winter’s grip on Canada in this period. The warming is expected to be most noticeable on the west and east coasts where milder-than-usual temperatures are anticipated. However, storminess is likely in the Maritime provinces from time to time as disturbances moving up the Atlantic seaboard bring unsettled conditions to the east. In the West, some of the milder air in British Columbia is expected to slide onto the western Prairies at times, bringing occasional melting by late February and early in March. Nevertheless, cold Arctic air is likely to continue its grasp across the eastern Prairies, northern Ontario and northern Quebec.

Near-to-normal snowfall will accompany the colder air in these central areas of the country.

Editor’s note:

Where’s my weather page?

Look in every second issue for your month-long Country Guide weather forecast during the winter months when we’re publishing every two weeks.

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

February 17, 2015

h e a lt h

Bloody noses — when should you worry?

By Marie Berry

nosebleed can be both bothersome and alarming, even if you don’t know its technical name is epistaxis. Most people have at least one nosebleed between the ages of three and 30.

Children younger than three usually do not have nosebleeds because they do not often experience nasal damage, and older people may have nosebleeds more often because of medical conditions and/or the medications they take.

The nose is responsible for the intake of air into the lungs, but it is lined with a rich supply of blood vessels that warm and moisturize the air along the way. The septum which separates your nasal passages is especially rich in blood vessels and most nosebleeds result from damage there.

An obvious cause of nosebleeds can be trauma to the nose, such as a blow to the nose, nose “picking,” or a foreign body lodged in the nose. Dry nasal passages because of low humidity during winter months may also contribute to nosebleeds, as can upper

If a nosebleed lasts over 20 minutes, or if you get several, see a doctor respiratory tract infections like the common cold, or inflammation on nasal passages due to conditions like allergies or hay fever. A deviated septum may also be involved.

If you take any drugs that can thin the blood, the risk for bleeding including nosebleeds can rise.

Acetylsalicylic acid (ASA) and other non-steroidal anti-inflammatory drugs like ibuprofen and naproxen are common culprits, but anticoagulants like warfarin and clopidogrel also may be implicated. A dosage adjustment may be needed. Indeed, sometimes a nosebleed is the first sign of too high a dosage.

In older people, kidney disease, atherosclerosis (hardening of arteries), and high blood pressure can

contribute to nosebleeds, but often nosebleeds start on their own without any obvious cause.

About 10 minutes of direct pressure on your nose, usually just below the bridge of your nose, will help stop a nosebleed. You will want to remain upright, so sitting down is fine, but not lying down, and remember to keep your nose higher than your heart. Also remember that bending your head slightly forward will prevent your swallowing blood.

A cool compress applied to the bridge of your nose may also help reduce blood flow.

If your nosebleed lasts for more than 20 minutes without any slowing of the flow, or if you have several nosebleeds without any specific cause, you need to get them checked. Some people use a nasal decongestant to shrink blood vessels, but if you are resorting to this measure, you also should have your nosebleeds checked.

When a nosebleed has resulted from trauma, an examination of the nose is usually recommended to rule out internal damage and any potential for infection. You will want to seek medical attention if a foreign object is lodged in your nose (or your child’s nose). Poking at the object or attempting to remove it may push it farther into the nose and increase the risk for inhaling it.

After a nosebleed, don’t pick at your nose or blow it hard because it could bleed again. Bending over, vigorous activity, hot or spicy food, or even smoking could also restart your nosebleed. If cold, dry air is problematic, lubricating your nasal passages, especially your septum and increasing the humidity at home or work will reduce your risk for nosebleeds.

Don’t ignore nosebleeds or take them for granted. Your blood loss could be significant, leading to anemia, or your nosebleeds could be a sign of an underlying cause. A bloody nose can be bothersome, but it could be the sign of something else as well.

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

Although you’ve probably heard about the increasing rates of tuberculosis, you may think you don’t have to be concerned because you aren’t at risk. While it’s true that tuberculosis does spread in close quarters, the incidence is increasing and everyone needs to be aware of the disease and its risk factors. Next issue, we’ll look at why tuberculosis seems to be making a comeback, and who is at greatest risk.

February 17, 2015

country-guide.ca 63

life

Living with dementia on the farm Alzheimer’s is a frightening diagnosis, but these strategies can maximize your control

By Helen Lammers-Helps etting a diagnosis of Alzheimer’s can be devastating, especially for farmers who want to stay active on the farm.

Even if you’re afraid of bad news, however, it’s important to seek a medical diagnosis as quickly as possible.

Memory loss or problems with cognitive function may be caused by treatable conditions, explains Lisa Loiselle, the associate director of research at the University of Waterloo’s Murray Alzheimer’s Research and Education Program (MAREP). Such conditions can include vitamin deficiencies, stress, depression, anxiety or alcohol abuse.

The sooner you get checked out by your doctor after you start experiencing symptoms, the sooner you can get the right care.

There are also medications that can slow the progression of dementia but, again, these need to be started early, says Dr. Debra Morgan, professor at the Saskatoon-based Canadian Centre for Health and Safety in Agriculture.

Early diagnosis also makes it possible to make plans for the future while the person affected by dementia can still participate in the decision-making process. Some of the arrangements to be considered include transfer of farm management and assets, updating wills and powers of attorney for property and health care, and planning for medical care and living accommodations.

Horse farmer Bill Heibein was working as an accountant in the Thunder Bay area when he was first diagnosed 15 years ago with early onset Alzheimer’s disease at the age of 59. He took early retirement from his accounting job right away but has remained active on the farm since his diagnosis. Now 74, he still keeps horses on the farm and only stopped training and showing his quarter horses a few years ago.

“Getting a diagnosis can feel like a kick in the teeth,” says Heibein, “but putting off seeing a doctor is one of the worst things you can do.” Getting educated can help you and your caregivers cope, he says.

He recommends contacting the Alzheimer’s Society, which has a wealth of useful information.

Heibein says that reducing his stress level by retiring from his accounting job was a good move. He also thinks that remaining active on the farm where he per64 country-guide.ca

forms repetitive tasks has also been good for him. Heibein heats with wood and gets lots of exercise cutting firewood. For many years he has played in a Dixieland band which performs at area senior’s centres. “Playing a musical instrument is good for the brain,” he says.

Heibein has developed systems that help him cope with his short-term memory loss. He uses a large calendar and prompts on his Blackberry smartphone to keep him on track. He also uses a GPS navigation system in his truck to keep him from getting lost when driving. Heibein is also active on various Alzheimer’s Society committees and is involved in a research program at Lakehead University in Thunder Bay. “It’s important to stay involved,” says Heibein, who was upfront with friends and family about his diagnosis.

“I’ve been fortunate that people have treated me the same,” says Heibein, who acknowledges that stigma can be a big problem for those suffering from dementia.

Heilbein also points to the support of his wife of 52 years, Heather, and he says a local support group keeps him up to date on research developments and helps him to not feel alone.

Like Heibein, Loiselle says it’s important to reduce your stress level if you’re suffering from dementia. “Slow down, take your time,” she says.

“Frustration makes confusion worse and increases the risk of an accident happening.”

Older farmers are already at a much higher risk of having an accident on the farm. One study shows farmers aged 70 to 79 are four times more likely to be killed in an accident on the farm than 30- to 39-year-olds, and it stands to reason that dementia would only make that worse, says Morgan.

While continuing to work on the farm can help those afflicted with cognitive problems to feel useful and valued, families need to be aware of the person’s limitations. Unfortunately, there aren’t any guidelines to help family members make those judgment calls, says Morgan. What is safe changes day by day, she continues. “Dementia is progressive and it’s hard to predict how the disease will unfold.”

Loiselle has other advice for people diagnosed with dementia. It’s important both for those experiencing dementia and for their caregivers to let others know what they need. “Communication is absolutely essential,” she says. Other strategies help too: try to stay February 17, 2015

life

“ Getting a diagnosis can be like a kick in the teeth,” says Bill Heibein, “but putting off seeing a doctor is one of the worst things you can do.” positive, keep doing the things that interest you, rest when needed, stick to a routine, and don’t be ashamed.

Family and friends should learn about the disease so they will be more accepting and sensitive to the needs of the person with dementia, continues Loiselle. Too often those with dementia and their caregivers become isolated, she explains. Family and friends can also offer respite care. The primary caregiver may need a break from time to time.

Loiselle also urges family members to include the person with dementia in the decision-making process. “It’s dehumanizing to exclude them,” she says.

Finally, make sure you give yourself enough time to process the diagnosis before making any decisions.

Heibein agrees. He’s glad he made the decision to rebreed their mares, figuring they would be worth more in foal. “It was a good decision,” he says since he was then able to continue training and showing horses for several more years.

Unfortunately, it can be tough to get access to specialists in rural areas. After a successful five-year pilot project, Saskatchewan’s Rural and Remote Memory Clinic in Saskatoon has become a onestop interdisciplinary clinic for those suffering from dementia. The clinic is particularly good at diagnosing the less common and more complex forms of dementia, says Morgan, the clinic’s director.

About 65 per cent of dementia cases are the result of Alzheimer’s disease, but altogether there are 100 different causes of dementia, says Loiselle. Since there is no one test for dementia, patients see all of the necessary doctors and have the necessary tests in one day at the Saskatoon Clinic. By the end of the February 17, 2015

day, patients have a diagnosis instead of spending months travelling to various doctors and hospitals for tests, says Morgan. Patients also receive ongoing followup support through both video conferencing and in-person appointments at the clinic.

As Canada’s population ages, and the average age of farmers continues to climb, the number of farmers with dementia will increase. Today, threequarters of a million Canadians are living with dementia but in 15 years, that number is expected to double to 1.4 million. CG

Resources • Alzheimer’s Society of Canada (also has many local chapters across the country) www.alzheimer.ca • Murray Alzheimer’s Research and Education Program (MAREP), University of Waterloo uwaterloo.ca/murray-alzheimer-research-and-education-program/MAREP www.livingwithdementia.uwaterloo.ca • Kate Swaffer is a person living with Early Onset Alzheimer's Disease. She is committed to meaningful dialogue with a wide range of stakeholders about the critical issues impacting a person living with a diagnosis of dementia and their loved ones. Check out her blog here: www.kateswaffer.com • In Saskatchewan, the Rural Dementia Care Centre cchsa-ccssma.usask.ca/ruraldementiacare/

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acres

By Leeann Minogue

It’s a rink out there When Dale takes grandson Connor to the arena, all sorts of things begin to slip ale Hanson and his son Jeff were out in the shop, trying to fix the electric tarp on their semi trailer. They’d hoped it was just a bad switch, but by mid-morning they’d figured out that the electric motor was seized. They were going to have to go to Regina for a new one before they could finish the job.

“Just as well. It’s too cold to work out here today anyway,” Dale said. “I’ll just change my clothes and get my truck out of the shed. I’ll pick you up in front of your house.”

“I can’t go, Dad,” Jeff said. “Connor has hockey practice this afternoon and Elaine asked me to take him.”

“I thought she said she’d be home all week,” Dale said.

“She’s here, but there’s some online web presentation she wants to watch on her computer after lunch.

It’s about strategy, or planning or something like that.”

“Huh. I would’ve made fun of you for that, but she’s learned a thing or two about negotiation, watching those damn webinars.” Dale had been impressed when Elaine had managed to get an extra set of concaves thrown in when the Hansons finalized the deal to buy a second combine earlier in the winter. “Who would’ve thought it would be smart to take a woman along?” he’d said on the trip home.

But then he’d added, “I just hope the neighbours don’t find out.”

“Wish I could go to Regina with you,” Jeff said.

“I wouldn’t mind picking up some shelves at Home Depot.” Jeff and Elaine had only been in their house a little over a year, and he was still spending most of his winter evenings finishing the basement.

“You go ahead,” Dale said. “I can take Connor to hockey.”

“That’s OK Dad,” Jeff said. “Remember? Mom went out cross-country skiing with some friends. She probably won’t be home before Connor’s practice at four.”

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“Are you kidding? Do you think I can’t take my grandson to the rink unless your mother comes along to hold my hand?”

“Well…” Jeff said.

“Cut me some slack,” Dale said. “I can tie skates onto a five-year-old!”

“They need a lot of equipment. And he’s pretty young. He needs a lot of help.”

Dale just snorted. “Your generation thinks you invented everything. I was putting shoulder pads on you before the Internet existed. Connor and I’ll get along fine. Go to the Home Depot.”

So Jeff went to Regina on a parts run, and a little after three o’clock, Dale picked up his grandson for the trip to town for hockey practice.

“Let’s go Connor,” he said.

“Good luck,” Elaine said, handing Dale a hockey bag almost twice as big as the boy.

They got to the rink and found the right dressing room. Dale was a little concerned when he first unzipped the bag, but as he pulled each piece of gear out, he soon remembered where everything was supposed to go.

“Your dad thought I wouldn’t know how to do this!” he said to Connor. “But it’s like riding a bike.

You never forget.”

“I think that’s the elbow pad for the right arm, Dale,” said Karen Avery, as she helped her daughter into shoulder pads.

Damn, Dale thought. Then he whispered into Connor’s ear, “Do you know when I was growing up, they didn’t let girls play hockey?”

“Neat,” Connor said.

Dale took the elbow pad off Connor’s left arm and started again.

When Connor was ready to hit the ice, Dale left him in the dressing room with the rest of his team and the coach, then went to the rink lobby. He took a look around for the first time in many years, wonfebruary 17, 2015

dering why he and Donna never took the time to go to hockey games. Then he headed over to the concession to get himself a coffee. Rich Walker joined him in the short lineup.

“Hear you got yourself a new combine,” Rich said.

“News travels fast around here,” Dale said.

“The story is that your daughter-in-law talked Greg into throwing in a set of concaves.”

Dale snorted, then pretended not to hear this. Rich saw he’d hit a sore spot and changed the subject.

“With these new low prices, maybe the oilpatch will slow down a bit around here. You might even be able to hire somebody to run that new machine,” Rich said.

“Could be,” Dale said. “There’s already a lot less oil traffic on the road by our place. A few guys who know how to run machinery could end up out of work.”

“Things can change quick in the oil business,” Rich said.

Rich bought Dale’s coffee, and the two men were still standing not too far from the counter when Ron Friesen came to get a cup of his own.

“Heard you got a new combine to use on that land you’re renting from me,” Ron said.

“That’s right,” Dale said.

“Maybe I should’ve waited. If the oilpatch caves in, maybe I could’ve hired somebody and kept farming myself.”

There was a silence. Dale took another sip of coffee, and was relieved when Ron said, “I’m just kidding. I’m done. I could grow the wheat, but I couldn’t get anybody to agree to let me sell it to them.”

And then the men were off on a 20-minute retelling of local elevator company horror stories, each man sharing a worse story than the next about “terrible grading,” or a company not taking contracted grain on time. Soon two more farmers joined in, and Dale remembered how much he’d always loved bringing Jeff to the rink.

Before Connor’s game was finished, Dale had eaten a hotdog, bought a handful of 50-50 tickets, joked with Karen Avery about how tough it was to figure out all the new kids’ equipment and got a line on someone who might be looking for work when seeding time rolled around.

“That was a lot more fun than I thought it would be,” Dale thought to himself when he was back in his truck and on his way home. He was on the edge of town and happened to be driving by a police car when his cellphone rang, so he didn’t even think about answering. Then the phone beeped. “Must be a text. I should figure out how to get this damn thing working through the truck speakers,” he thought.

When he got home, he parked his truck inside the heated shed, then walked to the house. Donna wasn’t home from skiing yet, so he took a look in the fridge to see if there was anything he might want to cook for supper before he thought to check his phone.

It was Elaine who had called. And she’d sent a text, too. It said: “Never mind. Karen Avery took Connor home with her. I’ll pick him up later.”

As he was looking at his screen, cursing himself, his phone beeped and another text appeared. This one was from Jeff.

“Next time, you can go to Regina, Dad. Maybe you’d have more luck with a trip to Home Depot.”

Leeann Minogue is the editor of Grainews, a playwright and part of a family grain farm in southeastern Saskatchewan. february 17, 2015

“ There was a very cautious man Who never laughed or cried, He never cared, he never dared, He never dreamed or tried.

And when one day he passed away, His insurance was denied.

For since he never really lived, They claimed he never died.”

— Author Unknown I arrive at the conference feeling a bit grumpy. Traffic was tied up at rush hour. The leader gives directions while I am hanging my coat. “Take 20 minutes and list your three most life-changing experiences.” After catching my breath I begin to write: train ride to college in a strange city, first solo in an airplane, falling in love and more. The leader summarized the responses. Something was common to all the lists. Every life-changing event meant taking risks, stepping beyond usual boundaries, trying something new.

I reflected that we are exposed to risks every day. An oncoming driver may swerve and hit you. The food in a restaurant may contain a deadly virus. A man with a rifle may shoot at you in a mall.

You may go to church and your heart will stop before the service is over. We are not God. We do not know about tomorrow.

In her book God, But I’m Bored, Eileen Guder writes, “You can live on bland food so as to avoid an ulcer; drink no tea or coffee or other stimulants, in the name of health; go to bed early and stay away from nightlife; avoid all controversial subjects so as never to give offense; mind your own business and avoid involvement in other people’s problems; spend money only on necessities and save all you can. You can still break your neck in the bathtub, and it will serve you right.”

You cannot avoid risk even if you want to. Our plans for tomorrow’s activities can be shattered by a thousand unknowns whether we stay at home under the covers or back out of our garage.

The biblical writer James gives practical advice: “Now listen to me, you that say, “Today or tomorrow we will travel to a certain city, where we will stay a year and go into business and make a lot of money.” You don’t even know what your life tomorrow will be! You are like a puff of smoke, which appears for a moment and then disappears. What you should say is this: “If the Lord is willing, we will live and do this or that.”

Sherlock Holmes and Watson were camping. In the middle of the night Sherlock Holmes awoke and looked up at the stars. He asked, “Watson, what do you see?” Woken from his sleep Watson looked up and said “stars.” “Yes, but what do these stars tell you?” Watson said “Cosmologically they tell me that we are part of a large universe — that we are one of billions and billions of planets. Theologically they tell me that we have a great God who made all of it. Meteorologically they tell me that the sky is clear and we will have good weather tomorrow. Temporally they tell me that it is the middle of the night and we should be sleeping!

Sherlock, what do they tell you?” “Well,” he replied, “they tell me that someone has stolen our tent.”

The Swiss philosopher and poet Henri Frédéric Amiel wrote this blessing: “Life is short and we do not have much time to gladden the hearts of those who travel this journey with us, so be swift to love and make haste to be kind.”

Suggested Scripture: Psalm 147, James 4:13-15 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. country-guide.ca 67

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