Cgw141209

WESTERN EDITION

country-guide.ca

December 2014 $3.50

COULD THERE BE A NICHE THAT’S RIGHT FOR YOU? PG. 24

FOR ONE, FOR ALL

THEY BUILT A VALUE CHAIN, THAT ACTUALLY WORKS PG. 16

+PLUS IN AUSTRALIA, FARMERS OWN THE PORTS, AND THE RAIL STOCK TOO AFTER 2014’S PESTS AND DISEASES, GET READY FOR A FIGHT IN ’15 Publications Mail Agreement Number 40069240

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CONTENTS

DECEMBER 2014

BUSINESS 8

AUSTRALIA’S DIFFERENT APPROACH

12

MAKING SENSE OF IT ALL

16

SUPPLY LOOP THAT WORKS FOR EVERYONE

21

THE CHALLENGE OF DIVERSIFICATION

24

FINDING THE RIGHT NICHE

28

THE BEST ADVICE

32

STARTING SMALL

36

BLACK BARLEY GETS ITS CHANCE

50

IT WON’T BE EASY BEING GREEN — OR RED, OR BLUE

52

GUIDE HR — ARE YOU A ‘ONE-MAN SHOW?’

54

GUIDE LIFE — SING AND READ WITH YOUR CHILD

Owned by 4,200 farmers, CBH Group controls the country’s four grain ports, plus locomotives, elevators and much more.

You can’t escape global economic trends, but our Errol Anderson shows how your marketing plan may be able to harness them.

If you thought lamb was a small niche, think again. This group of six farmers has converted the sector into big business.

Only one out of five diversification plans survives to become an integral part of the farm. Here’s how to succeed with yours.

Farmers share their niche stories, and ask the most important question of all: Do you have the passion to make it work?

NEW OPPORTUNITIES FOR OUR FARMS

Ask your financial and legal advisers these five questions if you want to be sure you’re getting the best possible advice.

For decades, the “experts” have talked about new diversification plans, new niches, new value chains and more. Now, farmers are actually getting beyond the hype and making real business plans that earn real dollars. Is your farm ripe for diversification?

What kind of diversification is best for you? All in this COUNTRY GUIDE.

For established farmers, niche marketing is an option. For new farmers like Nathan Klassen, there isn’t any choice at all.

This exotic strain is a hit with foodies, and soon it may be a favourite with a growing number of farmers too.

Machinery companies must apply the brakes to their assemply lines, but keep the pedal to the metal on new design.

If you are, your farm may be suffering more than you know.

Their first few years can help make them better farmers.

CROPS GUIDE 38

A TASTE FOR FABABEANS

40

NOT REALLY SO BAD

42

INSECT POST MORTEM

44

GRAIN WRECK

46

MILDEW REPORT

47

2015 DISEASE OUTLOOK

EVERY ISSUE 6 56 58

MACHINERY GUIDE

Get a look at these new combines, with even more technology.

GUIDE HEALTH

These rules will keep you in charge of your antibiotics.

HANSON ACRES Where did that combine come from? Only Connor knows.

Our commitment to your privacy At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Avenue, Winnipeg, MB R3H 0H1.

Occasionally we make our list of subscribers available to other reputable firms whose products and services might be of interest to you. If you would prefer not to receive such offers, please contact us at the address in the preceding paragraph, or call 1-800-665-1362.

DECEMBER 2014

Fababeans are building a solid base in the West. But can they make the transition to mainline crop?

The late harvest has impacted grain quality, so there may be spot pricing opportunities as elevators try to blend up.

Top Prairie insect specialists explain last summer’s insect pressures, and get out their crystal balls for 2015.

More went wrong with grain transportation last year than can be blamed on a big crop and bad weather. It’s time for a hard look.

There’s no denying that mildew has led to serious downgrading, but overseas buyers can still get the quality they need.

With outbreaks of fusarium in wheat and clubroot in canola in 2014, it’s time to start planning for a healthier spring.

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

If not now...

Canada’s mainline farm organizations are struggling for your support. They deserve another shot.

That’s not based on their past performance. It’s because of the scale and the solvability of the challenges ahead.

In other words, we’re at a point in history where farm organizations can make a difference, if they have good leadership.

Those who know me will know this isn’t a sentence that has always rolled easily out of my mouth.

In a way, the big farm organizations are on the wrong side of two mega-trends.

There’s a political trend that says the role of government is to get out of the way. So why give your time to a political lobby?

There’s also a cultural trend affecting everything from churches and service clubs to industry organizations. It’s the trend that has so many of us willing to help with special projects, but if you’re thinking I should sign up as a member of your group, well, thanks anyway.

Both trends have made it tough for farm organizations to not only have a reliable base to build on, but also to recruit the best delegates and leaders.

Nor does it help that there is still such intense pressure for everyone who ever speaks in public about agriculture to sing from the same song sheet, note for note. A “please park your brain at the door” approach isn’t exactly the best way to encourage constructive thinkers to join.

4 country-guide.ca

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

Instead, agricultural groups could be talking about positive possibilities.

Here are three, although I can only give thumbnail descriptions. Still, you’ll know what I mean.

1. Our infrastructure of roads, railroads, bins, ports, and everything else that separates our output from its markets is in serious decline. Repairing it will likely take not only farm leadership, but farm money too.

2. Provincial and federal programs need to be recalibrated to help today’s diverse generation of young farmers become not only the world’s most competitive farmers, but also to grow more of the food that Canadians want to buy.

Governments are increasingly unwilling to support the incomes of what they believe are wealthy older farmers.

3. University economic departments must be shaken up. This is a frequent bugbear of mine. If we’re to succeed in an increasingly complex business environment, where mistakes are fatally expensive, we must get the best insights and research from top brains that are focused on the problems that farmers — not government policy makers — actually face.

Of course, you’re justified in saying you don’t have time to participate.

My question is: if not now, when? What would a worthwhile mixture of need and opportunity look like if it isn’t what we’re in the midst of now?

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

Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com President: Bob Willcox Glacier FarmMedia Email: bwillcox@farmmedia.com Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. C o u n t r y G u i d e is published 13 times per year by Farm Business Communications. Subscription rates in Canada — Farmer $39 for one year, $58 for 2 years, $83 for 3 years. (Prices include GST) U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50.

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Call toll-free 1-800-665-1362 or email: subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 133 No. 13 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.

december 2014

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Machinery

By Ralph Pearce, CG Production Editor

It’s said that yield is the ultimate measure of a growing season, and if that’s true, then the combine is the ultimate device for measuring success. Sales of combines, like most farm machines, are admittedly finding the going tough these days. In its most recent assessment, the Association of Equipment Manufacturers (AEM) reported that North American equipment sales are likely to take a hit in the wake of lower commodity prices. Not only are net incomes falling, but the glut of used equipment at dealerships is also weighing on the market. Against this backdrop, however, manufacturers are continuing to innovate and improve. Simply put, the combines on this year’s market are the best ever.

New Holland CX8000 Elevation  New Holland has redesigned its CX Series by looking across the Atlantic and importing some key European features, all with an eye to boosting productivity. The CX8000 Elevation provides 490 horsepower, billed as the world’s most powerful conventional combine, yet capable of handling all crops from wheat to corn to canola. With a new, ultra-functional cab design, growers can stay in constant contact with the PLM Connect telematics, whether it’s planning to unload or refuel. Fingertip control means improved performance and the Harvest Suite cab provides superior operator comfort to keep fatigue to a minimum.

www.newholland.com

John Deere S Series  John Deere has taken a look inside its popular S Series combine and made some significant changes to its S680 and S690 designs. At the same time, the company is introducing its new 645SFD Hydraflex Draper to help growers improve their performance and productivity in soybeans as well as small grains. In the S680 and S690, throughput has been increased by as much as 20 per cent with Active Concave isolation, interrupter bars and heavy-duty separator gates. There’s also a new PlatformTilt feature, which ensures proper cutter bar positioning no matter the ground conditions or the terrain. Deere says the 645FD Hydraflex Draper means growers can harvest 10 per cent more acres per day.

www.deere.com

6 country-guide.ca

December 2014

Gleaner S8 Series  It may be new, but Gleaner says it has taken all it has learned in more than eight decades in the field to launch the S8 Series.

Significant upgrades have been made, but Gleaner’s performance in this series is based on proven yet unique technology. A twostage, four-strand gathering chain system translates into smooth feeding, always at the same angle, regardless of the header’s height. The distribution augers spread material evenly before entering the cleaning stage, reducing uneven feeding and blockages. The machine’s low centre of gravity, welded frames and heavy final drives also set the stage for a bin capacity of 390 bushels on the S68, S78 and the new 8 S88.

www.gleanercombines.com

Case IH 240 Series  Looking ahead to 2015, Case IH is defining its new 240 Series Axial Flow combine with more grain tank space, more fuel capacity and more power. Three models — the 7240, 8240 and 9240 — makeup this series, with a view to the increasing size and productivity of today’s farms, and those farmers’ need for more capacity, better fuel efficiency and the capability to ramp up more power to unload that harvested crop without slowing down. The continuously variable transmission (CVT) provides smoother, easier operations, and a 30-inch track for specialty crop harvesting is among the available options.

www.caseih.com

December 2014

Claas 700 Series  Claas combines are known for their size, but with the refinements added to the Lexion 700 Series combines, the company has taken yet another step forward. Claas says its accelerated pre-separation (APS) threshing system, combined with Roto Plus separation offer the industry’s most productive harvester. Added to its many features is the Terra-Trac undercarriage option, offering greater traction, lower compaction and greater header stability on challenging terrain.

In response to higher planting populations and more residue, Claas has also improved residue management with Pro Chop and Turbo Chop options.

www.claasofamerica.com

country-guide.ca 7

business

Australia’s different approach Owned by 4,200 farmers, the giant CBH Group adds a whole new dimension to phrases like value-adding and diversification

By Gerald Pilger

Australia’s farmers own their own fleet of locomotives and rolling stock through their CBH shares.

iven the demise of the prairie pools and the recent sales of a number of Canada’s new-generation co-operative grain terminals, it would be understandable if many Canadian farmers, grain traders, farm advisers and policy makers believe co-operative grain marketing ventures are simply not viable in today’s world.

Just don’t try and tell that to Western Australian farmers.

Their Commodity Bulk Handling Group (CBH) is now the largest co-operative in Australia. It receives and stores 90 per cent of the grain produced in Western Australia at 197 receiving sites, and it has 100 per cent ownership of and operates all four of the region’s port terminals.

CBH provides growers a total of 20 MMT of storage capacity even though Western Australia only produces an average 10.3 MMT of grains annually.

CBH has also captured over 50 per cent market share of Western Australia bulk exports of grain, and is the largest grain exporter in the country.

Most remarkably, CBH is solely owned and controlled by 4,200 Western Australia farmers.

These farmer-stakeholders have even expanded CBH into railroading through its own fleet of rolling stock and locomotives. CBH has also created value-adding opportunities through their wholly owned subsidiary Lupin Foods Australia, by a joint venture with Hudson Shipping Lines to create Australian Bulk Stevedoring,

8 country-guide.ca

and through Daily Grain, which is the leading price discovery and management service in Western Australia.

CBH not only markets and exports commodities, it even processes Western Australia grains internationally through their 50 per cent ownership of Interflour, which operates seven flour mills in Indonesia, Vietnam, Malaysia and Turkey.

In total, Western Australia farmers oversee an agricultural marketing co-operative that now has over C$2 billion in assets.

Remarkably, CBH started humbly in 1933, much like Canadian grain co-operatives. According to Brianna Peake, CBH government and industry relations manager, “The CBH storage and handling network was built by the growers of Western Australia starting in the 1930s when the price of bags became greater than the price of the wheat that went in them. The growers came together collectively to store wheat in bulk, and reinvested their profits back into the infrastructure, sowing the seeds for the storage and handling network model we have today.”

While Canadian grain co-operatives sought to increase revenues for members, however, CBH focused on reducing its members’ costs. Cheap, efficient upcountry storage was the co-operative’s cornerstone, and the focus on reducing costs has continued as CBH expanded into rail transport, port terminals, shipping, marketing, exporting, and processing.

As a result, average post-farmgate costs for CBH members are 15 per cent lower than for Australian farmers who rely on multinational corporations like GrainCorp, Glencore/Viterra, and Cargill for storage, movement, marketing and export of grains.

The lower costs enjoyed CBH members translate into higher net crop returns.

To see the impact of working to control costs, we only need to compare rail freight rates. While Western Canadian farmers have been frustrated by continually rising rail freight rates, in the 2013 CBH annual report CBH Chairman Neil Wandel noted: “During the 2012-13 harvest, CBH reduced rail freight rates by an average of seven percent, providing real value back to growers from the investment in rail.”

Peake concludes: “CBH offers storage and handling and transport services at significantly lower rates than other Australian bulk handlers as we are not driven by shareholder profits but by value to our grower members in low fees and efficient services.”

December 2014

business

Across the Pacific There are a number of other notable differences between CBH and the defunct Western Canadian cooperatives. “CBH does not pay dividends to growers,” Peake points out. “The CBH rebate system is a patronage-based system, based on a grower delivering to the CBH system and the following year receiving a rebate on charges due to the volume of business they have done with the co-operative.”

While this patronage rebate system may seem similar to the Canadian experience, a much greater percentage of the co-operative revenues are reinvested in CBH rather than distributed back to the members. “When CBH Operations develops their budget and sets their charges, they factor into this a minimum return of A$85 million per annum to be spent on capital and maintenance works across the network each year,” Peake says. “In high-volume years, this increases significantly and over the last five years CBH has invested more than A$500 million back into the storage and handling network.”

Another difference is that membership in CBH is strictly limited to active farmers. Before becoming a member, a farmer must have delivered over 600 tonnes of grain to CBH within a three-year period. Once this minimum is met, the farmer will be offered the opportunity to buy one share for A$2. If the farmer fails to continue to deliver this amount of grain over a three-year period, that $2 is redeemed and that farmer ceases to be a member.

Also, there is no retention of earnings held in a shareholder’s name by the co-operative, and no payment to shareholders to reflect any increase in value of the co-operative over the time a farmer was a member.

December 2014

Instead of offering growers higher prices and/ or retention and subsequent payments reflecting any increase in value of the co-operative, the CBH model strives to reduce costs, increase efficiency and promote sustainability. In reality, it is a long-term growth plan for Australian crop production.

The most important difference is the attitude Western Australia farmers have to grain marketing, co-operatives and particularly CBH. “… in Western Australia, based on grower survey results, the loyalty for doing business with CBH is at an all-time high of 88 per cent. Many growers have a good understanding of the competition in global grain markets and that they are competing in these markets with growers who have significantly lower supply-chain costs and subsidy assistance from their governments,” says Peake.

“The majority of Western Australia growers understand that ownership and control of their supply chain is critical to keeping their costs as low as possible and driving efficiencies that they would not be able to recognize on their own. This is a main driver for retaining CBH as a co-operative with the growers as its sole focus.”

Dr. Andrew Crane, the co-operative’s CEO, summed up the role of CBH in their 2013 annual report: “The CBH Group exists to create and return value to growers and to do that over the long term.

CBH has a key role to play in ensuring the sustainability of the Australian grain industry. The best way we can deliver this is helping growers run their own integrated supply chain to Asia, ensuring they can be competitive against other origins and other business models that return less value to the farm gate.”

Grower-owned CBH has reinvested $500 million in infrastructure in the last five years.

Continued on page 10 country-guide.ca 9

business

Australia’s four grain export terminals are operated by farmers through their CBH co-op.

Continued from page 9

What can we learn?

I found the co-operative which Western Australia farmers built to be not only efficient and successful but also exciting and inspiring. It has left me wondering if there is any way we could rebuild a co-operative grain marketing system in Canada. But Peake reminds me that building up the CBH Group has taken over 80 years, and has benefited from the continual reinvestment of much of the cost savings the system has generated back into the co-operative.

In other words, Canadian farmers would need to find billions of dollars to build such a system overnight.

Then it occurred to me that we may not be starting from zero. Farmers have already built much of the up-country storage that CBH provides Australian farmers, although it is privately owned and onfarm rather than part of the co-operative.

We already have a few short-line railroad co-operatives as well as producer loading car sites across the Prairies which give us access to the rail system. Farmers should still have interest in the large fleet of rail rolling stock bought by the federal and provincial governments as well as the Canadian Wheat Board (CWB).

And the CWB, regardless of what you thought of the single desk, was very successful at developing international markets and creating a highly respected Canadian brand for our crops.

By 2017 the wheat board must be privatized.

Could it become a co-operative modelled after CBH? Would Western Canadian farmers in particular be willing to forego higher prices in exchange for a lower cost system? After the fiasco of last year with 10 country-guide.ca

Pilger asks: Should farmers here hope that Australia’s CBH will buy our grain handling systems? all the shipping problems and the poorest basis levels ever, are farmers willing to at least consider a cooperative alternative to the present grain marketing system dominated by a few multinational players?

Do farmers now have the attitude needed to build a new grain system for the benefit of western Canadian farmers? Can farmers find the expertise that could manage grain held in onfarm storage and market that grain through a co-operative system without immediately having to spend billions on additional country storage?

Fortunately, we are not at the financial cliff that farmers faced back in the ’30s when they created CBH, the pools in Canada, and even the CWB. But since Canadian farmers are still enjoying relative prosperity, I question if Western Canadian farmers would buy into the CBH model, even though its performance is head and shoulders above its Australian competitors.

Perhaps our best bet for an alternative marketing system is if CBH would either partner with or even purchase the CWB. A partnership or even a sale of the CWB to a friendly low-cost competitor might be more beneficial to Canadian farmers than seeing the CWB sold to profit-seeking stakeholders of a multinational grain company which is likely already sourcing grain from our competitors. CG December 2014

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business

Making sense of it all Agriculture can’t escape global economic trends, but farmers can adapt their market plans to key numbers. In this second of five columns, market analyst Errol Anderson tells us how

By Gord Gilmour, CG Associate Editor Grain prices rise, and grain prices fall. Sometimes it’s a straight supply issue. More grain gets produced, or less gets produced, and prices react accordingly. But those movements tend to happen over the short term. Often too, they’re tough to plan for because they’re sparked by either good weather or bad.

Other issues hit on the demand side, however, and they can get very complex very quickly. These include issues like the health of national economies around the world, as well, how the greater commodity complex is faring. And then there are interest rates, currency fluctuations, credit availability, stock markets…

It can seem bewildering, and it can also seem a long way from the farmgate. Yet if these trends are caught soon enough and farm managers respond wisely, they can make a real difference in any farm’s economic success. Market analyst and Country Guide columnist Errol Anderson recently sat down to talk to us about the key trends in the global economy that bear watching this winter, and over the next few years.

Country Guide: Everyone is a bit worried about what to expect from the global economy, especially with the recent stock market volatility, which I should note you were predicting the last time we spoke. What are the things we should be watching now, especially in a global context?

Errol Anderson: There are three key geographic areas that can impact commodities, and we should probably look at all three in some detail.

They’re China, the U.S., and Europe, and each of those three are in very different circumstances.

Probably the country that everyone thinks about first when it comes to commodity demand is China,

12 country-guide.ca

and there’s no denying it’s been very important in recent years. In a lot of ways, following the crash of 2008, it was Chinese demand that kept prices high.

They were still buying a lot of things like iron ore, copper and energy. That supported the overall commodity complex, and their changed diets also supported agricultural commodities. There are now some signs that their economy is slowing, and growth there is predicted to be around 6.5 or seven per cent next year. That’s still high, but in 2007, for example, their economy grew by 13 per cent. This will likely temper demand for commodities somewhat.

The U.S. is still feeling the effects of 2008 and working their way through that. We have to remember, at the time they were really heading into a depression and they did things like quantitative easing — basically printing money — and other extraordinary measures to prevent that from hap-

december 2014

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pening. What remains to be seen is whether they’ve succeeded or just kicked the can down the road. I suspect they’re going to be a lot like Japan has been since the 1980s and we’re going to see a long period of extremely low growth. We’ve just seen the U.S. Federal Reserve ending their QE3 program, and what remains to be seen is if the country can maintain even modest growth without it.

But from our perspective, what was interesting was those two things playing out at the same time and how it affected us. If China saved the world economy after 2008, whatever it gave came doubly back to Canada, because we’re a commodity producer, and we’re ordinarily directly tied to the U.S. economy. But now the slowdown in China is our slow down, and unfortunately, I don’t think the U.S. is going to pick up the slack.

Guide: So it sounds like you’re most concerned about the demand, not the supply, side of the equation?

EA:

Yes, I think that’s a fair way to put it. Everyone always talks about the supply side, but I really think the true driver of commodity markets is always demand. In the end, demand is king and it doesn’t matter what supply is. Supply certainly changes the picture, but only over the short term.

In the long term, it’s the demand trends that set the prices in commodity markets, and unfortunately right now those trends don’t look good. We’ve seen an overall growth in the supply of all commodities, from oil to grains and everything in between. At the same time, we’re now seeing falling demand. That’s going to mean overall lower commodity prices for a period, until demand catches up, and agriculture commodities are going to go along for the ride.

Guide: You’ve said when it comes to commodity prices, there are leaders, and there are followers. Can you tell us a bit more about this?

EA: There are really two commodities that lead the rest when it comes to pricing — oil and gold. Everything else basically follows these two, even if there’s no direct connection between them.

We’ve seen gold fall substantially. In 2011, it hit its peak at around $1,900 an ounce. Right now it’s just over $1,200 an ounce. And oil, of course, has been falling too. It hit a peak in 2008 at around $140 a barrel, and they were talking credibly about $200 oil. After the crash of 2008, it fell briefly to about $40 a barrel, then recovered to around $100 a barrel. Now it’s been moving downwards again, and it’s no secret the industry is worried. december 2014

I think both of them have fallen for fairly understandable reasons. High gold prices were a reflection of economic uncertainty, and ideas of increased inflationary pressure, stemming from U.S. Federal Reserve QE stimulus. But U.S. money printing did not stoke inflation as planned. The price of gold fell back as a result. High oil prices were a reflection of demand, which fell when we had a recession, and now what’s causing them to fall even further is new supply from non-traditional oil sources like fracking — just on that alone, they’re predicting North American energy independence in the next few years.

Other commodities, like agricultural commodities, generally follow these big two. Until oil and gold begin moving up again, it’s unlikely we’ll see a large move upward in agricultural commodities.

We’re just waiting for something to happen on the supply side to give us an upward tick.

“ The true driver of commodity markets is always demand. In the end, demand is king… and unfortunately right now, those trends don’t look good.”

Guide: What about interest rates? They can always hit hard if they go up. What do you think will happen with them over the next while?

EA: I think over time they will go up, but not immediately and not by very much when they do move. My reasoning for this is pretty straightforward. I just see too much slack in the global economy to justifying moving them upwards quickly and risk choking off any recovery that may be happening.

It’s true, they’re very low right now, but I just don’t see them rising much, like they did in the ’70s and ’80s.

The difference today is debt. I was recently in New York City, and there’s a debt clock just off Times Square showing the public a real-time look at the astonishing rise in U.S. debt. If interest rates move up, it’s going to increase the cost to the U.S. federal government too much — I simply don’t think they can afford to raise rates right now. I’m not expecting to see any movement for the next 12 to 18 months at least.

Continued on page 14

country-guide.ca 13

business Continued from page 13 When we do see movement, I suspect it’s going to be several small increments that might see interest rates rise by one or two per cent, and it’s going to be a few years out.

In other places, like Europe, there’s even more pressure to keep rates low since they’re fighting deflation. You could even see them cut rates even further over the next while. They want to do everything they can to keep their economies moving.

I really think they’ve got a tough five years or so ahead of them.

That said, however, I think now would be the time to look at whether there’s any way to get your debt exposure down, while rates are low, and even though they’re going to stay low for a time.

Guide: What about currencies?

The Canadian dollar has fallen relative to the U.S. dollar. What do you see driving this? What should we be watching over the next while?

EA:

Two things have been happening at the same time. The U.S. dollar has strengthened, partly on the perception that the American economy is improving, partly because of the safe-haven buying, and partly from fallout of other currencies such as the Euro and Japanese yen. The U.S. dollar is still seen as a safe place to store wealth. That strengthening has pretty much been across the board against all major currencies. Then in the Canadian dollar we have seen some of the value come off because of falling commodity prices, especially oil.

Over time I think we could see that pattern continuing.

Within Canada, that’s going to do a couple things. It’s going to hurt commodity producers because their products are priced on global markets in U.S. dollars. It could help the manufacturing sector in places like Central Canada, where they’ve been in real trouble in recent years due to the strong dollar. For domestic consumers, it’s going to mean some price inflation because so much of what we consume is imported, and a lot of it from the U.S. Over the longer term we’re going to have to watch what these currency gyrations are going to mean. They can trigger trade issues, and those can be really hard to predict.

14 country-guide.ca

Guide: What are some of the other things that we’ll need to be looking out for?

EA: Credit markets are another key

area, especially with the move to end QE3 and any move to start a program like it in Europe. The major test of this is still straight ahead of us. Sure, the end of the program has caused a modest stock market correction, but it’s been short lived and the market has come back. Will this continue? I don’t think anyone knows for sure. But I think if, over the next few months, we saw a stock market correction of 20 to 25 per cent, there would be a lot of pressure to rethink this decision. That would, of course, have a huge impact on all the markets. So we’re certainly still not entirely out of the woods yet.

Guide: Can you boil down what this all may mean for agricultural commodity markets?

EA: I think for an agricultural producer, now is definitely a time to be very disciplined.

It’s definitely a very different world for a grain producer. It’s now a time to play defense, not offense.

Cost-cutting and managing exposure are key.

There will be opportunities to find profitable prices. Markets will rally, but those rallies won’t hold, they’ll fall back. When they do occur, you need to be ready to act, because they won’t last long. I’ve said this before, but it’s a very important point to realize: unfortunately, commodity markets don’t care about your cost of production. They will sometimes pay you less than your cost of production for a very long period of time.

There will be times when there is an opportunity to lock in a great delivery basis. When you get that opportunity, you may consider a strategy of flatpricing your cash grain and replacing your tonnage with call options to reopen the price ceiling. This strategy moves physical grain, taking advantage of a delivery opportunity, while injecting cash flow into a farm operation. But it also offers growers the opportunity to take advantage of a possible price rise later in the crop year.

Livestock producers are in a very interesting situation. They’ve enjoyed a very strong market recently, and I think they need to begin to prepare for the end of that. I can’t see these prices continuing indefinitely while you’ve basically got a third of the global economy — the U.S. — just getting by, and two-thirds of it — China and Europe — seeing slowing growth or no real growth. This global environment is going to reduce demand or, at least, dampen the appetite for purchasing any commodity at a high price point. CG

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business

Supply loop that works for everyone If you’re skeptical about value chains, it’s time for a hard look at how these Ontario farmers helped build Trillium Lamb Inc.

By Maggie Van Camp, CG Associate Editor emand is flying high. Lamb isn’t a niche anymore. It’s everywhere on mainstream meat counters. But it isn’t on the farm, and in 2010, Newmarket Meat Packers (NMP) found only 10 per cent of Ontario lamb sales were being met with Ontario-grown lamb.

Surely, that sounds like an opportunity.

“Our demographics have changed,” says Newmarket’s Maggie Pearce. “Sixty per cent of the world eats goat, but our new immigrants can’t get enough here (in Toronto) so they are turning to lamb.”

The problem was escalating because the number of sheep producers — mostly hobby farmers — was shrinking. Most of the flocks were lambed on grass once a year, which creates lumpy supplies into the market. Also, mutton entered the meat supply marketed as lamb, causing confusion and dissatisfaction among consumers and retailers.

Equally bad, said the Newmarket study, was that the supply chain was deeply fragmented into farmers, auctions, processors, retailers and consumers, with little or no communication between these parts.

At the time, Pearce was literally knocking on doors looking for supply for their small-ruminant abattoir, and she was holding meetings to encourage more farmers to expand into the sheep business.

Yet while a few more signed on, it didn’t address the consistency problems at their plant.

Now four years later, a solution has been built, centred on open communication and collaboration.

Six large-flock, year-round lambing producers have formed a company to establish a stable price contract based on consistent quality and quantity of lambs. NMP has installed handling and traceability technology and can track the meat from farm to checkout. It’s giving carcass information back to 16 country-guide.ca

Maggie Pearce

“ Consumers drive the bus,” Pearce says. “They put the money in. The rest of us just move it around.” the producers and has been the conduit to link these farmers with a large family-owned retailer. Now, the large retailer is starting to market the meat based on the farmers’ photographs and stories.

It’s a value chain management success story that started on a trip overseas. In 2012, a dozen large-flock December 2014

business

Photography: deb deville

From left to right: Zach Grove, Jenny Carnaghan, Maggie Pearce and Marc Carere. operators from Ontario toured Great Britain, including the Cotswold region an hour and a half northwest of London, designated an elite producer of sheep like the Champagne region of France. At one stop, the tour was told how the Cotswold Sheep Group (a group of lamb producers in the region) had hired a marketing person to liaise between the producers and the abattoirs The Canadian farmers nodded. That’s what we need, they thought, i.e. someone to organize marketing and transportation because we’re too busy operating our own farms. After the trip, the Canadians went home to tend to those flocks, but didn’t forget the Cotswold lesson.

Shortly after returning, Marc Carere from Lindsay, Ont. was asked to join a sheep industry strategy task force, which included transportation suppliers, processors, extension, retailers and farmers. The conversations started with issues. “We didn’t understand each other’s businesses, so we talked, asked questions and learned,” says Carere.

Again they went home to tend their flocks. But a link had been forged, and it would become a catalyst for a new business model.

December 2014

NMP’s Pearce was on that task force too, and she kept the conversation with Carere going long after the task force meeting. He and two other larger yearround producers met one of the owners of NMP, Nick D’Elia, and started delivering directly to the plant. D’Elia liked the consistency and quality this group delivered, and wanted more.

A more formal think-tank was formed with Pearce. One producer dropped out, but more largeflock farms signed on, all from the nearby area and each producing lambs year round with RFID tags.

The group of six now includes Miklin Farms (Mike and Linda Thompson), Ryan Van Loon, Maple Winds Farm (Ken Lamb), Eden Lane Farm (Dick Kuiperij), Carncroft Farms (Jenny and Luke Carnaghan and Zach Grove) and Ballinahistle Farms (Marc and Helen Carere).

The six shared ideas and asked questions. They all wanted a steadier price and knew they needed a more consistent supply of quality lambs to drive demand. They soon learned that neither the proces-

“ The power of this group is the power of wanting to learn,” says value chain expert Martin Gooch.

Continued on page 18 country-guide.ca 17

business Continued from page 17 sors nor the producers were making huge profits off the backs of the other parts of the supply system.

“We started by building the relationship, the trust,” says Carere.

Martin Gooch, chief executive officer of Value Chain Management International, believes those first steps were exactly right. “They started small and involved only people with the right attitude,” Gooch says. “The power of this group is the power of wanting to learn.”

The group also wanted to inspire industry-wide change to improve the quality, reputation, quantity and ultimately the demand for Ontario lamb.

Led by Pearce, the group organized a learning day to connect buyers, processor and producers. At the abattoir they saw what the animals eventually looked like as carcasses and discussed how that related to grade and what buyers wanted. With some Green Belt funding, they even made a video of it as a teaching tool for the industry. (The video is available via the Ontario Sheep Marketing Agency’s website.)

For the producers it was a kind of revelation. Suddenly they could appreciate the impact of their production methods. “It gave us the ability to see what our premium animals looked like compared to mutton,” says Jenny Carnaghan from Blackstock, Ont. “They showed us how they graded them, and what quality means.”

However, it’s not a simple case of good and bad. Demand for lamb in Ontario is driven by large, growing ethnic communities, each wanting something different from their meat.

During the video, retailers and wholesalers explain what they’re looking for.

NMP now addresses the segments of the market based on its buyers’ needs by shipping more boxed cuts targeted for specific uses. “Instead of selling only whole carcasses, one carcass now does two or more markets,” says Pearce.

Recently, the company has started stamping “MUTTON” on the old ewes that come through their plant, whereas normally mutton goes into the mainstream under the “Ontario Lamb” moniker. Selling mutton for lamb prices makes for big margins, but can also turn customers off eating lamb, hurting the entire industry.

18 country-guide.ca

“The consumers drive the bus,” says Pearce. “They put the money in; the rest of us just move it around. If they don’t buy, we don’t play.”

To use the less marketable cuts, NMP has also created a value-added division, and has planned another expansion for the spring. “We need to sell the whole carcass,” says Pearce. “The profits are what’s left over in the cooler.”

The farmers went home from the learning session with a commitment to keep the learning and the conversations going. NMP organized a meeting with one of its large retail customers, and when the small group of sheep farmers from rural Ontario sat down in the retailer’s swanky downtown Toronto office, the conversation once again started with the issues of steady supply and quality.

The sheep farmers explained the challenges of year-round lambing and price swings. To their surprise, they discovered the suits were a multi-generational family business wanting stable, sustainable business relationships, just like them.

“The discussion was honest and open, with no hidden agendas,” says Carere. “Their mindset was like ours; we are here and we are not going anywhere, so let’s help each other.”

NMP and the farmers hosted a bus full of meat counter staff at one of their sheep farms, followed by a tour of NMP’s abattoir and value-added facilities. They ate together and asked each other questions. Most of the butchers had never set foot on a farm and were surprised by the scale and professionalism.

Key shifts in perception began to happen. The butchers and farmers learned what was chopped off before they get chops, and how waste impacts profits all the way along the value chain. The retailer realized how much more was involved for farmers to produce lamb in the winter, and that they couldn’t just turn on volume like a tap.

The abattoir saw how certain production practices produced better-quality, more uniform lambs and better final yields. The farmers learned that a consistent, traceable supply was valuable, and by working together it was doable.

Most significantly, the farmers were Continued on page 20

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business Continued from page 18 inspired to formalize their supply loop.

With some assistance from a federal Growing Forward 2 grant, they started a new company called Trillium Lamb Inc. The six original farms are shareholders and board members, and they have an annually established price contract with NMP. They’ve also added a few more producers to ship about 100 lambs a week, but still aren’t totally filling the demand.

Trillium Lamb Inc. is in the process of expanding the number and geography of farmers supplying lambs, and they are setting formal quality requirements to ship under the Trillium Lamb agreement.

According to Gooch, for a value chain management to have staying power everyone involved must follow an agreed set of practices. And if someone doesn’t, there must be repercussions.

Trillium Lamb is in the process of hiring a person to handle the links between them, NMP and the retailer and to do their marketing, as they had seen in Cotswold. “Bringing people in with the right attitude, someone who understands the vision, can help make it sustainable,” says Gooch, although he says it doesn’t always happen. “Generally, farmers don’t want to invest, to cover the costs in human resources to maintain it.”

Christoph Wand, OMAF livestock sustainability specialist, has seen other initiatives last only a few years. “What sets this one apart is the idea of the field person who communicates along the supply/value chain but is an employee of the producer group.”

Together with NMP, the Trillium producers want to have a formal pricing-andsupply contract directly with the retailers.

Normally the price paid for live lambs is set every Monday at Cookstown auction market and varies from week to week.

However, the price in the grocery store is set once a year based on discussion between the abattoir and the retailers, and varies depending on the size of the order.

Trillium shareholders and suppliers all use RFID tags so each carcass can be traced back to their farm, and with some grant money NMP has updated its equipment to read and share that information with the farmers. The Trillium producers can then use those numbers to select genetics based on carcass traits, such as percentage cut-out or shipping weights. NMP asked the group for its data wish list and shares its own qual20 country-guide.ca

“ Their mindset was like ours,” Carere says. “We’re here, and we’re not going anywhere, so let’s help each other.”

Marc Carere

Jenny Carnaghan ity assurance values, such as cleanliness of the animals. Most recently, Growing Forward 2 has also helped NMP update its gating and sorting system.

As well, the farmers’ photographs and stories are going to be part of the marketing and packaging program led by the retailer.

In the end, the value chain has been short-linked and information flows freely from producer to abattoir to retailer and soon to the customer. Yet without government grants and behindthe-scenes help from Wand, it probably wouldn’t have happened.

Still, the grants and extension work are only the starting points for change.

It takes an investment in the vision from all parties to recreate long-established marketing routes. “It’s been a team effort to get this off the ground,” says Carere.

They are all aware of other supply loops that have failed because processors went broke, or because retailers or farmers didn’t have loyalty to the program. What makes this one different? Probably it’s because now, they all know more about each other’s businesses. “To be fair, we do not chase the market price,” says Carere. “We all have to be reasonable.”

“Our business model is based on openness, honesty and loyalty,” agrees Pearce.

“Without that, it would all fall apart.”

It’s also based on recognizing both the market and the players at every level, including that the number of slaughter plants in Canada has plummeted by a third in the last decade.

Over those same years, much hot air and government money got pumped into the concept of value chain management. Perhaps inevitably, a lot of the initial projects came to learn their feet weren’t solid enough, and their hopes sank into the mists.

But others made progress quietly, eventually, including Trillium Lamb.

Some lessons also emerged. Most important may be that value chain management takes commitment, openness, trust and a champion to lead the cause.

And yes, it can also help if the change in supply is pulled by customer demand, not pushed by producers. CG December 2014

business

The challenge of diversification The odds that your diversification plan will succeed are just one in five. But you can stack the deck

By Maggie Van Camp, CG Associate Editor or decades, on-farm diversification has been talked about, ruminated on, spit at and swallowed whole. We’ve seen underdogs become successes, and we’ve also seen outrageous failures, even when they had big government backing.

At the same time, economies of scale have propelled non-diversified farms to unbelievable sizes, backed by the five-year bull market in grains.

It all leaves Michael Gertler looking back on his work about diversification with some hard questions.

“For decades, specialization and scale has driven agriculture,” says the retired sociology professor from the University of Saskatchewan. “This is economies of size, using the same amount of labour for a lot more output.”

Diversification itself is getting more diversified, with farmers taking on an ever-wider range of business projects In the race to get bigger, Gertler says, we’ve forgotten economies of scope, which are synergies created between enterprises on farms.

Partly it’s because agronomic technology (fertilizer, GPS, large equipment, breeding stock, seed, etc.) and crop insurance have taken the place of diversification as a risk management tool.

It can also be partly because our farm community has become so diversified. In the last decade, while commodity farms have been sizing up, there’s also an influx of very diversified farms, with everything from organic production and direct-marketed ethnic produce to value-added operations of every different kind. Along our rural roads, there are also unprecedented differences in farming styles and farm sizes.

Today, Gertler sees rich-man and poor-man diversification. A “poor man’s” approach means small steps of adding value to try to increase the value of core production. These projects are flexible, don’t require huge capital and carry less risk. By getting into it gradually, farmers can experiment and test to see if it meets their economic and financial rationality.

On the other end of the scale, farmers with established, strong capital bases are typically looking for good investments of all sorts, including off-farm December 2014

investments like rental units. On-farm, they tend to get into larger projects since they can afford to invest more money, time and expertise to start new businesses. They may even hire management for the existing enterprise while the owner takes the time to develop the next one, says Bev Connell, from Proagri Consulting and co-author of the Ontario ag ministry’s Exploring Value Added Opportunities.

For example, Connell has worked closely with a large farm in Nova Scotia which now boasts not only a large beef cow-calf operation and a feedlot, but also a business that exports strawberry plants and perennial flowers, plus another that produces fresh fruit and plant cuttings, with each of those enterprises large enough to be a standalone business. It’s diversification of a different order than adding a row of beets to sell at a farmers’ market.

Over the 20 years Connell has been working with farmers and other businesses (lately he’s been working in the lumber and mining industries), he has noticed two distinct attitudes that drive diversification.

First is the business entrepreneur who wants to create and develop new businesses, and continue to grow and expand. Those individuals can be large or small farmers; it’s more about their culture and personality than the sizes of their businesses.

The other group includes those who diversify to try to create more value from what they’ve traditionally done. They want to keep farming, but need to generate additional revenue to stay in business. For them, diversification is more of a necessity than a desire.

Anecdotally, Connell has noticed ventures fail more often if the farm needs to bring in more money rather than if the farmers have an interest in developing another enterprise. Typically more money can be made by first being better at their base enterprise before they divert their attention and resources to a new enterprise.

“When farms have tried to start a new enterprise and taken their eye off the ball, it has typically resulted in a failure of the new enterprise as well as damage to the existing one,” says Connell.

The success rates for farm diversification efforts are probably not much different than for any small business venture. The majority fails in the first five years, and many don’t make it past the first year. Based on the survival rate of other business ventures, Connell Continued on page 22 country-guide.ca 21

business Continued from page 21 estimates only one in five are successful, with success defined as contributing positively to the financial health of the farm.

However, sometimes the objectives of the enterprise may not be all about money.

Maybe the farmers are only looking to feel good about what they are doing as citizens of the world, or it could be part of the succession process. “Many diversification projects break even or occupy time and provide purpose, but do not contribute financially,” says Connell.

It’s important to understand why you want to diversify. “People give it meaning,” agrees Gertler. “What’s valuable to you?”

A survey of farmers in Sweden found they wanted to diversify to reduce risk, to use idle resources and develop a business for social and lifestyle reasons. In a Saskatchewan survey, farmers often diversified to use available management and labour and to provide full-time, yearround employment for key hired personnel. For example, by diversifying into fabrication, processing, transportation or

“ Attitude is the biggest determinant,” says Bev Connell. “If you think you can’t, you’ll probably be proved right.” livestock a farmer could retain and make economical use of a full-time employee or other family members. The Saskatchewan farmers tended to reduce exposure to market and production risks with offfarm income, or through non-agricultural enterprises.

However, Connell says that while access to big chunks of capital can help you grow and capture economies of scale, at some point diseconomies creep in. The enterprise starts to lose efficiency because it’s too large for the management capability.

The Internet has also dramatically changed how we market. Diversification used to focus mainly on local markets since many farms didn’t have the resources to market regionally, nationally or internationally. Now everyone can reach potential customers worldwide, so marketing “local” means marketing a local prod-

uct to the world. Moreover, people will pay for an experience and a story and not just buy food that tastes good and fills their belly.

Many successful ventures are also driven by either children or spouse.

Gertler says many modern farm women want to manage an enterprise by themselves, leveraging their skills and experience and contributing to family income, instead of just helping behind the scenes. Connell has seen farming parents form a new business venture with the non-farm children, using some of the farm’s resources to help get the new enterprise started. They plan to transfer the new venture to the non-farm children once viable.

Connell also knows a case where the senior generation transferred the base farm to their children and then started a

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December 2014

BUSINESS new enterprise as their semi-retirement project to keep them busy. The retiring generation is typically financially established and can put the time and patience into developing something new. Risk becomes less of a factor because they’re not necessarily relying on it for a living, so they are willing and able to experiment and be creative.

Whatever the motive, it should match risk tolerance, and this needs to be talked about with everyone involved.

Share up front how much money you want to make, how much you’ll need to start and operate, and exactly how you’re going to get funding.

Lack of patience and cash flow can crash startups. When University of Kentucky researchers studied 120 valueadded dairy processors across the U.S., they found only about a third had reached positive cash flow one to three years after launch. For six per cent, it took five to 10 years.

That first year can be very tough sledding. Of the nine per cent of the respondents who had been involved in on-farm processing for less than a year, only 12.5 per cent had positive cash flow. This type of value-added enterprise is not a quick solution to profitability issues for a dairy, concluded the researchers.

Although we read and hear about current success stories, often they have been working towards diversification for many years before becoming successful. With today’s instant communication networks it seems like it happened overnight, but it likely took a long time.

Plan ahead and share your idea with others to validate your assumptions, says Connell. Some people think that if they share, someone will steal their ideas, or they’re afraid to hear critical comments about their plan. However, more of that type of critical thinking and discussion is needed to develop ideas and make stronger business. “Many people get married to their idea and start to convince themselves it’s fail-proof when it may not appeal to many others,” says Connell.

Farmers by nature are risk takers, so simply taking an off-farm job may not provide the incentive they need to feel successful, says Connell. Although sometimes it’s the right thing to do and will bring in the necessary revenue to keep the farm going, it’s typically not what makes a farmer excited to get out of bed in the morning. “It’s the creation, development and independence that motivates DECEMBER 2014

them to continue,” says Connell. “It’s not always just about money.”

Connell knows first hand how an entrepreneurial heart beats under flannel. He has created and sold several businesses ranging from a beef enterprise to a farm market, Christmas wreath export business and blueberry-packing enterprise. One thing he has learned over the years is that a farm diversification is no different than any other business created by an entrepreneur: Many fail, and

not always for lack of planning. Some fail due to timing. Others because consumers’ tastes change before a business reaches maturity where it can afford to change.

Entrepreneurs with the ability to regroup, learn, persevere and stay positive attract like-minded individuals, creating a positive culture and that eventually leads to success. “Every failure just identifies a way not to do it,” Connell says. “It doesn’t mean it cannot be done.” CG

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business

Finding the right niche Is niche diversification really the right strategy for your farm? Your best answer may come from answering this: ‘How driven are you?’

he reasons for wanting to diversify the farming operation are almost as diverse as the opportunities themselves. On many farms, it’s because expansion is so costly at today’s land prices, so the only way to grow is to intensify. Or it may be because there are more generations needing to draw income from the operation. Or it could be simply because you see an opportunity and the business possibilities are just too intriguing to overlook.

But those are only the beginning of the possible reasons for wanting to diversify. Maybe a pumpkin patch that you used to grow for the kids in the area becomes a full-service Halloween fright night, or maybe a niche grain processor opens up in your area, or a new road opens so all of a sudden you have traffic zooming past your laneway, paving the way for a thousand different retail ideas.

For some farmers, diversification opportunities are hobbies on steroids. A case in point would be the greenhouse operation at Court Seeds and Greenhouses located at Plumas, Man. Look Plumas up on a map and you might not think that this would be an ideal location for a retail greenhouse operation.

“Our greenhouse business could be regarded as an accidental success, but that would take away from the actual hard work that went into it,” says Randy Court, who owns Court Seeds and Greenhouses with his wife and business partner Jeanine.

“It started from Jeanine’s hobby. After our two children were walking, she built a smaller greenhouse to supply our family, friends and neighbours. To take the next step and invest in proper infrastructure, we quickly realized we needed a lot more customers — our business plan was clear about that.”

The Courts looked to the nearest business centre, Neepawa, and met with some of the larger retailers — groceries like Safeway and Co-op as well as hardware stores. “It was Safeway that stepped up first,” says Court. “They realized that the garden centre business was not their strength. We were able to negotiate a lease agreement with them and took over the entire

24 country-guide.ca

business, and they supported us. We each focused on what we did best, and we did really well together.”

It wasn’t long before the Co-op store in Gladstone made a similar arrangement. “In seven years we had gone from a hobby to 15,000 square feet of greenhouse, two retail locations and 12 staff,” says Court. “It was quite a learning curve.”

Along the way, however, the Courts had to learn the lessons that many farmers bump up against when they invest in diversification.

“Growing a plant yourself is very different from teaching, managing and directing staff to do it for you,” Court says. “We had maxed out on the size of our operation and stabilized it at that level over the next 25 years.”

The Courts started farming from scratch with 400 acres they bought in 1980. Very quickly they realized that they’d have a hard time making a go of it with conventional production and by 1981, they had switched to seed production.

Then, by 1987, the greenhouse operation grew to its final size, and by 1990 the farm itself was on the path to its current 4,000 acres, of which 60 per cent is owned.

Their daughter Tracey has joined the operation and has added her own business as an agronomist.

“We were successful, yes,” says Court. “We tried other diversification ideas. We toyed with a poultry barn, and woodcrafts. We even bought a small cattle herd which only lasted three months. I quickly realized I had no patience or passion for livestock and sold the herd when prices were at a good level.

“Trial and error is part of farming and growing the business,” Court now says, but he has also come to recognize that some management traits pave the way for successful diversifications.

In particular, he believes he has a natural passion for business, team work and hard work. That doesn’t mean other farmers don’t, he’s quick to add.

But those are the traits that he has needed to rely on.

“You have to be passionate about whatever it is you do,” Court says. “Without that, you won’t stick with it. Or if you do, it’ll be a chore, and success will be limited.”

December 2014

Photography: Sandy Black

By Andrea Hilderman

business

eye on what differentiates successful diversifications from those that struggle. For the most part, he emphasizes, he rarely runs across horror stories.

“Usually you will see the disaster coming before it hits,” he says. “There’s generally enough time to get out, even with a loss, before that happens.”

Still, on many farms, it may be more important than ever to get it right with niche agriculture. Simply put, there may not be many other options for achieving your objectives, such as trying to provide a way for two, three or more kids to succeed you in an era of high land prices and high input costs.

Because of this, Veldhuis works with his young students on putting some business rigour around their ideas.

“Mom and Dad often can’t provide a farming opportunity for all their kids,” Veldhuis explains, “so we are teaching the kids to come back to the farm with their own business idea and plan.

“And maybe this idea isn’t a hands-on farming idea either. Farms need legal and financial advice — lawyers and accountants — that’s an opportunity.

Niche production demands passion, Randy Court says.

And it also takes a love for business, and team work too Court also stresses discipline on the business side. In other words, passion is essential, but it isn’t enough on its own. Success demands business discipline too. “You have to spend your limited resources wisely,” Court says. “That said, I also say the only reason to have money is to spend money and make more money!”

Nathan Veldhuis agrees with Court. Just because you enjoy doing something, or even take pride in it, isn’t enough to make it a good diversification project. The entire psychology of the project has to change when it becomes a business.

“Going from a small flock of turkeys to supply your family and friends to a turkey barn is a big step,” Veldhuis says. “What took 10 minutes of your time on a daily basis before is now eating up three or more hours a day. And if you get busy with other farm tasks, you will start missing out on the small details that govern profitability.”

Veldhuis runs a bee farm at Starbuck, Man., and also works as an instructor in ag business at the University of Manitoba.

Honey might sound like a niche, but with 1,200 hives and a business with a solid 20-year track record, niche probably isn’t the right word.

Over those years, Veldhuis has kept a careful

December 2014

Or maybe it’s a new venture or a custom operation business of some sort that allows you to participate in the farm way of life.”

Of course, diversification can start with your personal philosophy too, which has an ironic twist these days. It isn’t that so many more farmers are becoming organic purists, for example. It’s that so many farmers have eased up on their antipathy to the concept.

“Those producers for whom organic production was a philosophy have already transitioned,” says Laura Telford, business development specialist in organic marketing with Manitoba Agriculture, Food and Rural Development. “Now we are seeing more conventional farmers looking at organic and seeing a real economic advantage.”

Increasingly, organic is just one of myriad of diversification options, Telford says, and it’s being judged on business criteria. “Organic is a real, viable option for the farm that is not difficult to embark upon,” she says, noting that conventional farmers are often converting only a portion of their farms to organic, not the whole operation.

“Transitioning to organic isn’t complicated,” says Telford. “If you have some existing pasture land, the transition can take as little as one to two years. It’s definitely not an all-or-nothing exercise.” CG

country-guide.ca 25

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.

Tuesday, January 27

Conexus Arts Centre

Regina

Tuesday, February 10

Medicine Hat Exhibition and Stampede

Medicine Hat

Thursday, March 12

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

business

The best advice These five questions will help you be sure you’ve got the right business advisers for your farm

By Amy Petherick It’s not a bad thing to seek outside advice — as long as it’s good advice. No matter how smart you are, you can’t be aware of all your options and opportunities.

We all need great input that we can ruminate on, evaluate and implement, and this great input must come from people we are confident will give us the best advice. They need to be people we trust and that we can talk to openly, because we have to talk to them about the most important things in our lives — our families, our dreams, and our money.

Are you getting the best business advice? Even if you think your answer is yes, get ready for 2015 by asking your financial advisers these five questions.

1. Does our farm align with your current client portfolio targets?

Both the company they work for and your advisers themselves likely have goals that they are working towards. Those are goals that can change. So even if your business matched the criteria your adviser was targeting initially, that may no longer be the case.

Asking this sort of question also offers your adviser an opportunity to share their career path

If you want good advice, Stefanson says, you have to be willing to pay for it.

28 country-guide.ca

plans with you. Farmers may never plan to truly retire, but other people do and your financial advisers may be among them. Or perhaps they just plan to cut back their workload in the coming year. Maybe they’re aspiring to make a move up the corporate ladder. If you have advisers who are comfortable enough with you and are permitted to divulge this information, then you might get the chance to plan ahead for any imminent changes.

More importantly, this question will help you assess changes within your own operation and whether your adviser remains compatible or not.

Brenda Stefanson is a regional farm business management specialist for Saskatchewan’s Ministry of Agriculture who says even if your farm hasn’t physically changed, outside forces may be having an impact. “The assets farmers control, in Saskatchewan and right across the country, are much more valuable than they were even 10 years ago,” Stefanson says.

Farmers may own the same amount of land, for instance, but today it’s worth much more money than when it was originally purchased, so it may require new financial management strategies. “I have had some farmers come in here and talk about dissatisfaction with their regular adviser just because of that issue,” Stefanson says.

There’s no one reason farmers start to feel out of sync with their current advisers, but Stefanson rattles off a number of common ones she hears about regularly: “their outlook has changed, their goals have changed, or there’s a younger generation involved that changes the risk tolerance of the farm.”

With all the many advisers out there, Stefanson says you don’t have to just put up with someone who has become a bad fit with your business.

But don’t throw out the baby with the bathwater, warns Lloyd Steier, professor of strategic management at the University of Alberta School of Business.

December 2014

business Steier says a great example is when the next generation inherits the family farm and envisions major business changes. “New products, new markets, new strategies, growth; all those things may necessitate bringing on new advisers,” he says. “But inherited businesses come with social capital, something built up over years, and that’s an incredible resource.”

Social capital includes things such as outstanding favours, community goodwill, and your reputation within the industry. So before you fire the adviser who sang at your father’s funeral, Steier suggests acting out of respect for previous good service by keeping up old relationships while you build new relationships into your team that are more consistent with your new intentions.

2. Are any of our farm’s 2015 objectives unclear to you?

Whether you’re talking in the ultra-long term, or even if you’re just thinking through all the jobs you’ve got to get done today, farm management is really a series of what, when, who, where, and why questions.

Adding up those questions then helps you think your way through to a strategy that you can use to prioritize your business activities for the rest of the year. What do you really want to accomplish, and how are you going to accomplish it?

Sharing this strategic plan with your adviser provides them with important context, so you want to make sure your advisers understand it well. “Strategy should drive structure,” says Steier, who then adds, “strategy should also drive what you’re doing.” Sporadically seeking a little legal, accounting, and banking advice when you need it might be enough for a “Mom and Pop” farm that owns a little bit of land and a couple of tractors, but complex operations need more.

“Typically, operations have evolved to be fairly complex, in terms of costs and assets, but still use very informal governance mechanisms that really don’t fit with where they need to go,” Steier says.

“Farmers are running multimillion dollar companies and they haven’t moved beyond coffee shop-type forums as their major source of advice.”

Steier says he doesn’t mean that the informal advice you get from peers is worthless. In fact, he believes it is the most cost-effective way for someone starting up to get some really good input. But for the same reasons you don’t use a horse and plow to farm 1,000 acres, you can’t expect to make milliondollar decisions really well without sophisticating these systems as well.

Clients who don’t outline their strategic plans to their adviser do so at their own peril, says Don Shaughnessy of the Protector’s Group in Peterborough, Ont. Often, however, Shaughnessy finds the clients can’t outline their strategic plans because they haven’t articulated them for themselves.

“Most of the people I talk to have never asked themselves the ‘W’ questions,” Shaughnessy says.

“Because of that, the adviser takes over by default and they end up driving the bus.”

December 2014

“ The people I talk to have never asked themselves the ‘W’ questions,” Shaughnessy says.

To understand why that’s a recipe for disaster, he says consider this: good financial planning breaks down into strategic, tactical, and logistical layers.

Business owners must be responsible for the first layer, since no one else can define the values of the business.

As experts in the tactical field, advisers provide the second layer, and then collaborate in implementing that plan during the final phase with the business owner.

If you don’t bring a good strategic layer to start with, Shaughnessy says the tactical discussions can become confusing, so it’s hard to make choices. “If the client comes with a strategic idea, the client and the adviser actually have some sort of reasonable working relationship,” Shaughnessy says. “If your possible solution has come through a tactical door, one of the things you’ll find is people aren’t especially good at sharing blame.”

One way Shaughnessy says you can keep your strategic conversations clear is to eliminate precise details from the discussion. “In strategic planning, precision is of no value whatsoever,” he explains. “All you’re looking for is direction.” In other words, this is a good time to only use round numbers. Shaughnessy says to think of it like you would a connect-the-dots drawing.

All the points have to be there for the right picture to emerge, but look too hard at the size or shape of any one dot and you lose sight of the larger image. “Strategic planning is just organized common sense, there’s nothing magic about it,” he says. Still, he says he never had any trouble providing advice to farm clients who could clearly outline their plan for him.

Continued on page 30 country-guide.ca 29

business

“ I don’t advocate switching advisers so much as broadening,” says Steier.

Continued from page 29

3. What professional development opportunities would you recommend for us?

One thing Stefanson, Steier and Shaughnessy all agree on is that while farmers today are better educated than ever, the pressure is on to get even more highly trained. Go to workshops. Read magazines. Watch webinars. Talk to government representatives who can channel unbiased information to you. Seek new ideas.

“You have to go outside of your social system to learn something new,” Steier says. “You have to bring in other resources.”

In sociology textbooks, the idea you want to build on is called the strength of weak ties. It describes how cultivating relationships with many acquaintances improves access to fresh ideas even more than strengthening all your closest relationships.

Some of your most valuable network connections could prove to be old dorm mates, your hired hand’s brother or your dental hygienist. Steier says this is why it’s wise to grow your team of advisers when you’re making major changes to your business. “I don’t advocate switching advisers so much as broadening your advisory capacity,” he says.

4. What services should we consider outsourcing this year?

Outsourcing specific services is one way you can use your current advisers to help in the process of broadening advisory capacity. Perhaps monthly 30 country-guide.ca

bookkeeping has become more than the family can handle, and so it waits until the cropping season is over. Your accountant may suggest that it’s time to bring in a professional.

Stop before you just call in the person your accountant suggests though. “You’re going to pay this person a substantial amount of money, you’re going to work very closely with them over a period of time, and the advice they give you will guide you in some of the most important decisions you will make,” says Stefanson. In many ways, this person is about to become a new farm employee, so she urges farmers to prepare themselves accordingly.

When you choose a new outside resource, interview at least three people. “I would say interview five, but three seems to be as much time as people want to put into it,” she says. Why so many? “You want something to compare to because the first person you interview might have a great sales pitch you fall for hook, line, and sinker.”

Make sure it is someone who listens, she adds.

“I’ve been in this situation as a farmer myself,” Stefanson says. “I’ve gone to look for advice and I felt like the adviser wasn’t listening to what I wanted.”

Stefanson also recommends asking for a resumé and three to five references from every adviser you interview. Don’t just look at the list of names and expect that’s enough confirmation. Before you sign any contracts, call these farmers and ask them about their satisfaction with the adviser’s work, how easy it is to get a hold of the adviser, and if they’ve ever been surprised by extra fees.

5. Can we get that in writing?

Stefanson says you want a contract with your adviser not for legal protection so much as for clarity’s sake.

“You can have a conversation with somebody and hear different things,” Stefanson says. “If it’s written down and you agree to the wording, then that’s what’s agreed on.” This prevents simple little misunderstandings or confusion as a result of jargon, and it can help you stick to budgets better. A contract or letter of agreement lays out what services will be provided, by certain dates, and what costs will be associated with them including things like hourly fees and mileage.

No matter who comes to see her, Stefanson says cost is always part of her discussions, and it always seems to be an issue. “We’re often reluctant to pay,” agrees Steier. “If you want to get good quality advice, you have to be willing to pay for it.”

Steier’s top advice is to beware of false saving.

“I’ve seen people go out and spend $300,000 to $400,000 on a combine and then they have a do-ityourself will kit,” Steier says. “When those people passed away, they create multimillion dollar problems just to save $10,000 in legal costs.”

Good advice comes at a cost, Steier says. But it also delivers value, he adds, so make sure to always buy the absolute best advice you can afford. CG December 2014

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business

Starting small Is diversification the best way to get a start today? As Nathan Klassen is learning, even if the answer is yes, that doesn’t make it easy

By Helen Lammers-Helps athan Klassen might not have grown up on a farm, but for as long as he can remember, he’s wanted to be a farmer, so in 2011, in the midst of North America’s record-smashing run-up in the price of farmland, he made that dream come true.

Klassen was 24 that year, and he bought his first patch of farming ground. But whether, at 75 acres, you’d call that patch a farm probably depends more on who you are than on any definition you’ll find in a dictionary. For some of his neighbours, 75 acres is more like a big backyard than a working farm.

In the best traditions of agriculture, however, the only opinion that really matters to Klassen is his own, and he’s convinced that he’s on the right path.

When he bought that ground near Plattsville, Ont., Klassen saw it as a key step in achieving a goal he’d been working towards his whole life. Growing up near Rochester, New York, he had taken every opportunity to work on farms, and in 2010, he

As with any kind of farming, Klassen’s operation starts with a focus on efficient production.

32 country-guide.ca

completed a degree in organic agriculture from the University of Guelph.

Using organic production methods, Klassen grew just one acre of vegetables that first year to test the water. But with a farm to pay for, he’s been more or less doubling his acres ever since. The second year he grew three acres, the next year, six, and then 10.

Recognizing that he must be careful not to overextend himself, he plans to expand at a slower rate in 2015 by bringing two more acres into vegetable production for a total of 12 acres.

“With the rapid growth, systems are always changing,” explains Klassen. “I’d like to get to more of a steady state.”

If a dozen acres still seems a very small number, however, just read on. The numbers soon get bigger.

With 40 different vegetable crops, and a total of 200 varieties, farming for Klassen is anything but simple. Tomatoes are one of his most important crops and he grows 40 different kinds. He is constantly evaluating varieties. Some are old standbys that he grows year after year. Others don’t make the cut and are only grown once.

And as on any other farm, the numbers keep multiplying. Klassen, for instance, takes note of the days to maturity advertised by the seed company, but also keeps careful notes on maturity and other agronomic factors on his own property.

He has even developed his own customized system of maturity ratings, which he considers an indispensable tool for ensuring a consistent supply of vegetables ready for harvest.

As well, by saving seed from the earliest-producing plants, Klassen has been able to shorten the days to maturity of one of his favourite varieties.

Despite knowing the dangers of expanding too fast, Klassen says it’s hard to be patient. “I see so many opportunities, and I want to go after them.”

At this stage, sales aren’t the problem, Klassen says. While it did take a few years to make a name for himself, he has a reputation now.

It wasn’t always easy though. It took trial and error to figure out what would grow well and sell well. For example, he learned in his first year that

December 2014

business

It’s hard to be patient, Klassen says. “I see so many opportunities, and I want to go after them all.”

Klassen started with just 10 CSA customers. This year, he’s looking at 100.

broccoli doesn’t grow well on his farm, nor sell well in his markets.

This past year he added a walk-in cooler which increased his capacity to store vegetables, thereby substantially reducing waste.

One of the coolers is set at 5 C and the other at 10 C so he can store vegetables at temperatures closer to their optimum.

This past year Klassen purchased a second delivery van. In addition to delivering vegetables to market he also used the van to pick up harvested vegetables in the field. He also uses two bicycles outfitted with trailers as a low-cost and environmentally friendly way to run back and forth between house and fields.

Again, established farmers mighthardly call such things “farm machinery.”

But for Klassen, the important thing is to keep one eye on the work, and the other eye on the budget, and somehow manage to make a living.

It’s why, for instance, he has two converted clothes washing machines that he uses to wash and spin dry the salad greens.

Similar to the way he expanded production, Klassen has been growing his markets, i.e. step by step. In addition to selling at five farmers’ markets in Waterloo, Toronto, Brampton, Etobicoke and Aberfoyle, he’s been growing his weekly veggie box program. He started with just 10 the first year while he got the hang of it. The next year he had 20 members, then 50. He thinks next year he will aim for 100.

The CSA members generally pick up their weekly boxes at the markets he sells at or at the farm. Klassen is considering shifting more of his sales to the CSA model. “There are some real advantages to the CSA model over selling at market,” he explains.

Continued on page 34

December 2014

country-guide.ca 33

business

Continued from page 33 That includes a better cash flow, since members pay up front at the beginning of the season for a share of vegetables.

Secondly, CSA is a dependable market. “If it’s rainy, people don’t buy at the market,” Klasen explains.

Filling the weekly boxes also reduces waste. “You sell 100 per cent of what you harvest,” he says.

There is flexibility with the CSA model too, since he can put in the boxes whatever he is harvesting that week.

Finally, selling through the CSA program is less time consuming. When he goes to market, he usually spends four to five hours at the market plus travel and

34 country-guide.ca

setup time. With the boxes, he just fills them and drops them off Still, Klassen recognizes the time he spends at markets gives him useful feedback and helps him to ensure his CSA customers are getting good value.

Klassen also sells some produce from the farm but needs to invest some time and effort into a better setup to exploit this more fully. For example, people tend to buy what they can see, so a refrigerator with a glass front would be helpful.

Branding has been a very important part of Klassen’s marketing strategy. He grows high-quality produce using organic methods so he can command higher prices and develop loyal customers.

With the help of his family during a brainstorming session they came up with the name Nith Valley Organics, named for the Nith River that meanders behind his property.

Klassen explains that he wanted a name that was tied to the local region. With the help of his sister, a graphic designer, he developed a logo which he uses on marketing materials, the website, signage and the delivery van. (His sister created the website but Klassen keeps it updated.)

At market, Klassen keys into the romanticized image of farming by using rustic wooden packing crates painted barn red. (The paint was left over from

painting the barns.) Klassen and his employees wear plaid shirts and straw hats as part of this image.

Customers often have questions about the produce so he makes sure his market staff know how to cook what they sell. And with an uncommon vegetable like Jerusalem artichoke, he incudes instructions on how to prepare it.

Klassen is also very aware of the psychology involved in selling at market.

For example, displays shouldn’t be too symmetrical or too neat. Otherwise, potential customers will be loath to disturb the display by removing a basket.

Not one to stand still, Klassen is always looking for new opportunities.

This fall he started growing cold-tolerant salad greens in hoop houses to extend his sales season, and he will soon try sprouts as well. He will also offer a few shares of a winter CSA program to get experience with it before deciding if he wants to pursue this on a bigger scale.

Eventually Klassen plans to target restaurants but he wants to be sure he is in a position to provide a consistent supply of high-quality vegetables first.

Despite the hard work, Klassen remains excited about his chosen profession. “We’re moving in the right direction. And I’m doing what I love,” he says with a smile. CG

December 2014

Photography: David Charlesworth

We’re moving in the right direction,” Klassen says.

“And I’m doing what I love.”

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business

Black barley gets its chance The exotic strain is a hit with food enthusiasts — and maybe soon it will be a hit with farmers too

By Ralph Pearce, CG Production Editor

36 country-guide.ca

currently being grown in Arizona and California, although specific acreages aren’t available.

For Dr. Tarlok Singh Sahota at the Thunder Bay Agricultural Research Station (TBARS), 2014 is also the first year he’s been able to give black barley a fair chance in test plots. In 2013, seed from Woodland Foods in Waukegan, Illinois, arrived too late for optimal planting and the weather at the Lakehead remained relatively cool, so what did get planted in June didn’t mature very well.

This year, Sahota was delayed again by the prolonged winter, but he did manage to get the plots planted on May 23.

Balanced yields “We found that it tillers profusely and has a pale green canopy,” says Sahota, the director of research and business at TBARS. “It’s nearly one month later to head compared to AC Newdale and at 96 cm in height, is eight cm (about three inches) taller than AC Newdale.

But it’s also seven cm shorter than Millhouse.”

In addition to its tillering capability, black barley has shown test yields that are comparable to other barley varieties. According to an extension bulletin from the University of Vermont, field trials conducted in 2012 indicated grain yield from black barley was 58.3 bu./ac. On paper, this may not measure up compared 72.6 bu./ac. for AC Newdale and 59.8 bu./ac. for Robust. However, Sahota notes that both Newdale and Robust are hulled barley varieties, meaning their net grain yield after removing the hulls is closer to 48.8 bu./ac. for Newdale, and 40 bu./ac. for Robust.

Bushel weight is also higher in black barley at 54.4 lb., compared to AC Newdale at 46 lb. and Robust at 47 lb.

Another positive trait is its adaptability. Similar to conventional hulled varieties, black barley is expected to be as easy to grow near Palmerston or Winchester, Ont., or St. Hyacinthe, Que., as it is south of Thunder Bay. The longer growing season in southern regions is another advantage. Weed control is also expected to be a simple matter, not only because the same chemistries that are used on feed barley apply to black varieties, but because of the thicker tillering in black barley varieties.

“There’s no room for weeds to grow,” says Sahota.

December 2014

Photo: Dr. Tarlok Singh Sahota

Black barley is seen growing in a test plot at the Thunder Bay Agricultural Research Centre, with director Dr. Tarlok Singh Sahota.

n the past 10 years, growers across Canada have been introduced to a parade of specialty and alternative crops. East and west, there’s been camelina, crambe, sainfoin and, of course, quinoa — with test plots indicating it might be grown here with even better quality than in South America.

Black barley is among the newest of these new arrivals. Also referred to as Ethiopian black barley because of its country of origin, black barley was once an important food source for the ancient civilizations of North Africa, the Middle East and the Himalayas. Its name derives from the black colour of its edible gloom (i.e. bran) layer, which stays attached to the kernel.

The grain itself is white, yet unlike most other hulled barley varieties which are fed to livestock, black barley is considered a hulless or “naked” type, and could see its greatest demand from specialty food markets seeking its reported nutritional and medicinal values.

Its North American history isn’t clear. One report says the crop was first raised by an American farmer in Montana. Another contends that it started with seed imported from Russia in 1911.

What is clearer, however, is that black barley is

BUSINESS Preliminary indications are that disease control may be an issue, Sahota says, but it will depend on the specific area, the barley varieties grown there, and on the disease species particular to that area. “Each barley variety will be different in terms of susceptibility to a particular disease.”

The separation process also sets black barley apart from hulled barley production. When processed as a food source, barley hulls bind to the kernels and must be removed, usually with the loss of the bran layer. But with black barley being hulless, there is no separation stage; the hull simply falls off during combining, leaving the whole-grain kernel and the edible-bran layer intact.

A NEW FOOD FRONTIER Black barley has a unique opportunity to tempt so-called “foodies,” many of whom are including quinoa in their diets. Black barley is touted as having a rich, nut-like flavour, and an appealing chewy, pasty-like texture, and has a glossy “sheen” to it when cooked.

“It tillers profusely,” Sahota says, adding “There’s no room for weeds to grow.”

When it comes to its uses, it can be eaten alone as a hot breakfast cereal or added to soups, stir fries, rice pilafs, grain salads and even stuffing. Ground into flour, black barley can be used to make bread, pancakes, pasta — anything that conventional wheat flours can be used to make.

From a health perspective, black barley is reported to be high in dietary fibre, minerals (including molybdenum, manganese, selenium, copper, phosphorus and magnesium), Vitamin B1 and niacin. It’s believed that niacin can help reduce total cholesterol and lipoprotein (a) levels. Its dietary fibre is high in beta glucan, which can also help lower cholesterol by binding to biliary acids and excreting them from the body.

According to work done at Agriculture and Agri-Food Canada’s Cereal

Research Centre in Morden, Man., a quarter-cup of barley provides three grams of beta glucan per day, sufficient to reduce cholesterol and the risk of coronary heart disease and diabetes.

In concept, Sahota says, black varieties may therefore become barley’s equivalent to identity-preserved soybeans.

Barley’s chief current markets are for livestock feed and the brewing industry (although malting barley production is almost exclusive to Western Canada).

That’s why Sahota maintains that black barley is a perfect fit for the specialty food market.

As consumers’ tastes and demands for different flavours and healthier food choices continue to grow, Sahota believes farmers may find this as a perfect opportunity to feed those demands. CG

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DECEMBER 2014

country-guide.ca 37

guide

A taste for fababeans Will new zero-tannin varieties mean fababeans finally take off? Margot and Theo Thirsk hope so

By Gord Gilmour, CG Associate Editor

itting in her kitchen last summer, watching a massive thunderstorm pass through on an early July evening, Margot Thirsk knew exactly why she likes fababeans better than field peas.

She and husband Theo have grown both on their operation near the community of Kelsey, about 80 miles southeast of Edmonton, with the 2014 season marking their second crop of fababeans.

“They combine so much more easily than field peas,” Margot, the farm’s chief combine operator, said during a visit with Country Guide. “They stand up and don’t lodge.”

“We’ve had field pea crops that lodged so badly you could only combine them one way. You’d have to make a pass, then run all the way back to the other end of the field and start again.”

This very basic and practical consideration is just one of many reasons the crop is getting a long hard look from a lot of growers around the province, said Theo. He also cited declining field pea acres due to growing disease pressure that makes the crops less economic, plus accompanying concern over too-tight canola rotations driven home by the clubroot situation.

“I think people are really looking for another crop to add to their rotation right now,” Theo said.

38 country-guide.ca

Fababeans also fix nitrogen from the air like peas, so they’re attractive as a relatively low-cost crop to produce.

All this has combined to create an interesting situation for the Thirsks. Their fababean crops have been getting a whole lot of attention. In fact, Theo even admits to engaging in a little good-natured ribbing with the neighbours.

“Last year I had it on a back road, and I saw the tire tracks and footprints,” he said. “People are really interested in seeing this crop in the field, and I don’t blame them. This year, I’ve been joking with the neighbours that I put it right on the highway so it will be easier to find.”

The next morning after the storm had passed, a visit to the field in question gave an inkling just why other farmers might be curious about this crop.

Despite pounding rain from the storm the night before, there was absolutely no evidence of lodging throughout the field.

Supported by sturdy thumb-sized stems, the broad leaves and white flowers continued to stand upright, something that Theo said remains more or less constant even as the large seed pods develop a bit later in the season.

Meanwhile, the Thirsk’s level of interest is nothing new to Craig Lindholm, a seed grower in the New Norway area, just west of Kelsey. Lindholm has been a tireless promoter of the crop in recent years, and the Thirsks have grown their seed under contract to Lindholm Seed Farms.

Lindholm has also been a familiar presenter at farm meetings throughout the province, telling Country Guide that growers are interested in the crop because it solves a number of problems for them.

“It’s grower-friendly all the way,” Lindholm said.

“It’s just much easier to manage.”

Sown with conventional equipment, it takes just a few days longer to mature than wheat, yet is frosttolerant and hardy, and Lindholm says over a number of seasons the crops he’s familiar with have averaged about 50 bushels to the acre, even through some tough growing conditions, for a gross return of $350 to $400 an acre, with prices in the $7 to $8 range, where they sat as harvest approached.

December 2014

guide

“In a good year, you can easily get between 60 and 70 bushels an acre,” Lindholm said.

All that has combined to drive exponential growth in the crop over the past couple of seasons, although it started from an admittedly small base. In 2012, farmers sowed just 6,000 acres to the crop. In 2013, estimates pegged the crop at between 25,000 and 30,000 acres. In 2014, most reliable estimates say about 80,000 acres went into the ground.

Those are tiny numbers in a province with almost 24 million arable acres, but Lindholm insists they’re significant.

“It might not sound like much — a few tens of thousands of acres — but it’s getting big enough that we can start approaching some big players about getting fababeans into their feed rations,” Lindholm said.

That’s going to be the make-or-break question that determines how big this crop gets in the coming years. Will faba marketers succeed at finding those innovative livestock producers?

It’s a bit of a struggle because this isn’t a crop with a long history as a feedstock, due to a quirk in its physiology, Lindholm said. Until very recently the beans held a lot of tannin, an astringent and bitter plant compound.

To say the least it’s an acquired taste, and it made fababeans a very small human food product and kept them pretty much entirely out of the livestock feed sector.

“It makes the beans bitter and the livestock are not receptive to them,” Lindholm said. “A few years ago, however, the first zero-tannin fababeans were developed which don’t have that bitter taste.”

That’s led to a flurry of new research, all aimed at testdriving this new crop in feed rations. It would be a natural fit, since what’s left when the tannins are removed is a palatable, high-protein, high-energy product.

“There’s been a lot of feed ration testing, and it’s worked out well, especially in the hog sector,” Lindholm said.

But despite that fit with hog rations, the crucial issue of reaching critical mass remains. That’s because large-scale hog operations are like any large production concern — they thrive on consistency.

Hog farmers prefer to formulate a feed ration that works, and then use that ration day in and day out.

They’re not exactly opposed to including new potential food sources, but you could call them a bit of a tough sale, and certainly not interested if there isn’t enough on hand to supply their operations year-round.

This means the crop is entering a crucial few years, where market development is going to be the focus.

Without a feed market, fabas may never be anything but a niche crop.

But what if feed markets come online? It’s hard to say, but Lindholm is convinced the crop could become a big thing, since farmer interest is already high.

December 2014

“This is a nice alternative for farmers looking for something other than peas and other pulse crops, because of the disease issues,” Lindholm said.

“Really, I think it’s nothing but good.” CG

Getting fababeans into feed rations is the next big hurdle. In fact, it may be the make-or-break challenge for the crop.

With stalks as thick as your thumb, fababeans can easily thrive through weather that lays other crops flat, leading backers to say it has the makings of a major new rotational crop through much of the West.

country-guide.ca 39

guide

Not really so bad With 2014 in the bin, there may be pricing opportunities as the trade turns to blending to hit grade specs

By Gord Gilmour, CG Associate Editor

ust over a year ago, Bruce Burnett, the Canadian Wheat Board’s head of weather and crop research, stood in front of the 2014 Cereals North America conference and spun the unlikely tale of a late harvest that delivered a large and high-quality crop.

Rolling the clock forward to this fall, Burnett again took the podium, this time in Winnipeg for the 2015 version of the outlook event.

But this time, he delivered starkly different news.

It had been a late harvest again, but the quality of the crop is much more in line with what you might expect from that scenario. In fact, some parts of the wheat matrix are an absolute mess.

“We do have a lower quality crop this year, caused by a cool and wet growing season,” Burnett told the meeting.

Initially most of the crop got off to a decent start, although that start was delayed by a slowly disappearing snow pack in some parts of the Prairies. The notable exception was western Manitoba and eastern Saskatchewan, where around two million acres didn’t get planted due to wet conditions.

The next source of trouble was a torrential rain over the Canada Day weekend that again hit the same region, damaging some of the crops that did get in. Burnett estimates additional losses hit 1.75 million acres, adding that his family has first-hand experience with the problem, because they farm in the region.

“We say we were lucky, we only got six inches in 48 hours,” Burnett said. “A lot of the neighbours around us got eight or 10 inches.”

That was the kickoff for a wet growing season for much of the Prairies, with a large swath of the region including eastern Alberta, most of Saskatchewan and western Manitoba receiving between one-and-a-half and two times their expected precipitation throughout the summer months.

Then late in the season, a large chunk of the southern Prairies turned wet just as harvest was coming up.

“That’s not a prescription for a high-quality crop,” Burnett said.

If there was a lone bright spot it was that the first killing frost was delayed until well into the fall, though Burnett concedes it’s a bit of a hollow victory given the other quality issues that have resulted from the tough growing season.

40 country-guide.ca

“If you think it was bad this year, what really would have pushed us over the edge was an early frost,” he said. None of this was surprising news, especially for growers who lived through it. But Burnett said there are some interesting and surprising trends that are showing up now that the post-harvest picture of the crop is becoming clearer.

The durum crop has almost none of the top-tier No. 1 grade available, with just four per cent reaching that standard. Only an additional 19 per cent made it to No. 2 status. A whopping 77 per cent of the crop falls somewhere between Nos. 3 and 5, said Burnett, and he called it the “worst grading crop we’ve ever had.” To put the lack of top quality durum into perspective, he noted that theoretically the entire production of top quality durum for the region could have been filled by just three or four large producers in a normal production year.

Burnett also said other countries had similar quality problems, including harvest rains in France, Italy and Greece, while other major producers like Mexico are nearing the end of their crop year and have scant supplies available. All this has combined to double and even triple prices over the past year, with current prices sitting somewhere between $9.25 and $11.00 a bushel, compared to prices near the $5 mark 12 months ago.

Burnett said he’s calling the market to be at or near a top for a couple of reasons. First, he’s getting calls from general interest daily newspapers on the East Coast of the U.S. wondering why pasta prices are climbing.

“Durum wheat prices are a pretty esoteric topic, and when you have that kind of interest, it’s telling,” Burnett said. “Someone is noticing the price of pasta is rising, likely at small local shops, and is asking questions.”

When end-use customers start worrying about prices, so do semolina millers and pasta producers, causing some to ration demand by switching to lower grades, which can still produce quite nice pasta.

“Quality is entirely in the eye of the beholder,” Burnett said.

Some of this substitution is already happening, with a major sale to Algeria serving as an interesting bellwether.

That country is normally a reliable purchaser of No. 2 durum, but this time they bought some No. 3 CWAD. It’s not that they don’t prefer milling No. 2 CWAD. “They do,” Burnett said. “But they don’t like to mill it at these prices.”

December 2014

guide

Burnett also said the weather did have an impact on the quality of the CWRS crop in parts of the Prairies, but that damage was far from even. Overall the crop was about average, but pockets were extremely hard hit, especially in the southern Prairies, where the durum also graded badly. There, both quality and protein levels were disappointing.

“If you look at the whole crop, it was about average,” Burnett said.

In other words, Burnett says the shortage of top quality Canadian wheat may have been overstated.

“There is quality grain available in Western Canada,” said Burnett. “Protein is good. Lots of quality differences and problems, of course… but the protein levels look OK.” Buyers looking to source top quality wheat shouldn’t experience the same difficulties as those looking for durum.

“There seems to be lots of opportunity to meet grades through blending,” Burnett said.

That could mean some pricing opportunities for growers with higher-protein spring wheat, especially later in the marketing year.

Burnett also said the canola crop’s quality concerns for 2014 appear to have been a bit overreported. Similar to wheat, the concern has been over large and untimely rainfalls in various parts of the growing area, yet the crop itself isn’t showing dramatically different numbers than in most years, with Burnett calling the crop “average, with a bit higher protein meal and slightly lower oil content” than last year’s.

He’s expecting the canola basis levels to continue to improve, as he sees lower ending stocks of just over 900,000 tonnes, compared to 2.363 million tonnes at the end of the past crop year. Don’t necessarily look for that drawdown in ICE canola futures, however, because the U.S. is expecting a large soy crop this year. Rather, look for the basis to improve as the marketing year wears on.

“They will need to ration demand as we move into the last quarter of 2014-15,” Burnett said.

He’s also not looking for major swings in acreage for most crops next year.

“My thought is we’re going to remain flat on our oilseed-cereal mix,” he said, though he noted we may see a shift in oilseed acres, with just over two million acres of soybeans in Manitoba and parts of Saskatchewan. CG

“ There is quality grain available in Western Canada.

Protein is good.”

— Bruce Burnett, Canadian Wheat Board

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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.

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December 2014

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guide

Insect post mortem Top Prairie pest specialists reflect on 2014’s major insect trends… and what they could mean for the coming year

nsects are like the commodity markets. It’s really easy to know what they’re going to do, once they’ve already done it.

One of agriculture’s big challenges is dealing with different insects in different geographies, and doing the best you can to hedge your bets. Like the markets, however, insects are subject to a fair bit of detailed analysis, and every year the entomologists from the three Prairie provinces meet at the Western Pest Forum to present their version of the year that was, and to get a handle on the year that might be.

There are a number of factors that come together to make insects behave the way they do. Weather is one of the big ones, and the insects’ reproductive ability is another. The right number of egg layers surrounded by the right food and enjoying the right weather is a recipe for a perfect storm. When it all comes together, that’s when you get a plague.

On the other hand, you can also get a population crash, even when everything looks like it’s breaking in the insects’ favour. For instance, with grasshoppers, a well-timed rainfall could make the difference between a quiet year and an explosion.

Grasshoppers building “Well-timed is when the grasshoppers are first emerging,” says Alberta’s Scott Meers. “Raindrops are like little bombs on them, so they get bombarded by rain. Now I don’t think a raindrop would kill them directly, but it makes it cool and damp and they become susceptible to predation, starvation and diseases. If they’re not feeding regularly, which they can’t do when it’s wet and cold, they tend to die off.”

Wet and cold were last spring’s operative words for the Prairies, with melting, drying and seeding all behind schedule. Grasshoppers prefer a warm, dry spring, so 2014 should not have been a grasshopper year. Yet in some places on the eastern Prairies, grasshoppers were a major story.

“It was an interesting year, not what I would call 42 country-guide.ca

ideal,” says Manitoba’s John Gavloski. “I think there were a lot of eggs in the ground from the previous summer because they had good egg-laying conditions.

We got a decent hatch so there was a lot of edge spraying going on. Certainly some fields were sprayed.”

Gavloski also attributes the greater numbers to warmer and drier weather later in the summer.

Hoppers have been building for a couple of years, so they could be headed for some kind of a peak if conditions line up. If Manitoba farmers have a dry spring this year, they may want to keep an eye on their ditches and be ready.

Scott Meers in Alberta agrees, and he advises farmers that grasshoppers may not be gearing up for an explosion on par with 2002 but they could be on the upswing and farmers should watch for larger hatches in the spring.

In Saskatchewan, however, Scott Hartley isn’t calling for big numbers. Last summer’s wet conditions kept hopper populations down over most of the province except for some areas around Maple Creek, off toward the river and west of the sand hills where there was some spraying. But cutworms were another story.

“After a three-year decline, we were expecting it to continue in 2014 but actually it went the other way,” Hartley says. “Early on, cutworms were probably one of the biggest issues. Maybe not as big as four years ago but it still surged much over what it was in 2013.”

December 2014

Photography: Shannon Van Raes

By Gord Leathers

GUIDE

THE WEEVIL RISK

MIXED CUTWORM THREAT As with many of our pest species, cutworms aren’t easy to predict and any of several things can affect their numbers. As if that’s not bad enough, there are upwards of five different species.

Cutworms also like to live within the soil, which makes them harder to find and monitor. In fact, sometimes the only real sign that cutworms are a threat is actual crop damage.

“Whether or not they were a huge issue, it was certainly bigger than the year before, so it’s one that we’ll want producers to keep an eye out for in 2015,” Hartley says.

“Cutworms are regulated by natural enemies and particularly by diseases in Manitoba,” Gavloski adds. “The population goes through these cycles and we’re at that peak where we’ve got some higher populations. Sometimes we’ll get a few bad years in a row and populations drop and stay low for a few years and swing back up.”

DECEMBER 2014

“Our cutworm numbers were actually down in 2014, but we really don’t know what that means year-to-year since cutworms are such a hit-and-miss thing,” says Alberta’s Scott Meers. “I expect that we’re still going to have trouble with pea leaf weevil and cabbage seed pod weevil in our traditional areas south of Highway 1.”

In its larval stage the pea leaf weevil feeds on the roots and root nodules of legumes while the adults feed on the leaves. It’s a relative newcomer and was first found in southern Alberta in 2002.

It’s particularly fond of fababeans and this could be a serious problem with the growing popularity of faba. It’s a prodigious egg layer with individual females laying up to 1,500 eggs in the soil.

“We’re seeing pea leaf weevil as a problem primarily in southwest Saskatchewan, although it has shown some damage north of the South Saskatchewan River,” Hartley says. “It’s still primarily south of the river and east of the Alberta border to Swift Current.”

Hartley suggests if you had trouble with pea leaf weevil last year you may want to consider a seed treatment for this year. He also suggests looking for its cousin, the cabbage seed pod weevil.

“2013 was a banner year for cabbage seed pod weevil and it’s showing up at a latitude level with Kindersley and Outlook,” Hartley says. “It is north of the South Saskatchewan River now and it’s also well east of Regina. It’s still primarily in the southern regions and not quite to the Manitoba border yet but it’s now into the traditional canola-growing area.”

The seed pod weevil arrived in Canada in the 1930s and is a pest on canola, mustard and the cole crops like broccoli and cabbage. The adults emerge from the leaf litter in the spring and find their way to a plant where they feed on

the floral buds and young seed pods.

They lay their eggs on the pods where the larva continue feeding on the seeds.

They cut their way out and drop into the soil where they pupate. They mature in August, emerge from the soil and overwinter in leaf litter.

FLEA BEETLES AND MIDGE Another canola pest, the flea beetle was not a big problem over most of the Prairies except in Manitoba. Flea beetles don’t like a cool wet spring but they still caused trouble in the eastern plains. It could be a result of the plants emerging slowly and remaining cool for a long period of time.

“That creates problems because the seed treatments eventually wear off and people are out doing foliar sprays in addition to seed treatments,” Gavloski says. “The plants had a hard time getting to that point where they were big enough to resist the flea beetles. The numbers were quite high so if we get a cool, wet spring again then flea beetles would probably be another one to watch.”

Flea beetles are a perennial problem in canola just as wheat midge is a perennial problem in wheat. Alberta and Saskatchewan both had trouble with wheat midge.

In Alberta it was the Peace Region that was hardest hit.

“There was substantial damage in 2013 and in our soil survey the numbers were very, very high,” Meers says. “We’re still processing our samples from our fall survey. For the Peace it looks like the risk is going to be lower going into 2015, but we have had some individual sites that are fairly high in central Alberta so we may have midge issues we’ll have to watch in central Alberta.”

“It’s sort of our perennial pest in wheat and certainly the wheat midge forecast map had indicated that there was going to be a lot on the eastern side of Saskatchewan,” Hartley says.

“Every year, midge is a problem somewhere in the province although we’ve got increased acreage of midge-tolerant wheat planted.

Those were the big insect problems encountered by Prairie farmers this year.

Others that may be worth looking for include Bertha armyworm, diamond back moth and lygus bug. Farmers may also see the detailed reports from the Western Pest Forum at www.westernforum.org/. CG country-guide.ca 43

guide

Grain wreck The big crop and awful winter weren’t the only causes of 2014’s rail fiasco, says transport expert Mark Hemmes.

There are also deep systemic issues that must be resolved

By Gord Gilmour, CG Associate Editor

“ 2013 sticks out like a sore thumb,” Quorum’s Mark Hemmes says of the big yield surprise.

f there’s anyone out there with a bird’s eye view of the rail system and exactly what happened last winter, it’s Quorum Corporation’s Mark Hemmes.

The organization is the federally appointed monitor of grain transportation, charged with tracking how efficiently grain is moved out of the Prairies following partial deregulation of grain transportation around the turn of the millennium.

Hemmes told the Cereals North America conference late this fall in Winnipeg that it would be hard to foresee a series of events that would have caused greater strain on the system than those of last winter.

“We are indeed living in interesting times, and our job was made even more interesting in the past 12 months,” Hemmes said.

One thing he made clear at the top of his presentation was that the problem really comes in two parts. There were the immediate problems caused by a brutal winter plus a huge crop. But it’s clear this situation exposed serious, system-wide weaknesses.

“Lots of people talk about how last year was all about a big crop and cold weather,” Hemmes said. “It certainly had a lot to do with the challenges. But it also brought forward other systemic issues that became apparent because of the cold weather and crop.”

Especially bad were the lack of coordination throughout the system that led to issues with system fluidity, and issues with the railways' inability to scale up in the face of a larger than expected crop. In part that’s because, heading into the fall, few realized just how big the crop would be, he said.

During the early part of the growing season, Hemmes recalled, most crop watchers were actually worried the crop might be in trouble. Seeding had been late and the spring was cold and dry, so the expectation was for yields that would be anywhere between normal and a bit lower than normal. June saw growing conditions normalize a bit, but it was only in July and August that crops really took off.

“It was perfect growing conditions, and as the summer wore on, it became obvious that it was going to be a bin buster,” Hemmes said.

44 country-guide.ca

By the end of October, this big crop was starting to fill the pipeline as the various grain companies made sales to customers who were ordering vessels to be filled at Vancouver and Prince Rupert.

“It was at the end of October last year that we started to see the whole system slow,” Hemmes said.

Hemmes said evidence of this can be seen in the high stock levels at country elevators, which remained over 95 per cent of capacity for a record 30 weeks straight.

Railways were already struggling to meet demand due to a shortage of trained staff, and then in November another record came rolling along — the longest uninterrupted stretch of cold weather ever recorded. To give some sense of just how cold it was, Winnipeg, for a time, was widely and accurately reported to be colder than the surface of Mars.

For the railways, the effect of cold can be severe.

Air system seals fail, resulting in air pressure too low to run the braking systems of trains at maximum lengths of more than 100 cars, so they had to be made shorter, which further exacerbated the systemic problems.

For producers in the country, this translated into serious problems moving their crop to market and a critical lack of post-harvest cash flow. Grain companies found their costs rising due to demurrage charges on boats that were kept waiting at port, with the feeds climbing daily while their holds sat empty.

“We all saw the pictures of the ships,” Hemmes said. “They were parking them in the port, off Vancouver Island, and up and down the coast.”

Hemmes said demurrage per ship was $6,000 to $8,000 a day, but could have been worse.

“The past couple years we’ve actually had quite low rates for ocean freight,” he said. “In a more average situation you would expect that to be somewhere between $25,000 and $30,000 a day.”

Hemmes said the demurrage charges will likely keep piling up through 2014-15 due to the backlog, so grain companies have scaled back their forward sales since they’re not sure they can get crop to port on time and they don’t want to incur charges.

“They’re starting to pare back,” said Hemmes.

“That’s not good for us in the long term.”

And while he stuck to his position that there are systemic issues to resolve, Hemmes did concede he’s hoping Mother Nature will be more co-operative this year.

“If I could wish for anything this year,” Hemmes said, “it would be a milder winter.” CG December 2014

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guide

Mildew report Mildew led to widespread downgrading in 2014, but the crop’s overall quality outlook is still positive

By Ellen Goodman

his past fall, mildew has been one of a number of downgrading factors affecting the Prairie wheat harvest to a greater extent than last year, but it doesn’t necessarily mean it’s all bad news for finding markets for milling quality wheat.

Each fall Cigi (Canadian International Grains Institute) receives samples of the different wheat classes from grain companies which are then made into composite samples and evaluated for quality characteristics in end-use products, with the results then presented to industry and customers around the world.

As well, the Canadian Grain Commission (CGC) prepares standard samples representing the typical condition of each wheat class for grading by CGC grain inspectors.

The samples represent grading factors (including mildew, frost/heat stress, and green or immature wheat) that are influenced by environmental growing conditions and are assessed visually. (For more information check www.grainscanada.gc.ca/fact-fait/ss-et-eng.htm#e.)

Across the Prairies in 2014, the higher incidence of mildew, caused by the fungus Cladosporium, is attributed to wet conditions at harvest, says Elaine Sopiwnyk, director of science and innovation at Cigi.

“Parts of Alberta received snow that resulted in some lodging of the grain where stalks fall over and get compacted by moisture that promotes spore growth,” Sopiwnyk reports. “As of early October, mildew accounted for almost 65 per cent of the downgrading of CWRS to No. 3, with even more in Manitoba but less in Saskatchewan. Other downgrading factors that seem high this year are frost/heat

46 country-guide.ca

stress, sprout damage, and fusarium which is especially high in Manitoba and Saskatchewan.”

Mildew is non-toxic and causes a discolouration of wheat flour, Sopiwnyk says. The greyish colour can be undesirable in some end-products that require a high level of brightness or whiteness, such as for white pan breads or for some Asian products like steamed breads. “Some of these markets are really discriminating, and the brightness and whiteness of their product is very critical. CWRS, for example, is exported to so many markets with different endproduct applications and quality requirements.”

In addition, Sopiwnyk points out that sometimes the wet conditions causing mildew may also cause additional degrading factors due to weathering that can affect flour and end-product quality. “Generally, mildew is an indication of the weathering that occurred. If you have grain that is wet at harvest, then there is also a possibility of sprout damage as well.”

Ashok Sarkar, Cigi senior adviser for technology, agrees that more than one degrading issue can be associated with a wet harvest. And while mildew dulls the colour of flour, the inclusion of some blackened parts of the wheat kernel in lower grades of durum wheat during milling can also add undesirable dark specks to durum semolina which could affect the appearance of pasta.

However, Sarkar says some markets that are more sensitive to price than quality are open to using wheat affected by mildew for blending with other flour for baked goods. “Even domestically there are baked products where mildew does not have an impact on quality,” Sarkar says. “But in places like Asia where noodles and steamed bread require a bright and white colour, wheat with high levels of mildew may not be acceptable.”

Sarkar says that a bleaching agent can be used during milling to whiten dull flour, but with only limited effect. “It’s all relative,” he says. “Mildew strictly affects colour while, on the other hand, I’d say something like frost damage is one of the more difficult grading factors to deal with from a milling and end-product quality standpoint.”

This year initial reports have indicated that mildew is not having too detrimental an effect on flour or crumb colour, Sarkar adds.

Cigi began presenting its harvest assessment to customers mid-fall and, together with the CGC and Cereals Canada, it will hold new crop seminars in Asia, Europe, South America, the Middle East, and North Africa. CG December 2014

guide

2015 outlook

disease

The 2014 growing season saw some serious disease outbreaks, and it looks like 2015 will too

By Gord Gilmour, CG Associate Editor

Last summer’s leached spikelets could mean a poor start for this year’s wheat crop.

rops diseases are always a risk for grain growers. Be it rust in the 1950s, fusarium in the 1990s or clubroot today, it seems there’s always a new pestilence lurking just around the corner.

Country Guide spoke to crop disease specialists from the three Prairie provinces late this fall about what they saw in the field during 2014, and lessons that should be drawn for next year.

You can’t predict tomorrow based on what happened yesterday, particularly when it comes to something as variable and weather dependent as crop diseases. But you can see the large trends developing, and get a better sense of the looming challenges.

Maybe you can even get just a bit better prepared this time around.

Fusarium If there was a headline story for growers across the West in 2014, it was the return with a vengeance of fusarium head blight.

This isn’t a new foe for growers, of course, but it is the first time in a few years that it’s been a major widespread problem. Why? Well, if the three rules of real estate are location, location and location, the three rules of fusarium are timing, timing and timing.

In this case, says Manitoba Agriculture, Food and Rural Initiatives disease specialist Holly Derksen, it’s the timing of the winter wheat crop.

“It was big this year in winter wheat — the spring wheat was not as bad,” Derksen says. “In the winter wheat we saw some severe damage, because everything just lined up right as the winter wheat was starting to flower.”

Alberta’s Mike Harding saw much the same pattern farther west, saying the diseased material from decaying stubble began producing spores early in the season, just when the winter wheat crop entered the most susceptible part of its season.

Both Harding and Derksen say there were isolated problems with the spring wheat crop as well, but nothing anywhere close to as bad as the winter wheat experience.

Meanwhile in the central Prairies, conditions turned wet at just the right time to hit the spring wheat crop hard, with widespread rain that began in earnest over the Canada Day long weekend, says Saskatchewan Agriculture integrated pest management specialist Brent Flaten.

“It just went on and on, for a long time,” Flaten says. “It gave a chance for the disease to develop in the infected crop residue from previous years.”

That then produced spores which in turn infected the heads of the new crop, causing the all-too-familiar shrivelled and bleached heads, and subsequent wrinkled kernels and elevated levels of mycotoxins.

“We always talk about the disease triangle — you need to have a susceptible host crop, the inoculum and the right weather for it to develop, and this season we had all three,” Flaten says. “It really was, in a lot of ways, the perfect storm.”

The region always has susceptible crops, and Continued on page 48

December 2014

country-guide.ca 47

guide Continued from page 47 the explosion of the zero-till production system over the past three decades has guaranteed the presence of inoculum, Flaten says.

“I’ve always been an advocate of zero till for its soil conservation aspect, but sometimes along with the good you get the bad, and this is one of those cases,” Flaten says. “The inoculum survives in that crop residue that’s left on the surface of a zero-till field.”

While it was a bad year, future cases of the disease depend largely on weather, so there’s no way to really know if the problem will repeat in the 2015 season.

The bigger question, instead, is whether you can find decent-quality seed for next year, since the inoculum can also be carried on the seed and infect the crop during crop establishment. It won’t cause fusarium head blight, but it will result in root rot and other early-season issues.

“I would suggest testing potential seed lots early this year, and getting them to test both total level of fusarium and what type,” Flaten says.

Clubroot broke through canola’s genetic resistance genes in 2014.

48 country-guide.ca

Type is an important question because the seedling issues are most common in the graminearum subtype, while fusarium avenaceum is also common in the province, especially in the drier western part.

Both can cause fusarium head blight, but not in the season of seeding, since there is no systemic transfer.

If a grower doesn’t have enough suitable seed, they may want to consider buying new seed this year, but Flaten noted with the problem as widespread as it was this past season, there are no guarantees, so lab tests for this seed will also be important.

“Unfortunately, even certified seed growers were struggling with this disease this year,” he says.

Clubroot Another major crop disease everyone is eyeing nervously is clubroot in canola, particularly in the region surrounding Edmonton, which is the epicentre of the outbreak in Western Canada.

Here Mother Nature delivered a stern lesson in the relentless mathematics of selection pressure, all in a short time due to the highly variable nature of the clubroot infection.

“Clubroot is what’s known as a hypervariable infection,” Harding explains. In simple terms, that means the disease has a lot of variation within its population, vastly increasing the likelihood that some small portion of the disease in any field will have naturally occurring resistance to any control measure, be it chemical or genetic resistance built within the crop itself.

It’s that second type that was introduced to Alberta about three years ago, and this season, for the first time, serious infections were reported in fields planted to these resistant varieties. Harding says the final lab analysis is still pending on the samples, but that it’s very likely the province is looking at the first case of the breakdown of genetic resistance to clubroot.

“It would appear that what we’ve seen is a shift in the field to a new pathotype,” Harding says. “It really underlines that we’re going to need all our tools — genetic resistance, rotation, and cultural practices like limiting the spread of soil — to stay ahead of a disease that can turn over the population so rapidly.”

It’s a familiar message for growers in the affected area, but one that bears repeating, since the disease continues to prove it correct at every turn. Still, it’s not necessarily a welcome message for grow-

Test your wheat seed early, Saskatchewan disease expert Brent Flaten recommends.

Fusarium loads are heavier than they’ve been in years ers who are faced with the inevitability of more complexity and higher management requirements on ever-larger farms.

One bright spot in the recent finding, however, is that the problem thus far seems localized to just one production area, meaning the vast majority of growers are unlikely to be affected next season. However, it also highlights the need for vigilance and to be actively looking for either the disease or new variants of it.

“We need to be out there really looking for it,” Harding says. “It doesn’t matter if you’ve planted a resistant variety or if you’re in an area where you think you don’t have it — you should still be looking for it.”

Finding the problem early is vastly preferable because it tends to be smaller and easier to manage, Harding says.

“It’s a much different situation if you’re dealing with a small patch rather than a full 160 acres,” he says.

It’s those preventive measures that his colleagues in the other two provinces are currently focusing on. Both Saskatchewan and Manitoba have reported their first few findings of clubroot.

December 2014

guide In Manitoba the disease had been identified in the soil a few years ago, but 2013 saw the first identification of an infected crop in the field, leading to a testing program that found the disease in 10 rural municipalities, with no clear cluster pattern emerging.

“It’s here, it can survive here, and it could cause problems here,” Holly Derksen says. “We really need to stay ahead of the curve.”

Brent Flaten reports a similar situation in Saskatchewan, saying so far there have just been a small handful of reports. Two soil samples were found to have the disease present, one in 2008 and one in 2012.

Clubroot symptoms were reported in two fields in the fall of 2011. This year the province tested 80 fields and all were found to be clubroot free.

“We haven’t been identifying it, but it might be in other areas at a level below detection,” Flaten says. “We’re telling growers to be very aware of the issue.”

If they do suspect they’ve got a problem, they should contact their agronomist, or a provincial extension specialist, to confirm the diagnosis.

Flaten says he’s most nervous about how quickly the disease overwhelmed the genetic resistance, suggesting a multipronged integrated approach will be key to long-term management.

“I think we do, at times, rely too much on the genetic resistance in the crops to control diseases,” Flaten says. “That can apply a lot of selection pressure to the diseases and result in the genetic resistance in the crops breaking down.”

So far breeders have been both good and lucky, keeping ahead of key diseases like blackleg and cereal rust — but he fears this won’t continue on forever. “It’s going to be a real challenge to keep clubroot out of Saskatchewan,” he says.

Aphanomyces Aphanomyces isn’t exactly a household name yet, but with pulse crop acres rebounding, it’s definitely one growers should be aware of.

“It’s a new disease that was identified about a year and a half ago,” Flaten says. “Before that we didn’t think we had it and likely wrote off the symptoms as waterlogging and flooding.”

It’s most common in pea fields and it’s a water mould that requires wet conditions to really cause a lot of damage.

“In that way it’s kind of self-limiting and could be managed relatively easily with field selection,” Flaten says.

Alberta’s Mike Harding says it’s been found in his province as well, and he agrees that field selection is the most obvious way to go.

“If you have a poorly drained field, that might not be your best bet for pea production,” he says.

Brewing resistance A final concern is the looming issue of fungicide resistance to both sprays and resistant varieties.

Here the most obvious parallel is herbicide resistance, and if fungicide resistance becomes a real concern, it will be for exactly the same reason — too frequent use of the same products and varieties without proper rotation.

“Rotation is key,” Derksen says.

“Both rotating your crop and rotating your fungicide and your varieties to a different type.” CG

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country-guide.ca 49

mACHINERY

It won’t be easy being green — or red, or blue Tough decisions lie ahead, with all the major brands needing to throttle back production but still keep up with changing market demand

By Scott Garvey, CG Machinery Editor

hat a difference a year makes.

The heady days of overfilled order books at ag equipment assembly plants have faded into history. By the end of September, the Association of Equipment Manufacturers (AEM) was reporting year-to-date sales of four-wheel-drive tractors in Canada were down by 19.8 per cent. Combine sales had slumped even further, dipping 21.1 per cent, although sales of rigid-frame tractors above 100 horsepower still managed modest growth of 3.9 per cent.

In the U.S., the news is as bad or worse, with a 15 per cent decline in four-wheel-drive tractors and a 17 per cent dip in combines. Sales of rigid-frame tractors above 100 horsepower there have fallen off 8.6 per cent.

Meanwhile in Russia, the only overseas country in which AEM tracks sales, year-to-date sales had actually been riding high over 2013 numbers, but by August they were plunging, with overall tractor and combine sales down about 30 per cent on a monthto-month comparison, suggesting a severe cooling off.

Russia was one of the growth markets that the Big Four equipment brands have had their eyes on and invested in, so declining sales there are bound to be a blow to shareholder expectations. Low commodity prices, the loss of access to capital and political isolationism are fuelling uncertainty there.

Although the dynamics affecting global farm revenue and machinery sales vary from region to region, overall demand for ag equipment is clearly falling. Agriculture, and therefore ag equipment sales, had been among

50 country-guide.ca

the few sectors to weather the latest global economic downturn virtually unhindered. Now they’re staring at tougher times ahead, at least in the short term.

It’s important to remember, though, that the decline in farm equipment sales is happening to an industry that was surfing along on never-beforeseen, record highs. A cooling down may have been inevitable, and even a pull-back of 10 to 20 per cent overall still equates to relatively strong demand from a historic perspective.

But there are some new problems the sector will have to deal with.

“We believe the long-term fundamentals in agriculture are very strong,” says John Lagemann, John Deere’s VP of ag and turf sales and marketing. “Having said that, the market will go through dynamics and we’re going through dynamics right now. We understand this industry has some cycles to it and we’re very well prepared, we’re managing appropriately… we’ll match our production to market demand and that’s what we’ll do. That’s the way we’ve always run the business.”

For Deere, and the other brands the first step in matching production to market demand is to slow down assembly lines and lay off workers. In August, Deere announced it was placing 460 employees from its Waterloo assembly plant on “indefinite layoff.”

Other brands have made similar announcements. For example, short-line manufacturer Great Plains gave 40 workers their pink slips this past summer, and AGCO announced it will cut back production at its facilities.

December 2014

MACHINERY

John Deere’s new 9R tractors are being released into a Canadian market that has seen sales of similar machines decline almost 20 per cent so far this year.

John Lagemann, VP of ag and turf sales and marketing at John Deere.

Photos: Scott Garvey

December 2014

“During the third quarter, we experienced weaker-than-anticipated levels of demand and are responding by making more aggressive cuts in production schedules and expenses,” stated Martin Richenhagen, AGCO’s chairman, president and CEO in an investor-relations press release.

In the U.S., which is still the largest and most lucrative market for equipment manufacturers, there are several factors putting pressure on sales. Low commodity prices, of course, are front and centre, and there may be no immediate relief on that front.

“The big question is, of course: ‘how long will this downturn in farm income last?’’’ says an article published by AEM. “According to the USDA’s 2023 projections, lower crop prices will continue to result in declines in export values and farm cash receipts through 2016 (in the U.S.).”

According to the OECD-FAO Agricultural outlook, Canadian farmers will face the same. “Crop prices are expected to drop for one or two more years, before stabilizing at levels that remain above the pre-2008 period, but significantly below recent peaks,” reads their report.

One factor unique to the U.S. that will drive sales numbers lower is a change in tax laws that will affect new machine depreciation.

“Capital expenditures on machinery are expected to decrease from past heights due to a change in tax incentives and subsidies,” forecasts the AEM. “The amount that can currently be deducted for tax purposes is set to drop from $75,000 to $25,000.”

The ag equipment sector is also feeling the full effects of a hangover from the previously overheated market, which left dealer lots littered with low-hour, highvalue machines looking for homes.

“The large inventory of used equipment sitting on dealer lots is not only decreasing the ability of the dealers to purchase and finance new equipment, but is also lowering the value of the trade-ins farmers tend to use when buying new equipment,” notes the AEM. “Dealers might go so far as to not accept used equipment for trade-ins.

The fact that some large companies are offering sales incentives such as free warranties on used equipment illustrates the urgency to get it off the lots.”

Deere is one of those to announce an incentive program this summer to help keep demand up for used equipment.

“We are introducing a strategy we’re calling certified pre-owned,” says Lagemann. “We think it’s the right kind of strategy because of the value of used equipment. One of the biggest reasons customers purchase equipment is to help them manage their risk. When they buy equipment, they want to use it.”

Lagemann says there are two elements of Deere’s certified pre-owned strategy that are especially important. First is that every piece of certified equipment it qualifies will have a one-year comprehensive warranty on it just like a new warranty. Second is that they will all have JD Link capability, which means they will be telematically enabled, allowing a customer to manage risk profile and also boost their productivity.

Lagemann also sees a bright spot in the current commodity price doldrums. Livestock producers who are looking at record beef prices will also have lower production costs, greatly increasing their profit margins.

“We’re going to have a record corn and soybean crop, that’s putting pressure on prices,” Lagemann says. “But if you think about it, from the livestock customer segment, that means the lowest cost those producers have seen in many years.”

In an act of impeccable timing, Deere just released an almost entirely updated line of hay and forage products that will cash in on what could be a jump in new equipment sales in that sector, which had been an industry laggard.

“We’re very, very pleased with what we’ve introduced,” Lagemann says.

And Lagemann sees one other potential bright spot for Deere from lower farm incomes. He believes farmers will be looking for ways to better manage input costs. That in turn means they will be in the market for products that help them do that, which suits Deere’s digital technology strategy right down to a tee.

“If you think about the ability to analyze the effect of inputs, that’s a big deal,” Lagemann says. “I argue now our customers will be even more focused on the cost side than they’ve ever been… and if you think about cost management, that really invites precision agriculture.”

Says Lagemann: “We believe technology integrated with the product, supported by the customer allows us to take agriculture to another level. That’s what we’re really excited about.” CG

country-guide.ca 51

HR

Are you a ‘one-man show?’

Most farmers are entitled to feel proud. But what happens when your ego won’t fit through the door anymore?

By Pierrette Desrosiers, work psychologist, business coach and author

e were starting into a critical phase of succession planning on a family farm, and the farmer had something he wanted me to know. His son wasn’t cut from the same stuff that he was, Paul told me. “He will never be able to succeed like I have.”

Paul’s pride, unfortunately, had reached an unhealthy and destructive level. He was a 60-yearold farmer who started with nothing and built a prosperous company, attaining impressive success.

That is all to his credit, but the problem was that his ego was as developed as his business.

There’s nothing wrong with that, you may think. What happens, though, when that ego swells out of proportion?

“ Business is like making babies, it’s not something you can do all by yourself; it requires the collective efforts of others.” — Robert Kiyosaki The results are often tragic. The “one-man show” inevitably leads to failure during a transfer. The qualities that helped the entrepreneur achieve success can also lead directly to a farm’s collapse. It’s an outcome we see time and time again in family businesses from many sectors, where some failures are directly attributable to the founder’s style.

Just think of the traits associated with successful entrepreneurs: being independently minded, needing to get their own way, making all the decisions alone, having a strong need to be personally identified with the success of the business, not consulting with others, having an authoritarian and dominant approach, doggedly pursuing their objectives, and being competitive.

In some contexts, those traits may lead to success, but we can also imagine the havoc they create in partnerships involving either family members or others.

Ironically, some entrepreneurs who have achieved major professional success may have perpetual doubts about their own worth. In some cases, it is more important to the father that his children not outdo him than it is to ensure the success of the business, even when that implies significant financial loss.

52 country-guide.ca

Often, the ego wins because human beings tend to be more emotional than rational.

Exactly how does a “one-man show” type of father interact with his children? Here is how Paul’s son responds to that question: “He never congratulates me or recognizes my accomplishments, or my successes, but takes all the credit when they work and puts me down when I make a mistake. I have the impression that he is constantly trying to find fault in me. He has no interest in my needs, my expectations or my interests. He doesn’t discuss anything with me, but he makes all the decisions and then makes demands of me. I’m 35 years old, and he treats me as if I were still 15.”

Of course, the “one-man show” isn’t limited to parent-child relationships. It is also common in employer-employee relationships. As the leader of your company, your job is to lead well, making the business effective and efficient so that it achieves its goals without wasting time, money, or resources.

Here is the formula that all leaders should remember: Right PEOPLE + right POSITIONS + right ACTIONS + right REASONS + right TIME = EFFECTIVE ORGANIZATION A leader should not be blinded by his omnipotence.

He should care for and listen to others. He needs to ask questions and be concerned about others’ motivations, needs and fears. He should leave his ego at the door.

The “one-man show” types should avoid partnerships because they will sabotage their businesses and their relationship with their family, often unconsciously. Often this type is only interested in continuing his show alone and waiting for the curtain to fall so that he can sit back and revel in his achievements.

However, he needs to know that after the show is over and the applause dies away, he will be alone in his dressing room without anyone to celebrate with him.

Ironically, while no one person can single-handedly build a great company, one wrong leader can single-handedly cause its demise.

As we know, cemeteries are full of people who thought they were irreplaceable. 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.

December 2014

w e at h e r

MILDER THAN NORMAL AVERAGE PRECIPITATION

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NEAR-NORMAL TEMPERATURES AND SNOWFALL

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NEAR NORMAL

December 14, 2014 to January 17, 2015

Dec. 14-20: Dull, with intermittent rain on the coast and occasional snow inland.

Chance of heavy precipitation. Windy at times. Variable temperatures leaning to the mild side.

Dec. 21-27: Seasonal to mild on most days. Look for intermittent coastal rain and fog, changing to snow inland on two or three occasions. Windy from time to time.

Dec. 28-Jan. 3: Fair but expect snow on two or three days, chance heavy in some localities. Snow mixed with rain along the coasts. Occasionally windy. Seasonal to mild temperatures.

Jan. 4-10: Disturbances bring in colder air along with windy and wet conditions to the coast on several days. Periodic snow inland, possibly heavy in some regions. Colder.

Jan. 11-17: Temperatures fluctuate from seasonal to cold. Windy at times with higher wind chills. Intermittent rain to snow on the coast changing to heavier snow inland.

ALBERTA

Dec. 14-20: Conditions vary as disturbances bring blustery winds and variable temperatures. Fair days alternate with occasional heavy snow. Risk of rain in the southwest.

Dec. 21-27: Fair, seasonal with some higher wind chills but gusty, milder intrusions on two or three days bring some snow with blowing snow to southern regions. Flurries, cold in the north.

Dec. 28-Jan. 3: Several clear and cold days this week with higher wind chills but a couple of milder days result in snow and drifting in the south. Clear and cold in the north.

Jan. 4-10: Cold and settled with a few December 2014

higher wind chills, although some scattered snow and drifting snow in the south on a couple of days. Clear and mainly cold in the north.

Jan. 11-17: Fair and seasonal to cold apart from scattered snow on a couple of occasions. Brisk winds at times result in higher wind chills and drifting in the south.

SASKATCHEWAN

Dec. 14-20: Unsettled. Windy on two or three days this week with intermittent snow, possibly heavy in places, along with blowing snow in southern regions. Changeable temperatures.

Dec. 21-27: Mild to cold. Unsettled with snow and blowing snow in southern areas on two or three days. Flurries, higher wind chills in the north.

Dec. 28-Jan. 3: Falling temperatures and brisk winds create higher wind chills.

Occasional blowing snow in the south with scattered snow on a couple of days. Settled, cold in the north.

Jan. 4-10: Clear skies and cold with high wind chills this week but a couple of milder days bring snow and blowing snow to southern regions. Clear and cold in the north.

Jan. 11-17: Clear and cold weather dominates most days aside from light snow and blowing snow on two days this week. Windy days cause high wind chills at times.

MANITOBA

Dec. 14-20: Conditions vary this week as colder air exchanges with milder intrusions. Occasional snow, chance heavy in places with some blowing snow.

Dec. 21-27: Temperatures fluctuate but

trend to the mild side. Blustery with snow and blowing snow on a couple of days this week south. Colder with flurries in the north.

Dec. 28-Jan. 3: Several cold days this week with some higher wind chills. Otherwise fair with scattered light snow and some drifting in the south. Mainly clear, cold in the north.

Jan. 4-10: Clear skies dominate with seasonal to cold temperatures. Slight warming and gusty winds usher in some light snow and drifting on one or two days.

Clear, cold in the north.

Jan. 11-17: Seasonal to cold. Blustery at times with a few higher wind chills. Settled apart from scattered light snow and drifting on a couple of days south.

December 14, 2014 to January 17, 2015 NATIONAL HIGHLIGHTS The shortest and coldest days of the year will be accompanied by occasional harsh winter weather from the Prairies eastward to Quebec. However, a milder circulation in British Columbia and also in the Atlantic provinces should somewhat lessen the severity of the conditions. Some of this mild air will make its way into central portions of Canada from time to time. As a result the cold air will occassionally be moderated, resulting overall in near-normal average temperatures and near-normal snowfall from the western Prairies to Ontario and western Quebec.

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. country-guide.ca 53

life

Sing and read with your child ... it sets them up for a life of farming success

By Helen Lammers-Helps hen you play pat-a-cake with your baby, you might think you’re just enjoying a fun game.

However, child experts say rhymes, songs, and finger play actually help our children develop early literacy skills and build the foundations for a lifetime of learning.

Language and literacy do more than open up the possibility of academic achievement, says Daniela O’Neill, professor of developmental psychology at the University of Waterloo. Research has shown that oral language and literacy skills affect not only our reading, writing and math skills, but also our ability to get along with peers and to manage emotions.

Some researchers have even looked 20 years down the line and been able to see the impact of early literacy on the level of education attainment and the type of jobs people excel at, adds O’Neill.

The good news is that all of us — parents, grandparents, aunts, uncles and childcare providers — can help a child develop fundamental literacy skills.

O’Neill along with early childhood educator and children’s book author, Lana Button, share practical advice for how we can do this every day.

Both O’Neill and Button (no relation to CG editor Tom Button) agree that the essential thing for us to do with our kids is to read, read, read.

It’s never too early to start. For babies, look for sturdy, washable books. But don’t expect baby to sit

What to look for when choosing children’s books Children’s author Lana Button makes the following suggestions: Babies — Look for sturdy board books with bright colours, textures and few words.

Age 2-3 — Look for simple text and avoid heavy themes.

Age 4-6 — Look for simple story lines. They will appreciate a series like Franklin where the main character and setting become familiar.

Age 5 — Children this age will start to be able to appreciate humour.

Button recommends reading through books yourself before reading them with your kids to make sure they are appropriate. Some themes will be too complex for some kids.

54 country-guide.ca

while you read or talk about the pictures in the book.

“It’s OK if baby moves around, or even chews on the book,” says O’Neill. “It’s the sharing that’s important.”

However, reading isn’t the only way to promote language and literacy skills in young children. Talking and singing are two other ways adults can help children with literacy, says O’Neill. Speaking any language with the child will promote language development, she says. “Talk about routines like bedtime or bath time or what you see when you go on a walk.” When you are grocery shopping you can talk about the food, or point out logos and talk about what they mean, continues O’Neill.

Babies also enjoy rhymes, short poems and finger plays, adds Button. And, says O’Neill, two-year-olds love repetition. They may want you to read the same book over and over again, and that’s OK, she says.

“Follow the child’s lead… follow the child’s interests and don’t try to redirect him or her. Children learn the most when you talk about things they are interested in.”

Rhymes help toddlers remember stories, anticipate what’s coming, and figure out word patterns, says O’Neill. This helps prepare them for when they start to read. Singing simple songs also exposes them to word patterns.

While books with simple text suitable for a short attention span are best for toddlers, four- to six-yearolds will enjoy a more complex story, says Button. For example, many children like the Franklin series. They get to know the main character and the setting, she says.

Books can also be used to start a conversation or to create links to real life events, says Button. For example, reading the book How Cold Is It? can lead to a discussion of temperature. Reading the book Today I Feel Silly can prompt a discussion of emotions.

There are many resources to help adults select appropriate songs, finger plays or poems if you can’t remember the songs from your own childhood or if you’d like to expand your repertoire beyond Wheels on the Bus and Itsy, Bitsy Spider. Try searching the Internet, or attend a reading circle or song time at your local library, community centre or book store.

When it comes to school age children, educators agree that reading for at least 20 minutes every night

December 2014

life

Recommended Books is crucial, says O’Neill. You want reading time to be a positive experience, so choose a time of day when they aren’t too tired if they are getting frustrated, she says.

Most schools have levelled reading programs to help gauge a child’s reading ability. If you have any concerns about your child’s ability you should talk to his or her teacher, O’Neill adds.

Be aware that the child’s age when starting school can make a big difference in their reading readiness, especially when a child is only three or four, says O’Neill. Boys may also lag a little bit in their development, but O’Neill’s research shows the lag is only about two months.

If there is some kind of issue, the sooner the problem is investigated and identified the better. “There can be many, many reasons for a problem,” says O’Neill. Sometimes problems can be identified as young as 18 months, she says. If you have concerns about a child who is not yet in school, seek out a child speech pathologist in your community. “Earlier interventions are more successful,” she says.

If your child prefers factual books over fiction, that’s OK, says Button. But if you can find a fictional book on a subject of interest, it will really come alive for them, she says.

Some schools will hold reading nights where staff provides information to help parents explore books with their children. For example, O’Neill says you

December 2014

Babies — Goodnight Gorilla by Peggy Rathmann Babies — Read Me a Story by Barbara Reid Baby — The Zoe Board books by Barbara Reid Age 2-5 — 10 Minutes to Bedtime by Peggy Rathmann Age 3 — Red is Best by Cathy Stinson Age 3 — Giraffe and Bird by Rebecca Bender Age 3 — Where the Wild Things Are by Maurice Sendak Age 3 — How Cold Was It? by Jane Barclay Age 4 — Today I Feel Silly by Jamie L. Curtis Age 5 — The Day the Crayons Quit by Drew Daywalt Age 4-8 — This Is Not My Hat (series) by John Klassen

can go on a “picture walk” in a book where you just look at the pictures and try to anticipate where the story is going.

Even when children are reading by themselves, both O’Neill and Button urge parents to continue to read with their kids. It’s an important way to bond with your kids and maintain a connection. “This may be the time when they want to tell you about their day,” says O’Neill. CG

Sources of Recommendations for Books Your local librarian Good Reads www.goodreads.com Amazon www.amazon.ca Pinterest www.pinterest.com Reading is Fundamental website at www.rif.org/kids

country-guide.ca 55

h e a lt h

Smart use of antibiotics

By Marie Berry

ith the discovery of penicillin by Alexander Fleming in 1928, people were able to effectively treat diseases that once killed them.

While this marked the birth of modern antibiotics, the actual use of a substance derived from one living organism (i.e. mould on bread) to kill another living organism (i.e. a bacterial infection) is considerably older. Over 2,500 years ago, the Chinese applied mouldy soybean curd to carbuncles, boils, and other skin infections.

You know that penicillin antibiotics originated from Fleming’s mouldy bread. But did you know that sulfonamide drugs were discovered as a byproduct of azo fabric dyes in Germany, and that the cephalosporins were first noticed in a sewer outlet off the Sardinian coast?

Tetracyclines and erythromycins were found when soil samples from various world locations were systematically screened.

Today, the chemical structures of antibiotics are known, and they are manufactured in pharmaceutical plants. Moreover, new antibiotics are discovered by researchers in their labs manipulating chemical formulas, not searching mouldy bread!

When you take an antibiotic, it almost seems like magic that the antibiotic knows where to go in your body to fight the infection, but it’s not. Each antibiotic is effective against a specific group of bacteria, and each type of infection is most often caused by a specific type of bacteria. For example, 80 to 90 per cent of urinary tract infections are caused by E. coli, and sulfonamide antibiotics are the most effective against this bacteria.

Over time, researchers have found which bacteria are most likely to cause an infection, and thus which antibiotic is the best fit. However, you may still need a culture and sensitivity test to check to see which bacteria is causing the infection, and to which antibiotics it is sensitive, especially if the infection persists.

In recent years, antibiotic resistance has become

more common. It occurs when the bacteria causing the infection develops resistance to an antibiotic. If it is resistant to one member of the antibiotic group, it is likely resistant to all. A different and often more potent antibiotic is needed. Spread of an infection that has antibiotic resistance is always a problem because infections are difficult to treat and often older or sicker individuals have poor outcomes.

At one time, if you had a serious infection, for example a bone infection or osteomyelitis, you needed to be in hospital and to take intravenous antibiotics. Today many “Home IV” programs are in place which mean that you go to a hospital or clinic on a daily basis for the intravenous drug, but you remain at home. Then, of course, after you complete the course of the IV antibiotic, you will be prescribed oral antibiotics for a continuing period of time.

Ideally, antibiotics should be taken on an empty stomach so that you have the maximum absorption.

However, stomach irritation can occur with some antibiotics, for example erythromycins, and you need to take them with food so that you tolerate them better. Antibiotics are best spaced evenly throughout the day. If the dosing is twice daily, then try to space the doses 12 hours apart; three times daily, eight hours apart; and four times daily, six hours apart.

Remember, antibiotics are only effective against bacterial infections, not fungal or viral infections.

Coughs, colds, and the flu are viral infections and antibiotics have no value here. In fact, by exposing any bacteria in your body to an antibiotic, if you insist on taking one for a cough, cold, or the flu, you can contribute to resistance.

Also remember to take your complete antibiotic prescription. If you stop too soon, you may feel better, but some bacteria may remain and develop resistance.

You want to be smart when you take an antibiotic so that when you need one, it will be effective.

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

How many of you have difficulty swallowing a tablet, big or small? There are many ways of handling the swallowing, one of which is NOT to give up trying because you can’t swallow it. Next month we’ll look at some ideas which will help you swallow even the largest tablet.

56 country-guide.ca

December 2014

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December 2014

Give the gift of…

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“Life as a Mountie on the Prairies was never dull.” Darby Elder, 82, spends his days sitting by the window in a care home. His body is limited by a stroke, but his mind is active. His bedside table is covered with pictures from years as an RCMP officer in Saskatchewan. Early in his career, Darby was the lone policeman in a small town. He recalls a man, long since deceased, who “sold a lot of grain.” He had a quarter section of scrubland which did not grow much. “But he had a three-ton truck.”

Another man sold 12 calves in one year but only owned one cow. “He testified the cow had twins and triplets. The magistrate was raised on a farm. He was not fooled.”

Darby is especially proud of a picture of himself in red serge astride a black gelding named Trump. He was a member of the RCMP Musical Ride in 1953, the year of Queen Elizabeth’s coronation. The troop travelled across Canada and also performed in Portland, San Francisco and Los Angeles.

The young Mounties were a huge attraction beyond the welltrained horses. A smile comes across Darby’s face when he confides “coming home late at night covered in lipstick… but we still had to get up early and shovel manure.”

As a chaplain, I attend monthly meetings with the RCMP veterans. We enjoy ham and eggs at morning meetings, and steak when we meet in the evening. I was pleased to see Darby at the last meeting, smartly dressed in a blazer and tie. Some friends had loaded his wheelchair into a van and hoisted him up a set of stairs.

The Sick and Visiting committee reported on ailing members. A few were in hospital. Others were recuperating at home. Committee members had visited most of them, taking fruit baskets to some. Darby spoke up when they finished their report: “If I may speak for the sick and shut in, I want to say how much we appreciate your visits and your concern.” When he finished there was silence in the room. Some may have felt guilty for not visiting more often. Others may have wondered who would visit them when they encounter limitations of sickness and old age.

During the busy Christmas season, we might give some non-material gifts. Most of us know a Darby Elder, someone who spends long days alone. A few minutes for a chat will bring back memories and brighten a lonely person’s day.

Darby has dreams. We all dream. Humans have a great capacity to dream, to yearn, and to search. Even when our dreams fail to come true, or our yearnings go unfulfilled, we dream. Something from our souls keeps bubbling up and calling us to hope again. The day we refuse to hope is the day our souls flatten out. We begin to die from the inside out.

Some people are excited about the coming of Christmas.

Others just want to reduce a long to-do list. No matter how we approach Christmas, most of us dream more at this time of year.

We let our imaginations run further. Maybe it is the music, the candles in a silent night, or the Christmas message about peace, hope, joy and love. These become invitations for something deep within us to rise up again and search for something or someone worthy of adoration. At Christmas we dare to dream there is hope for our world, that a better future lies ahead.

Suggested Scripture: Isaiah 9:2-7, Luke 2:8-14 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon.

STAN JEEVES

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SHHH! YOUR NEIGHBOURS DON’T HAVE A SUCCESSION PLAN EITHER PROFESSIONAL TIPS TO GET FROM THIS YEAR’S GRAIN MORE PRICING HOW TO FIRE THAT EMPLOYEE, WITHOUT GETTING SUED

ACRES

By Leeann Minogue

Where’d that combine come from?

“He must have seen this coming,” Jeff said.

Dale just shook his head eff was looking at his laptop screen at the kitchen table when his father, Dale, came in the back door.

“There’s coffee on,” Jeff said, not looking up. “Elaine’s at a meeting in the city, but she left some cookies on the cupboard.”

“I’d better pass on the cookies. I just had breakfast in town at Wong’s, and your mother’s been nagging me about eating too much.”

Dale helped himself to a cup of coffee, then poked his head into the living room to see what his grandson was up to.

“I’m farming, Grandpa!” Connor announced.

He was in the middle of the living room floor, surrounded by all kinds of miniature farm equipment.

“Do you want to help? You could run the combine.”

“Not right now, Connor. I need to talk to your dad. Make sure you have the sieves set right. No point throwing a bunch of durum out under the coffee table.”

Dale turned back to the kitchen table, grinning when he heard five-year-old Connor making engine sounds in the next room.

“We’ve got some decisions to make,” Dale said, putting his cup down on a coaster on the table.

“No kidding. If we’re going to get a full discount on this overpriced canola seed, we’ve got to book it before Friday.”

“Well, you might want to book more than you planned.”

This made Jeff look up from his screen.

58 country-guide.ca

“Ron Friesen’s finally pulling the plug. He booked an auction sale.”

This news didn’t come as a big surprise. Jeff, Dale and every other farmer in a 20-mile radius had spent a lot of time considering what might become of the Friesens’ four sections of high-quality farmland. Ron had to be nearing 75, and both of Mary and Ron’s daughters had moved East after graduating from high school. If the Friesens had other relatives waiting in the wings to take over, none of the locals knew about them.

“Geez,” Jeff said. “Are you kidding me? You found out about his auction sale at the coffee shop?

I’ve been blowing snow out of that guy’s driveway every blizzard for the past three years, hoping we’d get a crack at that land one day. And you hear about it at coffee row, like every other clown?”

“I didn’t hear about it at the café. Ron phoned while I was in town. Your mom took a message.”

“Oh. Oops.” Jeff was embarrassed. “But it did sound like the kind of intel you’d bring home from breakfast in town. Do you think he wants to sell?”

“He asked your mom if we’d want to rent. Some of it, anyway.”

“That’s a relief,” Jeff said. “I don’t like the looks of land prices around here. Not with wheat and soybean prices falling. And all that fusarium in our bins.”

“Yup.” “Just one problem,” Jeff said.

“Yup,” Dale said again.

DECEMBER 2014

acres

They both knew the problem. Finding time. Rain and breakdowns had kept them harvesting until well after Thanksgiving this year. In September, it seemed like every time it was dry enough to get into the fields, it rained again. Then they’d lost three good days when their one-year-old combine broke down.

“If we add any more land to this farm next year, we’ll have to hang our Christmas stockings up in the cab of the grain truck.”

The men were both silent long enough for them to hear Connor talking to himself while he pushed his toys around. “Get that truck over to the combine,” the boy ordered.

“Greg’s been out here a lot this summer,” Jeff said.

Greg was a salesman at the machinery dealership in town. “Kept asking if he could get us a quote on a second combine. He must have seen this coming.”

Dale just shook his head.

“I know,” Jeff said. “We spent most of August and half of September trying to figure out who was going to run just one combine. Beats me how we could keep two of the damn things going.”

“Yup.” “But it would be handy to have two. We wouldn’t feel quite so sick when one went down.”

“Yup.” “We haven’t put out an ad in a while. There might be someone we could hire.”

Dale didn’t say “yup” this time. Both of them were remembering the responses they’d gotten the last time they advertised for a farmhand. The long list of impossible candidates included a senior citizen from Ontario who said he’d “always loved gardening,” and a civil engineer from Malaysia who claimed to “have very fine English.” None of the applicants had experience operating any farm equipment — let alone an almost new line of expensive machinery with the latest GPS technology.

Jeff went to the kitchen for more coffee, and topped up both their cups.

“I remember when you were about Connor’s size,” Dale said. “You wore a hole in our living room rug, ‘farming’ the carpet. Just like he’s doing now.”

“That’s why we put in hardwood,” Jeff grinned.

“You couldn’t wait to get in the combine.”

“Yeah,” Jeff said. “I’d still like to get more time in there. Seems like there’s always so much else to do, just running around from field to field, keeping everything going.”

“That won’t get any different if we rent more land and pick up a second combine,” Dale said.

“You’ll be one of those guys out driving around with a cellphone in one hand and a clipboard in the other.”

“Probably an iPad, Dad,” Jeff said. “I don’t

December 2014

think they make clipboards anymore… But… Yeah.

The job’s changing. And I don’t know what I think about that.”

“Yup.” “It would sure be nice to take on the Friesens’ north section. The one that’s right up against ours.

He hasn’t seeded canola on that land for years. And it’s high enough, it won’t likely flood this spring.

Jeff’s computer dinged, and he glanced down at his screen.

“Dad, you won’t believe it. It’s an email from Greg. Sending over a quote on a used combine, same make as ours.”

“Huh,” Dale said. “That guy doesn’t miss a trick, does he?”

Dale and Jeff spent the next hour looking at the specs on the used combine, and estimating potential profits from renting more land.

“I don’t even know what to pencil in for hired help,” Jeff said.

“ We’ve got some decisions to make,” Dale wanted Jeff to know. “Ron Friesen’s finally pulling the plug. He booked an auction sale.”

“If that gardener from Toronto’s still available, you might get him at a discount,” Dale said, getting up from his chair. “I’d better get home for lunch. I’ll call Ron when I get home. I’ll tell him you want to make a deal.”

“All right,” Jeff said. “I’ll set up a meeting with Greg. Monday?”

“Yup,” Dale said. He poked his head into the living room again on his way to the door.

“Hang on,” Dale said. “Jeff, come take a look at this!”

Jeff went in to look. Connor was still “farming” in the living room. He had two identical combines moving in parallel lines across the floor.

“I thought he just had one,” Jeff said. “Connor, where did you get that new combine?”

“Greg,” said Connor. “He said you need another one too.” CG Leeann Minogue is the editor of Grainews, a playwright and part of a family grain farm in southeastern Saskatchewan.

country-guide.ca 59

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