CGE120412

EASTERN EDITION

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April 2012 $3.50

THE FARM GENDER GAP Are women like Margaret Rempel farming better?

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APRIL 2012

PG. 18 PLOWING THE GLASS CEILING Now that more women are taking more management roles on more farms, are they doing business differently?

Writer Angela Lovell shares the inside scoop.

BUSINESS

PRODUCTION

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Retire and transfer equity to the next generation at the same time.

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MEET THE FAMILY

Those forage prices look great, but hay quality is in the eye of the beholder.

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More Canadian farms are making formal business meetings an essential part of how they operate.

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SIGNING UP For farmers like Shelley McPhail, time spent finding the right education and government programs pays off big.

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When farmers call themselves “producers” is it any wonder our kids struggle with their business skills?

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STAFFING THE FACTORY

MACHINERY GUIDE When it comes to self-propelled sprayers, it’s all about speed, power and performance.

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HANSON ACRES Dad finds out he isn’t always right, or is it the world that’s wrong?

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GUIDE HEALTH The bad news is, you’re never too old for shingles.

The good news is, early diagnosis helps.

AG AND THE REST Shouldn’t our thriving ag sector be creating more ripples in Canada’s economy?

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EVERY ISSUE

DAMNED IF THEY DIDN’T Feeling happier with Monsanto these days?

That’s all by design.

#PESTPATROL Here’s advice from Mike Cowbrough on managing leafhoppers in forage fields.

CASH IN, CASH OUT Forty per cent of farmers don’t do cash-flow projections. If that includes you, here’s what you’re missing.

SNEAKY NEW DISEASES Two new root rots may be undermining your alfalfa stands.

HOW TO MARKET IN THESE TURBULENT TIMES

THE PLAN

AND OVERSEAS TOO Sure, it’s complex to export hay, but it can also be extremely lucrative.

These nine tips from Errol Anderson will help you thrive despite global financial worries.

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BIG PRICES FOR FORAGES

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PETUNIA VALLEY Knowing the difference between a wish list and a dream is key to Dan’s farm happiness.

Like you, AGCO needs rural employees. Here how the company gets — and keeps — them.

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GUIDE HR — SAME BLOOD, BUT SO DIFFERENT Brothers don’t always make good business partners.

Sometimes you just can’t force it.

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GUIDE LIFE — ADD IT UP These tips will help you raise children who know business, and still love to farm.

APRIL 2012

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CONTENTS

RETIRE ON REDEEMED CAPITAL

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: Maggie Van Camp (905) 986-5342 Fax (905) 986-9991 Email: bmvancamp@fbcpublishing.com Gord Gilmour (204) 294-9195 Fax (204) 942-8463 Email: gord.gilmour@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com Cory Bourdeaud’hui (204) 954-1414 Cell (204) 227-5274 Email: cory@fbcpublishing.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

The end of summer There won’t be any more recessions.

I remember being told this by a good friend who has done all sorts of impressive things with Deloitte and who has all sorts of letters after his name. It was around the turn of the millennium, and his point was that economists had finally learned enough about the economy that they would nip any future recessions in the bud, and we should plan for a much more stable Dow Jones.

Of course it didn’t quite work out that way. Human nature got in the way.

I also remember when the Berlin Wall came down and historian Francis Fukuyama wrote The End of History. He argued the 20th century had been dominated by a contest between fascism, communism and democracy, and now that democracy had won, we were about to enter a period of unparalleled peace.

Nor did that work out quite as planned.

Again, humans with their religions, cultures and economics keep getting in the way.

Now we’re being told that Canadian agriculture is entering a long period of stability.

I don’t believe it this time either.

The arguments do sound convincing.

After all, there simply isn’t that much land coming up for sale in most parts of the country. You couldn’t expand at breakneck speed even if you could afford to.

That, I’m told, means that farms will need to stay at their current sizes, and it also means that the summer of 2012 will be a good year to enjoy the fruits of your labours without worrying about the future.

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Instead, it’s my bet that many of tomorrow’s most successful farms will look back on the summer of 2012 as the start of the good things that have happened to them.

Others — less fortunate — will look back and see the year the end came in sight.

More land will soon be available. The numbers vary, but the conservative estimates I hear say that a third of Canada’s commercial farms do not have a successor in the next generation. Yes, I know times are good and these farmers want to hold on, but with today’s market and weather volatility, that will change.

Technology will drive change too. We need to keep reminding ourselves that the GPS systems we have today will soon seem like Commodore 64s.

As well, competitiveness will inevitably return as a hanging judge in Canadian agriculture, at least sporadically. Markets won’t always be so buoyant.

The topics that our writers tackle in this issue were chosen with a view to helping you define and target the challenges that will determine farm success. They’re ideas that start and end with the assumption that as agriculture gets bigger and more complex, it actually becomes more of a people and less of a tractor business, ironic though that may sound.

I hope the interviews and the insight in this issue give you something to think about and act on this summer. Are we getting it right? Let us know. You can reach me at 519-674-1449, or email me at tom. button@fbcpublishing.com.

Advertising Services Co-ordinator: Arlene Bomback (204) 944-5765 Fax (204) 944-5562 Email: ads@fbcpublishing.com Publisher: Bob Willcox Email: bob.willcox@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Assistant Production Manager: Farrah Wilson Email: farrah@fbcpublishing.com Director of Sales and Circulation: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com Designer: Jenelle Jensen 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. 131 No. 7 Internet address: www.agcanada.com

ISSN 1915-8491 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.

APRIL 2012

Machinery

By Philip Shaw

It’s all about speed, power and efficiency when it comes to today’s self-propelled field sprayers. In this issue, we take a closer look to find where those differences start.

rogator rg900, rg1100 and rg1300  Rogator RG900, RG1100 and RG1300 sprayers are designed to move quickly and easily among a wide variety of crops, crop heights and field conditions. According to Rogator, their drive package also gives you more horsepower than ever before and matches it to the payload capacity, giving you more consistent field and road speeds with far greater fuel efficiency.

These Rogators have new Tier 4i AGCO power engines with the exclusive e3 technology. The models range from 280 to 339 hp with a pressure compensated drive system that monitors drive pressure. It automatically changes to a lower speed range, reducing drive system load while maintaining the engine r.p.m. you need for field conditions.

Features include unlimited wheel spacing from 120 to 152 inches and a 50-inch crop clearance. As well, an air suspension with an anti-roll system on the front and rear axles evens out your ride while keeping the boom at a consistent height. www.rogator.com

john deere 4940 sprayer  John Deere offers four models of selfpropelled sprayers from the 4630 to the new 4940. According to the company, the 4940 is John Deere’s largest and most productive sprayer, offering a range of options targeted at keeping you spraying accurately and efficiently through very long days.

A pri l 2 0 1 2

The new JD 4940 sprayer has direct injection kits, allowing the operator to accurately inject chemicals into the carrier flow without having to mix chemical into the solution tank. This results in easier changeover between crops, faster loading times and less wasted chemical.

There are four different injection systems, with capacities ranging from 35 to 200 gallons.

A variable-speed hydrostatic ground drive provides an infinite range of speeds in the field or for transport. Matching speeds to field conditions is done with the +/- button on the hydro handle. Power from the 9.0 litre PowerTech engine turns two hydrostatic pumps, transforming this power into oil flow and pressure. Each pump is plumbed to two opposite wheel motors. www.deere.com

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doIng more. usIng less.

A series on being ready for the farming challenges ahead

Productivity There will be several ways to meet the challenge of feeding 9 billion people, but creating more land isn’t one of them

More food from the same land base Even if those problems are addressed, more food will be needed to feed a growing population. That food must result from increased productivity. Population may be able to multiply quickly, but the land base to support it can’t. While some more land can be brought into production in South America and the former Soviet Union, that potential is limited.

Much of the land currently in production was developed at the expense of important native ecosystems, and that doesn’t only include the Brazilian rainforest. Only a tiny fraction of the

long-Term World PoPulATIon groWTH 1750 To 2050 Millions

Billions

Population Size

Annual increments

I

t took 123 years from 1804 to 1927 for the world’s population to double from one to two billion. It took 32 years until 1959 to add the next billion and just 15 years for the next billion reached in 1974. It’s now projected to increase by about another billion every 12 years, reaching at least nine billion by 2030.

The remarkable growth in the human population has prompted some to declare that the 18th-century economist Thomas Malthus was wrong. He famously predicted that “The power of population is indefinitely greater than the power in the earth to produce subsistence for man.”

Yet in another sense Malthus was right. The world’s population in his time was about one billion. Today, the United Nations estimates that about one in seven of the world’s population — also about one billion — go to bed hungry every night. The UN says hunger is the world’s No. 1 health risk, killing more people than AIDS, malaria and tuberculosis combined.

Feeding today’s hungry is a challenge. Feeding them, plus another two billion more people by 2030, is an even greater challenge.

There is no single solution. Today’s hunger problems are not all due to a lack of food, but to inability to distribute it where needed. That’s often due to war or ethnic conflict which drives farmers off their land, preventing them from feeding themselves and their families.

Much of the world’s food is wasted, lost to insects, animals or mould due to poor storage facilities. In wealthy countries where food is relatively cheap, much is simply thrown away. A George Morris Centre study in 2010 estimated that $27 billion of Canadian food ends up in landfills and compost every year.

Source: United Nations Population Division

biologically diverse tall-grass prairie that once covered central North America remains intact.

Of the world’s agricultural land that has been brought into production, much has been seriously degraded by erosion and nutrient depletion, especially in Africa, where population growth is expected to be highest.

That makes protection of the soil resource the number one challenge. Once threatened by the Dust Bowl of the 1930s, North American farmers have made great strides in restoring and protecting their soil through a combination of improved tillage technology and herbicides. While such large equipment can’t be used by farmers in Africa, what North Americans have learned about conservation agriculture can be applied on a scale appropriate for their farms.

A combination of native genetic resources (many of our important food crops originated in Africa and the Middle East) and modern breeding technology will also allow developing country farmers to meet the challenges of feeding their families and neighbours.

Here in North America, technology such as cellulosic ethanol, which would allow production of fuel from waste material or high-yield biomass crops, may help resolve the conflicting demands between fuel and an ever-growing world population.

caseih.com

On a farm, there’s no such thing as a few small chores. You need versatile equipment that works as hard as you do. That’s why we offer a family of tractors and hay tools designed with the power, efficiency and versatility to help you get things done. All built for a level of operator comfort that makes those long, hard days a little shorter and a lot more productive. And right now, you’ll find great offers on our full line of Farmall® tractors, balers, windrowers, and Puma® and Maxxum® tractors. To learn more, visit your local Case IH dealer or caseihdeals.com.

©2012 CNH America LLC. All rights reserved. Case IH is a registered trademark of CNH America LLC. www.caseih.com.

Please go to caseihdeals.com for official rules *No purchase necessary. The promotion winner will be selected from among all eligible entries by a random drawing on or before July 1, 2012. Entries must be received by May 15, 2012. Grand Prize Winner must pick up the Grand Prize Ram truck at an authorized Case IH dealer located nearest to the address supplied on the Winner’s entry form within 45 days of Winner’s prize notification. Prizes are not transferable, cannot be redeemed for cash, and the CNH Capital Reward card second and third place prizes cannot be applied to existing balances or transferred as a credit balance on a CNH Capital Commercial Revolving Account. All reward cards expire July 1, 2014. Unclaimed and undeliverable prizes remain the property of Sponsor. See your participating Case IH dealer for more information or visit caseihdeals.com/fieldofdealspromotion for complete promotion rules. Void where prohibited by law. SPONSOR: CNH America LLC, 700 State Street, Racine, WI 53402.

Limit one entry per person; if you have already returned an entry form to your local Case IH dealer, you are already entered into the Promotion and need not enter again.

case international patriot series sprayers

miller nitro series sprayers  Miller offers six models in their Nitro series from 215 to 365 horsepower. The company calls the Nitro series the most productive and robust front-boom sprayer in the industry.

Miller engineering emphasizes operator comfort as one of its top priorities in the Nitro series. The front boom offers great visibility. The Nitro deluxe cab features a high back air-ride seat and an industry leading air-ride suspension. Nitro sprayers have high clearance (six feet) a turning radius of 13.5 to 15 feet, superior traction with direct-drive wheel motors and superior weight distribution. There is a wide choice of product tanks and options to best fit your operation.

These Miller Nitro sprayers also come with a light package containing 14 powerful and adjustable halogens that light up your work area. This can be enhanced with optional Xenon, plus front and rear mount field lights and an amber rotating beacon. www.millerstn.com

The Patriot Series from Case International comes in three models, from the Patriot 3230 bringing a 220-hp 6.7 litre six cylinder turbocharged Case IH NEF diesel engine with a tank size of 800 U.S. gallons, to the 4420 with its 290-hp 8.3 litre engine and tank capacity of 1,200 U.S. gallons.

New for 2012 is the Patriot 4430 rated at 324 hp. The 4430 is Tier 4A compliant, with boom widths from 60 to 120 ft.

Case IH emphasizes its “cab forward design” that offers better weight distribution, helping minimize soil compaction even with a full product tank. The Surveyor cab offers comfort and visibility to boost productivity by reducing operator fatigue.

This is enhanced by the aircraft-style suspension, which helps both the boom and the operator by absorbing both vertical and lateral shock loads.

Each Patriot sprayer comes with the “AIM Command” spray system. This brings independent pressure control so the operator can manage droplet size to match field conditions without changing tips, speed or rate. In turn, this enables the operator to increase average field speed, control drift on the go, maximize chemical utilization, and limit off target application risk. www.caseih.com

apache field sprayers  New for 2012, Apache offers the AS720, AS1025 and AS1220 field sprayers. These Apaches have new cabs offering 12 per cent more space, plus new ZF transmissions with a torque converter to help transfer more power to the ground. They also come with axles that can be adjusted from 120 to 160 inches.

Apache sprayers from Equipment Technologies differentiate themselves from other field sprayers by using tough mechanical drives instead of mounting a hydrostatic engine on each wheel. Key to this mechanical drive versus hydrostatic environment is “tractive effort” which refers to transferring all the power to the ground for maximum efficiency.

With no hydrostatic engines, the price point of the Apache is lower than competitive hydrostatic sprayers. According to Equipment Technologies, this cost is not only lower at the front end, but operating costs are lower as well. For instance fuel costs are much lower as there is no need to run engines at capacity in order to run hydrostatic motors. The units are also lighter, so the company says there is less soil compaction and crop damage. www.etsprayers.com

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April 2012

business

Succession strategy

Retire on redeemed capital Retire and transfer equity to the next generation at the same time

By Maggie Van Camp, CG Associate Editor istorically, succession was solved by lifespan.

The next generation took over when the older generation gave out. Today, with the average Canadian living about 80 years, that just isn’t a solution anymore.

Now we need to figure out ways for multiple generations to balance power, ownership and workload on the farm.

As well, farm asset values have also continued their steady rise, climbing 6.2 per cent in 2010 alone, so there’s too much on the table to leave it all to happenstance.

With more at stake and more people involved — and involved for longer — the traditional mindset of inherited farm succession is understandably under pressure.

The problems often lie in how farms deal with the interconnected issues of personal income and the transferring of assets, says Merle Good, farm business specialist with Alberta’s agriculture ministry. “It’s really, really, really important to discuss draws in a family business, and expectations,” says Good.

Basically income can be taken out of a business for only four reasons — labour, management, return on capital or capital redemption. The trick is to weigh each of these numbers so the farm succession discussion is focused on the viability, expansion and transition of the business instead of personal wealth.

Setting salary or management fees can be awkward but there are some standard industry numbers and it helps if it’s put in the context of the business.

Many parents rely however on return on equity for much of their retirement income. The older generation often retains assets such as land, barns and equipment and rents them to the business, especially at the beginning of succession.

This is different from capital redemption, when assets or shares are sold to the next generation. See Table One. Table One Next generation farmer

Parent

Labour Management Return on Capital Capital Redemption Total income

Good suggests slowly reducing the parents’ equity investment over a given period by redeeming their capital tied up in the farm.

In other words, the older generation should retire by effecApril 2012

tively selling their equity to the business instead of holding it and taking salary and management draws.

“Parents need to retire more on the redemption of equity rather than on return on equity,” says Good.

In a farm corporation, transfer of ownership often starts by freezing the share value, with the parents being issued preferred shares at this frozen value. At the same time, the new generation gets common shares.

Slowly redeeming the preferred shares out of the company gradually reduces the parents’ equity state. Besides, about $30,000 per year of these “redeemed dividends” can be taken out of the farm with little or no tax if there are no other sources of income, or at lower dividend tax rates even if there is other income.

“Every province is different, but tax on a dividend up to about $30,000 from a Canadian company is much lower than the rate on other income,” says Dean Gallimore of KPMG in Lethbridge, Alta.

With sole proprietorships, the parents sell the assets to the child and get a note. Doing this allows them to take advantage of the capital gains exemption and the farmland rollover provision. That note usually stipulates annual principal payments with no interest over a long time, says Gallimore.

Either way, over the next 25 years the parents’ share of the farm will be vastly reduced and the farm will have been able to grow as the next generation has slowly built up asset wealth within the farm.

This transaction should be negotiated up front, and with corporations can be inside the share holders’ agreement. By tracking and sharing this information annually everyone knows, including spouses, what the equity situation is at any given time.

Connecting those numbers to reality and putting enough weight on capital redemption requires some long-term thinking and honesty. All parties need to agree that the assets should change hands in tune with contribution and they need to talk about how that will shake out over the next 20 years.

This discussion brings clarity to the salary the next generation is earning relative to the parents. Who’s putting in the most time and who is responsible for the management of the farm?

How much is the individual contributing the farm? What’s a good hired man worth?

If the younger generation is capable and committed, then logic says they should be getting more salary and management fees and what they get out of the farm should increase as they build it and take on more responsibility.

“If the son (or daughter) is getting paid more salary, then they should be responsible for getting up in the night for calving,” says Good.

The sacrifices of long hours and low disposable income can be justified by farm asset accumulation. For some spouses, working for low wages compared to off-farm jobs is much easier to take if they know they’re building up net worth in the farm. “It’s an incentive,” says Gallimore.

It also takes away from the farm transfer being perceived as an inherited gift and protects the new generation from the “someday you’ll have all this” syndrome.

This limits any estate headaches which can erupt during inheritance and when non-farming family members inherit farm assets that the farming child relies on. “Some parent are unwilling to transfer the farm before they die,” says Good. To those parents, Good has a simple message. “You can’t afford to buy tractors twice.” CG country-guide.ca 9

management

More Canadian farms are making formal business meetings an essential part of how they operate

he joke used to be that if you want to hold a meeting on the farm, all you really need is a mirror. But you don’t hear that joke so often anymore. And even when you did hear it, it was never as true as the joke tried to make it seem. Farmers may not always have had meetings, but they’ve always interacted, even if there wasn’t always a whole lot that was verbal about how they did it.

Geoff Hewson’s experience is a good example. The family’s 8,000-acre grain and oilseed farm at Langbank, a couple hours east of Regina didn’t always need meetings. “Before our generation began taking a more active role on the farm, my father and uncle Robin and Thomas were running it,” says Geoff, who is also vice-president of the Western Canadian Wheat Growers. “They didn’t see a big need for a formalized meeting structure. They were in contact with each other all the time, and always had an unspoken connection, not feeling the need to talk a whole lot.”

Growing up on the farm, Geoff felt the whole family was included, noting, “We certainly weren’t kept in the dark. We didn’t make the decisions, but they weren’t kept from us either.”

As other family members got more involved (now the farm includes Geoff and his wife Amy, his sister 10 country-guide.ca

Margaret, and his cousin Mark and his wife Amber), the farm outgrew that kind of “it-will-happen-onits-own” approach.

Geoff says the family began having regular meetings when his sister returned to the farm full time, noting, “It just developed from there. There wasn’t particular tension or issues before, but looking back, I think it was a smart move — done proactively, not reactively.”

Starting in the winter of 2002, the family began meeting every Monday, typically for a one- to twohour meeting, and they’ve continued building on and refining that strategy ever since.

Meanwhile, a half-day’s drive west of the Hewsons at Innisfail, Alta., the Edgar family also had an approach to farm meetings that many families will recognize.

Elna Edgar has been married now for 37 years, and recalls having sat down to her first family meeting the day after she married her brother’s best friend (whom she had known since the age of five).

“My mother- and father-in-law lived on the same farm in the same yard with us for the first 10 years of our marriage — and not a bad word was ever spoken between us,” says Elna.

Elna’s in-laws later moved to town, while she and her family moved into their farmhouse. Her father-inlaw decided to return to work at the farm for quite a April 2012

Photo credit: carey shaw

By Rebeca Kuropatwa

management

If it’s Monday morning at the Hewson farm, the family is meeting to discuss markets, business strategies and all the decisions that go into running a modern farm. The meetings take time and commitment, but the family is convinced they contribute to the farm’s financial success. while after. “He always felt welcome to come back and work if he wanted to,” says Elna. “And if he wanted to stay in town for the day, that was fine too.”

“He and my mother-in-law were fantastic to work with. Everything was out in the open. We’d come over every morning — a ritual — have coffee and plan out the day. There’s always been that open line of communication.

“Farming is my passion,” says Elna. “There’s nothing else I’d rather be doing. I’ve never been a housewife. I’ve always been a farmer.”

The Edgars settled in the area in 1907. Today, Elna and her husband Doug are the fourth generation of Edgars working this land. A fifth generation is starting up too, with the Edgars’ daughter, Keri, and son-in-law Randy having built a house on the quarter south of them.

“Together, we continue having daily meetings with a lot of things being hashed out as we go,” says Elna.

“Everyone knows what everyone else is planning for the day, and what everyone else is thinking.”

Same kinds of evolution Even though the Edgars had this tradition of daily meetings, it wasn’t enough on its own. Today, in addition to the daily meetings, the family holds an annual meeting every year as well.

The point, says Elna, is to determine where the family sees itself going. “At these meetings, everyone has their own viewpoint,” says Elna. “We discuss April 2012

them and make a decision from there, with everyone’s vote carrying the same weight.

“It’s critical to both talk and to listen, otherwise it’s just not going to work,” says Elna, who adds that accurate minutes are also kept, so the family has a record of what was decided and why.

Through this transition, the Edgars have also come to terms with what it takes to make such meetings work. “Everyone needs to be aware that it’s not about what’s best for me, but what’s best for the farm,” Elna says.

“What’s best for the farm is best for me in the long run.”

The Hewsons also settled on a formula that mixes formality and informality. At 29, Geoff is technically president of the family corporation, with his cousin, sister, dad, and uncle all sharing in the farm’s management and ownership. The meetings, however, aren’t structured to care about titles.

“No one really has a formal role of chair of the meeting,” says Geoff. “There’s usually enough stuff going on that if one member feels too much time is being spent on one subject, someone will say we need to talk about it more next week and meanwhile move on to the next matter.”

Like the Edgars, the Hewsons have also found their comfort level with paperwork. “We don’t have written agendas for our weekly meetings,” Geoff says. “We Continued on page 12 country-guide.ca 11

management Continued from page 11 do keep a binder of written notes from the meetings, but we don’t do agendas.”

While there isn’t an agenda, the weekly meetings are structured with what the Hewsons look at as a standard operating procedure. Each meeting starts by reading over the notes from our previous meeting and addressing “action items.” Step two involves a review of markets, and updates and discussion on sales and positions taken.

Then the meetings move on to new business.

“With disagreements, if a majority consensus is reached, whoever might have had the dissenting opinion will go along with the majority decision,” Geoff adds. “Our group is really good. Nobody gets too upset or bent out of shape about things.

When there’s a disagreement, we can usually find an amicable way to deal with it.

“We do have the rare times when that doesn’t happen,” Geoff says. “We just move on.”

In part, that works because of the mentoring role of the older generation. “We do have Robin and Thomas (Geoff’s father and uncle) at the meetings, and theirs are very valued opinions,” Geoff says. “If they thought we were doing something that isn’t in the best interest of the farm, they would say so. But they don’t lord it over people that they might be the ones with the most experience or knowledge on the board. They never try to pull rank.”

12 country-guide.ca

“The first generation is very good about not dictating to the next generation,” Geoff adds. “It’s more that they coach us.”

As with the Edgars, however, attitude also has a lot to do with the success of the family’s reliance of meetings. In this case, it’s a shared attitude toward business. “The older generation has always been of the mindset that there is a need to spend money to make money — and not to spend it frivolously,” Geoff says. “If there’s a business case (that will enhance the farm’s profitability) to be made for a new purchase, then no one would stand in the way.”

Also like the Edgars, the Hewsons have an annual meeting. In their case, in fact, it’s a fairly formalized process, involving not only shareholders but stakeholders as well, says Geoff. “Outside advisory services have been used to help with more complex business decisions, such as succession.”

Now, the family is looking at the possibility of developing these into a semiannual format.

Different kinds of farms The Edgars’ farm, just off Hwy. 2 between Edmonton and Calgary, is very diversified, with not only the largest asparagus field in Alberta and 15 acres of hand-picked, market garden peas, but also beans, rhubarb, 1,200 acres of grainland, and cattle producing hormone- and antibiotic-free Angus beef.

Elna looks after a 42-acre market garden. In the spring and summer, 12 to 15 employees help out. Elna manages the quality of the picked produce, and plants peas and beans every week.

“My husband does the grain, and is the chief guy who fixes things when anything breaks down,” said Elna.

The Edgars are also heavily involved with Innisfail Growers, a five-family marketing co-operative that started up in 1993. Through the co-op, they participate in about 20 weekly, summer farmers’ markets, and a couple year-round markets. At the year-round markets, they do winter delivery to Red Deer and also have a permanent booth, opened four days a week, in Calgary with regular hired staff and an Edgar family member there to manage it fairly regularly.

At the year-round markets, the Edgars sell their Angus beef, as well as a lot of preserves — from beet pickles to asparagus pickles, asparagus relish, asparagus soup, pickled beans, mustard beans, apple chutney, apple sauce, apple butter, and fruit leather — adding value to their produce.

Part of the function of the meetings is to ensure everyone is up to speed on how the farm is growing and evolving, and to give them a voice in decisions. For instance, their daughter Keri and her husband now live at the farm. Keri is a stayat-home mom and is heavily involved doing the books on the farm, while her husband Randy is involved with the cattle side of the business.

As farms go, the Hewson farm couldn’t be much more different. It’s a dedicated grain and oilseed operation totally focused on their productivity and efficiency as producers and marketers of canola, winter wheat, fall rye, spring wheat, malt barley, and oats.

“Having family meetings has definitely helped us financially,” says Geoff.

Critical to their success, he says, is up-todate record-keeping, plus a safe environment where open communication is not only expected, it’s prized.

“It’s also important to prioritize operations based on the greatest return/value, netting the best possible long-term results for the farm,” Geoff says.

“I’d say any family farm business with more than two people involved in the operation and management would benefit from having meetings,” Geoff sums up. “It doesn’t need to be weekly. It can be monthly or whatever works.” CG April 2012

BUSINESS

SIGNING UP For farmers like Shelley McPhail, there’s a big return on selecting the best business-education programs for your farm, and the best grants to help analyze your farm busness

By Maggie Van Camp, CG Associate Editor

helley McPhail’s eyes sparkle.

She is telling me about the work she does encouraging farmers to sign up for professional development courses and to apply for grants, and her energy and emotion are there right at the surface, open for all to see. And that should come as no surprise for, as I quickly learn, McPhail herself is a walking advertisement for how these programs can transform not only our farm businesses, but the people who run them.

That is, if the right farmer gets lined up with the right program, which based on McPhail’s experience, probably isn’t as difficult as it might sound.

McPhail farms part-time with her husband Harold on 450 acres near Almonte, Ont. in the Ottawa Valley. She’s also a workshop leader and program representative for Growing Forward’s Business Development, administered in Ontario through the Ontario Soil and Crop Improvement Association (www.ontariosoilcrop.org/workshops).

APRIL 2012

As both a farmer and facilitator, McPhail’s own training — including her MBA — are vital to her work, helping her set targets and then achieve them, whether for herself or for others.

But it works as well as it does because McPhail, like other farmers, is able to integrate that training with her wealth of insights gleaned from being a part of a farm community, immersed in farm culture.

Every farm has at least one pivotal moment, McPhail tells me. Sometimes that fulcrum is tragic, personal and emotional. For the McPhails it was an early winter morning in 2000. Harold and Shelley were in the barn milking their 40-cow dairy herd while their two pre-teen children were still snuggled in their beds.

Fire broke out and started racing through the bungalow.

Luckily, the McPhail children knew some fire safety and they escaped through their bedroom windows, but Shelley couldn’t shake the connection between milking the cows and the near loss of her

children, with the complete destruction of the family home.

Two years later, the McPhails sold their cows and quota, bought a few beef cows and continued their cropping operation. Harold started driving truck in the winters and Shelley took charge in the barn, but she was looking for more.

In January 2005, now in her mid-40s with a diploma in business administration, Shelley applied for the University of Guelph’s Masters in Business Administration in Agriculture, a mostly online course with some short residency requirements. “I needed to move myself forward,” she says.

The program begins annually in May, can be completed in two years and today costs $42,000 (www.uoguelph.ca/cme/mba).

When McPhail enrolled, it started in June, took three years and cost about $30,000.

The MBA was also heavily loaded with group work with people from multiple time zones, resulting in some lateContinued on page 14 country-guide.ca 13

business Continued from page 13 evening online time for McPhail. Her thesis though was a strategic analysis of her own farm, including linear programs to test various enterprises, and it was an eye-opener.

But the main immediate impact was in her, not the farm.

Beyond business know-how, the MBA experience also helped McPhail develop both her self esteem and her ability to draw the positive out of people. Those might be what are called soft skills, but she has used them many times in her role as workshop leader. “A positive attitude is contagious,” she says. “People start feeding off each other.”

But it goes beyond that too. McPhail even says a good attitude is also key to getting the most out of the government-supported programs. “The money is available, you might as well use it,” she says. “It’s there for a reason. The government is responding to a demonstrated need.”

“The better you are prepared, the easier it is to take advantage of some of these programs,” adds Cliff Harrison, a business consultant for Prairie Skies AG Consulting in Domain, Man. and who has been advising farmers for 40 years.

In Harrison’s experience, the farmers with the best track records of getting into these programs are farmers who consistently complete their year-ends on a timely basis and then scope out the coming the year. “If you’ve already done your homework, know your historical needs and have a focus on the future, it’s easier to take advantage of these grants,” says Harrison.

Government business years typically go from April 1 to March 31, so both federal and provincially funded programs tend to be initiated then. For example, the existing five-year Growing Forward Agreement will expire next March and the next Growing Forward Agreement is being developed to replace it then.

For farmers, that means their annual financial farm books should be done by mid-February to take advantage of the programs before the ramp up to the next government year.

It also means doing the legwork to know which programs — and what details — apply in your province and to your farm.

Although many companies sell the service of finding and applying for grants, the Canadian government’s (www.canadabusiness.ca) online search service is free. All the provinces and the territory of Yukon have information on their websites about their agriculture grants. Also, Farm Management Canada has a detailed listing of support programs for farmers with links at www.farmcentre.com/ features/thenewfarmer/Resources/GrantsAndPrograms.aspx.

Workshops Across the country, funding is often available only after farmers participate in a course, seminar or workshop. McPhail has seen this format work exceptionally well, from both sides of the desk.

She leads two-day Growing Your Farm Profits workshops in Ontario and within a week of the sessions she meets again with participants to review their action plans and forms. Then the farmer completes a cost-share application and mails it off to OSCIA for approval and then payment.

“The workshop leaders walk you through it,” says McPhail.

“They give you a checklist and help ensure you fill out everything correctly.”

Each province and territory determines the type of management and skills development training it will offer and how it will be delivered in the Growing Forward’s business-development programs. Ontario is the only place where the program isn’t 14 country-guide.ca

April 2012

BUSINESS

“A positive attitude is contagious.

People start feeding off each other.”

— Shelley McPhail

being delivered through the minister of agriculture.

What you can get funding for and how much funding you can get also varies geographically. In 2009, the McPhails took advantage of the subsidized fullfarm financial assessment. In Ontario, grants for $2,400 go toward hiring a farm financial planner to analyze your farm finances and then come back a year later and review developments. Farmers only pay $100.

The financial adviser drove up their lane and viewed their operation and their plans with fresh eyes. “It was the best thing we’d ever done for our farm,” says McPhail. “He gave us objective ideas.”

They had been thinking about starting an on-farm brewery but the adviser could clearly see their personal and farm’s strengths and weaknesses. Instead, he suggested that since Harold already enjoyed driving truck for someone else, he should buy his own rig. The McPhails did that and bought a bigger sprayer and Harold got his commercial pesticide-application licence to do some custom spraying.

“Planning is everything but, sometimes circumstances force a revision of the plan,” says Shelley.

PHOTO CREDIT: ROBIN ANDREW • UNPOSED PHOTOGRAPHY

BE PREPARED

APRIL 2012

For many government programs, funding is limited and oversubscribed. For example, the demand for project funding through the Environmental Farm Plans means the application deadlines are notoriously frantic. Under the EFP, funding is limited by announcements per year and demand is high for a limited number of dollars. In Ontario, farmers take a workshop in advance, fill out the binder with the help of course leaders and line up on a given day as funding is limited to the first come, first serve basis or by the end of the year.

Under the EFP program, the need to be absolutely prepared is even more pressing, says McPhail. For their farm, she applied and got grant money to help buy a no-till drill with GPS, as well as fencing to keep their cattle out of the river running through the farm. She says it paid to have a plan complete with quotes when she walked through the door on application day.

McPhail says that for some programs it’s important to make it work around the farm’s schedule. This is especially true for the workshops she leads which involve committing two full days and some timeconsuming planning and communication.

For most farmers, participating in these workshops is usually best done in late fall or early winter, she says. “Do the workshop at a time when you can keep the momentum going,” she advises.

COMMUNICATE Both McPhail and Harrison suggest communicating with the field staff, key extension people and your accountant about these grants to prioritize the programs you want to get into and to get the forms filled out the way the programs’ administrators want them. Some of the local folks administering these programs have been known to keep farmers posted on the dates and life of the program, and let them know when new programs are being planned and what other grants are available.

“Only a select group are going to fit into the program so you need to be aware well in advance what the funding is available, what the deadlines are and the requirements,” says Harrison.

Often in agriculture, applications are reviewed by a peer group who are given score cards and charts. In the past, Harrison has been on a peer group and has seen the importance of being specific and practical on applications forms. “They only have a couple of minutes to get a basic understanding of how significant it will be to meeting the goals of the farm,” he says.

If the applications are filled out based on hard financial records, real quotes and a predetermined business plan, it quickly tells the peer-review committee how well the application fits into the context of the program.

When Harrison applies for funding for farmer clients, he keeps in mind the mandate of the program and the current associated buzz-words, such as “renewable” or “sustainable.” Typically they start filling in the forms and then stop to ask him what do they really want me to say?

Harrison replies that once you focus on what your farm wants and needs and how that fits into the program, the application process often falls into place quickly. The projects are getting more capitalized and the pot of money is getting smaller, so it makes more sense to give the money to a handful of farmers that will complete the project timely and convert into something useful.

“There’s not much magic to it, anyone can do it,” says Harrison. “But you need to be disciplined, do a year-end review and update for the next year.” CG country-guide.ca 15

M AY 2 0 1 2

Take a New Approach to Farm Business Management

Global change means business for Ontario farmers

“Farmers need to stop thinking about producing cheap commodities and set their sights higher.”

That was the stand out message from the Agricultural Management Institute’s (AMI) inaugural farm business management conference held earlier this year in Guelph, Ontario. Global Perspectives for Growing Farm Profits brought together more than 160 people involved in agriculture at all levels including producers, farm organization leaders, federal and provincial government representatives, input and equipment suppliers, and communicators, as well as international delegates and presenters.

“Ontario is facing a time of great promise for its agricultural sector. It is ideally situated to increase on-farm profitability by helping to feed a growing global market,” he added. “Too many producers work in isolation, and it’s all too easy to think and act locally.We need to adapt our strategies to take advantage of a changing international marketplace.”

The conference generated discussion, ideas and direction on a broad range of topics, including: leadership and innovation; supply management; global economics; communication; dietary changes worldwide; food security and sustainability in under-developed nations; and what it all means to the future of farming here at home.

A roadmap for opportunity

A global shift

AMI established this conference to give farmers a connection to opportunities that exist globally, and a roadmap to get there, explained AMI Chair Gerald Renkema.

According to presenter Cristine Medford, Senior Intelligence Strategist with Farm Credit Canada, food demands to satisfy population growth by 2050 will require a 70 per cent

Untitled-36.indd 1

increase in production.Why? Because the majority of that growth will come from less developed nations.

for high-value Ontario products to satisfy the dietary needs of that country’s growing middle-class.

“In some areas of Africa and South Asia, farmers are barely growing enough to feed their own family,” explained delegate Ron Bonnett, North American Board Member of the World Farmers Organization, and president of the Canadian Federation of Agriculture. Under-developed countries need to be more self-sufficient in the production of basic crops, he said. “But they need assistance from developed countries in order to achieve that goal.The resulting increase in wealth will bring a demand for more and better food.”

A helping hand

Dr. Siwa Msangi, Senior Research Fellow with the International Food Policy Research Institute explained to the audience that as incomes rise in poorer countries, consumption of corn and coarse grains decline with a move toward more wheat and rice. A further increase results in the consumption of meat and other high value products.

“Working co-operatively with neighbours, business partners, and farm organizations, drives innovation and efficiency on the farm and achieves results and economies of scale rivalling those of larger operations.”

But dietary changes are not limited to countries beyond our borders. Immigration is also playing a significant role in the changing palates of Canadians, said John Cranfield, Professor in the department of food, agricultural and resource economics at the University of Guelph. “A-culturalization – or the adaptation of cultural traits from one group to another, including cuisine – has, and will continue to play, a role in food demands here at home.”

Opportunity knocks With these changes come opportunity for Ontario farmers, said conference presenters.

Research indicates that Canada is a net exporter of agricultural products. According to Statistics Canada, in 2005 the FAO ranked Canada ninth in the world with almost US $21 billion in exports – ahead of Australia and China1. “We have the benefit of low population relative to land mass and the potential to grow exports.These things alone position us to be a key player as demand grows,” noted Bonnett.

Delegate Youming Zhao, President of the Canada-China Agriculture and Food Development Exchange Centre stated to the audience that China is open for business. It is looking

To succeed, farmers need to collaborate and think strategically, moving beyond the delivery of low value commodity crops into products that will bring better returns.

“It all starts with a conversation around the kitchen table and a change in mindset,” said Renkema. “Gone is the time when a farmer could work alone and expect to make a profitable living.Working co-operatively with neighbours, business partners, and farm organizations, drives innovation and efficiency on the farm and achieves results and economies of scale rivalling those of larger operations.”

AMI encourages and helps farmers to work together to build successful businesses. For example, access to mentors and advisors is available through a no-cost business management club. “Most successful farmers don’t work in isolation,” noted Renkema. “The business management club has already connected many farmers with experts and organizations resulting in profitable business outcomes.”

AMI also provides funds to collaborative groups working toward a mutually beneficial goal through a project, whether for export or domestic agricultural purposes. Interested parties can download application forms from the AMI website at TakeANewApproach.ca.

Whether creating a unique product for the export or buylocal market; developing a new input method or technology; or making better use of labour, energy and innovation on the farm – it all adds up to a new direction for Ontario agriculture.

“We hope that this conference gave farmers a fresh perspective on their business and a realization that now is the time to take advantage of opportunities that are ripe for the picking,” concluded Renkema.

Select conference presentations will be available to view through Farm Management Canada’s Agriwebinar platform.

Check the AMI website for more information on how to view these presentations.

SOURCE: Fork in the road: Canadian agriculture and food on the move, Statistics Canada, 2008

To learn more about how AMI can help you grow your business, visit TakeANewApproach.ca, or call us at (519) 822-6618.

A federal-provincial-territorial initiative.

AMI is part of the Best Practices Suite of programs for Growing Forward, a federal-provincial-territorial initiative.

08/03/2012 1:18:45 PM

business

producer t Rempel, a hog re ga ar M ys sa y, oneenchable curiosit at keen observation I see in my here is qu un h it w ts ar pel says. “T to nourish th Leadership st d learning,” Rem u are in.” an. “I would love an M , n io ne at An or e. pl St ex nt from ion yo ghter, that consta and every situat year-old granddau to learn from everyone you meet always something

18 country-guide.ca

april 2012

BUSINESS

Plowing the glass ceiling With more women as farm managers, it’s time to ask.

Do women really lead differently?

By Angela Lovell

PHOTO CREDIT: VICTORIA ANNE PHOTOGRAPHY

he farm wife of 1962 has become the farm partner of 2012. In operations all across the country, she has gone from keeping the accounts to managing them, and a lot more besides.

Plus, on a growing number of farms, it’s a woman in charge.

It took a long time coming. But now that it’s here, is it making a difference? If you’re working in a woman-dominated operation, or if the cousin that you’re running a partnership with now comes to meetings as a husband-andwife team, have the rules somehow changed?

Heather Watson, general manager of Farm Management Canada starts by telling us to keep it in perspective.

“We’re seeing more recognition of the contributions of everyone as a vital part of the success of the farm operation,” Watson says.

In other words, there’s more going on than just this one trend of increased involvement by women. Instead, most farm families are more aware than ever of the benefits of collaboration and team building, and they’re consciously trying to get the best out of everybody.

Still, women are engaging more fully and effectively in farm management functions than ever before. Even on “traditional” farms, women are making decisions and managing human resources. They are actively participating in business and succession planning, plus they’re keeping the farm on top of changing regulatory requirements and they’re dealing with environmental and on-farm safety issues, all while knee deep in financial and production decision-making.

Maybe women always had more clout than they were given credit for. But now there’s a different dynamic around the kitchen table.

APRIL 2012

The great leveller One of the great change agents in agriculture — as it has been elsewhere — is technology, which is finally letting farm families allocate human resources based on aptitude and attitude instead of muscle power.

“We can farm without having to rely on brute strength anymore,” says Margaret Rempel, a hog producer from Ste. Anne, Man. “We have ways to use technology and mechanization to overcome any physical shortcomings.”

But that’s only the start of technology’s impact on this story. Technology has also changed the jobs that might traditionally have been thought of as women’s work.

Computer software means women no longer are as submerged in double-ledger accounting.

But at the same time, computers have exposed the farm to an information tidal wave.

Now, the tedious hours that most farm women used to spend keeping the books have been replaced by more hours spent managing the incessant flow of information.

In fact, while the men worked around the clock during seeding and harvest in the past, now women often burn the midnight oil throughout the year. Plus, as farms get bigger, the logistics and planning involved in running them consumes more and more time.

“I find there is just so much more work overall with keeping everyone organized and productive, whether it’s getting parts or fuel to somebody, payroll, keeping up with ag programs, meeting food safety requirements or other record-keeping, that I try not to book myself into the outside work any more than I have to,” says Bertha Campbell, coContinued on page 20

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BUSINESS THE NEXT GENERATION

Continued from page 19

While their parents still struggle with the gender wars, today’s youngest farmers are moving on. For them, gender equality isn’t an issue, it’s a resource.

“The Young Farmers of P.E.I. for example have a good split of men and women in their organization and don’t seem to even think about gender as an issue,” says P.E.I.’s Bertha Campbell.

Campbell knows it hasn’t always been like that. She has served as vicepresident of the ADAPT Council and chair of the P.E.I. Ag Sector Council, and she has been the eastern women’s representative on the Canadian Federation of Agriculture board. More recently, she became president of the P.E.I. Federation of Agriculture, and often over those years, she has been one of the few women sitting around tables dominated by men.

Nova Scotia’s Jeannie van Dyk also sees the transition that Campbell sees.

She attributes a lot of it to the women themselves. Being confident in their ability to pursue their passion is probably the biggest change in the younger generation of women, van Dyk believes.

Much of that confidence has been inspired by the many women involved in management on farms and in agrirelated businesses and organizations.

They have served as role models for subsequent generations.

Manitoba’s Margaret Rempel is one of those role models. She has been managing Rempelco Acres, a mixed farm made up of a 500-sow farrow-tofinish hog enterprise and 1,600 acres of cropland on her own since 2003, when her husband died of complications from a brain tumour that he had battled for 20 years. During his illness, Rempel repeatedly managed alone during long periods, including three harvests when surgeries, chemotherapy and radiation therapy had kept her spouse from actively farming.

“As more and more women become visibly involved in agriculture it empowers other women to do the same,” says Rempel. “I have deep respect for the role models that have inspired me; the people who helped me figure out how to be comfortable and confident. And I hope at the very least that I can give back enough to provide that for the next generation.”

owner with husband Vernon of Mull Na Beinne Farms near Kensington, P.E.I. Computers and wireless technology may have simplified some field and barn jobs, but not enough to make up for all the extra hours that need to go into business and information management.

“In today’s world you are bombarded with so much information, you have to be able to manage it, recognize what’s important and utilize anything that will help,” says Jeannie van Dyk of Lellavan Farms, who has plenty of experience with assessing and managing information.

Van Dyk was the first woman to conduct extension work with the Nova Scotia government’s livestock branch as a provincial swine specialist. In the early 1980s she left that job to join husband John building their modest 18-cow dairy farm into the 95-cow operation that it is today, and in 2007 she became the first female chair of the Farmers Cooperative Dairy.

Today van Dyk is involved with everything from milking and animal care to administrative, financial and planning functions for the farm near Noel Shore, N.S. She’s also a partner with her brothers Peter and Charles in Van Dyk Blueberry Enterprises, a low-bush blueberry operation with 600 acres of blueberry land and 400 acres of forest.

Rempel too spends more than her fair share of time at her computer. “Hog farmers in Manitoba over the last nine years have seen 44 additional regulations placed on us, and all of those carry paperwork,” she says. Rempel has received at least six Top Ten Producer awards, as well as the Swine Stewardship Award for innovative farming practices and dedicated community service. None of these are achieved without a lot of time spent paying attention to details.

“The amount of time that farmers are required to sit at their desk and make sure the paperwork is up to date is very different than a few decades ago,” Rempel says.

20 country-guide.ca

The triple threat Farm management is being reshaped to meet the increasingly complex challenges of food production, which recognizes that agriculture is arguably more vulnerable than any other industry to a triple bottom line.

“In today’s agriculture, if we are going to be sustainable, the environmental and social costs have got to be figured in as

well as the financial ones,” says Campbell, who adds that balancing profitability against the health and well-being of the farm’s soil, environmental assets and employees is paramount.

In fact, it might be this total-sustainability sort of environment that plays into women’s management strengths.

“Women lead with their minds, hearts and hands,” says Watson. “I believe women have a holistic approach to situations and decision-making, and we’re able to read situations to pick up on nuances that may play a significant role in the outcomes of decisions.”

“The diversification of our farm has led to practices like rotational crops and using manure to decrease commercial fertilizer use. It’s made us a better holistic operation,” agrees Campbell, who sits on a provincial environmental advisory committee. “There’s been a lot required of us from an environmental standpoint over the last 30 years, and for the most part we have been able to successfully build that into our operation.” The Campbells were named to the National Soil Conservation Hall of Fame in 1999.

New business strategies Sometimes women find they also bring a different business perspective. Marie Gosselin is a leader with vision who fully understands (and incorporates) the concept of a triple bottom line. As president and CEO of Les Serres du Saint-Laurent, one of the largest greenhouse growers in Quebec, she was the driving force behind a new greenhouse complex, the first of its kind in Quebec, heated with biogas from a landfill site.

Yet one of the breakthroughs that Gosselin forged didn’t have much to do with plastic and steel. Instead, when she signed on 20 years ago, it was her marketing and sales skills that made the difference.

Gosselin had a vision to develop a new brand (Savoura) for the company’s products. The associated advertising campaign that she developed featured a slice of bread sandwiched by a tomato with the motto “Le goût prend le dessus” (taste comes out on top) and has helped the company secure a 60 per cent market share in Quebec.

Still, Gosselin wonders whether women are being held back, and whether the industry is being held back too because of it. Gosselin is vice-president of the Syndicat des Producteurs en Serres du Québec (UPA) and director of the APRIL 2012

BUSINESS

Rempel runs Rempelco Acres with 500 sows and 1,600 acres. “As more and more women get visibly involved in agriculture, it empowers other women to do the same.”

Quebec Produce Marketing Association, and she says it’s at the policy and upper organizational levels where the glass ceiling for women seems hardest to crack.

“I find that there are not yet enough women occupying highlevel functions in agriculture,” says Gosselin.

What still distances many women from the glass dome is visibility and perspective. “While women have always been leaders, it is the recognition piece that is missing and deserves cultivation,” agrees Watson.

Professional quality Campbell, who was a public health nurse before leaving to farm full time in 1992, felt she was suddenly no longer viewed as a professional when she joined the farm. “In nursing I felt that my input was valued,” she says. “It took a lot of getting used to the fact that people didn’t recognize the value of my role on the farm as clearly as they had in my previous occupation.”

Most of the hurdles which made it tough for women to assume agricultural leadership roles in the past are gone. No longer are women farm owners unable to take out crop insurance, and increasingly the agricultural lenders at local banks are women. Women head agricultural research teams and farm organizations. They build careers in agronomic extension work.

It could also be that women and men perceive leadership differently. “Perhaps we equate leadership with the leadership as demonstrated by and recognized in men,” says Watson. “I believe both the physiological and psychological differences between men and women are to be embraced and appreciated rather than the latter trying to fit the mould created by the former.” CG APRIL 2012

EMBRACING ALL THE ROLES Perhaps no one understands better than farmers that life has a way of making its own rules. As a new generation of farm women prepare to lead both on and off the farm, they are grappling with what motherhood means in this new environment.

Now, however, they are finding that their responsibilities to the farm business are if anything making them in some ways even better mothers.

“Although I knew that staying home and raising my kids was the most important thing I could do, I just sometimes found parenting on the farm and dealing with the isolation to be not nearly as easy as going off to work every day and being with my peers and doing all the things that met my own needs for personal growth,” says Bertha Campbell.

Often, farm women are coming up with unique solutions.

Marie Gosselin is thankful that she didn’t have to make the same compromises as many other women when she had her two children. “I was fortunate to have a sister-in-law who offered to help and loved our children as her own,” says Gosselin. “My family is the most important thing in my life and I have always found the time to have a good balance between my career and my family. I could not have been happy without that.”

Plus, say the women that COUNTRY GUIDE interviewed for this story, there are advantages for the children when Mom is a decision maker on the farm.

How many business leaders get a chance to involve and teach their kids about financial management, business planning and the real meaning of personal responsibility on a daily basis, they ask.

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TOOLMAN

How to market in these turbulent times

By Errol Anderson uring periods of unstable financial markets, commodities take on a different personality. Uncertainty breeds fear. Buyers fade out of the picture, and although farmers typically focus on the supply side of market fundamentals, the maket sees supply as only half the equation. If buyers reduce their buying, it doesn’t matter how tight supplies are on paper. Prices drop.

Lingering credit problems in Europe are creating a background of investor doubt, slowing buyer demand for some grains and encouraging buyers to look for cheaper sources.

Next we should expect a bottoming phase. This may take weeks or months to complete, but a key sign that a market has bottomed is when trade volume drops. It doesn’t matter how good the deal is, there are no buyers.

That’s a sign the worst is over.

Through the first two stages, commodity prices are deflationary. Typically, interest rates also fall. World governments try to restart their economic engines by dropping central bank rates, but with little effect. Buyers just aren’t in the mood to buy… surely this sounds familiar.

The last stage is recovery. Deflation turns back toward inflation. Commodity values start to race higher. Suddenly, the cheap cost of money makes the pace pick up. Inflation spurs a quick jump in bank rates. Talk on the market floors is that commodities are considered too cheap. Markets roar higher.

These are unsettling world times, but economic recession, deflation, falling interest rates and dropping commodity values will eventually swing to economic expansion, inflation, rising interest rates and higher commodity prices. It’s all part of the big cycle.

It takes a clear understanding of all cash contracts, futures and options trading alternatives to arm yourself with strategies for this cycle. But it’s worth the investment in time and energy.

Here are some tips to consider…

Hone your ability to price into a rising market: This is more easily said than done but selling into market rallies is a real marketing plus. You can price into rallies by signing a deferred delivery contract or by selling the futures as a protective hedge. Another strategy is to purchase put options. Also remember, farm storage often doesn’t pay off in bear markets.

Separate your delivery decision from your pricing decision: Volatile financial markets can also create wild rides in futures markets. There are times when a rally in the futures is not followed by the cash market.

In other words, basis levels widen or weaken substan22 country-guide.ca

tially. During these times, lock the futures through either a cash grain buyer or a commodity broker but be sure to maintain delivery flexibility in order to keep your futures and basis decisions separate.

Consider direct delivery: When grain prices get mean and ugly, loading a rail car or delivering direct to the processor will save at least elevation fees. Depending on how low prices fall into the heart of harvest, this may improve your returns substantially.

Set pricing targets: Basis contracts are commonly used but they don’t stick a finger in the price dike.

Holders of basis contracts remain exposed to futures market gyrations. If you own a basis contract, consider setting a pricing target. You can also set a flat price target with a buyer.

Establish a commodity trading account: A trading account can greatly reduce farm price risk, if managed properly. When grain is unpriced in the bin, growers can purchase put options to help insure against the risk of dropping prices. Also, growers may place a short (selling) hedge with a broker. This is called a storage hedge. The grower has sold the futures protecting unpriced grain in the bin.

Consider futures and call options to replace cash grain sales: Owning paper can be a more powerful strategy than storing grain. There are several advantages to using futures and options. You can inject badly needed cash flow to meet bill payments yet take advantage of a price rebound down the road. Plus you avoid storage risk and extra handling.

Move your lowest-quality grain first: This may take a jumble of feeding it, blending it and just dumping it. Get rid of your headache first. If you are going to store, bin the good stuff. You can always replace your low quality grain with higher quality paper.

Be a salesman: Let buyers know what you have to offer. Bring in samples, and outline reasonable price targets and tonnage available. Cementing a bond between buyer and seller is critical in any marketing process. Don’t hide your grain. Show it off.

Scout prices for next year: Just like a scout for a hockey team, you must always keep an eye on rebuilding your team. Look for profitable selling opportunities months in advance. As the old saying goes, the best defence is a solid offence CG Errol Anderson is author of ProMarket Wire a daily grain and livestock risk management report. He is also a registered commodity broker located in Calgary. He can be contacted at 403-275-5555 or email prowire@shaw.ca.

APRIL 2012

business

The plan When farmers call themselves “producers” is it any wonder our kids struggle with their business skills?

By Angela Lovell here is a whole lot of doubting going on at Assiniboine Community College when Chad Bodnarchuk first addresses the students. Bodnarchuk volunteers as a mentor for the business plan project, a compulsory part of the college’s agribusiness diploma program. “I tell them it’s going to take hundreds of hours to complete their business plans,” he says. “They just laugh.”

“But when I am sitting there at 10 p.m. with one of my groups, they start to gain a whole new respect for the business planning process.”

Students at the Brandon, Man. college get six months to complete a detailed business plan for an agri-related venture of their choice. They often balk at first. “Whose idea was it to make this a compulsory course?” they can be heard muttering. “It doesn’t teach anyone how to grow anything.”

“It completely changes their perception of things,” says Terry Powell, agribusiness instructor at the college. “Often there hasn’t been much discussion at the farm kitchen table about business management.

This business planning process opens their minds to see a much bigger picture.”

With at least half of the college’s students coming direct from the farm — and probably as many wanting to return, at least part time — it isn’t surprising many choose to base their plans on a farm enterprise. Some students work on business plans for their home farms, often encouraged by parents who don’t always feel confident in their own business planning abilities, but who actively encourage their kids to develop the skills April 2012

they know are becoming vital to a successful farm operation.

“Farmers in general may call themselves producers, not financial managers, but they are all entrepreneurs,” says Bill Brown, ag economist at the University of Saskatchewan. As family farms become more complex, and as they expand to accommodate more family members, their business management approach depends largely on what they are producing, says Brown.

“When you deal with commodities like wheat or canola you need to look at economies of size and keep your cost per unit as low as possible,” Brown continues. “When you’re dealing with something like organics or purebred livestock that is no longer a commodity, it becomes a product and then it’s quality and reputation that sells that product.”

It all comes down in the end to what you are selling. Understanding this helps students identify new possibilities, not just for off-farm agribusiness careers, but also for opportunities that complement their farming aspirations.

“If you want to excel quickly you have to think outside of the box,” says Nick Boundy, a young farmer from Boissevain, Man., who graduated from the Assiniboine ag program in 2010. “If you’re doing what everyone else is doing you’re not going to have an advantage.”

During his second year, Nick worked on a business plan with co-students Brittni Nykoliation and Jason Wenzel.

Their business plan project was for a mobile seed-cleaning business, which Continued on page 24 country-guide.ca 23

business Continued from page 23 became a side venture for Boundy when he returned to farm with his dad.

Nick’s mentor Laurie Clarke was ready to retire from the seed-cleaning business that Boundy had used as the basis for his business plan. Boundy purchased the well-established business from Clarke, and thanks to his business plan projects, had advance knowledge of how the business works.

After a year of operational experience he is planning for expansion and has already added new clients, also thanks to some of the connections he made during his time at ACC. As each group works on business plans for their diversity of enterprises, the students begin to get more insight into other players in today’s ag industry too, like a farm supply business or a machinery dealership.

“It makes them realize why it’s necessary to pay a mechanic $120 an hour to work on their equipment. They can figure out where the numbers come from,” says Powell.

Like their peers in the business programs next door, the college’s ag students learn classical business planning techniques and they start to understand that agriculture works on the same principles as any other business. “First they get an understanding that the agricultural industry is much more complex than just the agronomy side,” says Bodnarchuk.

“The business plan process forces them to look at every aspect of a business — the strengths, the weaknesses, the opportunities and the threats — and it makes them take a serious look at whether their project can be viable or not.”

Students get a lot of leeway to choose their business plan enterprises, but the No. 1 piece of advice from Powell is to keep it realistic. “I advise them to target something at the lower entry level, and something they might realistically be able to do,” he says.

Kory Van Damme went out of his way to be realistic when he prepared his business plan at the college in 2004. “It would have been far easier to base my plan on an existing business with years of historical data to base projections on,” Van Damme says. “But it made me think more outside the box by doing everything from scratch.”

Van Damme’s business plan was for a small, localized consulting business offering agricultural services. Van Damme also had Bodnarchuk as his mentor and got lots of real-world advice too from Wade Barnes, who had graduated from the col24 country-guide.ca

lege’s ag diploma program a few years earlier, and who was just establishing a similar consulting company of his own.

Thanks to the business skills he learned, partly through the business plan process, Van Damme joined Barnes and his partner Curtis MacKinnon as the third employee of Farmers Edge, which the team has built up to be a leader in variable-rate technology, with locations across the Prairies.

A healthy dose of realism is always important in business, but it’s the creative and innovative projects that get the most attention, says Bodnarchuk, something that’s important for a couple of reasons.

All of the groups present their business plans to peers and first-year classmates in January and the top four business plan groups then present a second time in midFebruary to peers, parents and guests.

Each of these four groups are judged and will receive a Farm Credit Canada (FCC) Business Planning Award, with a monetary award of $2,500 for first place, $1,500 for second and $1,000 each for third and fourth places. This national program is offered in a number of post-secondary institutions across Canada and challenges students in agriculture diploma or degree programs to partner with parents, industry specialists and experienced farm operators to develop real-life business plans.

Being able to sell the business plan is as important as the plan itself. The presentations, which are never advertised, are attracting growing crowds, including professional recruiters looking for talent.

“What we are looking for in the agricultural industry is passionate people who are able to grow businesses,” says Bodnarchuk, who is a recruiter and business development specialist with Ag Call Human Resources. “The students have to stand up in front of their peers and guests and present an idea and they have to come across as passionate and really wanting to do this project. Students who can do that have very marketable skills.”

Bodnarchuk completed his own business plan before graduating from ACC in 1998, the first of probably over 500 that he has written throughout his career. “I have used my business planning tool set a lot. It has allowed me to work in several industries and own several companies and has been a great asset to me,” he says.

Both instructors and students agree the mentors, many of whom are former Assiniboine students like Bodnarchuk, are vitally important to the project. “Without

“ You need to have that business planning process going on in your head all the time,” mentor Chad Bodnarchuk tells ACC students Cody Nolan and Michelle Cathcart

April 2012

Photo credit: Sandy Black

business

the mentors it would be like a light bulb that never turns on,” says Powell. “Having a mentor really makes it real.”

Similar programs are taking root in ag programs across the country, at both the college and university level. For instance, the University of Saskatchewan’s (U of S) College of Agriculture and Bioresources offers a similar program in association with the Agriculture Council of Saskatchewan (ACS). The Saskatchewan Agri-Food Concept Evaluation Program receives applications from local clients who want to have an agriculturally related business and/or marketing plan prepared. Half of the $600 cost to prepare the program is covered by ACS with funding provided through the federal Agricultural Adaptation Program.

Students in the agribusiness diploma or degree programs at U of S then choose which application they want to work on, April 2012

and then meet with the client and work in groups of three or four to prepare a complete business plan as a compulsory part of their program.

Dealing with group dynamics and clients who often have no definite direction in mind for their intended business venture makes the process a valuable experience in co-operation and the application of skills already learned. “In terms of the business theory it’s nothing new to them, they have already covered these things. But when the students work with the clients they get all types,” says Brown. “A lot of these entrepreneurs have an idea, but no concept of how to do it, or the market or the finances and the students have to deal with all that.

As well, some of them have a new idea every 10 minutes, so they have to keep them focused. It’s really good experience for the students in a real-life setting.”

Just a decade ago, a typical on-farm conversation between the farm generations revolved around setting up an exit strategy that would help see the parents through retirement, while urging the sons and daughters to get as far from the farm as they could.

Today, as things look more positive in agriculture, the older generation is trying much harder to keep the next generation on the farm and is supporting them both financially and by urging them to get the business skills they will need.

“Everyone is aware of the bottom line,” says Bodnarchuk. “You need to have that business planning process going on in your head all the time. Agriculture is full of innovation and people are getting paid well for doing a great job. There are all sorts of opportunities in agriculture. You just have to step through the door.” CG country-guide.ca 25

management

Cash in, cash out Forty per cent of farmers do routine cash-flow projections. The other 60 don’t. If that includes you, here’s what you may be missing

By Angela Lovell hayne Kinley is a convert. “Before, we would stumble through,” says the cattle and sheep farmer from the Cartwright area of southern Manitoba. “Now we can remove some of the speed bumps before we hit them. It has removed a lot of stress too.”

Like many — and perhaps most — converts to cash-flow analysis, Kinley is enthusiastic about the value it brings to his operation.

“It’s always predictive rather than reactive,” says Kinley, who began doing cash flows in 1995. “By monitoring the cash flow we can clearly see when we are starting to fall behind the plan and do something about it ahead of time.”

Of course, it comes at a cost, and in this case, that cost is measured in time. It takes discipline to keep the cash flow up to date, which means taking time to plug in the figures on a regular basis. “It’s hard when the weather’s good and you want to be doing other things,” Kinley admits. “But if something unforeseen happens, that’s when you need to know exactly where you are at and what effect it’s going to have. Cash flows help you see that.”

It’s not always an easy task to keep the cash flowing smoothly on today’s farm in the face of constant uncertainty about everything from crop prices to input costs, which is why a cash-flow projection can be a useful tool to help deal with potential red ink on the bank statement.

As farms have become bigger and more complex, financial management tools such as cash flows are becoming more important, says John Molenhuis, business adviser with the Ontario agriculture ministry. Although many farmers hand off the preparation of cash flows to their farm advisers, Molenhuis suggests they be certain they know what those projections are saying. “Producers should be involved in the process,” Molenhuis says. “They need to have a good handle on the figures for themselves.”

Loan and investment programs are available through banks, provincial ministries of agriculture and Agriculture & Agri-Food Canada to help producers manage cash flow. These include the Advanced Payments Program, AgriStability AgriInvest and other business risk management programming. But in order to make best use of these 26 country-guide.ca

programs and in some cases to qualify for them, producers need to have a firm handle on how much money they need and when, which is where cash flow forecasting comes to the fore.

“The fundamental thing with a cash flow is, it enables you to calculate how much money you are going to need to run the business,” says Kevin Dodman, a research and planning adviser with U.K.-based Ditton Consultants, which has clients in Canada, Sweden, India and elsewhere. “Will you have cash in the bank to pay the bills or won’t you? That’s fundamentally what a cash flow forecast is saying.”

Banks are helping drive the uptick in cash flow analysis. Depending on the dollars involved, in fact, many lenders are insisting on annual and sometimes even quarterly or monthly forecasts as a condition for the renewal of farm operating credit.

For some advisers, any reason to get farmers doing cash flows is a good reason. Others aren’t quite so sure, worried that it may mask the fact that cash flows can be a great tool for the farmer, not just for the banker.

Besides, banks often want cash flows as much for what they say about the farmer instead of the farm.

Lenders are increasingly looking at management ability as a big part of their risk rating and scoring system for clients.

“Preparing a cash-flow projection or establishing budgets provides farmers with opportunities because it strengthens their relationship with their lender,” says Jim Snyder, national director of agricultural practice development for BDO Canada. “There may be advantages for the producer in terms of what they can negotiate on the pricing or cost of funds.”

In many ways a farming enterprise offers an excellent example of classical cash-flow planning, because it is cyclical and usually has fluctuating (but reasonably predictable) cash requirements throughout the year.

What the cash flow keeps track of is the short run feasibility of the business, rather than the long term profitability, says Molenhuis. “In most cases farmers know there is going to be a cash shortfall because they incur a lot of expenses at the beginning of the year and the cash doesn’t start coming in until later,” he says. “So they need to know how they are going to manage that cash shortfall in the short April 2012

management

term. They need to be able to map those things out with a cash flow.”

With the tougher, new economic realities brought about by the recent financial crisis, forecasting tools like cash-flow projections are becoming ever more vital to farm business operations. One thing that most financial experts agree on is that the recent volatility in markets and the wider economy is here to stay and that the volatility will make money increasingly harder to access.

“Volatility is the new norm in commodity markets,” says Snyder. “The other economic reality is that the retrenchment of lending institutions as a result of the fallout from the financial crisis of 2008 has tightened down access to capital.”

Managing the risk that comes with greater volatility in both markets and input costs is another valid reason for projecting cash requirements ahead of time so that producers can remain flexible enough to take advantage of market signals.

“We’re now seeing much more variability in terms of the cost of inputs and crop prices than a few years ago,” says Roland Kirouac, Manitoba district director with Farm Credit Canada. “Having a April 2012

strong cash flow will help identify ways to mitigate costs and on the selling side, having a firm marketing plan to help mitigate some of that variability is becoming more important.”

Another strength of the cash-flow projection is being able to plug in some “what ifs” and see the effect they could have on the business. “Part of the real value of cash flows is being able to say, 'what if we did this? What if we reduced our fertilizer costs by x? What if we could pick a price point and pull the trigger?'” says Snyder. “In volatile markets, knowing what your cost of production is and being able to select trigger points that will allow you to either buy inputs or sell commodities at any time of the year that allows you to capture a margin of profit that you have predetermined is essential.”

It can also prevent farmers from pulling the trigger for the wrong reasons. “A better understanding of cash needs might impact the timing of sale of assets, or help decide when one does something,” says Kirouac. “A lack of cash should never dictate when you sell something — as opposed to when is Continued on page 29 country-guide.ca 27

MANAGEMENT

CASH FLOW FUNDAMENTALS Cash flows are virtually universal in their value across the business world. Yes, there will be differences in the details because of business type, but according to Kevin Dodman of U.K.-based Ditton Consultants, which consults with practically every conceivable business type practically everywhere, the basic information that needs to be included is the same for any type of business.

Dodman gives the following advice about how to set up a basic cash flow:

MORE RESOURCES • Agricultural Marketing Resource Centre http://www.agmrc.org/business_ development/business_workbench/ • Canadian Farm Business Management Council http://farmcentre.com • Manitoba Agriculture, Food & Rural Initiatives — Farmplan (with Cash Flow component) http://www.gov.mb.ca/agriculture/ financial/farm/software.html • Ontario Ministry of Agriculture, Food & Rural Affairs|Farm Financial Assessment Program http://www.omafra.gov.on.ca/english/ busdev/growfwdffa.htm • Financial Management Resources http://www.omafra.gov.on.ca/english/ products/businessmanagement. html#finmgmt • Budgeting Tools http://www.omafra.gov.on.ca/english/ busdev/bear2000/Budgets/oeb.htm • Alberta Agriculture & Rural Development http://www1.agric.gov. ab.ca/$department/deptdocs.nsf/all/ bdv12845#cashflowproject • Saskatchewan Agriculture http://www.agriculture.gov.sk.ca/Guide_ Farm_Financial_Management • British Columbia Ministry of Agriculture http://www.agf.gov.bc.ca/busmgmt/ index.htm#tools

28 country-guide.ca

1. Prepare a Profit and Loss Statement A basic profit and loss (P & L) statement is a simple spreadsheet containing 14 columns across the page. The first is a list of the items being calculated, followed by one column for each month of the year and a “Total” column to total the items on each line down.

The top section of the P & L lists predicted sales and other farm revenue, and the bottom section lists expenses that are expected to be incurred throughout the year.

Revenue from the sale of a crop might only occur in one month or it might occur at several times over the year, so the anticipated dollar amount for those sales should be entered under the month or months when the farmer expects to make those sales.

Expenses should be listed under the month or months when the farmer expects to be invoiced for them, so if for example you expect to be billed for seed in April and fertilizer in May, the costs of those items should be entered under those respective months. Certain expenses will be fairly fixed and will recur every month or at regular intervals (examples might be wages, mortgage or loan payments and utility bills). These should all be entered under the months you expect to receive the bills for them.

A line at the bottom of the revenue section totals up all of the revenues for each month and the year’s total. Similarly a line at the bottom of the expense section totals all of the monthly and annual costs that will be incurred.

A final line which is at the very end of the P & L statement subtracts the total costs from the total revenue for each month and the year and shows the profitability of the operation for that year. It’s important to note that the P & L, particularly on a farm operation which does not have sales each month, is likely to show losses in each month except the months in which sales are made, which should show profits.

“That is a basic P & L — if we get an invoice for our seed in June, we put it in the P & L in June, but we don’t necessarily pay for that seed until three months later,” says Dodman.

3. Capital Expenditures Dodman says it’s always a good idea to have a line for any capital expenditures that you expect to incur in the year ahead included in the cash flow’s “cash out” section. These capital costs (such as equipment or new grain bins, etc.) may be purchased outright and show as a lump sum in one month, or they may be financed and the payments for that year be spread out as a cost over multiple months.

If financing (or some other form of equity

2. The Cash Flow Forecast The cash flow also has two sections, which are cash in at the top and cash out at the bottom. Most of the information from the P & L statement will be appear in the cash flow with one difference. The farmer now allows for any offset of cash coming in and going out.

In other words, cash in (from sales and revenue as listed on the P & L) will appear under the months when you actually expect to receive it. You may deliver a load of grain to the elevator in May but not be paid until June, in which case you enters the dollar amount of the sale in June.

Similarly, cash out (from expenses occurred as listed on the P & L) will appear under the month when you expect to pay those bills. If you are invoiced for seed in April, but the payment terms are 60 days, you would enter the amount due for the seed in June. This would be the same for some fixed costs, for example utilities.

Costs such as wages and bank payments, however, will still be listed under the month they are incurred as they must be paid more immediately.

Again, at the very bottom of the cash flow is a line for net cash. This will be the total of cash in minus cash out for each month and for the year. Other lines that should also be added below this are opening bank balance (to tell you what cash you started with in the bank at the beginning of the year) and closing bank balance (to tell you how much money you expect to have in the bank — or what your overdraft is likely to be — for each month and at year end).

You are now able to look at the cash-flow forecast to see what your requirement for cash is likely to be in each month of the year, where there are shortfalls in cash available (which will show up on the closing bank balance line) and by how much.

Then the planning process can begin for how to cover those short-term shortfalls in cash.

investment) is used to purchase these items there should also be a corresponding line in the “cash in” section showing the inflow of this revenue so that the bank balance figures show a true picture of the overall financial position.

Also remember that repayments of the capital amounts (in the case of a loan or other investment) for any capital expense should be listed separately from any interest payments, which should be recorded under a separate heading in the “cash out” operating expenses.

APRIL 2012

Canadian Marketing 100 Yonge Street, 6th Floor Toronto, ON M5C 2W1

FileName:Comm_AD_Agri_4.5x10_CountryGuideNational Pub: Country Guide National Material Deadline: Aug 22, 2011 Trim: 4.5” x 10" Insertion Dates: Sept 20, Oct. 18, 2011 Colours: CMYK

management Continued from page 27 the optimum time to sell something. The cash flow can help producers make better financial decisions.”

A cash flow can similarly identify and eliminate dead weights in the operation.

“There are so many people who haven’t taken the time to analyze if a particular part of the enterprise is truly viable or whether they are just doing it because Grandpa did it,” says Snyder.

Cash flow can also help identify short-term dangers arising out of changes that might look perfectly healthy frrom longer perspectives. Often, such changes will take time to provide a return on the investment needed to get them going.

That’s probably alright, as long as you know in advance that there will be a cash squeeze that might affect other areas of your operation, and as long as you get a chance to plan around it.

“The cash flow is different from your accrual financial statement, which talks about the profitability of the enterprise you might be contemplating, and that’s important too, but in the short run you have to be able to pay the bills as they come due,” says Molenhuis. “If you are planting an orchard for example, there’s a big cash outlay up front and there might be five or six years before you start seeing positive cash flow coming in. So you need to know how you are going to finance yourself in the short term until that cash flow starts coming in and it becomes profitable for you in the long term.”

Capital expenditures for new equipment or buildings are often overlooked when farmers do any sort of budgeting enterprise, which is a big mistake.

“What often happens is those capital expense things, which should be longterm debt, get pulled out of short-term debt or financing requirements because the cash is available, and that can create a crisis down the road,” says Snyder.

For Kinley, one of the advantages of cash flow analysis is that it also gives him the confidence to operate in times of uncertainty, when the economy and commodity markets continue to bounce around. Sound financial planning makes the difference between being buffeted by that uncertain, he feels, and riding along on top of it.

“You have to keep it current,” Kinley summarizes. “But if you do, it’s a very powerful tool.” CG April 2012

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Small Business Banking

BUSINESS

Damned if they didn’t

By Gord Gilmour, CG Associate Editor t has got to be one of the biggest corporate turnarounds in agricultural history, even if it didn’t actually change any red ink into black.

Indeed, as turnarounds go, this one had only a passing connection to anything as simple as current accounts and balance sheets.

Instead, the challenge was even tougher — to completely re-invent the way farmers think about Monsanto, the company with arguably the worst damned-if-you-do, damend-if-youdon't farm image of any ag company in over a generation,. In part, it was that tough because Monsanto is just so big and affects so many farmers around the world, and partly because the animosity toward it was just that deep.

Indeed, for farmers who have been 30 country-guide.ca

trying for over a decade to woo Canadian consumers and to get them to update their appreciation of agriculture, today’s Monsanto may be a case study in exactly how you orchestrate a change of heart on that kind of massive scale.

From the Monsanto perspective, it rides on three key elements: • Focus on hiring the right people and giving them the resources so they can be very, very good at what they do.

• Know everything about your customers.

• Earn the respect of others by respecting yourself as a business.

Unless you’ve been living under a rock for the past 15 years, you’re already familiar with the broad brush strokes of Monsanto’s corporate history. The St. Louis, Missouri-based multinational all but invented the agriculture biotech industry in the mid-1990s with the introduction of its Roundup Ready suite of crops including canola, corn and soybeans.

Monsanto was first out of the blocks with the commercial introduction of controversial new GMO technology, in the process becoming a lightning rod for Greenpeace and anti-GMO forces around the world.

On the farm front, at the same time, Monsanto launched a new way of doing business. Monsanto wouldn’t be a seed company like any other, developing varieties and hybrids and then jealously protecting those varieties in order to gain market share. Instead, Monsanto wanted to do business with everyone, even its toughest competitors, because if its business proposition was going to work, Roundup Ready’s numbers not only had to be big, they had to be more mindblowingly enormous than anyone had ever even imagined before.

They had to be, because the cost of developing biotechnology were on exactly that scale.

APRIL 2012

PHOTO CREDIT: RYAN FENNESSEY

More farmers today respect and even like Monsanto, yesterday’s arch-villain.

It’s no accident. It’s exactly how company strategists like Mike McGuire engineered it

business Indeed, the company had gone all in, shedding its portfolio of products like Astroturf, Nutrasweet, pharmaceuticals such as the arthritis medication Celebrex, Tide laundry detergent and other consumer goods. They’d then taken that money — roughly a billion 1980s dollars — and rolled the dice on the then embryonic agriculture biotechnology sector.

Making that big a gamble created a new reality for the agriculture indus-

ogy,” Phillips said in a telephone interview with Country Guide. “Beyond the farm gate, where there’s a much longer supply chain that needed to be satisfied and managed, they’ve struggled more.”

For example, he says the company wasn’t as well-prepared when consumer resistance began to build in the U.K. and continental Europe, and didn’t anticipate that the backlash would be seen by some competitors as an opportunity to differen-

“ We just didn’t get it,” Monsanto Canada president Mike McGuire now admits try. It meant that older, informal ways of doing business on a handshake had to disappear, replaced by a contractual agreement between the company and individual farmers. It also meant the company had to enforce its ownership of its intellectual property through its new technology-use agreements, complete with often unpopular measures like field inspections and suing farmers who had brown-bagged seed containing the Roundup Ready gene.

Farmers were already getting their first lesson in the Monsanto brand, i.e., this is not a company that does things by halves. Nor is it a company that second guesses itself, or apologizes.

That created a PR problem for Monsanto in farm country, but it also contained the seeds of its eventual redemption, because at the same time farmers were upset by Monsanto’s tactics, they were leaping into the Monsanto fold, buying its technology as fast as they could get it.

That was the opening that Monsanto needed, says one Saskatchewan-based academic who has followed the company’s story with great interest in recent years.

Peter Phillips is an agricultural economist at the Johnson Shoyama Graduate School of Public Policy at the University of Saskatchewan, and his CV includes work in intellectual property management, innovation systems, the impact of new technologies and the economic impact of agricultural biotechnology. He says Monsanto got both the benefits and drawbacks of what’s known as “first mover” status.

“Monsanto has proven themselves a wonderful marketer in terms of getting the product into the hands of farmers and getting them to adopt the technolA p r il 2 0 1 2

tiate their market offering and build a new strategic position for their own companies.

“It was really one small, almost marginal, High Street retailer that began to label itself as GM-free, and then others followed,” Phillips says.

It put Monsanto on the defensive in unfamiliar territory, making it defend their products in the consumer marketplace while facing a brewing backlash against what were seen as heavy handed tactics back on the farm.

Tone deaf Faced with these challenges, Monsanto didn’t muster an especially good response, according to one surprising source — the head of Monsanto Canada.

Mike McGuire is a transplanted Ontarian who’s held senior positions in the company’s global operations, including responsibility for corn and soybeans, before taking on the challenge of sitting in the big chair at the Canadian operation’s Winnipeg headquarters. During a meeting with Country Guide he conceded that Monsanto may have made some strategic errors early on when dealing with the backlash.

“If we look at how we’ve matured and this industry has matured, Monsanto is a fabulous research and scientific company and I think in the early days as we started to tell our story, we literally said, ‘This is great science, why don’t you understand?’ and we just didn’t get it,” McGuire said.

“We didn’t pause and say, ‘If you have concerns, let’s listen to them.’"

“We’ve learned that there’s more to it than science. There’s emotion involved, there’s business processes — it’s a whole lot larger than just the science.”

Monsanto CANADA One danger for any Canadian operation of a larger multinational is getting lost in the shuffle, and Monsanto Canada head Mike McGuire concedes it’s no different for their operation.

In practice, however, Monsanto’s new-found farm approval ratings owe a lot to its commitment to get new innovations onto farms in Canada at least as fast as they hit the U.S. “It’s like anything — relative to the U.S., you’re always much smaller, and we’re actually a fairly small team,” McGuire says. “But this much smaller team has made the commitment to having products available to Canadian growers at the same time as the U.S., even though there may actually be more hurdles to clear.”

There’s also the issue of making sure products and pricing reflect local conditions — even if that occasionally means going toe to toe with head office.

He cites the case of a recent corn product designed to combat a pest endemic to the U.S. Corn Belt. That pest is found in far lower numbers in Canadian corn production zones, and when Monsanto Canada tested the product and analyzed the results, it proved to St. Louis that the payback to growers would be lower in Canada, and the price should be too.

“Sometimes they will ask the obvious question, ‘Are you just afraid to charge the right price?’” McGuire says.

“But we were able to show them Canadian data that proved our point, and to their credit, they proved willing to listen.”

Another major challenge has been acting as the champion of a vitally important Canadian crop — canola — that isn’t grown widely elsewhere. It’s a unique situation, McGuire says, and one that he feels the Canadian operation has handled well. He told the story of a recent meeting of Monsanto executives, where a global map indicating important growing areas was displayed.

“When you see that map, as I did a few weeks ago, you see corn and soybeans, oilseed rape in Europe, cotton in Australian, and there canola was in western Canada — we’re literally on the map,” he said.

Continued on page 32 country-guide.ca 31

business Continued from page 31 To illustrate his point, McGuire told about a recent telephone conversation with a concerned caller from New Hampshire who’d gotten his number somewhere and called him up out of the blue. She’d been reading a “green magazine” where Monsanto was called out for mistreatment of organic farmers and she had a list of questions she wanted to find answers for.

The old Monsanto might have quickly circled the wagons, and mounted that strictly science defence. Instead, McGuire spent some time talking to her and suggesting some alternative information sources that might give her a more complete picture. It’s a critical thing in a world where poorly sourced information can make the rounds in a blink of an electron, and Monsanto is sometimes still seen as the bully on the block.

It turns out, a similar strategy is equally effective with farmers.

“The most powerful counter… is actually talking to someone,” McGuire says.

Peter Phillips says he has certainly noticed the company’s tone change over the years. He says he spends a lot of time at meetings that discuss biotechnology issues, and he’s noticed a very clear trend.

“If there’s one of the major companies that you can always count on being in the room these days, it’s Monsanto,” Phillips says. “And it’s not just the official spokesperson there telling you how it’s going to be, either — they’re management and technical people, who are there to listen and talk to you. They’re a very interesting company in that way, and I’d say that they’re easily the most transparent of the major life-science companies.”

Farm challenges The challenge of winning over the general public is definitely playing the long game. A shorter, but even more critical game, was winning back the respect and trust of the farm community in light of the company’s public relations challenges. It was even more critical, McGuire points out, because without any consumer products to rely on for income like some of the other major life science companies, Monsanto has just one pool of potential customers — the farmers who plant the seeds bearing Monsanto’s genes.

A dozen years ago, Monsanto’s name might not have quite been mud out on the farm, but it wasn’t far from it.

32 country-guide.ca

The company was again bearing the costs of being first out of the gate with the new technology — and the accompanying modifications to the way farmers were used to doing business. Technicaluse agreements, field inspections, and threats of lawsuits simply didn’t sit well with farmers.

Today that backlash has largely receded, McGuire says, for a few very important reasons. One of the most important is the passage of time and evolution of the business of agriculture.

“The whole business of farming has evolved,” he says. “We kind of got in at the front end when I think there was a transition phase, where there was this move towards agriculture being looked at more as a business than a lifestyle, and I think in the time since we’ve had the first agreements and today, it’s really moved quickly, with consolidation, with complexity, and growers realize these are fundamental things they need to do to be good businesspeople.

“The majority of growers understand why we do it,” McGuire says. “We learned as the process evolved and growers learned at the same time.”

One of the most important ways Monsanto has paid more attention to its relationships with farmers is through a Grower Advisory Panel that taps key commodity groups, who then appoint members. They meet twice a year with the company to discuss upcoming developments, grower needs and any other issues that may arise. It’s a model that was first employed in the U.S. and that the Canadian operation began to mirror around 2006, says Trish Jordan, Monsanto Canada’s director of public affairs.

It’s interesting to note that, while Monsanto is the only major biotechnology company making the effort to have such a panel, they’ve also been roundly criticized for their trouble — in some quarters the move is seen as window dressing, or a cynical attempt to co-opt the voice of farmers for their own ends.

Others darkly suggest that the farmers involved are somehow now beholden to the company, and members of the panel

have been criticized for being overly-cozy with the company. Despite this Jordan says the panel is still the right direction for the company to go.

“There’s always going to be some party that’s going to say we’re just doing it to improve our image or influence these guys,” Jordan says. “It’s important that we focus on our goal — to get closer to farmers and our farm customers, because they’re our only customers.”

One farmer who’s been a long-term member of the Grower Advisory Panel roundly rejects this criticism of the company’s motives. Kevin Bender, who farms near Bentley, Alta. and is president of the Western Canadian Wheat Growers’ Association, says he’s always found the company ready to talk about anything, and that the meetings almost always involve key company decision makers and technical staff.

“I’ve found them to be very open and transparent,” Bender says. “They also don’t just want to hear the good things. They’re always telling us ‘Don’t be polite at the risk of not being completely honest.’”

Bender describes the twice-annual gatherings as forward-looking and surprisingly open, where farmers can get a preview of technical developments. He also says they’re frequently focused on how to meet the market needs of farmers and keep them competitive.

“I’m very impressed by the whole process,” Bender says. “I got to a lot of meetings, and this is one that I look forward to the most. They’re productive, useful, and I feel they listen to us. It has definitely increased my respect for Monsanto as a company.”

Stittsville, Ont. farmer Don Kenny, who’s past chair of the Grain Farmers of Ontario and a current member of Monsanto’s advisory panel, says any criticism of Monsanto’s motives are baseless. He describes a process where the company seeks growers’ honest opinions.

“The meetings are very open and frank, where they’re generally sharing information that’s not out in the public sphere,” he says. “We’re able to see what’s coming down the line, and play a April 2012

business bit of the futurist role. It’s a good, open, two-way dialogue. They appear to be very keen to work together.”

Kenny agrees with the University of Saskatchewan’s Peter Phillips assessment of the company’s challenges based on being first in the market.

“They were first out of the gate, therefore they’re immediately associated with any biotechnology issues or controversies,” Kenney says. “It’s almost like they’re seen as being guilty by association.”

Monsanto Canada chief Mike McGuire is convinced that these new efforts are beginning to pay dividends already. He points out that with the expiration of the patent for the original Roundup Ready soybean genes in Canada and the U.S., the company’s efforts have been put to the test.

The company wondered if its gut feel about grower attitudes was wrong, and if farmers would run as far and as fast as they could from the Monsanto TUA. “It’s interesting,” McGuire now says.

“Most of the growers we’ve talked to weren’t feeling the contract agreement was an obstacle anymore.”

Maybe, though, the change was about there being a new kind of farmer on the back roads, instead of a new kind of Monsanto.

McGuire for one sees a convergence in the evolution of farmers and Monsanto.

“The growers that are commercial producers and are really forward-looking are driving agriculture these days,” McGuire says. “They manage their business in much the same way as we started the whole thing 10 or 15 years ago, so the whole concept of having agreements, having relationships based on more than a handshake, has become commonplace.”

Again, though, this is a process that Monsanto has actively encouraged, especially with aggressive new hiring across the country and the assembling of a field team that is characterized overall as young, sharp, and very loyal to the Monsanto philosophy.

McGuire refuses to take credit for this, preferring to emphasize the team dynamics within the company. In behind the scene interviews with Monsanto staffers, however, the talk always turns to McGuire’s keen strategic mind.

Unique, American One challenge that won’t be going away any time soon for Monsanto is the fact it’s an American company, says Phillips.

April 2012

“The fact they’re an American company shouldn’t be discounted,” Phillips says.

There’s also another key difference, says Phillips — the fact that Monsanto is an entirely agriculture-based company, what he says is very close to being a “pure biotech play.” As McGuire puts it, if there’s an R&D dollar to be spent it’s going into agriculture, and there are no discussions about whether it would be better spent developing a better housewrap or a new medication.

“The European companies have said different things, they’ve hidden a bit behind some of the industry groups, and they’ve had the luxury of Monsanto being willing to say some of the hard things,” says Phillips.

Another key difference has been the way some of the other companies have changed their corporate identities through a series of mergers and rebranding, points out Phillips. When a new company, with a new name, emerges it

then immediately distances itself from any past controversies.

“Monsanto hasn’t done this, even when it’s had the chance,” Phillips says.

“When they introduced their first biotech crops, their Roundup herbicide was just coming off patent, and they could have called them anything they wanted to — but they stuck with the Roundup brand.”

Likewise, when the company shed its consumer products it had the perfect pretext to shed the Monsanto name — and associated baggage — but chose instead to stick with its established brand for better or worse. Phillips says the challenges the company faces can be seen mirrored in other emerging sectors, like computing and the Internet.

“When you’re the first mover, you always get shot at,” Phillips says. “It happens everywhere. Look at Google, Microsoft, even Apple now. When a company is seen as being too big and too successful, they’re seen as being dangerous.” CG

Team player As he sat down with C ountry G uide for a recent interview, Monsanto Canada president Mike McGuire wanted to clarify one thing.

He’d seen more than one article in busness magazines where corporate leaders are presented as the visionaries in their company, building a better mousetrap through their own sheer brilliance. This wouldn’t be the right way to get at the truth of Monsanto, McGuire told us.

“I guess I might be the quarterback,” McGuire says, “but I don’t score all the touchdowns — we have a whole lot of very talented people who do that.”

It isn’t false modesty, McGuire insists.

Instead, he says it’s at the very heart of how the company attracts and retains good people who are widely respected in their individual fields of endeavour.

That’s important, industry observers say, because one of the key ways the company has moved past its old reputation is by attracting highly regarded new hires such as Dave Kelner, a former Westco agronomist, who now leads Monsanto’s technical development efforts in Western Canada, or Dr. Bruce Murray, the former Manitoba provincial weed specialist and currently an agronomist with Monsanto’s DEKALB seed business.

McGuire believes the most important

reason people come to Monsanto Canada is because it’s a focused organization where people work in a tightly knit team moving towards a clear goal, and they’re given the ultimate responsibility for making the whole thing work.

In effect, Monsanto's re-branding has been as targetted at employees as at farmers and consumers, and making it successful has required a new way of thinking at the company.

“It really is a unique environment because it’s so collaborative and one where you just can’t get to the finish line if one team or one person isn’t doing the piece they need to do,” McGuire says.

“It’s way different than Monsanto as a chemistry company.”

“As a chemistry company, the process was more discover-test-finish, and I think in the chemistry mentality, we probably thought of the distribution channel and retailers as our customer. I came from the seed business, and there was a clash of cultures when we became a seed business.

In the seed business I always thought the farmer was the customer. I saw this evolution in Monsanto, as the seed business became bigger than the chemistry business. In about 2002, we started to think more like a seed company.”

country-guide.ca 33

OPINION

Ag and the rest Can a thriving ag sector drive the Canadian economy? Or are we asking the question the wrong way around?

By Gord Gilmour, CG Associate Editor If you just looked at the raw numbers, you’d think that agriculture is waning in importance in Canada. You might even think it’s an industry in decline.

After all, agriculture’s proportional share of both GDP and the labour force has been falling for decades. Fewer Canadians work in primary agriculture today — around two per cent — than at any other time in the country’s history. And despite the chest-thumping we sometimes hear from farm politicians, agriculture accounts for only about eight per cent of GDP today. That’s big, but hardly dominating.

Are the numbers right? Or does agriculture mean more to Canada than a quick glance at the statistics might suggest?

To make some sense out of this raw data, COUNTRY GUIDE spoke recently to Al Mussell, an agricultural economist at the George Morris Centre in Guelph, Ont. That independent ag think-tank is a regular source of insightful economic research on agriculture, with a reputation for being unafraid to challenge the status quo.

C OUNTRY G UIDE : Should we be concerned that agriculture seems to be slipping in its importance to the Canadian economy? At eight per cent of GDP, it’s not insignificant, but there are other countries out there — say Brazil for example — where agriculture retains a far-higher proportion.

Al Mussell: As much as we all have an investment in the agriculture industry, I think we actually should be pretty happy that agriculture and food are a relatively small percentage of the overall economy.

It’s indicative of a sophisticated and welldeveloped economy, and we all benefit from that, both on and off the farm.

34 country-guide.ca

But you are right, it does set up a reality in which we have to live, and it can force us to consider some fairly sobering questions. For example, we have our own federal ministry — is that proper? Is that over-representation? Is that a good thing?

It also makes us ask a fundamental question. Are we as well co-ordinated and integrated with the rest of the economy as we should be?

We’ve tended to consider agriculture policy in isolation. It’s been more about seeking exemptions from things other sectors have to live with. While there might be some good from that, it can breed insularity and I think we can miss some of the innovations that occur in other sectors as a result.

APRIL 2012

opinion

CG: There's a lot of optimism about farming, and about feeding a global population that is both hungrier and wealthier. Will this translate into more prominence for agriculture?

AM: To a degree, it all depends. For example, there’s the Trans-Pacific Partnership that could provide us with some excellent economic opportunities. Those Southeast Asian economies are huge.

But let’s be honest. While as a country, we have an overwhelming interest in greater trade liberalization, we also have sensitivities, especially around supply management, which are thus far keeping us out of those talks. It’s going to be a challenging thing to get the industry engaged in, although I think we need to because this is where the opportunities are.

CG: In terms of our relative importance to the economy, you say we’ve grown modestly through productivity gains, while the rest of the economy has grown at a greater pace. What does that tell us?

AM: One thing it tells us is that agriculture is actually a very stable sector.

What we also know however is that farmers have historically been some of the most enthusiastic adopters of substituting capital for labour. As a result, we’ve seen direct employment fall dramatically while our absolute, rather than proportional, contribution to GDP has remained very stable. So, if you just look at primary agriculture, you could actually come to the conclusion that agriculture is a drag on the economy and on rural economic development, because it does nothing but eliminate jobs.

CG: How so?

AM: Well, let’s take the example of that hog plant in Brandon. They need to know there’s a stable and secure supply of hogs for their operation. But in the agriculture sector there seems to be a real hesitation to share that sort of information with the processors. They don’t want Maple Leaf to necessarily know exactly how many hogs are out there.

They’re afraid the processor will use that information against them.

We have a real fear of customers in Canadian agriculture and we tend to view them negatively — that’s very much a cultural thing.

Of course that’s not actually the case, because it ignores processing and other additional economic activity.

Processing tends to be set up close to the supply of raw materials, rather than close to the consumers. The meat-packing industry is a great example of this — take the Maple Leaf plant near you, out at Brandon. It’s there, producing jobs, because there’s a supply of hogs.

There’s a supply of hogs because there’s a reliable supply of feed grains. None of those jobs would exist in the first place without primary agriculture.

CG: We’ve all seen those studies that talk about the multiplier effect from agriculture — things like every dollar produced in ag eventually means a further $7 in economic activity. Are you saying those economic impact studies are right?

AM: I’m not sure I’d go that far. I think there are some problems with those studies, mainly with some of their assumptions. For example, they assume that without an agriculture industry the folks working there couldn’t possibly find another job. We all know that’s not true.

Just ask a farmer in a rural community in Ontario where an auto plant was located, and I’m sure they’d tell you that they have to compete for their labour and I suspect any farmer near the oil patch would say the same thing.

I think it is fair, however, to say that there is clearly additional economic activity related to agriculture beyond primary production — but I think it’s also fair to say that we’re not necessarily doing everything we can to foster that activity.

CG: You have talked about innovations we may be missing out on. What are we talking about here?

AM: Well, let me just give you one example. We all know that the automotive industry uses robotics on the assembly lines, but they're also using robotic forklifts to manage inventory.

It’s absolutely incredible.

In agriculture, we don’t tend to interact much with other sectors, and that means we’re missing some opportunities to learn from them. Take inventory tracking and management, for example.

Some of our growth opportunities are for products that require the ability to track where that product has been, what’s been done to it, and where it’s going. There’s technology out there that can do that, it’s broadly employed in other sectors, and we make almost no use of it — at least until very recently.

Can you imagine where we’d be if we’d adopted it at the same time as other sectors of our economy? CG

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country-guide.ca 35

March 2012

machinery

Staffing the factory floor As AGCO expands production at two of its major U.S. plants, the big challenge is to grow its rural workforce to keep pace.

Here's how the company plans to win the battle.

By Scott Garvey, CG Machinery Editor ike the farmers they build their tractors for, machinery manufacturers are facing a tough labour market, thanks to the countryside vacuum left by all the skilled employees who have rushed to North America’s booming cities. Maintaining production efficiency in that market is taking some intense, strategic thinking.

Now, it appears that at least some of that thinking is paying off.

“It’s been pretty lively since about last July when we started our recruitment efforts,” says Mark Dykema, manager of human resources at AGCO’s Jackson, Minnesota assembly plant. That facility along with the company’s Hesston, Kansas plant have had to significantly grow their workforces recently to keep pace with expanded production.

It’s meant finding large numbers of qualified workers in regions outside of major metropolitan areas. “It is definitely a challenge to grow in an area as small as we are,” Dykema says.

The Jackson plant just grew by 75,000 square feet to accomodate expansion of the third assembly

36 country-guide.ca

line for production of 8600 Series Massey Ferguson and MT600D Series Challenger tractors. Previously, these machines had been built in AGCO’s Beauvais, France facility. That growth in the Jackson plant’s output meant boosting the workforce to 1,050. “Our employment on campus has gone up by 200 people since July last summer,” says Dykema.

Despite limited labour resources in the relatively rural southeastern corner of Minnesota where Jackson is located, nearly all of the company’s new workers were found locally. “Most (employees) have come from about a 45-minute radius of Jackson,” says Dykema. “We’ve tapped out the area in seasoned skilled labour, like welders for instance.” So the company has had to embark on a wider recruiting drive for those workers.

With a local unemployment rate of only five or six per cent, many of the new hires had to be lured away from other firms. “It isn’t like there were hundreds and hundreds of people out of work,” Dykema says. “A lot of the people we are hiring were working somewhere else and they’re leaving that job to come and work for us.”

April 2012

machinery The Jackson plant was able to attract the larger workforce it needed without offering incentives like hiring bonuses because of a longer-term strategy by AGCO to position the plant as a premium workplace. “We’ve been branding our employment here for a number of years, really striving to become the employer of choice in this area,” Dykema says. “We offer pretty competitive wages and benefits.”

Bill Kaltenberg, vice-president of operations at AGCO’s Hesston, Kansas facility, says his plant has used the same long-term branding strategy to attract staff. “In most cases we try to be the employer of choice,” he says. “We’ve added 200-plus workers over the past couple of years and we’ve been very successful in hiring a good-quality workforce.” That plant, too, has been able to source most new factory workers from within the region.

Kaltenberg believes being an employer of choice creates the added benefit of allowing the company to attract many people who already have the skill level the company needs. That allows corporate training efforts to immediately build on that knowledge and to tailor it to specific practices used in the plant.

The level of experience, though, has varied a lot among the overall group of new hires at the Jackson plant. Dykema has noticed those with farming backgrounds tend to arrive with more mechanical knowledge than their urban cousins.

“The younger folks we’re seeing have less mechanical aptitude than a generation ago,” says Dykema. “Some of us grew up fixing our own cars or bicycles. There’s a little bit less of that now, but people who are on the farm still, generally, are involved with repairing their own equipment. So I hope we continue to be able to draw from people who have some farm involvement, because they seem to have more mechanical aptitude. They certainly are more in touch with how the end user benefits from our equipment.”

Lack of mechanical skill among any new employees means spending more time, effort and money on training. At the same time, new equipment is becoming more complex, driving the need for training to ever-higher levels, and keeping the workforce up to speed with technical advancements and new manufacturing processes is what Dykema sees as the biggest challenge for Jackson’s workforce overall. “In all technical areas, we’re really becoming much more complex,” he says.

Because of the variety of tasks each assembly line worker needs to master, craftsmanship is still a key element in building farm equipment. That sets assembly plants in the ag industry apart from those in the automotive sector where more workers tend to do fewer tasks on the line, which means they can get by with less training.

Unlike automotive assembly lines that pause for only a few minutes for a single process, those in the AGCO facilites stop for longer intervals at each station, and each worker has a broader range of functions to perform. There is also a greater variety of April 2012

models and machines coming down the line in farm equipment assembly plants than in those building automobiles. That minimizes the amount of specialization possible, so workers need a broad knowledge base.

“Our product moves at a lot slower pace than what you would see in automotive (plants),” says Kaltenberg. “Our employee has a lot more variety in what he does than someone on an automotive line.

That variety requires a higher-skilled employee.”

At the Jackson plant, Dykema says future training objectives will give workers even higher levels of competence by giving them a chance to better understand the machines they’re working on. “We want to get to that point in the near future that everyone has a chance to drive the equipment, see what we’re building and why, and to see how it’s used.”

However, that training target will require some advanced planning and more immediate needs will have to be dealt with first. “The logistics of getting 1,200 people to drive tractors and keep it safe is a little overwhelming,” Dykema explains.

It takes more than high wages to attract and retain skilled workers, but it takes high wages too Both the Hesston and Jackson managers realize blending an employee’s need for job satisfaction with building technical competency are important elements in becoming “an employer of choice.”

“We try to have people move three to five stations up and down the line for two reasons,” says Kaltenberg. “One, to give them variety, and two, to have some flexibility. We like people to learn all the stations they can.”

The company also allows employees to take greater responsibility in the overall workings of the plant by using Kaizen events. This management practice relies on ordinary plant workers providing direct input into how operations are conducted inside a facility through a structured process.

“The Kaizen-event approach takes some workers out of their jobs for three to five days,” says Kaltenberg. “They step back and look at waste inside the operation. You pull people in from other areas.

And that team, over the three to five days, identifies waste and makes changes. They come up with a plan, implement it and see how effective it is. The employees feel ownership of it because they came up with the plan.”

In the end, both Kaltenberg and Dykema believe it takes more than wages and benefits to attract topquality workers and develop them into craftsmen while building corporate loyalty. “I think part of it has to be a challenging work environment,” says Kaltenberg. “They’ve got to enjoy the job and we try to create the right work environment to foster that.” CG country-guide.ca 37

production

Big prices for forages But tapping into those prices for quality hay may not be as easy as it seems

By Ralph Pearce, CG Production Editor very spring, somebody tells us that opportunity has come knocking. Maybe elevators are buzzing over premiums for identity-preserved soybeans, for instance, or the talk might be about soaring prices for edible beans or some other crop.

Savvy farmers have learned that the hype often overlooks some pretty tough realities. But all the same, just because there’s hype doesn’t mean there isn’t a chance to make a buck.

Which brings us to forages for 2012. The bottom line on quality hay and other forages is, supply is tight, and demand is high. And that’s not just in Ontario, in Eastern Canada, or even North America.

38 country-guide.ca

Any place where there’s livestock, it seems, forage markets are through the roof.

Studies on the economics of growing quality hay often cite prices in the range of is $0.08 per pound.

Anecdotally, prices this winter have hit $0.11 per pound and sometimes more. That’s a 37.5 per cent increase.

As prices for corn, soybeans and wheat have surged into a new pricing paradigm on the Chicago Board of Trade, forage buyers have had to fight for acres. In fact, they’ve had to fight hard, so for growers the pricing opportunities are real and, in historical terms, they are good.

The difference is, growing forages isn’t the same as growing grains, where the quality standards are clear

April 2012

production

and industry-wide. Quality standards in hay are very specific. They aren’t the same for horses as they are for dairy or beef cattle, and growers considering entering — or re-entering — those markets need to familiarize themselves with everything from nutrient requirements and the physical properties of the forages to some of the environmental and economic benefits of growing them.

Table 1: Which earns more, corn or alfalfa?* Corn

Alfalfa

Item

(under conventional tillage)

(after establishment year)

Seed

103.6

0

0

24.35

Est. year cost** Fertilizer

123.85

59.35

By the numbers

Pesticides

13.05

0

The numbers involved in this market certainly favour the grower. Joel Bagg, forage specialist for the Ontario agriculture ministry, estimated in 2010 that the province has nearly 2.3 million horses and dairy and beef cattle in the province. The most often cited number for horses in Ontario is 300,000, which includes not only the horses that show up in census farm stats but those found in specialized riding and stable facilities too.

Based on that number and the fact that a horse will consume 2.0 to 2.5 per cent of its body weight in forage (dry matter) on a daily basis, that means there is an annual market for roughly 750,000 tonnes of hay just for horses. And that total is for Ontario only. The United States has more than nine million horses, with many of those located within trucking distance of Ontario and Quebec. Add to that an increasing demand for forages overseas, and the potential demand on a global basis is extraordinary.

On the cattle side, there are about 350,000 dairy cows, another 350,000 dairy heifers, plus 400,000 beef cows, 400,000 beef calves and another 450,000 cattle on feed.

According to the Ontario Forage Council (OFC), the value of forage crops in Ontario is more than $800 million, or about 10 per cent of the $8 billion total produced annually by the province’s agriculture industry.

However, the overall market potential for hay and forages has been dimmed by corn, wheat and soybeans, with a particular emphasis on corn. At $6 per bushel, corn has more than twice the income potential it did four and five years ago, and although prices for fuel, seed, inputs and land have all climbed higher, there is the perception that corn still comes out ahead.

Yet opinions differ on that notion. According to calculations by Doug Yungblut of Yungblut and Associates Consulting in Waterdown, Ont., $6 corn actually nets less than hay even at eight cents per pound (see Table 1).

But there are some even among hay producers, who beleive such numbers may need to be taken with a grain of salt. For instance, the notion of a hay crop having the same consistency across an entire field, sufficient to warrant the same premium price, is unlikely. Fritz Trauttmansdorff, a hay producer from Jerseyville, Ont., near Hamilton, contends that hay must be worth 1.3 times the price of corn in order to be competitive. So if corn is $6 per bushel and $240 per tonne, hay must be $312 per tonne or 12.5 cents per pound to compete.

“What I put in there is the risk factor,” says Trautt-

Tillage

49.75

0

0

37.25

19.9

0

April 2012

Tractor & Machinery Exp. Planting Spraying

10.2

0

Fertilizing

10.2

20.45

Harvesting & Trucking

75.9

0

0

61.7

75.2

0

Operator labour

0

26.25

Crop insurance

13.45

7.9

Baling, wrapping Drying

Interest @ 4 %

9.55

5

Marketing and other

32.95

0

Total costs (excl. rent)

538.6

242.25

Expected yield (tonnes)

4 (160 bu./ac.)

3.5

240 ($6/bu.)

198 (8 cents/lb.)

Price per tonne Gross return Net return

960

693

421.11

450.75

Source: Yungblut and Associates Consulting, Feb. 2012 * Slightly different criteria are used for each crop; a zero in a column indicates no value was calculated for that line for that crop **Establishment year costs less hay sales that year, divided by 4

mansdorff. “Basically, you can get about 8,000 pounds of corn off a field — if you do a good job and get 160 bushels — and you get the same with hay, if you run a good hay field and know what you’re doing. So it really comes down to costs, marketing, nutrient requirements and risk. And if you take all of those things into consideration, the value needs to be higher than corn.”

Know the markets The challenge is the disconnect between “forages” and “quality forages.” Indeed, it’s a challenge that even the most experienced forage growers wrestle with.

So, for instance, Ontario’s Joel Bagg is in favour of growers going after the big prices in today’s forage market, he also puts a qualifier on that advice. Markets for dairy and beef cattle forages are relatively strong too, so only go after the premium horse market if you have hay that meets its quality specs.

Meeting horse-quality takes skills that cannot be underestimated, Bagg says.

Continued on page 40 country-guide.ca 39

production Continued from page 39 Those skills start with knowing exactly what the markets want. Bagg calls it the first rule of marketing: “Identify the product your customer wants to buy, and then produce that product.”

“Certainly, if you want to be in that premium hay market, you have to meet those standards as opposed to just having some surplus that you want to move,” says Bagg. “If you want to get the premium price, it really has to be the kind of hay — and the bale type — that the customer wants.”

Another factor that is often overlooked is the feed requirement, particularly where the health of a cow versus a horse is involved. As a general rule in dairy cattle, producers are interested primarily in crude protein and Relative Feed Value (RFV). In most cases, the higher the values, the better the quality.

But horses have nutritional requirements that differ based on their size and purpose and also on their physiological differences. Crude protein requirements for horses are considerably lower (approaching 10 per cent, compared to the upper teens or even 20 per cent for hay for dairy cattle), and their nutritional requirements also vary on their activity level.

A racehorse will have a different nutritional demand compared to an idle horse or a young horse.

As well, horses with their single stomachs cannot tolerate weeds, dust and mould the same way as a cow with its ruminant digestive system.

“When you think about it, when we feed ruminants, we compost all of that stuff — the moulds, any toxins that are in weeds — they go into this big bacteria compost called the rumen,” says Bagg. “But horses have the stomach up front, and the fermentation happens in the lower gut, so they don’t have that fermentation happening early in the digestive system to do that detoxification.”

Hence the need for hay that is green and dry and free from weeds, mould or dust. Horses can develop chronic coughs, wheezing and even colic as a result of eating wet or mouldy hay.

Price discovery On the numbers side, there is also the fact that forages aren’t listed on the Chicago Board of Trade, so it’s harder to know what’s a fair price. Instead, the price for a bale of hay is whatever the individual is willing to pay for it, based on its quality and the type of animal involved.

That may be balanced though by the good news that growers of quality hay and forages are in demand. Despite the pricing uncertainties, word is that all segments of the market — dairy cows, heifers and horses — are hungry. The inventories one might expect in early spring are not there, neither in Canada or in the U.S. “Typically, there’s a fair amount of hay available for sale in March, and people are anxious to sell because they want to empty their storage before June,” says Bagg. “But I’m not seeing those 40 country-guide.ca

inventories out there, and you can’t phone the elevator and find out what the Chicago price is. A lot of hay dealers are working with confidential or proprietary information.”

Barry Robinson, district sales manager with Maple Seed in Lindsay, Ont., also acknowledges the short supplies and increased demand for quality hay, and he points to the diversion of hay acres into grains and oilseeds as part of the cause.

“Even livestock producers have reduced their acreages of forage because they want to grow some of the corn and soybeans,” says Robinson, echoing Bagg’s comment about the shortage of excess forage in the system. “The other thing is that at the price of forages, we can’t afford not to store them properly.

We need to treat forages like any other crop, where we need to be sure that we’re getting good yield and consistency, and it needs to be stored properly.”

The benefits and advantages Beyond the raw pricess and market demand, forages provide other advantages too. One of those benefits is the value of the N credit that goes with a forage crop, as well as the positive effect on soil health. The long taproot on a forage crop can run several feet into the soil profile and can have a beneficial effect on soil stability (including biological activity), porosity, root health and nutrient availability.

Overall, a forage crop can boost water retention and reduce structure breakdown, meaning soils will respond better to weather extremes, including drierthan-average conditions. Best of all, alfalfa as a forage crop provides a $70 N credit to the subsequent corn crop, along with a five to 20 per cent yield increase. At current market pricing, that translates to an additional $48 to $192 per acre (based on 160 bu./ac. yield). Typically, those benefits also last into a second year, albeit at lower levels.

Despite some of the disadvantages of growing forages, such as high initial equipment costs and a narrower window for harvest (compared to grains and oilseeds), there are opportunities for anyone to enter the market. In fact, says Doug Yungblut, it is possible for those growers who want to enter the market to do so, even without actually growing forages.

“There are many custom hay guys around, and you can slide some hay into your rotation, either on your land or you can get into a deal where you’re swapping some land with a grower who’s growing some forages into your rotation,” says Yungblut.

“There’s no question, there are huge benefits from a soil standpoint and from a number of different aspects, with benefits that last quite a while.” CG Yungblut’s detailed report on the “Value of Forages in a High Commodity Price Environment” can be found on the Ontario Forage Council website (www. ontarioforagecouncil.com — under the “Research” tab). Joel Bagg’s report on “Hay as a Cash Crop” is available at www.omafra.gov.on.ca/english/crops/ facts/makinghorsehay.htm.

April 2012

PRODUCTION

And overseas too Export markets for Ontario hay are huge, but the hurdles can seem like it too

By Ralph Pearce, CG Production Editor ure, it’s a lousy pun, but it’s also true. There’s plenty of “hay” to be made in North American forage markets in 2012. In fact, there’s even lots of the green stuff to be made selling hay to the owners of Ontario’s two million cattle and horses.

So why look overseas? Because the prospects might be even better, as a small but growing number of Ontario farmers can attest.

Fritz Trauttmansdorff, who farms near Jerseyville, Ont. has sold hay into England and Ireland. “There’s always something that’s in short supply,” Trauttmansdorff says.

That doesn’t mean it’s a simple market to serve. In fact, says Trauttmansdorff, it really isn’t a single market at all.

“The market is so fragmented that a producer or a group needs to pick its spot on what they want to supply,” he says.

Nor is it a market where it’s easy to score a quick sale and walk away with a bulging wallet. It takes skill, TrauttmansAPRIL 2012

dorff has learned… or actually, it takes a number of skills.

The conditions have to be right to do any kind of exporting, he says. Just because the market opportunity is present, doesn’t mean it is wide open to everyone.

For instance, growers need to know their hay’s quality, and they need to be able to figure out who needs that exact hay. “Hay isn’t like No. 2 corn,” Trauttmansdorf says. “I don’t think you can generalize it that way, because certain customers need certain things in certain years.”

Then come all the complexities of the marketing channel. One example Trauttmansdorf cites is shipping costs. He has seen shipping rates from Canada to England that are cheaper than trucking costs from Spain to England.

“That’s your competition, but some years, we can get cheap ocean freight,” he says. “And other years, freight is a little hard to get. And then you have currency exchanges or other factors that play into it.”

Few things on the export market are simple. Even fewer can be taken for granted. Demand may be high, but trade barriers and protectionism can be even higher. For instance, in the case of countries including China and Russia, there have been instances where loads have been held on the dock while buyers and sellers hammered out the particulars of how to test the hay for diseases in a load of hay.

Clearly, that isn’t the kind of discussion you want to go into without knowing your stuff, especially since buyers may not have access to technology that is as sound or as advanced as testing facilities here in North America, meaning that even where there is all the goodwill in the world, there can still be false positivies to deal with.

Are the buyers in these scenarios simply trying to cut their costs? Maybe. Are they being protectionist? Possibly.

Is it enough of an impediment to leave some growers and exporters disillusioned, to the point of staying home? Perhaps.

Challenges versus opportunities Even so, for Don Rowntree, some international markets are getting too large and potentially too lucrative to Continued on page 42 country-guide.ca 41

production Continued from page 41 ignore. Rowntree is a grower and exporter of hay from his farming operation near Georgetown, Ont. His expertise and perspective on overseas markets is fortified by his 17 years’ experience in Moscow where he worked in international cattle exports, as well as additional experience with China.

Rowntree is all too familiar with the hurdles that buyers can put in the way of farmers who want to go after these export opportunities.

“Getting on to these countries, for some people, it would be a monster of a project, and it can be, don’t get me wrong,” say Rowntree. “When you make commitments on the international market, or you haven’t got your money straightened away, it can be a big problem.”

Yet Rowntree is equally familiar with what he considers a major opportunity for Ontario hay producers.

Specifically, Rowntree is referring to the Middle East, a region that is getting onto the radar for many countries, including Canada and the U.S. Too often, the perception is that the Middle East is vast, arid and not a particularly strong player in agricultural production.

Instead, the real news is that some countries, including the United Arab Emirates (UAE) and Saudi Arabia, are changing their water or irrigation designations in ways that have major impact on their hay markets.

“They’re running out of water… they’re going to see about importing corn, wheat, soybeans and hay instead of trying to grow it there,” says Rowntree, adding that there have been several delegations to the region in the past few years. “That’s why the interest is starting to spike for compressed hay, cubes and pellets. But don’t think that the U.S. and other countries aren’t looking strongly at it also.”

Rowntree sees it is as a very large opportunity, but he also sees it as one that comes with the proviso that growers hit all of the parameters, ranging from quality to volumes to consistency.

Add to that the reality that growers in Quebec and Ontario are competing against forage growers in the U.S who often have irrigation and can easily produce quality hay with 20 per cent crude protein and relative feed values (RFV) of 180 and some as high as 200.

The good news from Rowntree’s perspective is that even if U.S. growers keep 42 country-guide.ca

Canada out of the Middle East market, there will be additional opportunities to fill any shortfall in the U.S. that might result.

From a government perspective, there has been intense interest in the Middle East for more than two years. Athar Shah, business development consultant for the Ontario agriculture ministry, is a strong advocate of addressing market demands from the Middle East. Although his specialty is in bakery, cereals and milling, he agrees that water scarcity in the region could translate into export opportunities for Canadian forage growers. Current estimates for the total forage requirements in the Middle East could be as much as a million tonnes per year.

Indeed, just last year a major forage distributor from the Middle East travelled to Canada and spoke with Ontario Forage Council representatives, Shah points opuit.

“Middle East companies are willing to invest in forages to secure their supplies,” says Shah, but he also notes that the same trends apply, including the need to develop relationships between buyers and farmers. In fact, it’s similar to the identity-preservation soybean market between Japanese buyers and Canadian growers. “Globally,” Shah says, “everyone is value conscious, and can negotiate the best possible deals.”

In fact, the Ontario Forage Council (OFC) is active in determining potential markets for the Middle East. In 2009, the OFC was involved in a trade mission to the region, to investigate some of the market potential. A year later, a research project was initiated to study moisture levels in Ontario forage, and the findings have been positive; levels were under the 12 to 15 per cent range. That means shipping is a far more viable option, with further study underway.

More research Other initiatives to help build hay exports include one by the Ontario Hay Marketing Forum, a group of farmers and industry stakeholders working to address new and existing markets for cashcrop hay. This group is also working with the Canadian Forage and Grassland Association, attempting to identify local and continental opportunities as well as those in the Middle East and China.

“They have looked at the feasibility of supplying these markets and identified the barriers that need to be addressed,” says Joan McKinlay, communications

assistant with the OFC. “They are currently looking at the feasibility of double compaction of hay in Ontario for export. The availability of containers for shipping, country protocols and harbour charges have also been examined.

Protocols must be set up with countries and importers so that the product is not rejected at the point of delivery.”

Reducing transportation costs and establishing consistency of supply are also critical, McKinlay says, and compaction is another key issue.

“For overseas markets, you need to work with containers, and with containers, you need to max them out for weight, and you can’t do that with a field press,” Trauttmansdorf says. “You need a stationary press that is capable of doing that so you can get your 56,000 maximum pounds into a container.”

If the OFC feasibility study determines the need for a stationary press, then work also has to be done to establish the infrastructure needed to ensure consistency and volume.

“The whole business has to build the infrastructure, and contracting growers to be suppliers,” adds Trauttmansdorff.

“You can’t just buy hay as it comes in.

It needs to be grown in a certain way, harvested in a certain way, stored and delivered — basically, you need to create a whole contractual infrastructure to make that grow.”

To that end, Rowntree would like to see a training or education program to help growers understand the various quality and volume parameters that they would have to meet for these export markets. That training would include segments on the need for proper storage, for instance, with skids on the barn floor to boost air flow around the stacked bales.

“We have to educate the farmer,” says Rowntree, using the catch phrase “green on four sides” as one example of a quality parameter demanded by international buyers. “We need to help farmers understand protein and relative feed values for these animals.”

In the meantime, the OFC research into export markets and building the necessary infrastructure continues. For some, the results can’t come fast enough, but the end result should be the same.

“Just as cash crop prices seem to have reached a new plateau, we believe that hay prices have as well,” says McKinlay.

“These higher prices will make it more lucrative to keep hay in the rotation.” CG April 2012

PRODUCTION

Sneaky new diseases Two new root rots are stealing more tonnes than anyone realized

By Ralph Pearce, CG Production Editor heck out the list of diseases that you need to watch out for in forage alfalfa and you’ll find some very familiar names. Phytophthora root rot, Pythium damping off, anthracnose, common leaf spot and Verticillium wilt are all well known — too well known — by corn and soybean croppers.

Still, alfalfa brings some additional diseases into the picture, including brown root rot and Aphanomyces root rot, two relative newcomers to forage fields in Ontario.

As with most diseases, these two promise to get worse before they get better.

Brown root rot Confirmed in Ontario in 2007, brown root rot is often mentioned as a companion to winterkill.

Infected plants are slow to emerge from winter dormancy and they lose yield as a result.

Brown root rot is thought to be widespread across most of the province and even into Quebec, and it is also common across the northeastern border states.

Brown root rot isn’t brand new to Canada or North America. It was found in Western Canada APRIL 2012

in the 1930s and since 2003 has been confirmed in western states including Minnesota and Wisconsin.

In 2007, Gary Bergstrom, a plant pathologist at Cornell University and graduate research assistant Michael Wunsch carried out a survey that included 10 fields in the Woodstock-Niagara region and around Ottawa. The results were somewhat startling, even on such a small scale. Seven of the 10 field samples tested positive for Phoma sclerotioides¸ the pathogen of brown root rot. The incidence in individual fields ranged from very low — five per cent — to moderate high, with 30 per cent of the roots or crowns being infected.

These results were judged to be preliminary but researchers did suggest that based on the U.S. experience, brown root rot is likely widespread, yet has gone undiagnosed.

“It’s in quite a few fields,” confirms Albert Tenuta, field crops pathologist with the Ontario Agriculture Ministry. “It’s not decreasing… there are pockets throughout the province.”

One reason why brown root rot has gone undiagnosed in so many fields is because there is little visible damage to the above-ground plant. Instead, the disContinued on page 44 country-guide.ca 43

production

Continued from page 43 ease affects the plant below ground, causing sunken brown (sometimes, almost black) lesions on the tap roots, the lateral roots and on the crown. In severe infections, the tap root is completely rotted away.

The fungus that causes the disease actually thrives in soil temperatures of 15 C or less, so it would normally only be active in spring and fall.

However, this past winter has been warmer than normal, and the cool, wet soils that are linked to winterkill have been the rule, not the exception.

The other concern with brown root rot is its slow growth, which contributes to its slow identification. In some fields, the infection goes unnoticed until the second or even the third year, when the plants become stunted or die off altogether.

“The warm, wet fall we had is a concern for me,” says Joel Bagg, forage specialist for the Ontario ministry. “Alfalfa likes cool, dry weather in the late fall in order to winter harden properly.

When it’s warm and the soils are saturated, then it doesn’t winter harden to the same level, so it’s more susceptible to all of those winter issues.”

In addition to the weather, Bagg believes many growers did a fair amount of fall cutting in September during the critical harvest period.

“Sometimes, we get away with that, sometimes we don’t,” Bagg says, recalling a similar situation in the fall of 2008, resulting in an increase in winterkill in 2009. “We have to be aware of the risk, and producers should get out there early in the spring, at green-up with a shovel and scout their fields. You don’t want to wait and find that you only have half a crop.”

Much of the reason for concern over brown root rot in Ontario is the lack of resistant varieties for growers, meaning management is limited to avoiding late or excessive fall cutting in order to reduce stress on the plant going into that winterhardening stage.

Maintaining proper soil fertility and rotating out of alfalfa for three years can also help reduce yield losses and improve a stand’s longevity.

Aphanomyces root rot Aphanomyces root rot has attracted little research effort in Ontario. Its distribution and economic impact have not been measured, and the consensus is that the disease is likely being underestimated, especially given the discovery of new Aphanomyces races in the U.S. Since the major defence against Aphanomyces is the development of resistant varieties, the sooner the status of the disease in Canada is confirmed, the sooner breeders can decide whether to target this root rot in their programs.

What is known about Aphanomyces root rot is that, like brown root rot, it is most damaging in 44 country-guide.ca

saturated soils. But where brown root rot affects the roots while leaving the above-ground growth appearing normal, Aphanomyces root rot attacks alfalfa seedings and can also affect mature alfalfa plants, reducing yield and vigour in established fields.

Aphanomyces leaves infected seedlings stunted yet upright, with yellow leaflets and cotyledons.

The stems and roots can also turn grey and appear waterlogged or water-soaked. In severe cases, the seedlings can also appear light to dark brown. The finer, fibrous roots that are common with alfalfa plants will be missing with Aphanomyces root rot.

Even the lateral roots can be rotted and absent.

Overall, the alfalfa stands can be thin, yellowed and weedy. On closer inspection, the seedlings may show reduced rhizobia nodulation. Often, the physical manifestations can be mistaken for a nitrogen deficiency, with poor vigour slowing regrowth. And since the root systems are compromised, infected stands will struggle in droughty weather.

Another factor that hinders the management issue is the survivability of the Aphanomyces euteiches pathogen. It can survive on infected plants, but also on plant debris. And the disease development is favourable, not just with saturated soils, but with moderate to high temperatures (16 to 30 C) and with humid or wet conditions. The disease is also prone to strike those fields that are poorly drained or compacted.

On the research front, Tenuta points to the efforts of Andre Levesque of Agriculture and Agri-Food Canada in Ottawa, who is working with the Ontario Forage Council to develop an effective soil test for the fungi that cause Aphanomyces and brown root rot. The work is being funded through the Farm Innovation Program and the Ontario Research and Development Program and is being administered by the Agricultural Adaptation Council.

“We’re looking at developing new molecular techniques, not only for these but for other alfalfa disease pathogens as well,” says Tenuta.

This new molecular identification tool will allow for quicker sampling of grower soil and plant samples, and help breeders identify lines with potential resistance.

The other good news is that breeding work to combat the disease is similar to that for breeding resistance to Phytophthora root rot in alfalfa.

Researchers and breeders have identified Race 1 and Race 2 isolates of Aphanomyces, with resistance to Race 1 being the more common. Of the two, Race 2 is the more virulent with the least amount of resistance.

“What we’re seeing is that the forage varieties are progressing every year,” says Tenuta. “We’re finding more and more varieties out there, so I would think growers are tending to go with new varieties, and every time we go with newer varieties, there are always some new advantages that come along with those.” CG April 2012

PRODUCTION

#PestPatrol with Mike Cowbrough, OMAFRA Have a question you want answered?

Hashtag #PestPatrol on twitter.com to @cowbrough or email Mike at mike.cowbrough@ontario.ca

QUESTION: What insect pest causes the most damage to forages? #PestPatrol To answer this question, I called on: @GillesQuesnel (Gilles Quesnel, Pest Management Specialist, OMAFRA — Kemptville) Joel Bagg, Forage Specialist, OMAFRA — Lindsay  Follow him on twitter.com

THE ANSWER: Potato leafhopper is one of the most damaging alfalfa insect pests in Ontario with new seedings being particularly susceptible.

Visually, potato leafhopper damage is not as dramatic as that of alfalfa weevil, but is more chronic and widespread. The injury often goes undetected and affected plants do not recover until the stems have been harvested.

When do outbreaks happen? Leafhoppers usually arrive in late May and can start damaging new seedings in mid-June.

What do they look like? Adults are three mm (1/8 inch) long, lime green and wedgeshaped. The juvenile leafhoppers or nymphs are about 0.8 mm (1/32 inch) long when they hatch. They resemble adults, but they are wingless and are often found on the underside of the leaves. Both feed on alfalfa.

What does the injury look like? Leafhoppers insert their mouthparts into a leaf midrib and feed on sap juices from the plant while injecting a toxin containing saliva. This blocks the tiny tubes that distribute nutrients within the plant and results in the characteristic yellowish, V-shape “hopperburn” pattern on the leaf tips. The alfalfa will be stunted and may turn reddish. Most of the damage occurs from June to mid-August. High-risk factors include hot, dry seasons. Symptoms are sometimes confused with nutrient (boron) deficiency or herbicide drift injury. Commonly, symptoms are often dismissed as “drought damage.”

Best time to scout: Losses occur before plant symptoms develop, so it is important to scout early. If leaf yellowing has occurred, it is too late to do anything. Scouting with a sweep net will determine whether management is required by either harvesting early or spraying a registered insecticide. In new seedings, scout fields weekly when the stand is 10 to 15 cm (four to six inches) high. In established

APRIL 2012

stands begin scouting after the first cut when plant regrowth is five to 10 cm (two to four inches) high.

Take 10 sweeps, count the number of leafhoppers and divide by 10. Do this in five representative areas of the field and note the height of the alfalfa:

Recommended action thresholds Stem height

Average leafhoppers per sweep

9 cm (3.5 in.)

0.2 adults

15 cm (6 in.)

0.5 adults

25 cm (10 in.)

1.0 adults or nymph

36 cm (14 in.)

2.0 adults or nymph

Best advice to farmers: • Scout early to establish the level of leaf hopper activity. If you observe above-threshold levels of leaf hopper activity consider the following management techniques: • If possible cut alfalfa early to reduce egg, nymph and adult populations. A naturally occurring fungal pathogen helps reduce the populations of leafhopper under cool, moist conditions. If early cutting is not possible, insecticides are available.

• A leafhopper-resistant variety will have more value in areas where there has been a history of infestations. Consider the cost of scouting, insecticides and the cost and yield performance of leafhopper-resistant varieties.

• Evaluate the cost and yield performance of alfalfa varieties resistant to leafhopper.

A leafhopper resistant variety has glandular hairs on the leaves and stems that act as mechanical barriers to leafhopper feeding. Varieties rated Highly Resistant (HR) include FSG400LH, TrailBlazer 4.0, WL345LH, and Pioneer 53H92 • The glandular hairs are not fully expressed the first year, so treat new seedings of resistant varieties the same as regular alfalfa.

country-guide.ca 45

hr

Same blood, but so different

By Pierrette Desrosiers, psychologist and coach

hen they were little, they played together so well that I was convinced they would make a good team later on.”

“He’s my brother, but we think differently and have different values and different personalities. In fact, I have the impression that I would get along better with a stranger.”

Often, parents dream of their children forming partnerships, and of seeing them work together harmoniously in the family business. Sometimes, however, in between a dream and reality lies a nightmare.

It seems that the marriage of business and family is not always as happy as we would like — on both the economic and the relationship levels. Betting on the success of an association solely because we are members of the same family is far from being a sure thing.

How do we explain how family members can be so different? We are the products of our genetic baggage and of our environment.

Let’s use nature as an example: • Our temperament is like a seed.

We are born with it. Our basic temperament is unique. That is why, for example, a baby can be very nervous while his sister or brother is very calm.

Our genetic baggage partially influences our predisposition to like certain things. It influences our IQs and the totality of what later constitutes our personalities, but at birth we already have a temperament, and we will always carry this unique kernel of corn, wheat or barley inside of us.

• Our environment is like the soil.

The immediate environment (home and school) influences the individual’s development just as the soil acts on plant development. We can easily imagine that environments can differ even between brothers. Just look at how school can be experienced differently by one brother who possesses a facility to learn, is excellent at sports and has a lot of friends, compared to his sibling who is shy and who has been the victim of bullying.

• Soil quality or characteristics may vary in the same field.

Contrary to popular belief, the immediate environment is not identical for children in the same family. In one field, you can find certain areas where the soil drains better or where the ground has more clay or is sandier, not to mention the pH and nutritional variations. Parents do not act in an identical way with all their children. In fact, each child is different and evokes different emotions and reactions from his or her parents. The various soil characteristics may not

46 country-guide.ca

provide the same conditions for all plants on your land, and likewise, the immediate environment does not provide the same conditions for each child.

• Each plant has different growing needs.

The children in a family soon undergo and choose very different experiences throughout their lives, first of all because they have different values and interests but also because they have different opportunities. As all varieties of plants have different growing needs, children also have different needs. That is why, like some plants in a field, some children will manage to meet their needs while, for others, the soil will not be rich enough.

• Each plant assimilates soil elements differently.

Lastly, to complicate things, one event may be interpreted very differently. Let’s take the example of two corn plants side-by-side. One will better be able to grow and take advantage of the soil in order to develop to full maturity, while the other plant, although under the same conditions, will struggle.

I’m always eager to listen to the stories of siblings and how they experienced their childhood so differently, especially how situations such as the loss of a parent, parent divorces or poverty may have affected the members of the same family so differently.

As agricultural producers, when we look at our progeny, we have to remind ourselves of nature’s teachings.

Therefore, when you wonder about the differences in your family, consider Mother Nature and your harvests.

Remember that, even though you try to plan the harvest, the results are sometimes different than you planned for. There are limits to our ability to model our children according to our expectations and dreams. We cannot genetically modify our progeny, nor control their experiences and the perceptions of these experiences.

As a result of all of those realities: 1. D o not expect that you children will share a lot in common simply because they are siblings.

2. D o not expect that they will all have the potential or the interest to become farmers simply because they have been raised on a farm.

3. E ven if they have the potential and the interest, do not assume that they will fit together and form a good partnership.

Mother Nature always has the last word. 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.

April 2012

w e at h e r

NEAR TO BELOW NORMAL RAINFALL

ONTARIO

April 22 to June 16, 2012

Apr. 22-28: Fair, seasonal, blustery with rain on a couple days, chance heavy.

Frost, flurries central and north.

Apr. 29-May 5: Variable weather as warm sunny days exchange with cooler, breezy, wet days. Frost north.

May 6-12: Seasonal to warm. Windy at times. Fair but rain or thunderstorms on two or three days. Frost pockets north.

May 13-19: Heavier thunderstorms and warm on a few days this week, otherwise mostly sunny, seasonal.

May 20-26: Sunny with scattered thunderstorm activity, risk heavy in places.

Blustery. Frost pockets north.

May 27-June 2: Pleasant, breezy. Seasonal to warm. Scattered thunderstorms, heavy at a few localities.

June 3-9: Highs often in the 20s. Cooler near lakes and north. Sunny with passing heavier thunderstorms.

June 10-16: Seasonal to warm. Sunny aside from a couple of humid days triggering heavy thunderstorms.

QUEBEC Apr. 22-28: Fair, seasonal but two or three windy, cooler days with rain, chance heavy. Frost and snow central and north.

Apr. 29-May 5: Fair, warm days exchange with cool, wet, windy ones. Frost, chance snow central and north.

May 6-12: Sunshine alternates with rain or thunderstorms, risk heavy in places.

Blustery. Frost pockets north.

May 13-19: Pleasant most days apart April 2012

Oc cas So rainional me sn ow

S sh cat t/s ow tere to er d rm s/ s

N PR EAR EC -N IP OR ITA M TIO AL N

d re / t e rs at we s Sc o rm sh /sto t AVERAGE RAINFALL

Spotty showers/ t/storms

MILDER THAN NORMAL

Sh Mild t/s owe tor rs ms /

NEAR NORMAL

COOLER THAN NORMAL

from heavier thunderstorms, cooler and windy on a couple of occasions.

May 20-26: Variable weather and temperatures as sunny skies interchange with showers or heavier thunderstorms.

May 27-June 2: Seasonal. Highs at times in the 20s south. Blustery. Passing thunderstorms, possibly heavy in places.

June 3-9: Sunshine dominates apart from showers or heavier thunderstorms on two or three occasions. Seasonal to warm.

June 10-16: A couple of warmer, humid days set off heavy thunderstorm activity.

Otherwise settled and seasonal.

ATLANTIC PROVINCES Apr. 22-28: Variable in west with some rain, chance snow. Inland frost. Windy, cool east with periodic rain, snow.

Apr. 29-May 5: A few pleasant days are followed by cool, wet, windy ones. Frost in places. Risk snow east.

May 6-12: Fair, seasonal aside from a couple of unsettled, cool, windy days with heavier rain. Chance snow and frost east.

May 13-19: Fair overall as sunshine exchanges with rain and blustery winds.

Frost at a few inland locations.

May 20-26: Sunny, seasonal days alternate with some rain and fog. Windy at times. Frost threat inland.

May 27-June 2: Pleasant west with scattered rain or thunderstorms. Variable, blustery east with some rain and fog.

June 3-9: Changeable from warm to cool.

Mainly sunny apart from showers or rain, heavier thunderstorms west.

June 10-16: Mostly sunny and warmer.

Scattered shower activity with occasional heavier thunderstorms west.

April 22 to June 16, 2012 NATIONAL HIGHLIGHTS Relatively dry conditions are anticipated during the seeding and germination period across the Prairies and northwestern Ontario. A broad upper ridge of high pressure is likely to inhibit moisture totals in spite of occasional showers or thunderstorms from time to time. Usually May and June are the wettest time of the year. Temperatures should run close to normal in these regions. In the far west, British Columbia should experience a cool circulation off the Pacific with average rainfall amounts.

Meantime in southern Ontario, the southern half of Quebec and Atlantic Canada, mild weather is apt to continue. However this will be accompanied by frequent rain, showers or thundershowers from time to time. A few heavy thunderstorms are also possible. Some snow and frost may linger in far northern and eastern areas until late May. Otherwise, near-normal precipitation is indicated for Eastern Canada.

Prepared by meteorologist Larry Romaniuk of Weatherite Services. Forecasts should be 80 per cent accurate for your area; expect variations by a day or two due to changeable speed of weather systems. country-guide.ca 47

ACRES

By Leeann Minogue

Trouble comes to the farm More is changing than just the generations, as the Hansons learn to their cost verything was ready to go. With another week or so of warm weather, the Hansons would be ready to start putting seed in the ground. They planned to seed as much of their 6,000 acres as they could get on to — anything that wasn’t still too wet after last year’s flood. The machinery had been checked, double-checked, and given one last once-over. The fertilizer was waiting in the bin, and the bags of seed were neatly stacked. There was nothing left to do but wait.

Nothing, that is, except take a half-section’s worth of canola seed back to the dealer.

When Dale got to the shop, his son Jeff was just loading the last few 55-pound bags into the back of the pickup.

“Why didn’t you wait?” Dale asked. “I was coming out to give you a hand.”

“I needed to get out of the house and burn off a little extra energy,” Jeff said. “And I think you’ve already helped enough with this project.”

48 country-guide.ca

“I didn’t think this would happen,” his dad said defensively.

Jeff snorted. “Neither did I. When Elaine and I spent the last three months working on spreadsheets and pencilling in the extra returns we could get from renting two extra quarter sections, we never dreamed you hadn’t signed a rental contract.”

Jeff set the last bag of canola on the top of the load in the truck box. Dale picked up the pallet the bags had been sitting on and leaned it up against the wall.

“We’re just lucky I ran into Arlon Brown at the terminal,” Jeff said. “If he hadn’t happened to mention anything, this could’ve been really stupid. I can see it now. You out in the field with the Quadtrac when a truckload of Browns pull into the field.

Jumping up and down, waving their arms, trying to get you and your tractor out of their field.”

“Well who would’ve dreamed some granola-eating vegetarian from Vancouver would throw over a friendship for a few extra bucks? I really thought we had a deal.”

APRIL 2012

acres

Ed went straight to the family the minute he heard the news.

That half section just to the north was coming up for rent Earlier that winter, Ed Hanson, Dale’s dad, had been drinking coffee in town at Wong’s Café when he’d heard that the half section of land two miles north of the Hanson’s yard was up for rent. The farmer who’d been renting it for the past three years had lost his nerve after the 2011 floods, and taken a job in the oilpatch.

As soon as Ed had finished his coffee refill, he’d headed out to the farm with the news. “Those quarters would fit in perfectly with this operation,” Ed said. “I always hoped we could get our hands on that land someday.”

The rest of the family had agreed. Dale had been confident and enthusiastic. The landowner was a woman he’d grown up with. Audrey Wilson had left the farm years ago, and the closest she’d been to the area since the early ’80s was Regina, where her mother had been retired until she’d died a few years ago.

“That Audrey was always a little nutty,” Dale had said. “Not surprised she landed up on the coast.

But I’ll call her up right away. I’m sure she’ll rent the land to us.”

Jeff had been pleased. He and his wife Elaine had packed their toddler directly into his car seat and taken their SUV north to take a close look at the land. Then they’d gone back to their house immediately to start running the numbers, evaluating their per-acre fixed costs with a bigger land base, and trying to decide what they should seed on the “new” half section.

It was early April before Jeff and Elaine found out Audrey had rented the land to someone else.

When Jeff wanted to know how this possibly could have happened, Dale explained that he’d phoned his old friend Audrey. They’d talked about the land. Dale had even mentioned a price.

“But she didn’t definitely say she’d rent it to you?”

“She didn’t say she wouldn’t,” Dale said. “And Audrey’s always been a little vague, really.”

“Dad, if I’d had any idea you didn’t have a written contract…” Jeff shook his head.

Dale was defensive. “I never told you I had a written contract. You didn’t even ask. If you would’ve asked, I would’ve told you.”

“Who would’ve guessed I had to ask? When you do business, you sign a contract, Dad. It’s automatic.”

“I’ve known Audrey since we were kids on the school bus. I’m not going to ask for a contract.

She’d have been insulted.”

“Well who’s insulted now?”

April 2012

Dale hung his head. “Yeah. I guess money’s the trump card.”

“I guess she didn’t think the agreement was quite as firm as you did.”

“Hang on a minute,” Dale said. “It sounds like you’re not even mad at Audrey. You’re mad at me.”

“Not mad. Disappointed. Farming’s a business. Business runs on contracts these days. When I bought this canola you can bet Al didn’t just load it into my truck. He got me to sign a contract first.

Al’s my friend, but when he sells seed, we’re doing business. I sign a contract.”

“Well what about the Browns?” Dale asked.

“You must be mad at them.”

“The Browns? They saw some land for rent and called up with an offer. Maybe they knew you’d called, maybe they didn’t. But they did know enough to get a signed contract before they bought a bunch of seed.”

“They know that land is right by our yard. They must’ve known we’d want to rent it. Land is scarce around here these days. You don’t get many chances.”

“It doesn’t matter,” Jeff said. “If we’re going to live here and be part of the community we have to be able to separate business from neighbours.

Remember when you bought that old bulldozer at the Tanner Auction? Arlon Brown was standing next to you, bidding on the same piece of iron. You took it home. He never held a grudge.”

“That was different.”

“Why?” Dale didn’t have a good answer.

“I’ll tell you one thing,” Dale muttered, turning around to straighten up things on the shop workbench that was already in perfect order. “When I was growing up, a person’s word was all you needed. You didn’t have to go around signing contracts for everything. Lawyers have us all trained so we’ll pay to let them run the whole damn world.”

“Could be,” Jeff said. “Look, Elaine and I’ve been talking. We’re going to spend some time networking this summer. See if we can figure out if any more land’s coming up for rent or sale around here anytime soon. Maybe we can get the jump on it next time.”

“Yeah,” Dale said. “Guess we could make a list of some people that might be thinking about renting. We might as well use our time for something useful, since we won’t have that extra 320 acres to look after. We’ll need something to do.”

“There’s something for you to do now,” Jeff said.

“Take this load of canola back up to Yellow Grass.

I’ll spend some time playing in the puddles with Elaine and our boy.” CG country-guide.ca 49

life

Add it up These tips will help you raise businesssavvy kids who still love to farm

By Helen Lammers-Helps ids learn about production agriculture at their parents’ knees. They ride in the tractor cab when the crop goes in, they learn to identify weeds when they go along on scouting trips, and they soon get asked to help feed the calves or milk the cows.

Learning to become a farmer on the farm is as natural as growing up. Kids are sponges. They soak up everything they need to know — everything, that is, except financial knowledge.

Typically, financial matters are discussed behind closed doors, away from the ears of the kids, and as a result, farm kids often grow up with very poor financial-management skills.

Inevitably, Mom and Dad then look one day at the kids and ask themselves, “Do they really have the financial skills to make it in today’s farming?”

It might be called a self-fulfilling prophecy.

If the next generation is going to take over, they’re going to need to understand financial statements and how to make decisions based on them, says John Anderson, an agri-business consultant with Collins Barrow LLP in Kingston, Ont. Tomorrow's farmers must have the ability to determine if there is any money in the direction they’re taking the farm, says Anderson.

Nor is Anderson alone. “It’s absolutely essential that they understand the financial picture,” says Reg Shandro, a certified agrologist and mediator in Lacombe, Alta. “A farmer’s competitive advantage is what’s in their skull.”

If we are counting on the farm to fund our retirement after transferring assets to the next generation, then it's doubly important for the next generation to be good financial managers, adds Mike Bossy, a Certified Agricultural Farm Adviser and president of Bossy Nagy Geoffrey (BNG) of Tillsonburg, Ont. “You need to train your pension managers,” Bossy says.

It’s easy to understand why the production end of things gets more attention than the financial workings of the farm. When it comes to production, it’s often a matter of “Here’s how you do things,” says Jennifer Stevenson, business extension specialist with the Ontario ag ministry. “When it comes to financial management, there are no hard-and-fast rules that can be applied consistently, it comes down to judgment.

Should I sell my crop now or store it? Should I buy fertilizer or wait and hope the price will come down?”

We also tend to gravitate to the things we enjoy the most, and on many farms, that won’t be the 50 country-guide.ca

financial side of the business, says Bossy. Most farmers are excited about the hands-on aspects of farming, so it’s natural for the kids to gravitate towards working in the barn or doing tractor work.

Another problem is that the senior generation doesn’t always have a good understanding of the financial statements themselves, adds Shandro.

Accountants often prepare financial statements for farmers but spend too little time explaining them, he says. As a result parents may be reluctant to discuss financial matters with the kids for fear they won't be able to answer their questions.

However, we do our kids a disservice if we don’t give them a good foundation in the financial management aspects of the farm before they take over. “The senior part of the team must be prepared to share financial information with members of the junior team who are active in the business,” says Stevenson.

“Joining in on conversations with accountants, bankers and other business associates is essential.”

Shandro cautions that kids need to be old enough to understand the value of money before doing so or they will likely zone out. He also warns that it’s critical to be aware of the source of the information and how that affects what’s said.

Accountants speak from a taxation angle and while bankers will have “real life” information, it’s important to remember the banker’s job is to lend money. Parents would be wise to give their own interpretation of the information afterwards.

And of course there’s also the matter of confidentiality to consider.

If you have a good relationship with your banker or accountant you could ask them to participate in a special session to explain the farm’s financial statements. “I’d ask them during a nonbusy time and give them some time to prepare ahead of time,” suggests Terry Betker, president of Backswath Management in Winnipeg. He recommends starting with the Income Statement so the kids can get an understanding of inputs, expenses, and gross margins.

“Too much information and you’ll lose them,” Betker says.

It’s important to remember that kids will absorb not just what’s said around the kitchen table but also how it’s said. In particular, Bossy recommends paying attention to how we talk about financial management. If we’re negative about having to “do the books” or meet with the accountant, the next genApril 2012

life

eration will pick up on that and also have negative attitudes about these tasks.

Talking about the history of the farm is another way to pass on management experience, says Betker. “Talk about what has gone well as well as some of the challenges,” he suggests.

Also consider giving the younger generation exposure to financial management by carving out a chunk of the business and allowing them to manage it, suggests Stevenson. For example, if your son or daughter is interested in growing a new crop, have them make a business plan with cost projections and revenue expectations, an agronomic plan, a human resources plan and a marketing plan before you give them the land, says Stevenson. “The key is to identify specific and achievable targets,” she says.

“Afterwards you should discuss what worked and what didn’t.”

Shandro suggests having youth raise chickens for the summer or grow a few acres of a crop where they are responsible for all aspects of production.

Create a simple worksheet so they get the concept of what it costs to raise a steer or grow an acre of pinto beans, adds Anderson.

Betker cautions parents not to let the April 2012

child keep all the profits though. “To create a realistic financial picture, some of that money should go to cover capital costs such as the cost of the land,” he emphasizes.

Or have them compare the financial implications of buying fertilizer in the fall versus the spring, suggests Anderson.

Yet the best learning experiences may actually come from time spent away from the farm. Shandro recommends that the next generation should spend three to five years working somewhere else before committing to the farm.

“Those who work in banking or accounting will be well prepared for a career in farming,” Shandro says.

Bossy likes the 3/2/1 model. Before returning to the farm, he says, the next generation needs three years of post-secondary education, two years of working for someone else, and one good idea.

Things are starting to change. Talking about money is no longer offlimits. Bossy says that five years ago if he had asked a group of young people who were in the process of taking over the family farm if they had seen the farm books, only 20 per cent would have said yes.

At a recent meeting, that number had shot up to 80 per cent. That, he says, is good news for agriculture. CG

More resources The AgriBusiness eCampus at Kemptville College is a web-based national resource centre for agribusiness management and entrepreneurial advice. Go to http://www. kemptvillec.uoguelph.ca/abecampus.html.

Many other universities and colleges also offer some finance courses online.

Alberta Agriculture has free downloadable software, Agriculture Business Analyzer (ABA), which includes industry ratios and standards. Go to: www.agric.gov.ab.ca.

Ag Expert, farmer-friendly accounting software, is available from Farm Credit Canada (FCC) at www.fccsoftware.ca.

FCC Agri Success series has free courses available to everyone. There are two courses in particular that deal with farm finances: Maximizing Profitability: Financial Budgeting and Maximizing Profitability: Statements and Ratios. Go to www.fcc-fac.ca/en/LearningCentre to learn more.

Farm Management Canada has a wide range of publications and webinars available at www.thefarmcentre.com.

country-guide.ca 51

h e a lt h

You’re never too old for shingles

By Marie Berry ven if you have never been affected by shingles, you probably know that it is an extremely painful skin rash with blistering. However, what you may not know is that shingles is caused by the reactivation of the virus that causes chicken pox, known as the varicella zoster virus.

Chicken pox is a childhood viral disease that about 50 per cent of children get by age nine. Common symptoms include a red, itchy rash with blisters that develop crusts. By age 30, more than 95 per cent of Canadians have had chicken pox, and the older you are when you are affected, the more severe the symptoms tend to be, including fever, nausea, and a more extensive, severe skin rash.

Get immediate attention if you find the tell-tale red rash around your torso When you contract chicken pox, your immune system develops antibodies to the virus and you acquire immunity against reinfection. Chicken pox vaccines also give you immunity. While you may not have the disease, however, the varicella zoster virus does remain in your body, lying dormant in nervous tissues and kept in check by your immune system.

If the virus becomes active again, it is known as herpes zoster or shingles. Reactivation is thought to be the result of reduced immunity. As you age, your immune system does not work as well as it once did, and in the presence of disease conditions like HIV infections or drugs like those used to treat cancer, your immune system is not as robust as it once was.

Shingles is characterized by a stripe of rash and blisters wrapped around the left or right side of your

If you have ever been bothered by poison ivy, you will realize that by avoiding the plant you could have avoided the skin symptoms. Next month, we’ll discuss what poison ivy dermatitis is, how to treat it, and how to avoid it.

52 country-guide.ca

torso (that is, along the pathways of nerves). Indeed, the word zoster means girdle in Greek, and the rash appears as a girdle around your abdomen. There is severe pain, burning, numbness, tingling and itching.

You can be contagious for chicken pox, but only to individuals who have not had chicken pox, and they must come directly into contact with the open blisters.

If nerves near your eyes are affected, your sight can also be impacted, and there is always the risk of bacterial infection of open blisters.

Because shingles is caused by a virus, antiviral drugs are used to treat the condition, for example valacyclovir and famciclovir. But the trick is to start treatment as quickly as possible, that is within 72 hours of the first symptoms, so that the viruses have not multiplied to numbers too large for the antiviral drugs to handle. These antiviral drugs can reduce the severity and duration of shingles, but are not a cure.

Cool compressed, oatmeal baths and even creams containing local anaesthetic can help. For pain, drugs that work through the nervous system like gabapentin or amitriptyline can be used, and of course pain relievers such as narcotic analgesics. Within a month the rash is usually gone, but scarring can occur.

Pain that remains after more than a month is called postherpetic neuralgia. Researchers believe that the reactivated virus has damaged the affected nerve fibres which sends out confusing and inaccurate messages which you perceive as pain. Anywhere from 10 to 70 per cent of people who get shingles will also have postherpetic neuralgia, and the incidence increases dramatically with older age.

The aim of treatment is to stop the pain with drugs like gabapentin, amitriptyline, and narcotic analgesics. Capsaicin, a cayenne pepper derivative, is a cream that depletes substance P from the nervous system. Without substance P, nervous system messages of pain are not transmitted, but it can take weeks for a maximum effect.

The most recent approach to shingles is a varicella zoster vaccine which boosts immunity. While it may not prevent shingles and post-herpetic neuralgia, it can certainly reduce the course and severity of the condition.

The key is early recognition of symptoms and early treatment. Be vigilant, especially if you are older!

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

April 2012

The Commissionaire on duty at Depot, the RCMP training academy in Regina, hands me my room keys. “Breakfast is at 6:45 a.m. and your course begins at 8 a.m.” My room, usually occupied by police cadets, is basic but comfortable. I don’t need the lock box for a firearm so I lock up my truck keys and my wallet.

In the early-morning dark I walk to the mess hall. I meet platoons marching smartly to a day of training. New cadets wear touques. Those about to graduate wear time-honoured Stetsons.

My course is for volunteer police chaplains and others who assist police officers to cope with the stress of their work. The first item is physical exercise. Fiona, a fitness instructor, puts us through a series of exercises. While struggling to keep up with younger people, I reflect “I am here 50 years too late!”

Fiona’s mantra is “If your body is not in shape, your mind will follow.” Physical fitness promotes good health and longer life.

Physical activity is as useful as talk therapy. Which would you prefer, she asks, “Taking medicine or daily exercise?”

The next seminar is “The Difficult Client.” Difficult people seem to be everywhere — at work, in marriage, in families, even at church. The leader, Jason, is a psychologist. He says the problem is often unreasonable expectations. People assume you are willing to help them but you may not have enough money, enough love or enough time. Your personal morality, or your religious convictions, may prohibit you from responding as hoped.

Jason suggests being clear and firm about how far you will go.

Your grandson may want you to buy him a truck, and you may have enough money, but you don’t think it is a wise move. A kindly delivered unequivocal “no” is the best solution.

Jason says difficult people come in several categories. Some people will cling to you. Dependency is not healthy. People need to make their own decisions and determine their own way in life. Guidance and suggestions work best. Some difficult people are just bossy. They feel entitled to your time, money or whatever else you have to offer. It is important not to let people exploit you. Some people will try to manipulate you. Jason suggests stepping back to consider the situation, then letting them do the work. Taking responsibility for the inadequacies of others is not a good route to follow.

Jason is careful not to give us “cookie cutter” solutions.

He says some people will not comply with instructions. “Do not walk on the kitchen floor with your dirty boots.” “Wipe off the tools and return them to the proper place.” He suggests motivation. “Apple crisp for desert when the floor is kept clean.” “Bonuses when tools are replaced.” Jason says we will not always be successful. There are people who are selfdestructive. They have a good job but are in danger of losing it because they are late, careless or argumentative. The psychologist says “You cannot save everyone. Some people only learn from bitter experience.” It is important to take care of yourself while assisting others. “Go into the water as a lifeguard but avoid being dragged under.”

We often hear the saying “The Bible says God helps those who help themselves.” The Bible does not actually say that, but there is wisdom in the thought. The power of God is available to those who reach out for it, even when humans test our patience.

Suggested Scripture: Psalm 121, Hebrews 13:1-8

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Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. april 2012

country-guide.ca 53

Va l l e y

A farmer’s hierarchy of needs n the same way that spring produces the first gin and tonic moments on the veranda and frog songs that waft up from the marsh in the evening, it also produces two famous lists on the fridge: those things which must be done and another that fantasizes what might be done if we had the money.

The “musts” are self-evident. We all know by now that the chief purpose of any country property is to be looked after.

There are gardens to fluff up and plant, lawns to repair and trees to prune. The wind ripped three sheets of steel off the barn roof, falling trees crushed 100 yards of fence, a flash flood tore a hole in the lane and carried a ton of gravel down the bank. There are seven internal combustion engines to coax back to life after a winter of discontent. It doesn’t matter that you put them away carefully, drained the gas out of the tanks and placed a drop of oil in the spark plug hole. They will not start until you call Jason the freelance small-engine guy who comes over and

54 country-guide.ca

reminds you that all of the companies you bought these machines from have gone bankrupt and parts now trade on the black market like blood diamonds.

There are no reliable trades who will help you saw up trees or prop up a fence.

Your sons would help, they really would, but right now they are busy in the basement preparing for the coming zombie apocalypse. So once again, you are on your own.

Then there’s the wish list.

I’d like a couple of cattle. I know that owning them is a mug’s game and has been since 1975. The cattlemen around me who are still in the business all share the thousand-yard stare of Dust Bowl farmers or lunatic prospectors in the tundra. A recent spike in beef prices has stirred them up for the umpteenth time.

“This is the year!” they exclaim down at the loading dock at the feed mill. “There will be money in cattle this year!” Then they clutch their foreheads feverishly because they know they’ve said the same thing every year since Dief

was prime minister. I point out to them that if we all just gave up our cows we could spend three weeks in Arizona with the whole family. They nod in agreement and think for a moment, and then say they suppose they’ll keep the cows another year. And I do the same.

The thing is, I like feeding stuff. It makes me feel useful, which is pretty important to a writer. So I buy two steers every spring and fatten them up until they’re so big you could sell them to Walt Disney. By the time they make it to the freezer they cost more per pound than Wagyu beef delivered by Lear jet. It’s ridiculous… but the light from the flame is so beautiful… I can’t help myself. Two Angus yearlings arrived this afternoon and the pigs are on their way.

My wife has only one item on the wish list but it’s a humdinger. She wants to close in the veranda from the ferocious westerly winds. Every year, all the garden furniture that isn’t bolted down tumbles away over the fields into the next county. (Sometimes, a new piece tumbles in from Winnipeg to replace it.) Tradesmen just love verandas and they flock to our door when word gets out that we are planning a renovation.

Cows look like a blue-chip investment compared to a veranda project.

There are a couple of pie-in-the-sky items, like the 40-foot gazebo with the copper roof and bleached stain tonguein-groove pine cladding on the ceiling. It looked great at that hotel in the Caribbean.

But you can only sit outside on maybe four weekends a year in this township. The rest of the time the gazebo would be jammed full of lawn furniture and farm implements while howling winds bleach the exterior to match the ceiling.

Finally there is that downstairs bedroom project, for when our knees give out and the kids are gone and the barns are empty. It will have triple glazed glass, in-floor radiant heat and handrails to the bathroom. Maybe when cows turn a profit… Maybe when pigs fly…

Our city friends say we are living a dream. They don’t know the half of it.

April 2012

ILLUSTRATION: RICK KURKOWSKI

Dan Needles is the author of “Wingfield Farm” stage plays. His column is a regular feature in Country Guide

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