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WESTERN EDITION

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March 29, 2013 $3.50

Strategic

TECH

Chris and Craig Mustard select tech to build business options ❯❯❯ PG.12

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MARCH 29, 2013

PG.12 TECTONIC TECHNOLOGY Barn performance did improve when Chris and Craig Mustard installed a robotic milker, but the technology’s bigger impact reaches far beyond that. It’s why technology is becoming THE big business story of 2013.

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THE SECOND ETHANOL After many false starts, cellulosic ethanol is catching on, at last. Soon, it could be bigger than grain biofuel.

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A NEW KIND OF EMPLOYEE This community college in Ontario is training foodprocessing students to work on the farm.

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SOCIAL SKILLS Anyone who doubts the marketing power of social media should talk first to the machinery companies.

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MARCH 29, 2013

GUIDE HR — MANAGE YOURSELF, MANAGE YOUR TIME As farming gets more complex, time doesn’t actually shrink, but the cost of bad decisions does grow.

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GUIDE LIFE — VIOLENCE ON THE FARM No one likes to talk about it, but violence, bullying and harassment happen all too often on the farm.

ASIA EXPRESS Can you be a farmer and a successful cattle exporter too? Well, say the Guilfords, it all depends.

THE NEW CORPORATE FARM Family corporations already dominate the profitability of Canada’s farm sector, and they’re still growing.

UNDER CULTIVATION Today’s young farmers are bringing a new generation of leadership skills to the job. They expect to need them.

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PARTNERS IN WINE Creating partnerships to incorporate diverse skill sets increase the challenges — and the payoffs.

CAN YOU AFFORD THE NEW INSURANCE? The builders of Growing Forward 2 foresee a new era of private insurance. The question is, can you afford it?

WHAT GOES UP… Can crop and land prices stay high? Our Gord Gilmour asks FCC chief economist J.P. Gervais.

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EVERY ISSUE 6

MACHINERY GUIDE These innovations caught farmers’ eyes at this year’s big shows in Saskatoon and Louisville.

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HANSON ACRES It used to be the older generation who didn’t communicate. Now the shoe is on the other foot.

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GUIDE HEALTH When does having trouble getting to sleep become insomnia that should be treated by your doctor?

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PETUNIA VALLEY After his outback romance, nobody needs to ask Dan if he left his heart Down Under. He insists he didn’t.

CONTENTS

BUSINESS

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 Fax (204) 942-8463 (204) 453-7624 Email: gord.gilmour@fbcpublishing.com Maggie Van Camp (905) 986-5342 Fax (905) 986-9991 Email: bmvancamp@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Cory Bourdeaud’hui Cell (204) 227-5274 (204) 954-1414 Email: cory@fbcpublishing.com Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562

Tom Button is editor of Country Guide magazine

Advertising Services Co-ordinator: Sharon Komoski (204) 944-5758 Fax (204) 944-5562 Email: ads@fbcpublishing.com

Another growing chasm

Designer: Jenelle Jensen

In recent issues we have speculated on how dramatically the last couple years of commodity and farmland prices are impacting the evolution of the farm sector in Canada. Truly, agriculture is entering new territory, and at the very least, more land than ever before is going to be farmed by someone other than its owner.

There’s another influence, though, that we haven’t added to the list. Maybe it will prove the most powerful of all.

It’s this. As farmers’ net worth soars, more farmers are getting better advice from more highly qualifiied accountants, lawyers and farm business advisers, often all working together.

This is by no means a uniform phenomenon. Many medium to small farms continue to struggle to justify any professional fees at all, and of course for beginning farmers, it’s hard to see how they can afford to expand at today’s costs and pay such fees as well.

Still, with nearly half of Canada’s farm production being generated by the five per cent of farms that rack up $1 million or more in sales every year, it’s clear that the financial capability to hire such expertise is there for a critical mass.

There’s a question of course as to whether these farms are getting equal value for the money they invest in professional advice. It continues to be notoriously difficult to rate advisers by anything other than word of mouth and on “fit.”

Personal observation also suggests, however, that large farmers are more will4 country-guide.ca

ing than smaller farmers to shop around for advice and to change their advisers.

Regardless, the fact remains that from this point of view that there are two categories of farmers out there — those who are relying mainly on the sort of advice that everyone can get, and those who get specialized, professional advice targetted to their unique operations.

It’s true too that those who pay more for their advice tend to play their cards closer to their vests. Partly this is because they’re more likely to view neighbouring farms as competitors, especially when it comes to being in position to buy land.

But even if they don’t, the advice they get may be so individualized to their particular corporate structure, for instance, that it makes little sense to share it.

If there are two such groups, a good question to ask is, which group would you bet on?

I can hear the rumblings already. “If the so-called experts were so smart,” I’ll be told, “why aren’t they the ones with the millions?” I’ll readily concede too that market analysts, for example, don’t really seem much better than farmers at picking market highs. But still…

I’m not a pessimist, because I believe there will always be entrepreneurial opportunities in agriculture. Even so, you have to question if good prices really are unalloyed good news for everyone in agriculture. Let me know your thoughts at tom.button@fbcpublishing.com.

Publisher: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com President: Bob Willcox Glacier Media Agricultural Information Group Email: bwillcox@glaciermedia.ca Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 12 times per year by Farm Business Communications.

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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. 132 No. 6 Internet address: www.agcanada.com

ISSN 0847-9178 The editors and journalists who write, contribute and provide opinions to Country Guide and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists, Country Guide and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as Country Guide and Farm Business Communications assume no responsibility for any actions or decisions taken by any reader for this publication based on any and all information provided.

march 29, 2013

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Machinery

By Ralph Pearce, CG Production Editor

Canadian farmers are in the midst of that annual process of turning their backs on winter and heading into what will be a busy — and hopefully successful — planting and seeding season. Whether you attended the 2013 National Farm Machinery Show in Kentucky or the Western Canadian Crop Production Show early in the new year in Saskatoon, or if are just wanting to improve your on-farm operations, there’s plenty new to look at. 2013 has new fertilizer applicators, new balers and wrappers, new sensing systems and much more — including new drip irrigation systems, which after last year’s U.S. drought probably shouldn’t be a surprise.

cloud technology  There’s been a considerable amount of ink devoted to “the Cloud” in the past year, and 2013 is set to see bigger gains in the use of this technology. Cloud computing has become a catch-

importance. According to one software company rep, the amount of information now flowing to and from farms is staggering — to the point where thumb (stick or flash) drives will be a thing of the past. Among the companies investing in wireless communications systems are Raven, Trimble, AgIntegrated (maker of Onsite) and

phrase for software designers and Internet service providers. Essen-

Hemisphere GPS. The key to developing these systems is sufficient

tially, it’s the next step in wireless connectivity, much like the

online data storage capacity, plus adequate power in computing

technology that’s used in online banking. Given the mobile nature

resources to enable streamlining of data analysis. The software

of modern farming, such wireless capability will only increase in

options coming available will only continue to grow.

hORSCH MAESTRO PLANTERS  A relatively new arrival from Germany, Horsch quickly made its mark in North America with its Maestro planter that sold out in short order. According to the company, the Maestro is the only mainline planter with electric drives on each row unit, and Horsch is the only manufacturer to offer that feature as standard equipment. The goal of the electric drive is improved seed spacing, no matter which type of seed is running through the meters. A new addition on its 2013 model is a hydraulic-driven pump, providing better control of liquid fertilizer through different sections of the planter. It’s also ISOBUS compatible, meaning it can operate with any brand of tractor. www.horsch.com

CASE IH ROBO-SHARPENER Staying sharp is part of staying in business, and the Case IH Robo-Sharpener provides easier maintenance for wavy or regular tillage blades. With a unit that sits on a trolley, the Robo-Shapener can roll from one blade to the next in a matter of minutes. And since it mounts directly on the row unit, it can be done anywhere 6 country-guide.ca

— in the shop or out in the field. A gang driver rotates the blades automatically at the ideal speed as they’re sharpened. Reblading the row unit is no longer the only answer when the blades run dull. Now Robo-Sharpener can extend the life of the blades, saving you time and money and improving the cycling of phosphorus and potassium.

www.caseih.com MARCH 29, 2013

john deere 9 series round baler  A more powerful drive system and larger tires are just two of the new features on the John Deere 9 Series baler. Heavy-duty components translate into heavy-duty reliability, and the 9 Series baler also brings increased baling speed and productivity. This

series boasts 12 different models, with standard and premium features that can produce 4 x 4-foot bales for specific uses and markets, all the way up to the heavyweight 5 x 6-foot bales. This series also comes with four different silage designs. www.deere.com

yetter air adjust coulter/ residue manager  Getting more done with greater precision is the hallmark of an efficient new combination unit from Yetter Farm Equipment. By combining air adjust technology with residue management and coulter tillage, farmers have the means to speed their planting process. This new design gives you the power to adjust depth and pressure from inside the cab. The unit comes complete with a controller, compressor and air bags and is the newest addition to the 2940 Air Adjust System.

The company states that use of this new coulter and residue manager — from inside the tractor cab — not only improves the effectiveness of the planter, it also increases overall on-farm efficiency. www.yetterco.com

MARCH 29, 2013

country-guide.ca 7

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opinion

BIG IDEA

What goes up…

Can what goes up stay up?

Maybe it can, with global population growth and the emergence of new markets to underpin grain prices.

Increasingly, though, the predictions are going the other way

By Gord Gilmour, CG Associate Editor

Apart from the usual production challenges, it’s been a good run down on the farm for grain growers. They’ve seen back-to-back years of excellent prices, driven by everything from new demand from China to old-fashioned weather shocks.

So it’s no wonder we’re in a new era of enthusiasm and exuberance on the farm — at times bordering on a sort of pinch-me-please kind of amazement. Investments are being made in land,

Talk like that may be anathema to believers in

equipment, technology and inputs, all with an eye

the “new era” school of thought, but it’s starting to

to making farms more productive.

become mainstream, rather than just the province

Still, there’s that age-old marketing truism: “The solution for high prices is high prices.”

of alarmists and doomsters.

In fact, the 2013 USDA Agricultural Outlook

Will the market go south? Perhaps new land

Forum — the most watched outlook conference in

will continue to come into production in areas like

all of farming — recently spent a lot of time talking

Brazil. Maybe China will continue to cut land deals

about just this topic, and. J.P. Gervais, Farm Credit

in Africa. Or perhaps the mess that is agriculture

Canada’s chief agricultural economist was there.

production in the former Soviet Union countries

Gervais recently spoke to Country Guide about

will get sorted out, with added urgency because of

which way the wind is blowing — and what it might

the dollars to be earned.

mean for Canadian farmers.

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march 29, 2013

BIG IDEA

Country Guide: I suppose the million-dollar — or perhaps billion is more appropriate these days — question is, what’s going to happen to grain prices? What was the sense you came away with from the USDA forum?

J.P. Gervais: That producers need to account for the likelihood that prices are going to come down from their recent highs.

I don’t think the idea is they’ll go back to where they were for the 20 years or so before the most recent price break in around 2005 and 2006. They’ll remain above where they were, but the USDA says they’re likely to come down towards the bottom of the new range. That’s likely to happen in both the short and medium term.

It’s going to happen for fairly predictable reasons. High prices have encouraged producers everywhere to expand production, use more fertilizer, make improvements to their operations. This is happening all over the world.

The major risk in the 21st century is going to be market supply response, from places like Argentina, Brazil, Russia and Ukraine.

CG: Can you tell us a bit about how that might look?

Where did the USDA highlight as areas to watch?

JPG: Their forecast is for corn exports from countries like Russia and Ukraine to increase by 43 per cent by 2022. The effect of that will be cushioned somewhat by continued growing demand in emerging economies like China.

In many ways China is the big question mark. For example, soy exports to China have been a key driver in recent years.

Will they continue? Will they continue at the same rate? Will they increase at the same pace as the past few years?

The other obvious question is what’s going to happen with U.S. corn inventory? It will be rebuilt, but how many years will that take? Getting timely rain is going to be very important for that. The current high price is really about bringing land into corn production from other crops. Then what happens from May onwards is going to determine the direction of the market.

It’s also important to note that acres are now coming out of the U.S. Conservation Reserve Program, but that’s mostly happening in the U.S. Great Plains states, which is of course a wheat-producing region.

CG: Is one of the key dangers here that farmers are going to get excited by this period of higher prices and build overhead into their operation that will be difficult to sustain when prices do fall back down? Even if it’s not to the levels of a previous era? Or am I being unfair?

JPG: I think that’s fair to say, and it’s one of the reasons we encourage our customers to look at things like debt-to-asset ratios when they’re planning for their business, rather than just the market value of their products. At one point, as we’ve been saying all along, without falling to the low price, low volatility levels of 1990-2005, those prices are going to come down.

That’s why we talk about general measures like debt and asset ratios, and the importance of stress testing an operation. Careful financial management is very important, and if it’s not done you could wind up in a situation where you’re trying to grow your operation but you may actually wind up hurting your business, and that can put you in a spot you really don’t like. march 29, 2013

opinion

CG: I also saw that the USDA is forecasting a rebound in margins for livestock producers in the next few years. Is this a case of the old trend of grains hurting and livestock prospering, or the other way around, reasserting itself?

JPG: (chuckles) I’m not sure it’s quiet as simple as that. Margins should improve in the coming years but that’s likely to mostly be due to growing demand, especially from growing economies.

I was a bit surprised by the hog numbers which aren’t dropping as much as expected, considering the difficulties we’ve seen in that sector.

But yes, feed prices will likely be dropping and hog prices will be rising significantly, but that’s some years down the road.

I would expect it’s going to be two or three years before we see a significant increase in price.

The USDA expects cattle prices to increase until about 2015, then start to decline as production expands, which they’re expecting to occur through about 2022.

“ What’s going to happen to the U.S. corn inventory? It’s going to be rebuilt.”

CG: Agriculture never exists in a vacuum. The major economic trends of the day are clearly going to impact the sector too — what was the thinking at the forum?

JPG: Sequestration (the automatic spending cuts of six to 12 per cent due to start March 1) was of course an issue, and its expected impact on the agriculture industry. Some of the main points were food safety issues at processing plants, delayed trade negotiations and delays at border crossings. The USDA thought it could lower farm income by as much as 0.6 per cent and reduce overall demand for food.

The U.S. dollar’s ongoing weakness and an expected recovery will also likely have an effect on agriculture. In recent years the U.S. dollar has fallen quite a bit, which has made their farmers more competitive. In the future it’s expected to be really strong, the short-term effects of the sequestration notwithstanding.

We saw this during the financial crisis of 2008 — the thinking seems to be, “Well, if we’re all going to die, we probably want to be holding U.S. dollars.”

CG: It’s a complex picture, as economic questions usually are, with a lot of moving parts. How would you boil it all down to the farm level? Is there a simple take-home message here somewhere?

JPG: (laughs) I’m going to go back to an answer I gave recently when someone posed a similar question to me. Sometimes you’re asked a question and you give an answer and later you see it and wonder, “What in the world was I thinking?” and other times you are a bit proud of your answer. This time I was a bit proud, and I said, “Know your cost of production.” CG country-guide.ca 11

business

New technology can do more than expedite production.

It can revolutionize how you run your farm business too

ew technology can reframe a farm business. Remember how your first no-till drill spawned an era of expansion, or how your precision highclearance sprayer became a pathway to custom work? Or maybe you retrofitted the tractor with autosteer and it helped your father take another step toward retirement, or you got a smartphone and soon found yourself tracking prices and calling your grain broker with trades from just about anywhere.

Sometimes, it seems, the game-changing impact of technology is neither in the barn nor in the field. It’s in your business model.

Sure, technology can save on inputs and labour, or it can help you measure and manage information.

Other times, however, technology can spur expansion or even succession, and it can also completely shift the future of a farm by allowing farmers to delve into everything from new markets to off-farm jobs, and from secondary enterprises to different financial and business structures.

The question then becomes, if a technology’s biggest impact might be on your business, how do you prioritize which technologies to adopt first?

One such tectonic technological shift is underway in Canada’s dairy sector, where robotic milking herds have nearly doubled in the past year. “There are about 120 herds (in Ontario) with robots now, and many more to come,” says Jack Rodenburg, former Ontario Ag Ministry dairy specialist who currently operates Dairylogix in Woodstock, Ont. “It is now mainstream technology.”

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While absolute numbers aren’t available, optimism abounds. Mark Futcher, DeLaval’s marketing manager for automatic milking in North America estimates over 500 dairy farms in Canada today use an automatic milking system, or robotic milker. Historically the robotic milker market was dominated

by DeLaval and Lely, although in the last few years several other companies such as Boumatic, GEA Westfalia- Surge, and Insentec (Galaxy-Starline) have entered the market, and price is being driven down by greater competition and more choice.

Futcher also says the average herd size with robotic milkers in Canada is about 120 lactating cows. “In Canada for herds between 60 and 300 lactating cows, 10 out of 10 will at least investigate and price robots. Of those who do, eight times out of 10, robots will be the preferred choice.”

MARCH 29, 2013

Photo credit: Deborah deVille Photography

By Maggie Van Camp, CG Associate Editor

business

This uptake is consistent with many European countries while in the U.S. the uptake is lower but is catching up quickly, says Futcher. In markets such as Canada, where there are limits on growing herd size, farms can only improve income by increasing efficiency and productivity.

Labour is the biggest cost item on a dairy farm.

One estimate pegs the per-kilogram labour and equipment cost of producing milk on a smaller farm at about three times that of 400-cow dairies. “The best way to reduce labour is still to grow your herd and claim economies of scale,” says Rodenburg.

“This is especially true with big labour-efficient milking parlours because this technology shines in large herds where it doesn’t sit still most of the day.”

However, for smaller herds, robotic milking helps close the gap, narrowing the disadvantage compared MARCH 29, 2013

to their larger neighbours. Each robot unit can milk about 60 cows 2.7 times daily. “Robotic milking is clearly competitive for herds with less than 200 cows,” says Rodenburg.

This improved labour efficiency is why the Mustard family from near Uxbridge, Ont. adopted this technology a year ago. For their 60-cow herd, they installed one Lely A4 with an investment of about $250,000, including some construction to make it work in their existing free-stall barn. (Most free-stall barns can quite easily be converted to robotic milking, although regulations require a room be built around the milking unit.)

As part of his long-term business strategy, every decade Grant Mustard invested in milking technol-

For Chris,(l), and Craig Mustard, robotic milking creates new business options.

Continued on page 14 country-guide.ca 13

business Continued from page 13 ogy, including automatic takeoffs in 1981. Last year when his successor sons, Chris and Craig, looked into updating the units for the 11-year-old parlour, it was a $50,000 investment. Then, when they added in the increasing amount of hassle, uncertainty and labour costs with the older technology, suddenly the move to robotic milking made a lot of sense.

Before the robots, the Mustards hired a high school student and a retired man to help with the weekend milking. Chris estimates this part-time labour cost them about $6,000 a year. Without a robot, he sums up, “It takes four people to do what I can do with one person.”

It was the first major investment as shareholders

When a technology’s biggest impact is on your farm business, how do you analyze the benefits?

in the farm corporation for the 32-year-old twins.

This technological jump was enabled by the younger generation’s comfort with computer technology.

“Dad would never have done this,” says Chris.

Typically, adopting technology can push the transfer of responsibility for that part of the operation down to the younger generation. Grant’s role on the farm has shifted toward retirement now that he’s more comfortable leaving the farm to go on holidays and does not operate the robot directly.

Although the next generation of Mustards doesn’t spend time physically doing the milking, Chris spends more time managing information about the herd. Lists are generated which tell him which cows are sick or off production that day, and he’s learning how to use the reproductive statistics that the robot tests for and generates.

14 country-guide.ca

Chris laughs that it only took their cows three weeks to get up to milking 2.7 times a day, but the humans are still learning the details of how to maximize all the information generated by this technology.

“I don’t think a lot of computer skills are needed today to be a success with robots,” says Rodenburg.

“But if you are interested in data and using it in management, all the new information these systems have to offer will move you ahead quicker, and you do need some basic skills for that.”

This ability to leverage information will impact the return on investment for robotic milkers, which varies for every farm. Payback time also depends on maximizing the use per unit, the value of the labour being replaced and how much it costs to convert facilities to the new technology.

Although the Mustards’ intent wasn’t to change their operation’s vision, the technology has enabled them to embrace several income opportunities, it has shifted their responsibilities, and it has changed how they envision and plan for business growth.

Within the first year, milk production on their farm has increased 15 per cent. With robotic milking, production is usually four to six per cent higher than twice-a-day milkings. As a result, the Mustards are focused on trying to buy as much quota as they can. However, with the cap in Ontario on how much dairy quota sells for, relatively little is being traded.

Dairy farmers used to spend their profits on quota to grow their business and improve efficiency. Now that they cannot expand their quota holdings, the next best way to save labour and improve efficiency is to switch to robotic milking, says Rodenburg.

Chris sees how doubling the 60-cow increments without hiring staff could be done easily. “In a heartbeat I’d put another one in, if I could get quota,” he says.

The Mustards have added a couple of hundred acres to their cropping operation, bringing them to 800 acres of corn, wheat and soybeans. They’ve also expanded their custom work to include spraying, corn planting, big square baling and some grain cleaning.

Chris says that since it only takes one of them in the barn to do feeding and other chores, they’ve been able to do a better job in the field. Craig manages their cropping operation and now he doesn’t have to stop field work to go milk the cows, and can spray in the early morning.

It also opens more time for their secondary enterprises, such as Craig’s 70-ewe flock and the corn seed dealership that Grant operates.

Jordon Underhill, general manager of the new Canadian Dairy XPO, heard at least five farmers at the show say that the milking robot has helped keep their sons or daughters in the business. They were interested in computer technology and the robot reignited their interest in the farming operation.

“The next generation does not want to farm or milk the same way their parents and grandparents did,” Underhill says. “There’s nothing wrong with that.” CG MARCH 29, 2013

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business

Bringing diverse partners with diverse skills together for a special project creates extra hurdles, and extra payoffs

Scott Fixter brings his MBA skills.

His wife Patti helps make the wine.

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omewhere out there, there should be a textbook that outlines exactly how a complex business partnership should work, and among the case studies featured in that book should be a profile of Burning Kiln Winery.

By Amy Petherick

Like the proverbial saying, Burning Kiln is a winery that rose out of the ashes. Except, this time the saying is truer than ever, for Burning Kiln grew out of the dwindling cigarette tobacco industry that previously dominated the sandy soils around Simcoe, Ont. Indeed, tobacco is where the winery gets its name, because of the kilns that dotted every farmyard here in the days when the Virginia-type crop was cured in the heated barns that were called kilns. Whether you were a smoker or not, the smells drifting out of those kilns as the tobacco cured were among the finest, most epicurean and romantic aromas you could imagine emanating from a farmyard.

Today, Burning Kiln boasts nearly 28 acres of grape vines — none more than six years old, and comprising eight varietals. There is an architectural marvel of a winery too, and something just as structurally innovative — an extraordinary six-way partnership.

Since opening their doors to the public in 2011, it seems the group has experienced nothing but success, avoiding all the potential pitfalls associated with such complex business arrangements. In fact, the first partner that I met, Gord Malo, could probably write his own book on how to make partnerships work.

MARCH 29, 2013

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Steve and Gord Malo bring financial and accounting strengths.

Gord is the only Burning Kiln partner who splits his share with his father, Steve, from whom he and his two brothers were already leasing land to grow tobacco.

It has got to add up to some interesting dinner conversations. And the pun is intended, because Gord also works fulltime as an accountant.

To some onlookers, the winery might seem a step too far, epecially considering the Tobacco Belt rarely if ever leaps to mind as a wine region.

But Gord begs to differ. “Considering the first wine made in Ontario was in our area, (a winery) should seem like a natural fit,” Gord says. Indeed, the area didn’t get out of grapes because it couldn’t grow them, but because it was such a phenomenally profitable area to grow “the golden leaf,” as tobacco became know locally.

As the tobacco industry sank, however, there was growing interest in other business opportunities. When Gord was initially approached by Mike McArthur, a Simcoe-born lawyer, the idea was to create a tourist destination which would include a small winery on the side.

But after a while, Mike says the idea grew and spun off into its own venture.

“The winery industry is one of the most vertically integrated, right from vineMARCH 29, 2013

yard to marketing and distribution. As a result of that, it required additional competence, as well as capital.”

Mike had approached Gord for his expertise as an accountant, and Gord knew they needed to find longterm investors. “The amount of capital required to invest in the project is substantial if you want to do it the way we have done it,” Gord explains. “There needs to be a shared understanding and acceptance of the fact that the payback is not going to be immediate.”

Scott Fixter, who earned his MBA modelling a startup winery, was soon on board. Dave Pond was asked for his marketing advice. Todd Saunders contributed his expertise in construction.

The inclusion of each partner was strategic, but Gord and Mike say the key to making the group work was that they could all agree on where they wanted this business venture to go. “Despite us having different views on different

Frank DeLeebeeck brings long experience on the region’s sandy soils.

Scott Fixter, Steve and Gord Malo, and Frank DeLeebeeck are only four of the six partners, each bringing essential skills ranging from number crunching to wine pressing

Continued on page 18 country-guide.ca 17

business Continued from page 17 things, a real lesson was just to keep an eye on who our consumer was going to be,” Mike tells me. “You have to have the mix of people who’ve got the work ethic, the imagination, and the capability of working together with others.”

But where is the active farmer in the group?

Frank DeLeebeeck initally suspected the group wanted him as a partner mainly for his land near the lakeshore.

He and his wife had grown tobacco on their farm for 30 years, never having had anything to do with grapes.

But the more we talk, the more I can see how Frank’s attitude and experience attracted the group. “You can’t teach an old dog new tricks” doesn’t apply to Frank.

The transition from growing tobacco to growing grapes came with a serious learning curve for Frank. Grapes take three growing seasons until their first harvest, and in that time each vine needs to be “trained” to grow on the wire trellis system commonly used in vineyards.

The vines even need attention through

18 country-guide.ca

the winter, a season when Frank used to enjoy some rest.

Frank is quick to admit it took him four years to get a handle on pruning, and he still doesn’t consider himself an expert. “I’m an older chap and, like I said, I’m just learning. I know I’m going to make mistakes.”

Frank says, in the beginning, he relied heavily on researchers at Brock University and a number of Niagara-based consultants. While he’s still quick to call for help with new problems, today Frank manages nearly all the field work himself and he doesn’t worry about any interference from other partners.

“I’m the farmer and they have no desire to take over what I do,” says Frank. “They never get upset that I didn’t learn everything the first year. They knew it was going to be a challenge for me.”

The partners’ confidence in Frank’s expertise is well placed. No one knows the soil like Frank, and it showed last year at harvest. The tonnage brought in last fall was good despite a dry year, the brix levels (a measure of sugar content) were nicely high, and they only had to irrigate the Merlot on the sandiest soil, according to Frank. He talks with pride about the components he’s brought to the winery from his old tobacco operation, like his irrigation equipment. But Frank’s experience really shines in using the old drying kilns.

Burning Kiln winery has adopted an unusual technique known as the appassimento method. Developed in Italy, this style of winemaking requires the grapes to be sun dried after harvest.

Canadian autumns are too wet for the grapes to dry naturally, so as their signature move, the Burning Kiln partners decided to air dry the grapes in tobacco kilns they modified themselves.

Not only did that earn them a provincial award for innovation, but where other Ontario wineries have struggled to adopt this style, they’ve had great success.

Frank, who manages the kilns when he’s not in the fields even says it’s easier than drying tobacco. “It was an art to cure tobacco. You had to know when to adjust the humidity and heat to get a certain colour on the leaf,” Frank explains to me. “Drying grapes isn’t as technical and the winemaker is quite pleased because I have hardly any spoilage.”

Gord says that having partners like Frank brings more to the winery than just some old equipment or a willingness MARCH 29, 2013

BUSINESS to learn. In everything he does, Frank is keen on quality and that’s something he thinks all the partners gained from growing up in Simcoe. “Tobacco is a crop which needs a lot of special attention to detail and being particular to quality above all else throughout the entire process,” he says. “Attention to detail is clearly a quality that has transferred from tobacco growing to the vineyard.”

The theme permeates the entire business. The winery itself is a repurposed tobacco pack barn, and their marquee wine is called “The Kiln Hanger,” named after the person who had the most difficult and dangerous job of scrambling amonst the beams inside the kilns in order to hand the tobacco up to dry.

Even their label depicts a burning kiln.

Mike feels the winery has been a real opportunity for all of the partners to reconnect with their agricultural backgrounds and honour the culture they grew up in.

With the right group in place, they say that what they have accomplished together is much more than any one of them could have alone. “This is more a function of

a well-operated partnership where we all respect each other’s strengths and ideas coming into it,” Mike says when I ask for the key to their success.

“It comes down to the individual attributes of each partner and also being open to venture out into other areas that we might otherwise individually feel uncomfortable.”

Now that the work to establish the business is largely done, the winery offers each partner a place to escape to when their other occupations will allow, not to supervise staff but rather to enjoy being part of a group that shares a passion.

The air of camaraderie doesn’t go unnoticed by their guests, and Mike says he enjoys sharing it with their visitors.

“Making wine is the type of activity that pulls in all elements of agriculture,” says Mike, “and all elements of people enjoying it and wanting to see what’s going on. We see the broader benefits, the connections you can make, and the fun you can have with people around it.”

It’s obvious, I suppose, but being passionate about connecting with people really does make large partnerships work. CG

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business

Under cultivation Shaping young farmers into leaders on and off farm

By Kim Waalderbos Who are Canada’s next generation of farmers, and what kinds of leadership skills are they bringing to the job? To find out, Country Guide visited three “ordinary” farms from west to east.

Not surprisingly, we found how extraordinary the ordinary things in agriculture really are. Within each of these three examples, we discovered that learning about leadership is as integral to the coming generation’s view of farming as learning how to drive a tractor or show a calf.

Their leadership styles may differ, but their end goal is the same — they want to farm, and they know they need to bring their best decision-making and leadership skills to the process.

As they share their stories and experiences to date, some common themes emerge. Each demonstrates a remarkable thirst for knowledge, each has left the farm before returning at their own pace to build a career, each readily identifies role models who have encouraged and challenged them, and each approaches the day to day with an open mind.

And also not surprisingly, each has parents with an incredibly abiding belief in the future of farming.

The Froese family Creating your own opportunities For this young farmer in Boissevain, Man., opportunities to learn and lead are things that you create. They don’t just arrive on their own.

That has been the key learning for Ian Froese, and it has involved a hands-on approach with school courses, travel and his own farming venture, as well of course as dedicated mentoring from his parents.

In that way, it’s the story of a big slice of Canada’s next farming generation, but it quickly becomes apparent too that it would be very wrong to underestimate the key decision points all along the way.

Growing up, Ian (24) was always surrounded by a good group of friends. “The farm kids hung out together,” he says. “We would find and make our own fun.” When not involved with the local boys’ club or school band, Ian enjoyed playing team sports, including volleyball and baseball. He could also be found riding in the tractor alongside his dad, Wes Froese.

Working the fields at Froese Family Farm is where Ian first developed his interest in agriculture. Today, the farm owned by Wes and his wife Elaine, comprises 4,500 acres. The family grows certified seed and grain, plus they clean and sell seed for their Boissevain Select 22 country-guide.ca

Seeds business, with a rotation that includes wheat, barley, oats, canola, flax, peas and fall rye.

Both Wes and Elaine have university degrees, in plant sciences and home economics, respectively.

Elaine is also widely known as a certified farm family coach and she holds a certificate in conflict resolution, often being called on by families that are immersed in the challenges of succession planning, and who sometimes are on the brink of having communications break down.

Wes and Elaine encouraged education for both Ian and his sister, Erica. “We value life-long learning and we encourage our children to never stop exploring, networking and learning,” says Elaine.

After high school, Ian went on to initially attend Bethany College in Hepburn, Sask., following his diploma with several months backpacking in Europe. While in Europe, however, farming wasn’t far from his mind, with visits to farm contacts in Scotland and Switzerland.

Then, after returning, Ian finished the year working alongside his parents while he began to consider more seriously a career in farming.

According to Wes, these were all good stopping points on Ian’s way to the farm: “We encouraged our kids to get as much education as possible to increase contacts and their knowledge base, and to see the world and how it works.”

It wasn’t until Ian enrolled in an agricultural diploma program at the University of Manitoba, though, that he really got fired up about farming. “It MARCH 29, 2013

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was a great way to meet new people, and to help see the possibilities in agriculture,” Ian says.

In his second year in the program, Ian enrolled in a self-guided course that enabled him to learn more about sustainable agriculture and renewable energy.

“We could make our own curriculum and tailor the course to learn about things that could be incorporated into our own farms,” he explains.

Since graduating, Ian now concentrates his energy on the home farm — but that doesn’t mean he’s new to the job. Because Wes and Elaine thought it would be an excellent learning experience for Ian to manage his own acreage and call the shots, Ian already has six years under his belt managing his own farm acreage as Ian Froese Farms.

Ian owns and rents a combined total of 600 acres.

Although Wes is there as a mentor, ultimately the decisions — and any mistakes — are Ian’s to make, including planting picks, tillage, spraying, harvest timing and marketing. “Dad wanted me to learn by doing,” says Ian, adding the experience has taught him a lot about the timing and organization needed — and that he needs to brush up on his accounting knowledge.

Ian uses a portion of his acreage to explore new crops. This past year, after much research he planted his first hemp crop with great success. Ian was so positive about the idea that his dad planted a quarter section in hemp too.

“Dad’s been really good to encourage and support me even when my ideas are very different from what he would otherwise consider,” says Ian. Now Ian is researching bison farming. He thinks it could be a good fit for a particular field that is most suited to pasture.

In his area, Ian says there’s not really a culture of getting involved as a young farmer. With so much information available on the Internet, he says it’s easy to get isolated and lose the benefits of face-toface interaction. To help, he makes it a habit to get together with young farmer friends for unofficial meetings, whether it’s over lunch or a coffee cup.

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“We share experiences and ideas, and become a sort of sounding board for each other,” Ian says, adding that by not hoarding knowledge and numbers they are able to help each other to be better without getting too competitive. “I’d love if we all succeeded and made our farm community stronger. Then more young people might choose a farming career.”

Looking ahead, Ian would like to get more involved with farm organizations such as the Keystone Agricultural Producers in his province or the Canadian Seed Growers Association. He is also expanding his knowledge about new market opportunities for their crops in the export business.

When he talks with young people considering a farm career, Ian encourages them to apply for an ag college or university program. Then, he adds, “If there’s any land available to rent or use, try your hand and get involved in any way that you can.”

“ Dad’s been really good to encourage and support me even when my ideas are very different from what he would otherwise consider,” says Ian Froese, with father Wes above.

Continued on page 24 country-guide.ca 23

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Their parents’ faith in farming has helped all the den Haan children choose to stay involved.

The den Haan family Banking on the farm As a kindergartener, she climbed on the fence and pointed, showing the neighbour boy each of the 4-H calves her three older siblings had shown. She could pick each animal out from the herd despite a year having passed since she’d last seen her siblings working the animals, and her parents knew then that Emily den Haan had a gift.

The youngest of four children, Emily (21) has been interested in dairy for as long as she can remember. She also always knew what career she would choose. “I’ve wanted to be a dairy farmer my whole life,” she says. With her sights set on returning home to Haanview Holsteins near Alliston, Ont., she’s been busying rounding out her life experiences to learn and do as much as she can.

Growing up, the den Haan kids were all encouraged to get involved and build their leadership skills.

While hockey and video games weren’t on the list, there were piles of opportunities made available, say parents, John and Bonnie. “The choice was theirs, but they had to stick it out to the end and give their best effort,” says John.

Emily played a number of team sports and was active in 4-H, often attending leadership camps and discovery days. “Once you get started, it’s like a virus,” says John. “You are exposed to so much, learn to work with others, and make new friends that can be friends for life.”

Bonnie says they encouraged their kids to be assertive and effectively communicate from an early age.

“We wanted them to be able to shake hands and look people in the eye, talking to adults like they’re friends.”

Music lessons would prove to be helpful training for Emily and her siblings. With a focus on diction, articulation, posture and presence — the training helped Emily feel comfortable in front of a crowd.

Emily attended the University of Guelph as an 24 country-guide.ca

animal science major, minoring in music. She says university really opened her eyes to the broad range of opportunities in agriculture, beyond what she knew from her dairy background.

She quickly immersed herself in campus life joining and leading clubs throughout her four years of studies, including dairy science club and judging club. This year she’s president of the campus-based Canadian Agri-Marketing Association, and finds her experiences leading a meeting and motivating her teammates to be great training for participation on future boards.

Once reaching university age, Bonnie says they had a firm rule that each of their kids had to work away from the farm for at least a few years. Emily strategically chose to work her summers between university terms as an agronomy trials intern for a leading crop company. Now, she has lined up a position for postgraduation with an agricultural banking institution.

“Farmers need to be well rounded and know so many different areas,” says Emily. “I’m an animal science major, and I know I have a lot to learn about cropping and the economics of farming.”

Emily says her parents have been excellent leadership role models. Her dad is president of 4-H Ontario and is serving his third year on council. Bonnie is a past graduate of the Advanced Agricultural Leadership Program. Together her parents have also embarked into dairy processing with their Sheldon Creek Dairy venture. They celebrated the grand opening on June 23, 2012 with more than 2,000 visitors in attendance.

“I see their excitement for this industry, and it’s contagious,” Emily says.

Interestingly, all four den Haans have chosen careers related to dairy. Oldest Scott with wife Steacy and daughter Grace farm livestock near Markdale, Ont. and produce artisanal cheeses. Marianne has recently returned from teaching in Nunavut to hanMARCH 29, 2013

BUSINESS dle marketing for the family’s Sheldon Creek Dairy.

Andy dairy farms in Fergus with his fiancée Amanda, and works as an area marketing representative for a semen company.

In the next few years as Emily transitions to a full-time role on the dairy farm, John will be keen to involve her. John uses the analogy of a plane landing to describe their approach to business succession. “It needs to be smooth,” he says. “It takes time to get down and back up again.”

Emily has a real passion for working with the cows, like her parents. Their 50-cow milking herd is all purebred and homebred. They take pride in their herd’s high production — 12,500 kilograms per cow — and solid classification results. Forage quality is a priority and the family grows all their own feed on their 400 acres, buying only supplements and minerals.

John and Bonnie know how to persevere — in 1983, a year after marrying, their barn burned down forcing them to rebuild Haanview Holsteins from scratch. Bonnie says that experience taught them how to celebrate the good things.

“Like when we’re done seeding it might be a dinner out, or after haying we’ll take a trip to Wonderland,” she says. “It’s important to keep positive and celebrate milestones.”

Emily accepts that she needs to spend time away from the farm to gain the skills to return.

Continued on page 26

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business

The Graham family Leadership, for real

Farm youth organization and farm educational programs are essential network builders, Nicholas believes.

In the local 4-H club, he soon learned that the leader isn’t only the person at the front of the room.

Leadership can be expressed as much by pitching in, serving at suppers, volunteering for cleanup crews, and organizing snacks as by running for office, and leadership is as much about being supportive, always being there when needed, and making sure the project got done as it is about chairing a meeting.

From a young age, Nicholas Graham’s passion for farming stuck out, says his dad, Kenny. As the second of four children, Nicholas (20) was always helping out around their potato and dairy farm near Centreville, N.B. Over time, that passion has been shaped and a leadership style encouraged, says Kenny. Now Nicholas is being groomed to be the fourth generation on the family farm.

Nicholas singles out the 4-H program for playing a pivotal role in shaping his leadership development.

For nine years he was a member of the local 4-H club. It was his dad’s idea, making sure he could get out and meet other farm kids and be exposed to new opportunities. Nicholas was mainly in the dairy club, but did other projects too.

“It was great,” says Nicholas.

“I learned a lot of life skills and got to meet a lot of people who I keep seeing again at college, meetings and now, visiting our farm.”

Into his teen years, Nicholas would also participate in the Eastern Breeders Inc. 4-H Showcase and Atlantic Young Breeders School. He keenly remembers the case studies and presentations he completed in each and says the critical thinking approach is one he now uses at home on the farm. Both he and his dad feel having programs like these that are driven by dairy stakeholders builds a stronger industry.

For all four Graham children, schooling was always a priority, says Kenny. Nicholas wasn’t keen on studying, but did take an interest in a high school course that enabled him to spend the afternoons of one semester in a work-study arrangement at another local dairy farm.

“I did jobs there that I didn’t do at home and saw different methods of doing things,” says Nicholas.

“It was a different management style, and the farmer’s Dutch origin also taught me about finding the more economical way.”

Kenny credits his wife, Mary, with strongly encouraging post-secondary schooling for all their kids.

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Nicholas eventually decided on the dairy enterprise management diploma at the then Nova Scotia Agricultural College. He liked that the program covered dairy, soils, forage crops and business courses, and that he would be building a network of classmates in the local region. Nicholas is really glad he took the diploma program, particularly because of the field trips and because the courses were so practical.

Since graduating last spring, Nicholas has returned home to the farm. He considered travelling and working abroad but decided the temptation to help tighten up a few areas at home was more enticing. Now he looks for short and weekend courses like the recent ones on feeding, reproduction and hoof trimming that he’s done.

Nicholas has also joined the New Brunswick Young Farmers Forum. This grassroots group has formed among young farmers looking to learn more about issues and programs related to them. Nicholas is really interested in the succession planning and business management topics that are presented at meetings.

Kenny is also making extra efforts to mentor Nicholas using farm situations as much as possible at Graham Farms Ltd. He brings Nicholas to lender and supplier meetings to be part of the conversation.

Nicholas has taken the initiative with some changes to their forage production, breeding program and calf feeding. The pair is also evaluating a potential farm purchase together, with Nicholas crunching the numbers to determine what will cash flow.

“Basically, I let him try things and be part of the process,” says Kenny. “My dad let us find out if things would work, and I have confidence in Nicholas doing the same.”

Today, Kenny and Nicholas milk a herd of 85 cows and crop 800 acres, growing contract potatoes, their own forages and grains. The family also was involved in fluid milk processing until 2002 when that part of the business was sold to a local dairy co-operative. In addition to Kenny and Nicholas, they hire seasonal workers to help with the potatoes.

Nicholas’s young brother John (14) is also keen to help with the farm.

Nicholas credits having good role models for contributing to his leadership style. He says his dad and grandfather have always been strong examples, as well as an older gentleman who did tractor work for them until he was 86. For his part, Kenny has just enrolled in the current cohort of the Atlantic Agricultural Leadership Program.

As the family works through the transition to the younger generation, Kenny says good communication will be important. It’s clear Nicholas will be part of the farm legacy, and in time, if younger brother John also wants to farm, they will support him too.

“We’ve always had the belief that if any of our kids were looking to farm and there was a way for us to help, then we’d say ‘yes, go for it’ and support them the best we can,” Kenny says. CG MARCH 29, 2013

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Asia express

Is exporting breeding cattle to Kazakhstan too complex for farmers? Well, say former cow-calf operators Rod and Kristi Guilford… it depends

By Angela Lovell echnically, it’s only half a world away, although it can seem so much farther than that. In fact, it can seem that everything in Kazakhstan is so different from Canada — their government, the economy, their standard of living, and of course their language — that it can seem barely possible that the two countries inhabit the same planet at all.

At the very least, it can seem there’s no way a Manitoba farm family could be building bridges between two countries.

Except… two things unite the disparate countries, namely winter, and beef production, because it turns out Kazakhstan is anxious to grow its beef business, and Canada’s cold-hardy cattle are the world’s best foundation for doing that.

Oh… and yes, there’s another point the two countries have in common too, i.e. entrepreneurial business people with the drive to do the seemingly impossible.

In this particular case, as in most business stories, the action starts with a bit of biography. Kristi Guilford had only intended to spend six months travelling with a girlfriend when she took a break from her human ecology degree at the University of Manitoba, but somehow she ended up staying for two years in the Cayman Islands, where she worked in marketing for a rum company.

There, she got bitten by the excitement of business and marketing, and when she returned to Manitoba, she switched to commerce, obtaining a double major with marketing finance.

Meanwhile, Rod had taken his agriculture degree at North Dakota State University and, after a few years working for a feed company as a dairy specialist in Wisconsin and Minnesota, he ended up in MARCH 29, 2013

1996 back on the family Hereford farm near Crystal City, Man., with his dad, Dave.

Rod then worked off farm for a feed company for a couple of years while helping to grow the farm to the point where it could support two incomes, and he and Kristi married in 2000.

The Guilfords were among the first purebred Hereford producers in the area, bringing their initial cows across the frozen lake during winter on a stoneboat, and Rod’s family is still raising Herefords today.

Rod had always been interested in the genetics side of the cattle business and like a number of other farmers, he was soon marketing embryos and semen to countries around the world. The family farm had also shipped 400 head of live breeding stock to Russia between 2005 and 2008 through other export companies, and it was the feedback he received afterwards which led him to start thinking about exploring some new opportunities.

“What we were hearing about these cattle that were being exported to Russia was that because of some of the management and beef production issues there, the cattle weren’t performing to the level of their expectations,” says Rod. “Our concern was if someone didn’t go in and address those management issues the market was going to dry up. And it was a very good market for the industry.”

Rod was beginning to formulate the idea of a consulting business that would go to Russia and Kazakhstan and help them improve their numbers by adopting Canadian-style management systems.

“We initially thought that our main focus would be the consulting side of it and that was where our Continued on page 28 country-guide.ca 27

business Continued from page 27 emphasis was going to be,” says Rod. “And we thought that providing genetics on the dairy side of it, with my dairy experience in Wisconsin and Minnesota, would be our secondary market.”

As it turned out, the business developed quite differently. Consulting became more of a support to the main venture, which, once they established contact with Kazakhstani buyers, quickly emerged as the export of live beef cattle for their breeding programs.

The Kazakhstan and Russian governments both subsidize the development of their beef industries. “That’s really shifted

the focus for producers in those countries to beef production,” says Rod. “With the government subsidy structure in Kazakhstan and Russia, it makes these countries the most readily available and highestdemand markets for us right now, so our main focus is on those markets.”

Kristi and Rod were encouraged to take an exploratory visit to Russia in 2009 by local businessman, Wade Barnes, owner of Farmer’s Edge, a consulting agronomy company.

Barnes was exhibiting at a trade show in Russia that October and offered to share his booth. The Guilfords bought their plane tickets, but then the complications snowballed. Show organiz-

ers insisted they have their own booth and the expenses for the trip began to climb. “Instead of being about a $3,000 investment it turned out to be about $10,000,” says Rod. “We were in up to our ears before we knew it.”

Yet today, Xports International is providing cattle genetics to some 25 countries worldwide and has become the leading Canadian exporter of live breeding cattle to Kazakhstan.

Clearly, someone did something right.

Farmer first, or exporter?

Canadian beef genetics are amongst the best in the world, and live cattle from Canada are well adapted to the

Tougher.

EAsiER. In TandemTm.

28 country-guide.ca 19446-05No DAS_Tandem 15.125X6.5.indd 1

MARCH 29, 2013

business harsh climates of Kazakhstan and Russia. “The transition for those cattle when compared to cattle from somewhere like Australia is much quicker,” says Rod. “It takes fewer generations to get to a product that is exactly suited to that climate and to that management.”

Still, that doesn’t make exporting any simpler.

In 2010, Rod stepped back from dayto-day farm operations to focus on the export business he and Kristi established.

To take the plunge full time into a relatively unexplored marketplace wasn’t easy, and it brought them a fair amount of criticism.

“A lot of people questioned our decision,” recalls Rod. “We just felt there

was too much opportunity to pass up and it was too exciting and it was exactly what we were both looking for in terms of challenges and opportunities. But we knew that if we tried to do it in conjunction with managing the farm on a day-today basis it was going to be too difficult.”

The Guilfords have since sent 11 shipments of live breeding cattle to Kazakhstan, and interest continues to grow. Shipments usually consist of two planeloads, each with a weight limit of around 205,000 lbs. Each planeload costs almost $500,000 to fly to Kazakhstan, averaging about $2,500 a head, so making sure that the payload is maximized for each shipment is crucial.

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The planes must be balanced for flight, so the loading is no simple matter. “We weigh the cattle and separate them into weight groups,” Rod says.

“We are given guidelines as to how many animals of a specific weight we can put in each crate and for certain positions on the plane. For example the nose and tail are very weight sensitive so we specifically earmark lighter cattle to go into those positions.”

They have certainly learned a lot since that initial trip, and Rod is in the country almost monthly. One of the first things the Guilfords realized was that Continued on page 30

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business Continued from page 29 doing business in Kazakhstan is very different than Canada and nothing gets done without the approval of the government. Once contact is established with a potential buyer, the government then has to approve the contract before any further negotiations of price and delivery can take place.

“Even if we have got a client that is determined he wants to do business with us there is no way he is going to do it unless the government gives him permission,” says Rod. “In fact a lot of the producers that we are dealing with are very influential businessmen and the reason they are getting involved in beef is because the government wants to increase and improve beef production and they are doing it to try and gain favour with the government.”

Developing good relationships is essential in any business, but in Kazakhstan, it’s crucial because many of the buyers have little experience in the cattle industry and need the Guilfords’ production experience and know-how as much as they need their elite Canadian breeding stock.

“Relationships are important and in a lot of cases the buyers are dealing with some cattle but not to the extent that they are now getting into cattle,” says Rod. “As an example we have one project that we are hoping to deliver cattle to this spring and we have been working with that client for two years now, putting management in place, developing cropping plans, finding machinery and assisting with different things in order to get that project to a point where it is ready to accept the cattle.”

Not all clients are as forward thinking and, although the Guilfords prefer a scenario where they are involved with the planning from the very start, they often find themselves in the delicate position of trying to recommend changes to already-established systems, where there can be substantial resistance to change.

“Sometimes there’s not as much of a buy-in from the whole farm,” says Rod. “For example, if a farm already has 2,000 or 3,000 head of cattle it’s very difficult to bring in a manager and try and effect very much change without restructuring the whole facility.”

In most cases, adds Rod, although they may have a good grasp of what they are doing, the transition between the old, soviet-style production systems and modern production methods can be difficult.

At the end of the communist era the legacy of agricultural production was large communal farms which were not heavily mechanized, relying instead on a plentiful supply of cheap labour. In the case of livestock farms, many still have old cement buildings which house cattle throughout the winter in conditions that are not always conducive to maintaining healthy, productive animals. “Part of our challenge is to promote getting rid of those buildings and allow the cattle shelter from the wind, but not house them, so they can keep them cleaner, drier and reduce oper30 country-guide.ca

ating costs,” says Rod. “It’s a pretty tough sell for many of those people before they come to Canada and see the way we manage the cattle.”

A requirement for getting government financing for the purchase of cattle from a Canadian source is that the Kazakhstan buyer or a farm manager must come to Canada and personally select the cattle.

Once they are here, an extra service the Guildfords provide is taking them on tours to different farms so they can learn about Canadian management systems and the technology used in the beef industry here. It can be quite an eye opener.

MARCH 29, 2013

Photo credit: PERSONAL EXPRESSIONS PHOTOGRAPHY

Relationship marketing

business

One farm, 500 employees “One thing that always amazes buyers when they come over here,” says Rod, “is when they see family farms where guys are running 200 cows by themselves, or a farmer and his son are running a 500-head cow-calf operation.

“Over there, if they have a 3,000-head cow-calf operation they probably have 500 employees,” says Rod. “The average wage for a farm worker is about $300 a month… we see lots of pitchforks.”

Cultural differences are strong too. It’s like stepMARCH 29, 2013

ping back to the time when his grandfather would have farmed as an early settler, admits Rod. Visiting the rural, one-room home of a farm manager means eating a meal prepared on a tiny wood cookstove while sitting around a piece of wood dropped in the centre of the floor to serve as a table.

Other old attitudes are hard to adjust to as well, especially the corruption that was endemic under communism. “The only real way to get ahead during communist times was to take a payment Continued on page 32 country-guide.ca 31

business

Continued from page 31 under the table,” says Rod. “While a lot of that has been cleaned up and eliminated the mindset still exists that if you give someone enough money you can make any problem disappear because that’s the way the system was. We even see that with customers sometimes. For example, a client will come over and fall in love with a bull we have in quarantine and we’ll say you can’t take him because he didn’t pass the tests and he’ll

“ A lot of people questioned our decision,” Rod says.

“We just felt there was too much opportunity to pass up.” say, well how much will it cost me to get those tests changed?”

Once government approval is given there is usually a time squeeze to get the deal finalized and all the necessary documentation done to ship the cattle within certain production windows in the spring and fall.

Shipments are usually 500 to 700 animals sourced from approved producers across Canada. Animals must undergo a minimum 30-day quarantine with lots of paperwork, including the pedigrees of the cattle and checking Radio Frequency Identification tags against the documents to make sure they match, and having all this translated into Russian.

Rules, rules, rules Various tests must be performed on the animals to ensure they meet health regulations established by CFIA before it will approve them for export. One of the quarantine facilities is run by Rod’s uncle at a neighbour’s farm and another is at a farm that Rod and Kristi sold to another person who now operates the quarantine facility there for them. The couple has recently invested $40,000 into their main quarantine facility to improve the safety and efficiency of handling the cattle, which can end up going through the chutes five to eight 32 country-guide.ca

times for tests, vaccinations, sorting, weighing and loading. A bottleneck in the handling facility can cause a big hit on the bottom line.

“A main reason for the improvements is we need to do blood tests to meet certain CFIA requirements on Monday and Tuesday and get those samples sent to the laboratory by Wednesday so they don’t sit in the mail over the weekend,” explains Rod. “If we can’t get all the cattle in quarantine through in those two days then we have to extend the quarantine for an extra week. When you are talking having about 800 to 1,000 head in quarantine, if you add an extra seven days to the testing procedure, it adds an awful lot of dollars to your cost.”

It’s an investment that the Guilfords are confident will pay off, especially this year as they expect to ship around 3,000 head of cattle into Kazakhstan, partly because they will not have competition from some of the other traditional exporters. Imports into Kazakhstan from the U.S. and Europe have been temporarily suspended because of disease concerns.

It helps keep the couple aware that the Kazakhstan side of their business is fickle and, whilst they fully intend to make hay while the sun shines, they are also working hard to diversify into new markets. “We have always felt this opportunity had a limited shelf life, but there will be other countries and opportunities that will present themselves once we get through the subsidies in Kazakhstan and Russia,” says Rod. “Those subsidies are in place until 2017 in Kazakhstan and 2020 in Russia so we have got some years yes.”

For the Guilfords exploring new markets and capturing new opportunities is only part of the impetus behind Xports International. Another huge part is the diversity and interest it gives them on a daily basis. “One day I will be working up to my knees in cow manure at the quarantine or helping to calve cows and two days later I will be dressed up in a suit and tie sitting down negotiating a $5-million business deal with someone,” says Rod. “Those are all part of what make the challenges greater is to be able to walk in both those shoes. Every day brings something different and exciting.” CG MARCH 29, 2013

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WORLD

The SECOND ethanol After a decade of stalled promises, the biofuel industry is finally breaking major new ground on cellulosic ethanol

By Rebeca Kuropatwa omehow, the name says it all. DuPont’s new $200-million cellulosic ethanol facility is being built in Nevada, Iowa.

Nevada? Iowa? At first it sounds like a place that doesn’t quite know where it is — which might make it the perfect home for cellulosic ethanol, which hasn’t quite known where it’s been for at least the past seven years.

Readers with good memories will recall that when Washington began bumping up its grain-ethanol mandates, it insisted that the measures were a short-term incentive program designed to ensure a supply of ethanol for the few years until cellulosic ethanol could come fully on stream and swamp the grain-based biofuel with a bigger, cheaper and more environmentally sustainable supply.

In 2007, George Bush offered $2 billion in cellulosic subsidies, and the USDA followed that up with another $1.6 billion, and together they promised that the U.S. would be producing 20 billion U.S. gallons a year of cellulosic ethanol by 2017.

After that first flush of optimism, however, the bad news started, including the ill-fated Range Fuels plant in Georgia, which began construction in 2007 and was to be the first American facility capable of producing 100 million gallons of cellulosic ethanol a year. Instead, after $82 million in grants and another $80 million in loan guarantees, the plant closed in 2011 without having produced a single gallon.

However, DuPont now says it has the answer to cellulosic production, and the industry is hoping that the location it chose — Nevada, Iowa — is a hint that cellulosic will finally pay off big time.

To win, the company is betting on corn stalks, and it is basing that bet on its belief that farmers will be willing to produce and sell those stalks

34 country-guide.ca

to DuPont’s $200-million facility, scheduled to go online in mid-2014 as one of the world’s first and largest commercial-scale cellulosic biorefineries.

“DuPont set out to develop innovative technology that would result in low-capital and low-cost cellulosic ethanol production,” James C. Collins, president of DuPont Industrial Biosciences told a recent media day. “By leveraging DuPont Pioneer corn production expertise and designing an integrated technology platform, we’ve built an affordable and sustainable entry point into this new industry.”

Residue management is a major challenge for many corn growers. Corn stover contributes valuable organic matter to the soil, but the stalks of today’s biotech hybrids are so strong and so resistant to breakdown that they interfere with subsequent crops, getting in the way of planting and delaying stand establishment, not to mention tying up soil nitrogen.

In fact, a major consideration for today’s Corn Belt farmers is to try and find tractor and combine tires that can stand up to being speared by these stalks.

DuPont’s goal is to get farmers to harvest these stalks and corn leaves in forage-type bales that can then be hauled to the ethanol plant, leaving behind enough residue to protect the soil surface from erosion.

Iowa corn grower Jim Hill signed up for early tests. “Many of us who have participated in the stover harvest program with DuPont are already seeing benefits of this alternative resi-

MARCH 29, 2013

WORLD due management strategy, including positive effects on grain yields the following year on our fields,” Hill says.

DuPont will also make its cellulosic ethanol technology available for additional feedstocks. Indeed, it is already testing switchgrass in a research facility it owns jointly with the University of Tennessee.

An International Organization for Standardization (ISO) compliant, peer-reviewed life-cycle assessment of the DuPont biorefinery and supply chain indicates a potential greater than 100 per cent reduction in greenhouse gas emissions compared to gasoline, in part bcause the biorefinery co-product is a material that can displace coal in electrical generating stations.

According to DuPont, more regional businesses and academic institutions are expressing interest in exploring the potential use of the renewable co-products to replace portions of other coal-fired operations.

Jan Koninckx, global business director for biorefineries at DuPont Industrial Biosciences, based out of DuPont’s Wilmington, Delaware office has led the company’s effort to develop and commercialize renewable transportation fuels for the past six years.

“In 2011, DuPont purchased Danisco and its Genencor unit and added their expertise into a new unit — DuPont Industrial Biosciences,” says Koninckx. “This integration allows the company to optimize DuPont’s bioscience technology and commercialization capabilities with Genencor’s biofuel enzyme technology.”

Now, the industrial biosciences division is working with local Iowa farmers such as Hill to develop a sustainable supply chain of biomass for DuPont’s future cellulosic ethanol biorefinery.

“Once completed in mid-2014, we’ll contract with over 500 local farmers to supply our facility with the corn stover residue from their fields,” says Koninckx.

Those farmers will harvest, store and deliver some 375,000 tons of stover per year, enabling the facility to produce 30 million gallons of cellulose ethanol.

Those farmers will harvest 190,000 acres within a 30-mile radius of the plant.

MARCH 29, 2013

They would have to harvest even more, Koninckx says, if Pioneer weren’t also making strides producing corn hybrids that optimize ethanol output, with more than 230 High Total Fermentable (HTF) ethanol hybrids that increase the fermentable starch content.

DuPont says the Nevada plant will push Iowa, which already leads the country in grain-based ethanol production, into the lead in cellulosic ethanol as well. On the drawing boards, the company says, are other plants, including some that could use switchgrass and other agricultural substrates.

“Nationally, building this plant and taking the next step toward commercialization is a critical milestone toward achieving U.S. energy independence and building a clean energy economy,” Koninckx says. “The U.S. mandates 36 billion gallons of cellulosic fuel in the transportation fuel supply by 2022 as part of the renewable fuels standard.”

DuPont also plans to license its cellulosic technology. “We’re active in discussions with various parties in North America and other regions,” Koninckx says.

“Our focus is determined by what we’ve studied and developed first — corn stover — but, we’re already in the process of broadening that. More feedstocks mean more regions will eventually be able to participate.”

But there’s more work to do at home as well, says Koninckx. “The next challenge will be to gain even larger-scale and improved economics to ensure advanced biofuels achieve their full potential.” CG

DuPont’s Jim Collins (r) is joined by Iowa political leaders who predict cellulosic ethanol will be as big a deal for the state’s farmers as grain-based biofuels.

country-guide.ca 35

business

A new kind of employee As farms expand and diversify, more of these foodprocessing students expect to find jobs on the farm

By Steven Biggs, CG Contributing Editor t makes me almost feel I must be back on a farm. The student I’m talking to has some shiny metal bits wrapped in a handkerchief.

It’s his metal-working project, and student Lance Green has brought it because he thought I’d be interested in seeing it.

I only remember to ask about it when he gets up to leave and I hear the pieces of metal clank. Green pulls out the stainless steel from his millwright course.

First he shows me a pry-bar, explaining how he made it using an anvil and forge. Next, he shows me a flat piece with holes in it, one of which is threaded.

As we talk about the threading, student Jessica Koch tells us how, when fitting a tap into her own piece of stainless steel, it broke. Disappointing, yes, but a failure, no — because learning the properties of stainless steel, ubiquitous in the food-processing industry, is the whole idea. The name of the game is to get a good grounding in seemingly disparate things such as metallurgy, legal package-weight thresholds, programming robotic equipment, and microbiology.

Like farming, food processing is a high-tech industry requiring diverse skill sets. And also like farming, there’s a cry from the sector for more skilled workers. The new Institute of Food Processing Technology, at the Cambridge, Ont. campus of

36 country-guide.ca

Conestoga College, is a joint industry-government initiative to try to address that shortage.

Bullish on food processing Luis Garcia, program chair, is enthusiastic as he talks about food processing. He says it is the largest manufacturing employer in the province of Ontario, with 120,000 people directly employed in the industry — and even that number fails to take into account support industries such as transport and packaging.

In dollars, it is the province’s second-largest manufacturing industry, after the automotive sector.

He doesn’t see that as second best, though, noting that the food-processing industry grew during the recession. “It’s very, very stable — we all have to eat,” says Garcia.

Food processing and farmers “Food processors in Ontario buy 65 per cent of what is grown in Ontario,” says Garcia, who is quick to connect the dots between farming and food processing.

Not only does he see how important the two sectors are to each other, he says there is overlap, with food processing often taking place on the farm. That could mean making value-added products, or simply cleaning and packaging produce for the consumer market.

MARCH 29, 2013

business

Clearly, he wants the farm community to know about the programs here.

Photo credit: David CharleswortH

Not a dirty word “Nobody seems to understand what the food-processing industry is,” says Mihaela Simion, program manager at the facility. To a lot of people, the term food processing carries negative baggage, bringing to mind potato chips and packaged products. But Simion explains that food processing is essentially whatever happens to food between the field and the grocery store.

“Food processing is not the enemy,” she says, explaining that bananas are a processed food, having been transported in a modified atmosphere. Food processing also encompasses washing and packaging, so it can be used to describe washing and cutting green beans which are then flash-frozen. “What about milk?

Do you think milk is processed?” asks Simion. Yes.

The program and facility “We are the only ones who offer this kind of training in Canada,” says Garcia, as he talks about a shortage of skilled workers in the industry. Before this MARCH 29, 2013

institute, he says, there was no option of hiring trained employees… unless they came from the competition.

Simion gives me a tour of the 8,000-square-foot pilot plant. The first thing that catches my eye is all of the shiny stainless steel. I now understand why the students are learning about working with this metal. Beside the plant is a laboratory, where students learn microbiology basics.

The one word Simion says over and over again during the tour is “troubleshooting.” Students learn how to operate machines, make adjustments, how to make different pieces of equipment work together — and how to troubleshoot when any of these things go wrong. That troubleshooting could mean interpreting messages on a digital screen, or it could mean making a replacement stainless steel part to get a broken line running again.

Simion explains that the focus is on the technology, not the end food products, so rather than making 100 types of bread, students focus on how to adjust equipment and simply understand the properties of cookie dough versus bread dough. One of the exercises that Continued on page 38 country-guide.ca 37

business Continued from page 37 students complete towards the end of the program is to fulfil a work order from start to finish. That could mean baking rolls, for example — which would entail assembling ingredients, making dough, and then adjusting all of the equipment so the buns are baked, properly cooled, and then bagged. To cool those buns, students need to adjust the speed of a spiral conveyor that gives buns time to cool so they don’t sweat when bagged.

The students Simion says that students are a mix of ages, background, and gender. Some come directly from

secondary school, some have worked in the industry and want to upgrade their skills, and some come from other industries and are retraining. She thinks that for older students, the stability of the foodprocessing industry is alluring, while for younger students, the technology gives the program sizzle.

Garcia points out that being able to hire collegetrained employees is new in this industry. That might initially make it a challenge for some employers to integrate college-trained employees into their hierarchy and pay scales.

Students I met during my January 2013 visit started the program in September 2012—and will go on a co-operative work term for the summer.

LANCE GREEN — Student Lance comes from the food-service industry, having previously trained as a chef. “I worked in restaurants for about four years,” he says, adding that food service required very long hours and lots of overtime. From there he went to the automotive sector, but an industry slowdown brought him to Conestoga College, where he took a program to explore his career options. That’s how he found out about the institute. He’s not yet sure what his ideal position will be, but he finds the schematics they’ve been studying very interesting. What he likes about the food-processing industry is that it is thriving, and it is an industry found around the world — something he sees giving him mobility to travel with work in the future. What’s next? “I’m looking forward to the co-op,” he says, talking about the upcoming work placement this summer.

JESSICA KOCH — Student Coming to the program right after secondary school, Jessica Koch says her previous food experience was working in a grocery store. That was something she didn’t see herself wanting to do long term, saying, “I wasn’t interested in working all nights, weekends, and evenings.” Based on her interest in the food industry, she came to an open house at the institute. She really likes the way this program exposes her to things she might not otherwise see, such as the millwright course. She likes the variety of courses — and the fact that they go beyond food itself. “There’re lots of job opportunities afterwards,” she says, explaining that right now, she is interested in food safety and quality assurance. “Having the pilot plant is really nice,” says Koch as she talks about the hands-on nature of the program.

MIHAELA SIMION — Program manager Simion says that there is a food-industry tradition in her family, as both of her parents were food scientists.

She attended university in her native Romania, including a term at an agricultural university in Norway. She then worked in the food-processing industry in Romania — and when she came to Canada, stayed in that sector, working mostly in quality-related roles at both the plant and corporate level. While she’s not currently teaching, she helps to develop curriculum, and she loves it. “I was always attracted to education,” she says, as she talks about her satisfaction in helping to develop curriculum. She’s excited about the future of the food industry, saying, “I think that it’s going to be very exciting.” She foresees more technology, along with changes in the sorts of products demanded by consumers, which will drive change on the food-processing side. Some technologies, she predicts, will be left behind, “just like video!”

LUIS GARCIA — Chair Garcia started his studies in chemistry. But there was one course, dealing with chemical products of vegetable origin that piqued his interest — so he moved into food science for a master’s degree. He has worked in new product development, in quality assurance, and as a plant manager in the private sector. In his native Guatemala, he worked in government. After coming to Ontario, he worked with the provincial Agriculture Ministry to develop training. He’s bullish about food processing, saying, “I think that the industry in Ontario has a really good future.” He points out that there is consolidation happening, which means some older plants closing — but that shouldn’t give the impression that the industry is declining. It’s not. He says that the industry has lots of work to do, “especially with HR training.” CG 38 country-guide.ca

MARCH 29, 2013

MANAGEMENT

Social skills

Social media now plays a huge role in how farm equipment manufacturers get their marketing message out, and how they hear back from customers

By Scott Garvey, CG Machinery Editor

t’s time for our photo game #AGCO fans,” reads the latest tweet to pop up on my Twitter feed. It was tweeted by someone in AGCO’s marketing department. “What tractor do you think this picture comes from?” it goes on to ask. Included is a link to an online digital image of the inside of one of the company’s tractor cabs — one of Massey Ferguson’s new 5600 Series models, I suspect.

It was an invitation to all of AGCO’s Twitter followers to submit their guesses, a friendly game prompting two-way interaction between the brand and its enthusiasts, keeping them engaged.

A few minutes later, another tweet arrives from John Deere with a link to an online video on its YouTube page offering tips on how to organize precision planting data.

These tweets are typical of what social media managers at all the major equipment brands are throwing out to their Twitter followers. Anyone who “follows” the major brands will have received hundreds like these over the span of a year.

It’s a clear indication that the importance of social media hasn’t been lost on the major manufacturers. It now plays a major role in how farm equipment manufacturers get their word out. But what’s even more profound is the way social media are actually changing what these companies want to achieve, which is a far cry from advertising in its more traditional form.

Instead, like any other Facebook “friend” or Twitter “follower” the brands want to develop a new kind of interactive relationship with farmers.

In the end, however, the motivation is still to sell machines.

“It’s changed the way companies think about how they do business,” says Subbu Sivaramakrishnan, associate professor at the Asper School of Business in Winnipeg’s University of Manitoba.

“Back in the olden days, there was traditional marketing. Most of the communication was through mass media. It had what you would consider a push orientation, where companies basically pushed their products on to the consumer and hoped they would MARCH 29, 2013

buy. What social media has done is, it’s created a very collective way of thinking and doing business.”

By exploiting social media, the hard-sell, one-way push has been replaced by two-way conversation designed to engage potential buyers in an entirely new way.

“There’s one main difference,” Sivaramakrishnan continues. “Think of it this way: it’s not that companies are screaming out what they want people to hear.

Now, it’s like being in a big room. Everyone chooses to enter and become part of a discussion. The company doesn’t have to push things on you anymore, because you chose to become part of the discussion.”

And in any discussion, information flows both ways. Taking advantage of that fact gives companies another reason to engage with consumers. Social media offers a return pipeline loaded with consumer opinion. Scanning an online chat site that focuses on machinery or sifting through Twitter messages lets any company executive tap into the thoughts and opinions of those farmers who use or have looked at his brand’s machinery.

“We use it to evaluate what the market thinks of us,” said Mark Harrington, vice-president of Trimble, who formed part of a manufacturers’ discussion panel at Ag Connect Expo in Kansas City in January. Social media was one of the topics covered. “There’s a harsh reality out there. We use it (social media) to see what the market really thinks of us. It’s like an early warning device.”

But just as social media can play a role in identifying problems, it can also be part of finding solutions to them. While companies still organize focus groups and Continued on page 40 country-guide.ca 39

MANAGEMENT Continued from page 39 conduct consumer surveys, social media use accelerates the rate at which feedback flows in, and it greatly expands the number of sources that provide it.

The digital discussions aren’t colour blind, either. By monitoring comments about competitors’ equipment, it’s as if executives at one brand get to tap into their competition’s marketing surveys and find out how they are faring when it comes to customer satisfaction. It also enables them to see what features on other products are getting high marks for desirability, making for a quick way to do some self-evaluation and rate their own company’s performance.

That opportunity to engage a lot of producers in a very short time with very little expense is unprecedented. Sivaramakrishnan notes the latest estimates are that up to 90 per cent of young farmers are online and engaged in social media. Brands only need to find a way to engage them, hence strategies like that guess-the-cab Twitter game.

That’s part of how the traditional push of products Sivaramakrishnan describes changes to a pull. “If I’m a machinery manufacturer, I can get people involved in the discussion,” he explains. “I can get literally thousands of people involved in something like product development, and every step of the way I can involve my consumers. And human thinking is this: if

I’m involved in the development of something, I’m more likely to patronize it.”

Farmer input is something the brands have repeatedly said they embrace when it comes to product design and evaluation, with or without social media. “It’s that constant customer interaction that keeps us alive,” said Gary MacDonald, executive vice-president of MacDon Industries, who was part of that manufacturers’ discussion panel. “Interaction with the enduser is how we improve our products.”

It also means the time when companies could rely only on occasional surveys or focus groups to keep up with buyer expectations is quickly passing into history.

Many consumers are coming to expect

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PerforMance.

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MARCH 29, 2013

MANAGEMENT to be able to join in a digital discussion with manufacturers of all types. “It’s at a point right now where if a company is not doing social media marketing, it’s actually considered a dinosaur,” says Sivaramakrishnan. “Nowadays, companies are on Facebook, Twitter, YouTube and so on.”

While the digital world is creating new opportunities for marketing and research, it’s also creating new challenges. Executives at all the major equipment brands have recognized the need to be socially active — in a digital sense.

But the learning curve for many of them has been a steep one.

“There’s a lot of data out there,” said Jim Walker, Case IH’s vice-president of

North American ag business, as he spoke on the manufacturers’ panel. “We had to bring in someone from Harley Davidson to help us with our social media.”

Only a couple of years ago, some of the tweets coming from the major brands were invitations to people with experience in social media marketing to apply for newly created jobs. “There are many companies that have social media marketing departments and social media officers and managers,” notes Sivaramakrishnan.

“There are all kinds of new positions being created within companies.”

However, the social media trend isn’t all good news. Along with opportunity comes risk. “The challenge is it also kills

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bad companies and bad products pretty quickly,” says Sivaramakrishnan. “The moment someone has a problem, all he has to do is go to social media and blast the company. That spreads like wildfire.

It makes companies stay on their toes; the bad ones get punished pretty quickly.”

So what is the future of social media marketing? “That’s a good question,” says Sivaramakrishnan. “If you’d have asked me (about marketing) 10 years ago, I’m not sure I would have even mentioned social media. Things are changing that quickly.

Now the sky’s the limit. It’s not going to go away, but the way we see social media today might seem old-fashioned 10 years from now.” CG

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country-guide.ca 41 2/25/13 7:21 AM

management

Can you afford the new insurance?

With governments taking an axe to farm spending, it looks like the days may be numbered for today’s insurance programs

By Gerald Pilger

he purpose of insurance is to protect against catastrophic loss. However, many in the agricultural sector view insurance as much more. Politicians see insurance as a non-trade-distorting method of transferring wealth to farmers. Many farmers believe insurance products should guarantee revenue. Some even want insurance to guarantee a profit margin.

And insurance providers see the largesse of government and the demands of farmers as great opportunity.

Caught on the hook is the taxpayer, who now pays a large portion of the premiums which insurers charge to provide the coverage that farmers demand and that governments support. As a result, our current publicly funded ag insurance system may not be sustainable over the long term, given today’s economic climate.

At least, that’s the view of Bruce Babcock of Iowa State University, who has studied the U.S. crop insurance system extensively. (In many ways U.S. crop insurance is similar to Canadian crop insurance.)

“What the public pays is too high,” Babcock says.

“The subsidies provide an irresistible incentive to farmers to buy much more insurance — and more expensive insurance products — than they would buy if they had to spend their own money. There is no doubt farmers are overinsured.”

Babcock was commissioned by the Environmental Working Group to analyze an alternative crop insurance safety net this group was proposing. His results are published in the April 2012 paper entitled “Giving It Away Free.” He found U.S. crop insurance since 2001 has cost taxpayers $50 billion, but only half of that was actually paid out to farmers.

The other $25 billion went to crop insurance providers.

In fact, Babcock says the U.S. government could save $6 billion over 10 years if they would simply give (premium free) all farmers 70 per cent yield insurance on all their corn, soybean, wheat, cotton, and rice crops.

Furthermore, found Babcock, “the value to farmers would be about $5.6 billion more than the net benefit that farmers of these five crops get from existing crop insurance today.

“Government assume that all farm businesses would fail if crops fail and farmers alone cannot afford the crop insurance premiums,” Babcock continues, “so taxpayers pay 70 per cent of the cost of 42 country-guide.ca

crop insurance.” But there’s a major flaw in that thinking. If agriculture was really that risky, Babcock says, it would not be viable.

The level of risk is not the same for all farmers, Babcock adds. Risk may be very low for farmers with low debt or it may be very high for the farmer with high debt or who is primarily cash renting.

Farmers should also be working with their bankers, accountants, and financial advisers to determine their level of risk and how best to manage that risk, Babcock says. Insurance is only one tool. Farmers need to keep their eye on crop rotations, equipment sizing, forward pricing, contracting, and other management strategies that also reduce risk.

Says Babcock: “If taxpayers want to help out farmers, they should only provide a base level of production insurance and let farmers buy with their own dollars any additional insurance. If this additional insurance is actually a good deal they will buy it.”

The Canadian experience As in the U.S., Canadian governments subsidize a wide range of insurance products for farmers. Two-thirds of the cost of AgriInsurance, the multi-peril insurance against production losses, is funded by government contributions. AgriRecovery is totally funded by government. Government provides a matching grant to the contributions farmers make into the AgriInvest fund. AgriStability, the margin-based, whole-farm insurance program is nearly totally government funded.

Between 2007 and 2012 taxpayers contributed over $10 billion to these programs.

But there is growing resistance to continuing to support agriculture insurance in Canada. Both AgriInvest and AgriStability have been cut significantly for 2013 under Growing Forward 2.

Government contributions to AgriInvest have declined from 1.5 to one per cent.

Farmers enrolled in AgriStability will find that reference margins are now limited. Government will only cover 70 per cent of margin declines, down from the 85 per cent level they used to cover. Additionally, the assistance rate will change from the original tiered structure to a flat 70 per cent rate. Combined, these changes will result is less chance of AgriStability triggering. And when it does, there will be a reduced indemnity payment.

While farmers are decrying these cutbacks, are MARCH 29, 2013

management Global Ag Risk Insurance these insurance programs really risk management in the first place?

James Rude of the University of Alberta and Alan Ker at the University of Guelph co-wrote the 2011 paper “Transfer Efficiency Analysis of Margin Based Programs” which examines how AgriStability distorts production. The research also quantified how much of the benefits actually flow to the farmer.

The final paragraph of their paper is startling and it is something every producer needs to consider: “Improvement in producer welfare comes primarily in the form of increased land rents and does not significantly improve the returns to other farm-owned inputs. These gains cannot be viewed as a source of improving the long-term wellbeing of farm households because they are capitalized into the selling price of land which will disadvantage renters and future owners. Given that an increasing share of land is rented, benefits of government programs will not be captured by primary agricultural producers.”

Private-sector agricultural insurance Many farmers are familiar with the hail insurance offered by private industry.

Now, the private sector is expanding into margin insurance as well. Global Ag Risk Solutions is an example of a private margin-based insurance program. (See sidebar) The jury is still out on whether private-sector, margin insurance will be able to compete with the highly subsidized AgriStability. Without question, the coverage in private-sector plans is much higher than AgriStability offers.

But growers have to spend their own dollars for this additional coverage, so the more important question is, how much insurance coverage do I really need and what type (or combination of types) of insurance will provide the best return for my insurance dollars.

Even the feds seem to believe this is a question you will start asking more often.

Says Patrick Girard, senior media relations office for the federal Agriculture Department, “Changes to BRM programs under Growing Forward 2 will encourage producers to assume a greater role in managing small income declines, adapt to market signals and should create an opportunity for industry to develop other private risk management solutions.” CG MARCH 29, 2013

Is private insurance the way forward? Here, one insurer makes his case for a new generation of insurance coverage A few years ago a group of financial and agricultural professionals came to the conclusion that the crop and revenue insurance available to farmers simply was not working.

Farmers were unable to adequately insure in light of rapidly rising input costs.

This group spotted an opportunity, and they developed a general insurance product and began marketing it in 2011 as Global Ag Risk Solutions (GARS).

President and chief financial officer Grant Kosior describes the insurance as “a new, private, revenue-based multi-peril product that insures your input costs plus revenue.

The coverage is higher than what is available through AgriStability, it is simpler, payouts are timelier, and banks will accept this policy as collateral so you can borrow against it.

This is the only insurance product of its type which major banks accept as collateral.”

According to Kosior, this product covers the actual cost of the three major crop inputs you use — fertilizer, seed, and chemicals, plus a specific amount of revenue per acre. “As input costs increase over the year, so does your coverage. There is no ceiling so you can focus on maximizing your production. And you select the amount of margin coverage you want over and above these three costs, to a maximum of $100 per acre.”

Should production problems or falling prices put you in a claim position, Kosior says 60 per cent of the claim will be paid out as soon as the loss is confirmed and the remaining 40 per cent is paid after the final financial analysis is completed. In most cases growers will have received 100 per cent of their claim by the time they are seeding their next crop. “We recognize the cash flow needs of farmers.”

While times are good for most Canadian crop producers, the financial risk may be greater than ever before. Kosior illustrates this with an example: Suppose a wheat farmer has an expected yield of 50 bushels per acre, and that the costs for seed, fertilizer, and chemicals to grow this crop are $150 per acre. The farmer hopes to lock in a new crop price of $8 per bushel and is hoping therefore for a gross revenue of $400 per acre less $150 for the three major inputs, leaving a margin of $250 per acre.

With GARS, the farmer now has the ability to insure this expected $250 profit by insuring the $150 input costs plus revenue insurance of $100 per acre.

However, if actual yield is only 35 bushels per acre and a break in the drought in the U.S. sends wheat prices down to $5 per bushel — both easily within the realm of possibilities — the actual gross revenue would be only $175, well below the $400 that was expected.

Plus, let’s say that farmer had to make a second pass of fungicide due to a late onset of disease which upped his input costs by $15 to $165. The actual margin then would be a disappointing ($175 minus $165) $10 per acre.

Had this farmer purchased GARS insurance, it would have actually increased in value due to the additional chemical costs to $265 per acre. So the farmer could expect a payment from GARS of ($265 minus $175) $90 per acre.

The premium for this GARS coverage is individualized for each farm operation.

To apply, a farmer submits five to seven years of accrual financial statements for his operation. From this information the average margin will be determined and a determination will be made of the farm’s ability to achieve its revenue targets.

Based on these factors, a premium amount will be established for the insurance requested. According to Kosior, this individualized premium is often less than the cost of crop insurance the farmer has been carrying. Kosior adds, “most farmers who apply will qualify for coverage at some premium level.”

While GARS may be all the insurance a farmer needs, Kosior says it often works best as part of a suite of products. As an example, he suggests farmers may want to consider still carrying the 50 per cent crop insurance coverage because of the early season and reseeding benefits crop insurance offers.

Kosior also suggests supplementing this basic GARS insurance with revenue protection of $75 above your margin, and then adding hail insurance later in the year if crop conditions warrant it and to provide spot coverage for hail loss.

It is important to note though that GARS is a whole farm policy, so all crops must be insured under GARS. Furthermore, a payment from crop or hail insurance will not reduce a payment from GARS. Growers who want more information on GARS can access the website at http://agrisksolutions.ca/. country-guide.ca 43

business

The new corporate farm Corporations aren’t merely on the rise in farm country.

It seems they’re cornering the industry’s profitability

By Amy Petherick

t’s the new chicken-and-egg question for agriculture. Does incorporation lead to farm financial success, or does financial success lead to incorporation? Either way, the two seem irrefutably linked.

The most recent Census of Agriculture found the sharpest rise in corporate farm numbers in two decades.

In 2010, farms reporting $1 million or more in gross receipts accounted for only five per cent of all Canadian farms, yet produced nearly half of all gross farm income.

About two-thirds of these million-selling farms were family corporations. Another 10 per cent were non-family corporations.

Looked at it from the other end of the telescope, fewer than a quarter were unincorporated. And that number keeps shrinking.

A range of factors drive families to consider incorporation, but the first to get many farmers’ attention is the farm’s tax burden.

Currently, Canada boasts some of the lowest corporate tax rates for small business incomes below the $500,000 threshold ($400,000 in Manitoba and Nova Scotia) for Canadian-controlled private corporations (CCPCs).

“ If you’re going to build a farm of any size now....you can’t do it without being incorporated.”

— Norm Mabon Farms continue to grow bigger, each year earning more than ever, and on many farms this is fostering a frenzy over strategic tax planning.

But incorporation isn’t only about taxes. In fact, maybe it shouldn’t even be mainly about taxes. Greg Bruce, accountant at Micacchi Warnick and Company in Woodstock, Ont., warns against becoming overly fixated on tax avoidance. Instead, he sees improved management as a key incorporation advantage.

“We often remind our clients that they shouldn’t make decisions on whether to sell farm inventories or to purchase farm inputs solely based on the tax implications,” says Bruce. “Corporate farm clients can focus on managing their business operations, financ44 country-guide.ca

ing farm expansions, or meeting debt obligations without having to worry about the tax impacts.”

Normand Mabon is living proof of Bruce’s theory.

Mabon is a pork and crops producer in Notre Dame de Lourdes, Man. who incorporated in 2002. When he isn’t farming, Mabon also works as a farm business consultant.

“The real benefit is that, after you’re incorporated, your management decisions aren’t clouded by the tax implications,” Mabon says. For example, he explains, it was because he was incorporated that he didn’t hesitate to sell 100 per cent of his crop when prices were extremely high last fall.

“Now that I’m incorporated, if the price is right, I market my grain,” Mabon says, adding, “I change equipment when equipment needs changing, not because I need to save on taxes.”

Mabon believes incorporating has not only saved him money in taxes, but is improving his profitability even further by enabling him to make better marketing and management decisions. In fact, he thinks incorporating will be the only way to go in the future.

“I think if you’re going to build a farm of any size now, it’s so capital intense and expensive, you can’t do it without being incorporated,” says Mabon. “If you’re an individual buying these expensive farms, to get that kind of principle paid down you have to pay huge amounts of tax on a personal basis, so it’s almost impossible to buy land.”

So far, the numbers seem to support Mabon’s theory. Sole proprietorships have decreased by over 30 per cent since the early 1980s, being replaced by a combination of family or non-family partnerships and corporations. Initially, it seems incorporation was slightly more popular in Western Canada, but today a significant move by farmers in Quebec and Ontario has pretty much evened out the adoption of the business structure across the country.

Mabon believes it was off-farm income that kickstarted the uptake of a corporate model in the West a couple decades ago.

“A lot of people on farms, either the husband or the wife or sometimes both, had to work to make it, and they had to keep their farm from making money because they were already in a 28 or 32 per cent tax bracket,” recalls Mabon. For these people, he says, incorporation became very attractive.

MARCH 29, 2013

BUSINESS

Continued on page 46 MARCH 29, 2013

OPERATING ARRANGEMENTS BY GROSS FARM RECEIPTS, 2011 Sole proprietorships

Partnerships and other

Corporations

100 20.9

90 37.3

80 70 Per cent of farms

Hellar Nakonechny is Mabon’s accountant in Carman, Man. He says incorporating has always seemed like a good idea to him for farmers who make more than they need to live on.

“I can remember when I came here in the late ’70s, the corporate rate was 22.2 per cent and it still made sense to incorporate even then, because personal rates were 53 per cent,” says Nakonechny.

“Now it makes even more sense and there’s quite a rush of people doing it, especially if they have a good year.”

Nakonechny admits some of the early structured farms weren’t necessarily set up the best and the question of whether or not to include land is still as complicated as ever. He says it’s most common not to transfer land into the corporation today. “The main purpose of transferring land to the company is to bump up the value from what you have in your personal hands, to today’s fair market value,” says Nakonechny. “Now the company owes you a big chunk of money for this land, so it allows you to extract cash out of the company, with no tax on the first $750,000 because of capital gains exemptions.”

Many people are well aware of how transfers such as these can be beneficial as a succession or expansion tool, but Nakonechny says it’s less well known as a retirement tool. “I’ve run into scenarios where people, when they’re close to retirement, get hit with huge incomes because they sell their grain, have no more expenses, have an auction sale, sell all their equipment and recapture lots of depreciation,” Nakonechny explains. “It makes sense to incorporate in the year or two before you retire, so those big chunks of income are through the corporation, then you pay your 11 per cent tax, spend the next 15 or 20 years withdrawing the cash from your company gradually, and it’s like a pension plan.”

But even the trends surrounding the use of incorporation for succession are changing too. In order to avoid nonfarming shareholders in second- or thirdgeneration corporate farms, Nakonechny directs his clients not to issue shares to young children, which also prevents the potential nightmare of having a nonresident shareholder in the future. Then, when children are old enough to start

69.0

61.6

64.7

67.4

53.7

11.4

5.4 10.4

15.0 20.8

60 26.0

50

84.2

40 26.7

30 20

58.3

25.7

26.0

24.9

25.4

6.1

7.3

9.4

12.6

Less than $10,000

$10,000 to $24,999

$25,000 to $49,999

$50,000 to $99,999

36.8

10 0

73.6

19.6 $100,000 to $250,000 to $500,000 to $1,000,000 to $2,000,000 $249,999 $499,999 $999,999 $1,999,999 and over

Gross farm receipts class Source: Statistics Canada, Census of Agriculture, 2011

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BUSINESS Continued from page 45 embarking on intergenerational transfers, he often encourages them to start their own company in the same way their parents did.

INCOME TAX RATES FOR CCPCS Income up to $400,000 British Columbia

Income between $400,000 and $500,000

General Active Income

13.5%

13.5%

25%

Alberta

14%

14%

25%

Saskatchewan

13%

13%

27%

Manitoba Ontario Quebec

11%

23%

27%

15.5%

15.5%

26.5%

19%

19%

26.9%

15.5%

15.5%

25%

Nova Scotia

15%

27%

31%

Prince Edward Island

12%

12%

31%

Newfoundland and Labrador

15%

15%

29%

Yukon

15%

15%

30%

Northwest Territories

15%

15%

26.5%

Nunavut

15%

15%

27%

New Brunswick

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Greg Bruce says similar butterfly techniques are being adopted in Ontario in an effort to keep corporate farm businesses as flexible as possible.

“Working with the client and their other advisers, we develop an ownership structure which is tailored to meet the long-term needs of the farm family,” Bruce says. “Quite often, more than one corporation may be used in the ownership structure to hold different assets, for example, individual land parcels owned by separate corporations.”

Given the special tax rules available to farmers, these arrangements can allow for a number of options to sell or transfer assets in a tax-efficient manner, says Bruce.

Nakonechny points out too that young people with land ownership can become completely creative and simply buck some trends all together, like paying CPP. “If you’re incorporated and you run all the income through the company, you can pay yourself either by a wage, or rent on the land, or you can be paid a dividend,” suggests Nakonechny. “The dividend and the rent do not trigger any CPP, which isn’t a particularly great investment anyway, and if you choose to rent, you also are entitled to buy RRSPs, so it’s sort of the best of both worlds.”

Incorporation may not be the only choice for future farmers, say Nakonechny and Bruce but, they believe, with continued industry success, more requests for farm incorporation are sure to come. CG

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hr

Manage yourself, manage your time “Time is what we want the most, but what we use the worst.” — William Penn

By Pierrette Desrosiers, psychologist and coach

o you feel out of breath at the end of your day? Does it seem that you have too much to do, and not enough time to do it? Do you have the impression that time is getting away from you, so that 24 hours in a day are not enough?

What if the problem was not a lack of time, but how we manage ourselves? How have we decided to invest or spend our time?

As you probably have noticed, we just have 24 hours per day. People who are more productive don’t manage time better; they manage themselves better.

Quite simply, they make better choices.

Healthy time management begins with setting priorities. Then we must look at where we are investing our time. This means that you have to first ask, “What are the results that I want to get in different areas of my life?”

We must also realize that not every hour is equally profitable in terms of desired results.

According to the Pareto principle, in general, 80 per cent of the time invested contributes to only 20 per cent of the results, and 20 per cent of what you do gives 80 per cent of the results.

The Pareto law has been found to be true in several different areas relevant to entrepreneurs and business managers. For example: • Eighty per cent of its profits come from 20 per cent of a business’s customers.

• Eighty per cent of its complaints come from 20 per cent of its customers.

• Eighty per cent of its sales come from 20 per cent of its products.

• Eighty per cent of its sales are made by 20 per cent of its staff.

• Eighty per cent of your profits come from 20 per cent of your time.

But how about your work on the farm? It’s easy to work long hours on the farm without significant results if you do not concentrate your energy on activities that truly pay off. You might say, “My father always did it that way,” or, “I have always done it this way.” For example, Mark is set on washing the stable walls himself when he could hire a student, at minimum wage, to do it for him. He would then be free to go renegotiate his debts or review his insurance. He could make hundreds of dollars, or in some cases even thousands, but instead he decides to make $9/hour.

Marie does not want to hire a housekeeper and MARCH 29, 2013

is letting the bills pile up. She is paying hundreds of dollars in interest. “I prefer to do my housework myself. It gets done better,” she tells me.

If you want to do more business, and do it better, stop for a few minutes to question yourself, to confront your beliefs, to review your habits, and to get out of your comfort zone. Habits that are firmly entrenched in our behaviour determine our actions, and then they determine our results. We carry on our habits without being aware of them, and it is very difficult to get rid of them without an active process.

To change your time management habits, ask yourself the following questions: In general: • What are the most profitable and important tasks to be accomplished in the business?

• What has the greatest payoff? What has the greatest impact over the short, medium and long term (in terms of both economics and relationships)?

• Are tasks prioritized (from most to least important)?

• Does this task necessarily have to be done?

• Is the person doing it the most competent for the job?

• Could that person do something more important or profitable?

For yourself, take a look at where you invest your time and resources and ask: • Where do I add value in my business?

• Am I the most competent person to carry out this task in this moment?

• Could I use my time for a more productive task?

• Could someone else do it instead of me with the same or very acceptable results?

• What would be the consequences if it is not done, or if it is postponed? Could I live with the consequences?

Most of us manage our time reactively, instead of proactively. We make choices based on the needs that land on our plates or what others expect from us. To determine the “right things,” we need to make deliberate choices according to the outcomes we most want. We also need to make conscious choices about what not to do, identifying what prevents us from reaching our goals. CG Pierrette Desrosiers 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) Email: pierrette@pierrettedesrosiers.com. country-guide.ca 47

ACRES

By Leeann Minogue

Falling for all the wrong reasons When Ed’s feet get pulled out from underneath him, there’s plenty of blame to go around onk. Honk. Hooonk!

Jeff, Elaine and their three-year-old, Conner, had just sat down to lunch when they heard a vehicle drive into the yard. Then they heard honking.

“What the heck?” Jeff said, rising from his chair to look out the door. “It’s Grandpa.”

“Why doesn’t he come in?” Elaine said, getting up to see for herself.

Conner climbed down from his chair and raced his mother to the door. “Grandpa Ed!” Jeff and Elaine stepped into their boots and threw on coats. Jeff picked up Conner and they went outside.

When Ed saw them come out, he stopped honking and rolled his window down.

“Grandpa, what’s the matter?”

“The guys at coffee say you’re selling all my stuff on kajoogle.”

“What?” Elaine said. “Come in the house, Ed. We have ham sandwiches and chicken noodle soup.”

“I didn’t come for a free lunch,” Ed sputtered. “I came to find out what’s going on.”

48 country-guide.ca

“Let’s go in,” Jeff said.

“I’m hardly going to go walking around your icy driveway with this, am I?” Ed opened the truck door and Jeff and Elaine saw the black plastic walking cast on his left ankle.

“Geez, Grandpa? What happened?”

“I already told you. I found out you’re selling all my stuff on kajoogle. And then I broke my ankle.”

As Jeff and Elaine helped Ed get the hospitalissue cane out of the passenger seat and navigate the ice-covered walkway to the house, they learned that Ed had fallen while walking home to his condo that morning, after coffee at Wong’s Café.

Ed wasn’t about to admit it, but the truth was that he was walking home from Wong’s much faster than he should’ve been, with the spring ice on the sidewalks in town. He was angry and he was in a hurry.

He hadn’t been in such a rush earlier, when he’d been on his way to Wong’s. In fact, he’d left at his usual time and still arrived about 10 minutes later than usual.

MARCH 29, 2013

acres

“You’re really slowing down,” Blake Hamilton had said. Blake Hamilton always had something to say. “We’re going to have to get you one of those medi-scooters.”

“I’m not late,” Ed had told the group.

“And so what? You guys can start solving everybody’s problems without me.”

“OK,” Blake said. “Don’t get all worked up. We just thought maybe you weren’t coming.”

“Huh,” Ed said. Some days he couldn’t deal with the Blake Hamiltons of the world. “I’ve been here every day all winter.”

“Thought maybe you had to go to the farm. To show people your house,” Ron Edwards said.

“What?” Ed said. “You guys’ve finally lost it.”

“It won’t sell unless you let people see it,” Ron said.

“I told you guys,” Blake said. “Ed doesn’t need to camp out at the farm all day to sell his house. His son and grandson can let people in the door.”

“Uh, yeah. That’s right,” Ed mumbled, trying to catch up quickly. “No point me putting all those miles on my truck.”

“So you think Kajiji’s the best place to sell an old house, eh?” Graham McGovern asked. “My nephew’s been trying to convince me the same thing.”

“Yeah,” Ed said. “That’s right. It’s the only way to go. You bet… Did you guys hear about that fender-bender down in front of the hotel last night?”

Ed forced himself to stay at the table until the rest of the guys were ready to leave. Not that he paid much attention.

He completely missed the story about the Jacobson boy getting caught by the RCMP and only half-caught the list of reasons why Alma Christenson was leaving her husband.

As soon as he could reasonably exit, Ed headed back to his condo at top speed.

Maybe he went a little too fast. At the corner of Smith Street and Third, he’d slipped and fallen on the ice. It hurt. A lot. But he didn’t start cursing until he saw that the driver of the car slowing down to help him was Blake Hamilton.

After some debate, Ed let Blake drive march 29, 2013

him to the hospital. Three hours later, he was back in the passenger seat of Blake’s car, this time with a walking cast on his broken ankle and a cane across his lap.

“Now you really will have to look into one of those scooters!” Blake had laughed as he helped Ed into the building. “You know, Ed, I barely had my stuff out of my house before my kid tore down half the walls and added something called a ‘sunroom.’ Built the place with my own hands.

Wasn’t easy to see that.”

Ed glared. “I have a perfectly good place of my own right here.”

As soon as he saw Blake’s car turning the corner, Ed had picked his way awkwardly across the ice to his truck and headed straight out to Hanson Acres to find out what was going on.

“Why didn’t you call us?” Elaine wanted to know when she heard about the injury.

“Humph,” Ed said. “Didn’t figure you had a phone anymore.”

“What?” Jeff said. “With all these cellphones?”

“Try using them,” Ed said. “So a guy wouldn’t have to go to Wong’s to find out what his own family’s doing.”

“The café?” Elaine said. “I doubt we’re actually doing half of what those guys say we are. Come to the table. I’ll get you some soup.”

E d s a t n e x t t o C o n n e r, w h o passed his great-grandfather a soggy bread crust. “I don’t know what this “kajoogle” is, but the guys at Wong’s were pretty excited to tell me it’s selling my house.”

“Oh!” Jeff said.

“You weren’t going to tell me,” Ed said, nodding. “I’d just drive out here one morning, and there’d be a blank space where the house I built used to be. Or maybe I’d meet somebody moving it down the highway.”

“No. I should’ve called you,” Jeff said. “But — we all talked it over. You knew we were going to try to move your old house out of the yard, now that we’ve built this new place. But I should’ve called. Geez. I didn’t even know if anybody would look on Kajiji for a house to move.”

“The guys at Wong’s weren’t looking for a house — but they sure found mine.”

“But, Ed, we went through the place together,” Elaine said. “There’s nothing left in there that you want, right?”

“I lived 54 years in the house. I’m entitled to know where it’s going.”

Elaine and Jeff did more apologizing. Conner passed Ed more half-chewed bits of lunch. When he finished eating, Ed hobbled back to his truck (with Jeff and Elaine’s help), and drove back to town.

It wasn’t fast or graceful, but Ed got into his condo safely. That evening, he was settled in his chair when he heard a knock at the door.

Blake Hamilton.

“Thought I’d drop by with some milk and cereal,” Blake said. “No fun buying groceries with a cast.”

“Huh. Thanks,” Ed said. “I was out of milk. But I’ve got some beer. Maybe you want to tell me about that kid of yours, taking over your house.” CG

Trait Stewardship Responsibilities

Notice to Farmers

Monsanto Company is a member of Excellence Through Stewardship® (ETS).

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

ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Roundup Ready® crops contain genes that confer tolerance to glyphosate, the active ingredient in Roundup® brand agricultural herbicides. Roundup® brand agricultural herbicides will kill crops that are not tolerant to glyphosate. Genuity and Design®, Genuity Icons, Genuity®, Roundup Ready®, and Roundup® are trademarks of Monsanto Technology LLC. Used under license. country-guide.ca 49

10623A_MON_GEN_stewardship_legal_countryguideresize.indd 8/9/12 10:29 1 AM

life

Violence on the farm Emotions can swirl out of control when your workplace is also your home, and your co-workers are your family

By Helen Lammers-Helps arming blurs the lines between family and work and between business and home.

In fact, it’s one of the best things about farming, when it’s working right. When it goes off the rails, however, “independence” can become “isolation” and disagreements can and do escalate into bullying, harassment and outright violence.

Although there aren’t any numbers specific to agriculture, the stats for violence in the workplace are worrisome enough. In 2004 Stats Canada found nearly 20 per cent of violent incidents — more than 350,000 of them a year — occur in the workplace.

In fact, most provinces have recognized this and are strengthening their protection of workers from workplace violence and harassment.

Ontario is an example. A June 2010 amendment to Ontario’s Occupational Health and Safety Act (OHSA) requires employers with five or more employees to have policies and procedures in place

Four main types of workplace violence Type 1. External perpetrator (thefts, vandalism, assaults).

Type 2. Physical or verbal assault by a business associate or customer.

Type 3. Employee-to-employee physical or verbal assault.

Type 4. Domestic violence.

50 country-guide.ca

to address workplace violence and harassment, reports Andrew Harkness, a healthy workplace specialist with Ontario’s Workplace Safety and Prevention Services. This includes completing a risk assessment, having procedures for reporting, investigating and resolving incidents, and communicating these procedures to staff.

These policies must also consider domestic violence where employers are aware, or ought to be reasonably aware, that domestic violence may occur in the workplace, adds Harkness.

But what counts as harassment and violence? At the OHSA, harassment can include unwelcome comments or behaviour or physical contact, bullying, teasing, staring, spreading rumours, telling offensive jokes, or circulating offensive pictures.

Acts of violence can include hitting, pushing, physical assault, sexual assault, stalking, robbery and threats.

Even if you are not legally obligated to have a program in place to address violence and harassment in the workplace, studies have shown that having a healthy workplace makes economic sense.

“Creating a healthy organizational culture can save time, money and frustration by preventing problems before they escalate to harassment, or worse, to workplace violence,” says Ruth Sirman, owner of the Ottawa-based CanMediate International. Sirman has 20 years’ experience as a mediator and has helped resolve conflict in government, corporations, communities, organizations, family-based businesses, and churches with groups ranging in size from four to 1,000.

MARCH 29, 2013

life

When things get bad, employees tend to vote with their feet and look for new positions instead of dealing with ongoing uncomfortable situations, says Sirman. On the farm, it can also mean a family member packs their bags and heads to the city, even though that’s not what they really want to do, and may not be in their best interests.

Of course, not everyone can leave, which means the farm is one place where it’s especially important to be on the alert for the early stages of harassment and violence, and where you need to know where to turn.

“If people leave due to a toxic environment, it costs the farm operation time and money to replace that person,” Sirman says.

And if it’s your child who does the leaving you may lose your natural successor, she adds.

Employees today (particularly young employees) are becoming increasingly vocal about bullying and harassment, continues Sirman. “They are more aware of this, leading to different expectations than older generations.”

Conflicts occur in every organization on a daily basis, says Sirman. It’s only natural. However, if not managed appropriately, conflict can devour substantial amounts of time and resources from everyone involved and create an atmosphere of tension and distrust that distracts people from their work.

Part of the organizational culture of any group is their collective response to conflict. “Does it get addressed constructively or is the pattern to sweep it under the carpet and ignore it in the vain hope that it will just ‘go away?’ asks Sirman. When conflict is not resolved or is poorly resolved, it can recur sometimes many times over. People tend to want to settle issues quickly but unfortunately the quick fix may not get to the root of the problem, and over the long term can lead to the creation of resolution-resistant “super-conflicts.”

When conflict is unresolved or is managed ineffectively it tends to escalate in both intensity and impact. These super-conflicts can be difficult to detect in their early stages. This can lead management to miss critical clues until the problem has reached a crisis state, says Sirman. The evolution of the super-conflict typically follows an exponential growth curve where it starts slowly but then builds momentum until the critical mass where the energy is so great that it explodes. Sirman cautions that the best way to intervene with a super-conflict will depend on the stage and may require professional help to sort out the appropriate course of action.

Leadership is the key (both formal and informal) to changing the organizational culture for the better, says Sirman. Every organization is a combination of formal leadership (those appointed by the organization) and informal leadership (the “goto” people who have a level of authority and capacity to influence others given to them by their peers). Both groups have key roles to play in creating a healthy environment.

Management needs to model appropriate behaviours to create an organizational culture of fairness and respect, agrees Harkness. Where skills are lacking, training resources such as those offered by Workplace Safety and Prevention Association can help farmers develop the appropriate awareness, knowledge and skills.

Very few people are born with an innate and natural competency at resolving conflict constructively, says Sirman.

To determine if there’s a problem, Harkness recommends observing the behaviour of employees and managers in the MARCH 29, 2013

Six keys to creating a healthy workplace

By Ruth Sirman, CanMediate International 1. Be objectively honest with yourself about what is going on. Ask for input to identify areas where things are going well and areas that could be improved. Be willing to own your own contribution to the situation!

2. Create a safe and supportive working environment where people can have open and constructive conversations about issues and challenges.

3. Talk with each other respectfully and constructively. Ask what kind of workplace do we want to have? a. J ointly create clear expectations about what constitutes acceptable behaviour. b. D iscuss how people can address times when someone’s choices or behaviour are causing an issue for them. c. Be willing to be confronted — even if what the other person is telling you is hard to hear. d. Find constructive ways to raise issues and problems without provoking defensiveness or escalating the conflict. Look not only at what is being said but also how it’s being said. e. Find ways to separate the people from the problems. When trying to address issues, be hard on the problems but gentle with the people!

4. Recognize that everyone has a different experience of the situation — and everyone’s perspective and experience is valid — even if you don’t agree with it. Avoid assumptions.

5. Model the type of behaviour you want to see. A picture truly is worth 1,000 words!

6. Ask for assistance. Get help and support if needed!

Where to go for help For criminal offences or if someone’s personal safety is at risk, call 911.

To find a mediator contact CAFA at www.cafanet.com/ or Alternative Dispute Resolution Canada http://www.amic.org/.

Training modules are available on the Ontario Workplace Safety and Prevention Association website at www.healthandsafetyontario.

ca/resources.

For domestic violence go to www.neighboursfriendsandfamilies.ca.

workplace. Are people yelling at each other or picking on one another? Are they aggressive?

Creating a workplace that’s respectful, tolerant and fair can be a challenge but it’s one that will pay off, says Sirman, whose observations are backed up by studies which show a healthy workplace increases productivity, reduces absenteeism and employee turnover, and decreases stress, illness, and accidents. Smart managers, Sirman says, know that soft skills including conflict management are essential to the smooth operation of the farm business. CG country-guide.ca 51

h e a lt h

Sleep versus insomnia

By Marie Berry etting a good night’s sleep is everyone’s goal, but from time to time, everyone has difficulty falling or staying asleep. It’s when sleep problems continue that insomnia begins, and anywhere from one to two per cent of Canadians are affected.

Actually, the real number may be higher than that because many people accept their inability to sleep as “normal.”

Sleep is a patterned rhythmic activity of the brain, and it can be monitored by an electroencephalograph or EEG. About a third of your life is spent sleeping, and sleep is thought to be the time that your body uses to “recharge its batteries.” It is restorative and gives your brain a chance to process daily information and to form memories. Not all animals need sleep, but human beings do because without it both physical and mental health suffers.

The idea is to find out what is causing your sleep disturbance, and remedy it While seven to eight hours are considered normal for sleep, your average may be different, and that’s fine as long as you consistently sleep your usual number of hours.

Sleep deprivation is a risk factor for obesity, heart disease, and even diabetes. This relationship may be related to altered hormone levels, especially hormones such as leptin and those involved in stress.

Headache is a symptom of lack of sleep and when insomnia develops, headache can become chronic. Because sleep involves various neurochemicals within the nervous system which are also involved in depression, sleep deprivation may be a contributing factor for depression, which is then compounded by the fact that you can’t get to sleep!

Without sufficient sleep or restful sleep, you feel tired during the day, which means at work and

home your ability to perform tasks and to remember are impaired. Lack of sleep can contribute to occupational and automobile accidents. Restless sleep can also disrupt your bed partner’s sleep. Overall your quality of life is reduced.

You may have seen various advertisements for sleep aids. Many non-prescription products are antihistamines which have sedation as a side-effect. Prescription drugs include short-acting benzodiazepines such as lorazepam, oxazepam, and temazepam, as well as agents like zoplicone. All sleeping pills or hypnotics should be used for the shortest period of time as possible, that is seven days to a maximum of four weeks.

The idea is to find out what is causing your sleep disturbance and remedy it, rather than take medication on a regular basis which will lead to tolerance, dependency, and addiction.

The best approach to sleep problems is a sleep diary, which is just a record of your sleep habits and your daily activities including what you ate and what you did. By keeping track for several days or several weeks, you may be able to pinpoint something that is impeding your ability to sleep. Ideally you want to go to bed and get up at a regular time and sleep in a bedroom that is cool, dark and quiet. Heavy, fatty, or spicy foods close to bedtime as well as caffeine or alcohol consumption can keep you awake and disturb your sleep patterns.

Some medical conditions, for example coughs, arthritis pain, leg cramps, gastrointestinal reflux disease or GERD, can keep you awake. Treating these conditions appropriately will improve your sleep.

Sleep apnea is the involuntary stopping of breathing; you gasp for air but may not awaken. It certainly impacts your sleep and for many sufferers the only symptom they may notice is their snoring. Weight loss and the use of a continuous positive airway pressure machine usually help.

In Hamlet, Shakespeare said, “to sleep, perchance to dream,” and that should be your nightly goal for your health. Incidentally, everyone does dream, but not everyone remembers their dreams.

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

You know that bananas contain potassium because you have been told to increase your potassium intake by eating a banana each day. However, you may not know about potassium’s activity in your body. Next issue, we’ll look at why potassium is important to your overall health, and what other foods besides bananas are good sources.

52 country-guide.ca

MARCH 29, 2013

r. Mary Anderson arrives in Saskatoon every autumn.

She shows up when the snow begins to fall and the temperature drops. She fills in for family physicians who travel south to escape the cold and snow. When spring arrives, Mary travels to her home country of New Zealand. “Why do you come to Saskatoon in the winter?” I ask. “You could come in the summer and enjoy the warm air. You could sit on the riverbanks and watch the South Saskatchewan River flow by.”

Mary loves winter. She finds sparkling snowflakes refreshing.

The crunch of snow is invigorating to her. She describes Canadian winters as “a shared challenge.”

Mary also enjoys work. She says work is necessary to keep balance in life. There is something fundamentally necessary about work. Mary calls work, “God’s solution to our self-centredness.” She says the test of work is that it benefits someone else. Work is worthwhile when we build something, teach something or improve on a situation.

In spite of advanced legislation for the benefit of workers, many people are underemployed or not employed at all. People come to Canada with professional and trade qualifications and find themselves doing menial jobs. Perhaps the fault is within us.

A few years ago I took part in anti-racism training. I discovered I was not entirely free of prejudice. Attitudes surfaced that I believed I had parked a long time ago.

The real benefit of the training was realizing how privileged I am. I was born in Alberta of grandparents who farmed and held traditional values, a father who worked hard as a bank manager in a small town and a mother who greeted me when I came home from school. I am white, I learned English as a first language and I attended university. Even if they are accidents of birth, these facts have opened many doors for me. Not everyone is so fortunate. Many persons struggle to find jobs, to get ahead, to provide the basics for their families.

The best way to approach work is to find a job doing what you enjoy. If you like motor mechanics, work at that. If you enjoy fishing, earn a living catching and selling fish. Gene Robinson, a bishop from the United States, tells the story of an old, curmudgeonly, ornery fellow who loved to fish and had incredible luck catching fish. He consistently made his limit even when fishing was slow at the local lake. Some other fishermen, jealous of his luck, became suspicious. They contacted the local fish and game authorities who sent an undercover agent to investigate.

The official showed up, chatted with the old guy, then asked, “Can I go fishing with you?” They headed across the lake to a cove where the older man had fished with success in the past.

The senior turned off the motor, then reached into his tackle box and took out a stick of dynamite. He lit the fuse and tossed it into the water. Hundreds of fish emerged. He began plucking fish out of the water and tossing them into the boat. When the fish and game warden had gathered enough evidence, he took his badge out of his tackle box, held it up and said, “You are under arrest for illegal fishing.” The old guy reached into his tackle box, took out another stick of dynamite, lit the fuse and tossed it to the startled game warden. He asked, “Are you just going to sit there, or are you going to fish?”

Suggested Scripture: John 6:25-34, Titus 3:12-15 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon.

MARCH 29, 2013

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Va l l e y

The shrew of Wydinia

ILLUSTRATION: RICK KURKOWSKI

Dan Needles is the author of “Wingfield Farm” stage plays.

His column is a regular feature in Country Guide milked cows for a year in Australia as a young man, at a little crossroads on the Murray River in New South Wales. There were only four farmhouses at the corners but that was enough for the residents to register the name with the postal service. They called it Wydinia because so many people had asked them, “Why dinya build your house farther away from the neighbours?”

Anyway, the house directly across the road from where I milked cows was owned by a prosperous couple who had bought up 1,000 acres of land that they rented and sharecropped. They had one daughter, Ida, a pretty little thing who spent most of her time riding her horse.

Ida was pretty easy to look at, but that wasn’t the only reason a parade of jackeroos came calling on her. They saw in her the prospect of a much easier life sitting in a cane-bottomed chair, supervising employees from the comfort and shade of Ida’s parents’ veranda.

But Ida was a hard marker when it came to selecting a life partner. She had a sharp tongue and a voice that would shatter glass. Her gaze actually rested on me very briefly during my stint at the farm. I pried a thin smile out of her with a story about a Canadian explorer who was lost so long in the Arctic that he had to eat his shoes.

I parlayed her smile into a dance date at the Pacific Ballroom in Bendigo, some 90 miles to the south. I appeared at her doorstep in a borrowed truck to take her to the ball, but Ida didn’t care for the dusty truck and she moaned all the way about her hair. Midway through the 54 country-guide.ca

evening I stepped fairly lightly on her toe and she let out a shriek that stopped the band dead in its tracks.

When Ida yelled it didn’t just turn heads. It brought everyone in the room to the kind of wide-eyed wakefulness you associate with two Benzadrines chased by a triple shot of espresso.

We drove back up the dusty track to Wydinia in silence.

That was the end of Ida and me as a couple. I returned to Canada still single but I kept in touch with my farm family over the years and heard that she got married to a big, easygoing man named Tom from South Australia who got on well with Ida’s parents and stepped easily into the family business. The old couple then moved into town and left Ida and Tom in the farmhouse.

The farms in Wydinia continued to prosper, workers’ quarters were added and the crossroads turned into a bit of a village. My host handed his farm down to his son Jeffy who would call me every so often and tell me about Ida and her famously patient husband.

For Ida’s temper never improved.

Tom learned to close his eyes and just take the abuse. If he was late coming home she would yell at him. If she saw

a spider she would yell at him to kill it.

If she didn’t like a birthday present she would hurl it back at him and yell some more. For two decades Tom just shook his head and shrugged.

Then, early one morning, Ida was riding her horse past the crossroads when it shied and she fell off. She shrieked at Tom, but he was in the shop and couldn’t hear her. Everybody else in Wydinia could hear her just fine, but they’d been listening to Ida for 19 years by that time and they didn’t think anything of it. Jeff and his wife were sitting at the breakfast table and they heard her.

Jeff decided something wasn’t right so he went out to investigate and found Ida lying in the ditch screaming that her foot was broken and why wouldn’t Tom do something? Jeff jogged across the road and met Tom coming out of the shop.

“Tom,” he said. “Ida’s fallen off her horse and her foot’s broken. Do you want me to get an ambulance?”

Tom paused for a long moment and then said quietly, “No. Just get a gun.”

It wasn’t long after that that Tom moved back to South Australia and took up beekeeping. Jeffy says a bee yard is the place a man goes when he really wants to be alone.

MARCH 29, 2013

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