EASTERN EDITION
country-guide.ca
February 1, 2013 $3.50
SUCCESS
ON THE FARM Scott and Jim Timmings take on a world of new possibilities PG. 22
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FEBRUARY 1, 2013 SUCCESS ON THE FARM It isn’t just the money, which is good since not all commodities have seen the price spikes of grains and oilseeds. Instead, the Timmings, the Cronins, the Groenewegs and all the farmers in this issue say real success lies deeper, and it’s never been more appreciated.
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CAN A MARKETING PLAN BE FLEXIBLE AND STILL BE A PLAN? Every good marketing plan does need flexibility, but it also needs discipline.
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VENTURE TOGETHER Ontario’s Timmings family uses a joint venture to make their succession plan both flexible and effective.
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MOBILE COMMAND Now farm machinery makers are using the smartphone in ways to put “Star Trek” to shame. Beam us up, Scotty.
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FEBRUARY 1, 2013
GUIDE LIFE — YOUR FAMILY ASSETS Yes, you’ve been told before, but now more than ever you need to update your will and these documents.
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GUIDE HR — HOW’S YOUR WILLPOWER? It turns out you can grow the amount of willpower you can call on every day. Here’s how.
BRING TO A BOIL Really? They’re growing durum in Ontario, and it’s all because of an innovative processor.
PROTECTING CROP PROFITS FROM FOREIGN EXCHANGE RISK Volatile currency fluctuations can be managed. Read how in the first of this two-part COUNTRY GUIDE series.
SHARED EXPECTATIONS Saskatchewan’s Franck and Kari Groeneweg are building a road to success for others to follow.
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SUCCESS MADE ON THE FARM Of course money is nice, but that isn’t how Amy Cronin defines success. She doesn’t think you do either.
TELLING IT LIKE IT IS These farmers are tackling the toughest leadership job of all, setting the public straight about farming.
FOREIGN TO US Canadian and U.S. agriculture depend on foreign workers. That’s where the similarity ends.
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EVERY ISSUE 5
MACHINERY GUIDE If you haven’t checked out what’s new in tractor tires in the last year or two, get ready to be impressed.
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HANSON ACRES On the farm, leadership can seem as natural as waking up in the morning. Or maybe not.
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GUIDE HEALTH If you still think drug abuse is only about the illegal stuff, it’s time for a bit of truth telling.
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PETUNIA VALLEY Dan is breakfasting on his own these days. Even he knows it’s a bad idea.
CONTENTS
BUSINESS
country-guide.ca 3
desk EDITORIAL STAFF Editor: Tom Button 12827 Klondyke Line, Ridgetown, ON N0P 2C0 (519) 674-1449 Fax (519) 674-5229 Email: tom.button@fbcpublishing.com Associate Editors: Maggie Van Camp Fax (905) 986-9991 (905) 986-5342 Email: bmvancamp@fbcpublishing.com Gord Gilmour (204) 453-7624 Cell (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 Cell (204) 227-5274 (204) 954-1414 Email: cory@fbcpublishing.com
Tom Button is editor of Country Guide magazine
What success looks like We all wrestle with trying to articulate what it is that makes farming unique. More useful perhaps is to look at what success means on the farm, and whether it tells us anything vitally important. The waters are muddy here. There’s no one dream of success that fits all farms, and no one way to rank all the myriad values so that every farmer would make the same decision in every case. Still, it’s useful to see where this leads. Among the neighbours I talked to about it, there were some quick answers. They pointed to the enormous capital demands of modern farming, together with the thin margins, and of course they were absolutely right to do so. It may not be absolutely unique to farming, but still, it is a fundamental characteristic of today’s farms, and any definition of success has got to include the justifiable pride that farmers embrace right from the beginning of taking on that mountain of debt and turning it into net worth that can be passed on to the next generation. This, of course, raises another success factor. For many farmers, being able to pass on the farm to the next generation is an important objective. But for all, leaving the land productive and sustainable is part of the measure of their lives. The fact that farming is typically a family business has got to factor into our thinking about success too, and so does the pride of growing a great crop or building a great herd. 4 country-guide.ca
And let’s kid no one. Money is a success factor too, even if you don’t flaunt it. But here are two more reasons. I’ve gleaned them from the farmers we interviewed this month, and I think they’re among the many insights in this issue that are worth pausing over. For instance, read about Franck and Kari Groeneweg in “Shared Expectations” (page 14), and their conviction that success on the farm is interwoven with your ability to create strong relationships with others, and especially with young farmers. I was particularly impressed too by Amy Cronin’s thinking about success in “Success Made On The Farm” (page 10), where she suggests that success on the farm has a lot to do with setting goals, and then putting together the skills and capabilities to accomplish them. I raise these for a couple reasons. Partly it’s because I hope you’ll find pleasure and meaning in reflecting on them. Part of success, after all, is celebrating it. Yet I also wanted to add that the No. 1 question that many farmers are wrestling with is whether their children have what it takes to take over the farm. Surely, much of the answer is in their attitude, not just their skills. Can they live by these dreams? If yes, despite all the uncertainties ahead, they’ve probably got as good a chance as you ever had. If not, well, you know where that leads. Passion is crucial. Let me know what you think. I’m at tom.button@fbcpublishing. com, or call me at 519 674-1449.
Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562 Advertising Services Co-ordinator: Sharon Komoski (204) 944-5758 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 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. Subscription rates in Canada — $36.75 for one year, $55 for 2 years (prices include GST). U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50. Publications Mail Agreement Number 40069240. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
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Call toll-free 1-800-665-1362 or email: subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 132 No. 2 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.
february 1, 2013
Machinery
By Ralph Pearce, CG Production Editor
Toss away all of the clichés about where the rubber hits the road. The real test of any tire is when it’s at work. That involves supporting bigger machinery doing bigger jobs under rugged and even under extra wet conditions. Yes, it includes transport between fields, but it also means protecting our soils from compaction and rutting, and it must include getting our crops out of the field and into the bin. Whatever capabilities you need in your tires, there have been engineering advances since the last time you looked, so read the snapshots below, check the company websites for specs and performance ratings, and get ready to do your background.
Michelin YieldBib In 2012, Machinery Guide introduced the Agribib. In this 2013 edition, we’re bringing you the Michelin YieldBib, the first North American standard-size VF tire for high-horsepower tractors. With its Ultraflex technology, the YieldBib allows you to carry the same load with air pressures as low as just 40 per cent of standard technology tires. The R1W lugs and a 45-degree lug angle offer superior traction and less slippage, plus a longer footprint which helps reduce soil compaction. With its unique lugs, the YieldBib can deflect stubble, and that means longer life for your tires. www.michellin.com
Trelleborg Three new tire designs made news for Trelleborg during the final months of 2012. In addition to its innovative IF 900/60R42 TM1000 High Power, Trelleborg unveiled its TM3000 for harvesting applications, and the TH400, a radial agro industrial line. The design uses the company’s BlueTire technology and will be available in the IF 800/70R32 CFO-size class. In the next few months, three more sizes will be introduced, including the IF800/65R32 CFO, the IF 800/70R38 CFO and the IF 1050/50R32 CFO. The new tires are designed to handle extremes, and the company says new technology means they will deliver more performance under a wider range of conditions. www.trelleborg.com
Galaxy
Bridgestone Americas – Firestone
Galaxy is appropriately named, given its wide selection and farreaching interests. Galaxy is part of the Alliance Tire Group (ATG), with international partners and regional headquarters in the U.S., India, the Netherlands and beyond. There are regional offices here in Canada as well, and also in Argentina, Brazil, China and France. That means Galaxy can call on a wide variety of experience and expertise, and with 15 patterns and 90 sizes in its catalogue, there’s a good chance you’ll find exactly what you’re looking for, no matter what the application. A tough performer in the field, Galaxy tires possess premium tread depths in a wide range of R-1, R-1W, F-1, F-2 and implement tires. www.atgtire.com
Bridgestone is doing more than just adding a new line to its Firestone-brand agricultural tires. It’s actually developing a new market for oilseed growers. In 2012, the company unveiled its latest design, a 900-pound farm tire containing more than 10 per cent soybean oil. The 800/70R38 radial deep tread 23 tire displayed at this year’s Farm Progress Show, is used on large fourwheel-drive tractors requiring eight tires. According to Bridgestone executives, the new tire design has been in the works for several years, and the company’s goal is to have soybean oil featured as a component in all agricultural tires by the end of 2013. www.bridgestone-firestone.com
f e bruary 1 , 2 0 1 3
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Business
Foreign to us U.S. agriculture depends on foreign workers. So does Canada’s. But that’s where the similarity ends By Maggie Van Camp, CG Associate Editor
U.S. Dept. of Homeland Security cracks down arc Smith, assistant director of the Cornell University experimental station is visibly shaken as he describes events on some U.S. farms that seem more “Men in Black” than “Farmer in Plaid.” He talks in heartwrenching detail about nighttime raids, helicopters landing in yards, Department of Homeland Security enforcement officers harassing farm employees, and farmers being taken away in handcuffs. You soon appreciate why Smith says the mostly illegal Mexican workers and the American farmers who hire them are living in fear. Then, Smith gets even more personal. About five years ago on Smith’s family’s dairy farm in New York state, government enforcers pried open a bathroom window and raided the living quarters of the farm staff and their families. It was 3 a.m. when many of the Smiths’ Mexican workers were hauled off to a detention centre, leaving a small child behind without his parents. Shockingly, this is not an isolated event. “Every time I go home there’s been another raid,” says Smith. “Seventy-five per cent of the workers on dairy farms don’t have the right papers.” Since 9/11, the Immigration Control Enforcement (a group within the Department of Homeland Security) has stepped up its patrols, especially in states such as Texas that border on Mexico, but also in New York state which borders Canada. “The authorities are not making a distinction between the good people who come here to work and drug lords and terrorists,” says Smith. “They are going way overboard.” The last two U.S. government administrations have made attempts to get a handle on the growing population of elusive illegal Mexican workers. They might be a little late. According to a widely cited report by the Pew Hispanic Centre, an estimated 12 million unauthorized individuals were already living in the U.S. by 2006. 6 country-guide.ca
Although very little is known about the work status of this population, the 2007 to 2009 National Agricultural Workers Survey estimated there were over three million migrant and seasonal farm workers in the U.S., and only about a third were American citizens. Furthermore, the survey says about 80 per cent of “crop” workers were Hispanic and of those, nearly half did not have legal authorization to work in the country, which means a high-risk life with under-the-radar employment conditions and living standards. Those are the stories that hit the general press. U.S. agriculture has been built and sustained on the backs of this illegal labour, especially in the fruit, vegetable and dairy sectors. In fact, in the 1990s state government extension promoted using this employee resource. Today, however, the political winds have shifted with the fear that illegal immigrants are taking scarce jobs. But what hasn’t shifted is that — just as in Canada — few local workers want those jobs, or will even accept them. “Americans won’t do this work,” says Smith. States including Alabama and Georgia have passed new laws. “They’re chasing these workers away by making living there horrendous,” says Smith. “It’s showing up economically in our diets, in our farmers and in this group of foreign workers, all in the name of exclusion.” American farmers have a federal guest-worker program built around a visa that allows a certain number of seasonal workers to come into the U.S. for limited time. Part of this program (called H2A) is a wage formula, with transportation and housing requirements. However, it’s a paperwork and bureaucratic maze that doesn’t allow for nearly enough employees. It’s estimated that fewer than 10 per cent of fruit and vegetable workers are working through this program. This H2A initiative gets its roots from a Second World War guest-worker initiative called the Bracero February 1, 2013
Business
Program which opened the border to over four million guest workers from rural, poor areas in Mexico. In 1964, the program was replaced by the H2 Temporary Guest Worker program, with H2A being agricultural workers and H2B designating those guest workers who do non-agricultural work. Although there’s an underlying fear their labour force could be arrested at any time, U.S. farmers are still not applying en masse to H2A because there are simply other cheaper options. In 2010, the U.S. Department of State granted only 55,921 H2A visas (i.e. a small fraction of the three million workers estimated by the National Agricultural Workers Survey). Some farmers have stopped hiring illegal workers by trying to find more local staff, hiring refugees or students on visas, adopting mechanization, or changing their cropping mix to less labour-intensive choices. Not surprisingly, on other farms, the legislation and new government enforcement have simply driven illegal employment further underground. It’s a toxic mix of racism, economics, politics and bureaucracy. The regulations involved can change February 1, 2013
depending on which party is in power, and now, getting the state department on top of everyone else simply creates more confusion. “Workers are telling me they feel like prisoners here,” says Smith. “Officers in patrol cars are watching them working in the fields. They are afraid to be seen in case they are arrested, and if they go to town they are sometimes harassed by authorities.” Some farmers have focused on lobby efforts advocating improved immigration policy. Post-election there seems to be a window of opportunity to make policy more workable for all parties. After all, it’s estimated that about 70 per cent of Latinos voted for the Obama administration. Smith is sure that better programs and systems would reduce the risk of exploitation and create an environment of decency for farmers and employees. Also in the discussion, however, are labour advocacy groups who want higher wages — often far more than farmers say they can extract out of the marketplace. Continued on page 8 country-guide.ca 7
business Continued from page 7 “If we had a working system here to meet demand — maybe something like they have in Canada — justice and moral issues would be better met,” says Smith. In typical Canadian style, the foreign-labour solutions north of the border are less reactionary, quieter, controlled, more reliable, and expensive. Both are paperwork heavy but the percentage of uptake in Canada is much, much higher, simply because there’s no cheaper, less bureaucratic (i.e. illegal) alternative. Basically in Canada there are four ways to get visas for foreign labour — Seasonal Agricultural Worker Program (SAWP), agricultural stream, highand low-skilled occupations — all overseen by Human Resources and Social Development Canada. Only about 10 per cent of Canada’s 300,000 temporary workers actually work in agriculture. In fact, many more work as in-home care providers (i.e. nannies) than farm labourers.
“ Officers in patrol cars are watching them in the fields. They’re afraid to be seen.” — Marc Smith Most of the farm labour goes through the SAWP program, which was initiated by the government of Canada, farmers and a number of foreign countries including Mexico and several Commonwealth Caribbean countries in the late 1960s. Under SAWP, only employees from certain countries can qualify. Other programs don’t restrict the country of origin, which can be a bonus for farmers when looking for specific skills. For example, many beekeepers like to hire workers from the Philippines. With both agricultural streams, farmers must advertise and their jobs receive no applications for a given period of time to prove that the foreign labour isn’t taking the spot of a Canadian. Applying can be complicated and take longer than expected. No fewer than four different government agencies are involved in these programs and a big chart of rules and options can be found at http://www.hrsdc.gc.ca/eng/workplaceskills/foreign_workers/agriculture/table.shtml. For the first time in 2011, the Census of Agriculture asked farmers to identify the number of employees in their operations and found about half of the agricultural workforce is employees (297,683) and half, employers. The proportion of employees to employers is trending upward with a growing reliance on hiring employees. By the way, some 62 per cent of farm employees were seasonal. Like American farmers, their counterparts here simply cannot get enough citizens to do farm labour, particularly seasonal labour. Almost every employer surveyed by Canadian Agricultural Human 8 country-guide.ca
Resources Council (CAHRC) reported one or more vacancies in their operation. There continues to be a 10 per cent vacancy rate on farms, nearly double that of other sectors. Filling that gap are a growing number of foreign farm employees. Under the low-skilled agricultural stream (formerly known as Pilot Project), the numbers have increased to 26,200 from 1,300 a decade ago. Although the total number of foreign workers in Canada is small relative to the U.S., that number has grown five- to six-fold in the last 10 years. Adding all the agricultural streams together, about 50,000 foreign workers come to work on Canadian farms every year. “The number of foreign workers has grown markedly,” says Debra Hauer, CAHRC project manager. For $38 per worker, the not-for-profit Foreign Agricultural Resource Management Services administers SAWP and processes the applications for farmers of most commodity groups. Although its primary focus is traditionally Ontario, FARMS does some work for farmers in other parts of Canada. In Quebec a group called FERME does a similar job and in Western Canada, most applications are done by individual farm businesses. Through FARMS, the farmer applies for SAWP and then the sending countries select and screen workers. Workers and employers sign a contact outlining respective rights, obligations and length of employment. Some only come for harvest but duration ranges from three to eight months, averaging about 20 weeks. FARMS connects nearly 18,000 seasonal agricultural workers from Mexico, Jamaica, Barbados, Trinidad/Tobago and the East Caribbean to farms in Canada. At the end of the contract, both employers and employees report on how well they have done and the following year employees can be requested by name. “Eighty-five per cent of the hires on the Caribbean program are requested by name, and most of the changeover is due to retirement,” says Ken Forth, FARMS president and a vegetable grower from near Hamilton, Ont. Forth’s passion for the SAWP program comes from 42 years of participating and personally watching workers from developing countries benefit from the extra money they can make in Canada. His family grows 200 acres of vegetables, mostly freshmarket broccoli, and employs two full-time seasonal persons, occasionally a few students and 16 workers on the SAWP, all from Jamaica. For fresh-market, tender-crop farms like the Forths’, people are still needed to do the primary harvest. Machines have made it easier but people are the only way to put the care in the product so the final product meets consumer standards. On the Forths’ farm, the foreign employees work an average 46 to 47 hours a week and in six months make about $15,000. That’s equivalent to what a policeman would make in three years in Jamaica, says Forth. The workers take the money they earn in February 1, 2013
business Canada and build better homes, educate their children and provide capital and innovations for their own farms at home. The vast majority don’t want to live in Canada year round. With pride, Forth talks about a long-term worker who now uses plastic mulch and drip irrigation on his small farm at home. One of his tractor drivers has used the extra money to pay for college education for his two daughters, something that would have been way out of reach for a tractor driver in Jamaica. “In Jamaica, you’re on a waiting list for five years before you can come work here through this program,” Forth says. The bilateral relationship means so much to the economy of these countries that government ministers, and even sometimes the prime ministers, meet with FARMS staff and directors personally. Forth feels personally insulted when city-based migrant justice and union groups make accusations of ill treatment and promote unionizing these labourers. He says unionizing would kill the program, because striking during the harvest window would bankrupt most farms and the farm families live where the employees work. Like many farm families using SAWP, the Forths work side by side in the fields with labour, foreign and Canadian. “Their bunkhouse is 30 feet from my house, my family,” Forth says. “I want them to be happy and comfortable.” Forth tells me about the Christmas party they held in November so they could celebrate around a tree with their staff from Jamaica. “It’s more than a bossworker relationship, it’s more like family,” he says. Last winter, when 11 foreign workers on a poultryvaccinating crew died in a terrible crash in rural Ontario while driving from farm to farm, calls for migrant worker justice and farm worker unionization reverberated throughout the press. “They were not in Canada under the SAWP, and although terribly tragic, it was not a farm accident but a traffic accident,” says Forth. Forth says that his workers tell him that they would not come to Canada if they were limited by a union to a maximum of hours a week. Mostly farmers themselves, they seem to understand and accept that weather controls farm work. Moreover, they want to make as much money as they can in the six months. “If it’s raining and they can’t work one week, they know they can work extra hours the next week,” says Forth. “They’d like to work 60 hours a week.” Work permits, issued by Citizenship and Immigration Canada, are tied to one specific employer. Workers cannot work for anyone else, even in off periods when their main employer has no work for them. “Time off depends on the crop but we must guarantee an average of 40 hours per week for their stay,” says Forth. SAWP has more checks and balances than any other temporary work program in Canada. In Ontario, for instance, as soon as workers step into Canada they’re covered by OHIP and they are registered with the workplace safety insurance board. February 1, 2013
If there’s a problem on the farm, workers can call officials liaison officers from their own country’s high commission on a 24-hour manned, toll-free number. These folks visit farms on a regular basis, says Forth, and are available to be on the farm usually within a day to deal with any issues. They can also call the involved ministries for help or to issue a complaint. Forth estimates that historically only maybe two per cent of employees have run into problems. Those problems seem to happen when farms fall through the cracks due to the varying government programs, laws, rules, inspectors and authorities across the country. In Ontario, for example, the Ministry of Labour inspects working conditions and each local Health Department is in charge of inspecting living conditions. If found to be in the wrong, the employer can’t get access to the program for two years. Although it may not seem severe, two years without this labour resource can break most vegetable and fruit farms. “Margins are so tight, if we don’t have this labour for two years we’re done. The farm would be bankrupt,” says Forth. In early December, the federal government eliminated access to parental, maternal and compassionate benefits for seasonal foreign workers when they’re back home, and yet employment insurance premiums are still deducted. This decision was made at the federal level and not by farmers or the programs themselves. Wages for SAWP workers are set annually by the HRSDC and last year were $10.25 per hour plus benefits (which add up to roughly $3 per hour). For comparison, Forth says the average farm labourer wage in Mexico is $5 to $8 for a 12-hour day. “If we worked 12 hours — we rarely do — it would be $123 plus all the benefits.” Farms in the U.S. pay less than that although still a great deal more than in Mexico, which explains the steady stream of illegal farm workers border hopping. In a 2011 extension survey of New York state, (keep in mind that they were reporting this to government staff) vegetable farm employers on average paid experienced general labourers just under $10 per hour and $8.25 for inexperienced general labourers, with fruit growers paying a little bit more. About half of farm employees were Hispanic. The reality is that Canadian fruit and vegetable farmers compete directly against U.S. and Mexican producers and the labour costs differences are staggering. Without access to foreign labour through programs, it would be impossible to compete and in many cases Canadian farmers could not find enough labour to harvest the crop. Although it’s more expensive, Forth would much rather have a controlled temporary visa system that we have in Canada with health-care, housing and fair wage requirements. “By default, we would be accepting those (U.S.) worker standards,” says Forth. For the Jamaican men who work on his farm, he says, that would simply not be good enough. CG country-guide.ca 9
BUSINESS
SUCCES A FAVOURABL
DESIRED OUT
(MERRIAM WEBSTER DIC
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FEBRUARY 1, 2013
BUSINESS
SUCCESS MADE ON THE FARM
CESS RABLE OR
OUTCOME.
By Anne Lazurko, CG Contributing Editor
Like you, Amy Cronin knows it isn’t the money
PHOTO CREDIT: HOLLY DALTON PHOTOGRAPHY
TER DICTIONARY)
FEBRUARY 1, 2013
t’s a simple definition for a word imbued with so much meaning by a society constantly striving for success. Perhaps it’s the list of synonyms such as prosperity, achievement, triumph or fame that we embrace. Success makes you a leader, a celebrity, an authority, a star. And if you are unsuccessful, the antonyms tell the story: failure, loser, and a most cruel description, non-entity. No wonder our obsession with the idea of success infuses books and business columns, talk shows and websites and yes, the farm. I read a column recently that went so far as to say that farmers have a genetic predisposition called the “agrarian imperative” to do what they do, and that survival of the fittest has ensured that only those farmers with the required characteristics for success have endured. Take that as you will, the characteristics listed make some sense. They include a capacity for hard work and perseverance, confidence in making decisions, ability to tolerate adversity and risk, and self-reliance. That farmers are hardwired for success was not proven out through the ’70s and ’80s when large numbers were hit by the economic crush of high land prices, high interest rates, low grain prices and/or drought. I suppose if that qualifies as natural selection, then Darwin’s theory was well illustrated. But the comment “well, he’s a good farmer” has been heard in coffee shops in small agricultural towns for decades across this country. The implication is that a good farmer is a successful one. And everyone sips their brew and nods their head as though privy to some kind of collective understanding of what that means. But are we really so sure we all have the same notion of what that farmer looks like, what makes them tick, and what they might view as their own success? For many people success means the acquisition of money. Straight and simple. Perhaps these people are neither business owners nor farmers because nothing in the world of business or farming is either that straight or that simple. It’s hard to imagine a business that doesn’t see customer service or employee satisfaction or quality product as measures of success. It begs the question of whether farmers would take the risks, work that hard, persevere through adversity if it were only about the money. I took the question to Amy Cronin who owns and operates three pork entities with her husband Mike. Cronin Pork, Cronin Farms and Oak Grove Pork are all headquartered near Bluevale in Huron County in Ontario. They are farrow to part finish with a combined 10,000 sows, with two operations in Canada and one in Iowa. Each is run as a comContinued on page 12 country-guide.ca 11
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Continued from page 11 pletely separate business. The couple also grows 850 acres of corn for feed and manages close to 50 employees. The Cronins hadn’t planned on a U.S. operation, but after a 2005 expansion they couldn’t find what Amy calls a “reasonable” weanling contract and, with their barns full and no available space nearby in Canada, they sent 2,000 pigs south the next year. “We learned a lot and saw huge opportunities,” she says. They now have three barns housing 6,400 sows in Iowa. In their late 30s, Amy and Mike have six children between the ages of five and 15. As if the barns and kids wouldn’t keep her busy enough, Amy is also chair of Ontario Pork and chair of the Ontario Agricultural Sustainability Coalition, and she serves as trustee for the HuronPerth Catholic District School Board. Theirs is an unusual operation and indicative of an ability to think outside the box to solve problems. In the case of this couple, embroiled as they are in the highly challenging world of hog farming, success is as much about the process of navigating uncertainty as it is about the financials. Amy defines success as “having a team that is committed and working well together, sticking to our core values, and meeting the goals we set out for ourselves.” That said, she points out that with operations of size and diversity, it is difficult to see success in every aspect. “Some parts might be having success while at the same time other parts might be experiencing challenges. It doesn’t happen very often that everything is going perfectly,” Amy says. “Overall we have success if we are able to maintain a fantastic and committed team who knows and understands our goals, and if we maintain operations and overcome challenges.” Many of the challenges in the pork industry are beyond producer control. “I find the pork industry very difficult at times,” Cronin says. “Cash flow and expenses fluctuate dramatically… so the key is to make sure that the things within our ability to control are done really well. When things come up that are out of our control, we can go to the bankers to show them how we’ll survive.” To that end the Cronins know and understand their financial picture. They use very detailed software to have their 12 country-guide.ca
cost of production calculated to the cent and they continue to hone in on cash flow numbers to help in making risk management and operational decisions. Cash flow is figured out for the year so there are no surprises. They know what they can afford and what they might need bank help with. “Whether we’re thinking about maintaining what we have, or growth and expansion, it all boils down to cash flow, what-ifs, and scenarios from there,” Amy says. Jim Tyler would say the Cronins are doing it right. He’s had one foot in beef, grain and oilseeds in Perth County near Stratford for 32 years, and the other foot for 25 years in farm advising. As a field person for the Farm Debt Review Board, he’s seen too many debt-stressed farm situations to say that numbers don’t matter to success. But often bad numbers are a symptom of other management problems that prevent success. Tyler says there is no one profile of the successful farmer. “I’ve driven in driveways where the place looks wonderful and looks successful, but their operation is a house of cards financially,” he says. “Other places fly below the radar completely and when you get into a discussion of their financial situation you find their debt levels are low, they are happy doing what they do and they are the truly successful ones.” Reading those situations is how Tyler came up with his definition of success. “Success, boiled down, is being able to set goals and meet them to be happy,” he says. “That definition accommodates the full range of people who are happy doing what they do and who can afford to do it.” His definition has nothing to do with size, or even particularly with money. It has more to do with happiness and achieving goals specific to each farmer, reaching standards set by the individual and not the “industry.” Tyler thinks it works this way in farming because, despite what the pundits and analysts want to tell us, “don’t kid yourself that it’s like any other business, because it’s not.” Farming is a lifestyle, a passion, and it is mostly a family endeavour that requires planning for future generations. “Of course you have to make it pay, but if you ask farmers why they do what they do, the front of the page is about their equipment lineup, the acres they crop, the quality of the cows in the barn, pro-
viding a great place for their kids to grow up,” he says. “The other side of the page is the financials.’ Not that he doesn’t advocate good financial management, goal setting, and good planning. Taken together, these are the things that create success. But how that success will be measured is vital and will depend on what everyone involved believes is important. “Success around the kitchen table is having everyone on the same page on goals,” Tyler says. Amy Cronin might agree. While financials are obviously critical, she sees them as a means to a greater end. Successful farmers must make good decisions based around the numbers they know. And for the Cronins, a good deciFEBRUARY 1, 2013
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On the farm, says Amy Cronin, success means “meeting the goals we set for ourselves.”
sion comes out of a good business plan which allows for flexibility in the event of a new opportunity or challenge, articulated goals and a set of core values to help guide the process. “Our family is our greatest asset, we understand the value of education, we operate with honesty and integrity and we make sure we have good people around us,” Amy says. “If we need to make a decision, it has to fit within those core values or we won’t do it.” But sticking to those core values in an uncertain industry isn’t always easy, so they integrate people who share them, whether it’s family, employees or bankers. “Relationships are sometimes more important than the financials,” Amy FEBRUARY 1, 2013
says. “It means that in terms of human resources we think very carefully about who we bring on. Having said that, we wouldn’t be where we are today without our employees. Our people on both sides of the border are fantastic.” The Cronin operation is, first and foremost, a family farm and they make all decisions with the future of their family in mind. “Hogs are not profitable every year, and it’s hard to get your head around that,” Amy says. “We have to think long term. We want to grow our business in order to have a succession plan.” They have sought help along the way and are constantly learning. Both are graduates of the Canadian Total
Excellence in Agricultural Management (CTEAM) program, offered by the George Morris Centre. Because participants develop operating and strategic plans for their farms through the course, the Cronins were able to work through a significant expansion of their operation while doing the course. “We’ll never be done learning, changing and evolving our business,” Amy says. Perhaps it’s that attitude that has seen the Cronins take a strategic plan and put it into action and achieve success on their own terms. It’s the attitude Jim Tyler says is required to get from knowing to doing. While goals might be set, finances be in place, and the right people be on board, it is the ability to actually follow through and do what it takes to meet set goals that is perhaps the biggest contributing factor to success. “I have met people who know a tremendous amount, but can’t translate it into doing,” Tyler says. “Something is stopping them. It might be they can’t let go, or the wall might be an inability to manage people… The truly unsuccessful are those who can’t make the connections between knowing and doing and dealing with others.” As a farmer, Amy Cronin understands that inclination. “In the early days, you’re so busy getting set up. You spend all your time in the barn and you have to wean yourselves away from the barn and into the office. It’s hard because you got into farming because you enjoy the animals and you’re good at caring for them. It’s hard to let go and entrust others with them.” It is hard. But Amy Cronin’s success hasn’t come easy. In fact her motto is: Do hard things. The easy things are easy for a reason. And no one has ever said success is supposed to be easy. Well, maybe if you’re a one- hit- wonder rock star. But for a farmer, success seems more of a long, steady and patient process, a climb if you will. In fact how we do things, why we do them, and who we do them with seem to be as much a measure of success as financial outcomes. It might be that successful farmers never actually reach any kind of summit, they just enjoy the view along the way a lot more. CG country-guide.ca 13
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SHARED
EXPECTATIONS Sure, it has always been true that there’s more than one path to success on the farm, but it can be more true now than ever. Just consider the Groenewegs, as well as their new farm-share concept for helping others get started By Angela Lovell ust a couple of years ago, Franck and Kari Groeneweg had a firm idea of what success would look like to them. In fact, it came with a specific number, as in 20,000 acres. So, I want to know, considering that they’re farming 7,500 acres in the Edgely area of Saskatchewan, which is less than half of their original goal, does that mean they’ve given up on success? Franck is quick to make his case. Like a lot of other farmers, he thinks, it isn’t that he and Kari have been changed by the new era of grain and land prices, it’s that they have evolved in order to meet this brave new world. Indeed, says Franck, ideas like their new concept of farm sharing might never have come up without the change in the global agricultural climate.
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But more on farm sharing in a minute. First, let’s get to know the Groenewegs a little better. When Franck and Kari were named as Saskatchewan’s Outstanding Young Farmers in 2011, a big factor in the decision was the couple’s philosophy, which is basically that an obstacle is just an opportunity waiting to be tapped. It’s a common enough thing to say, of course, but in their mid-30s, the husband and wife team have demonstrated that they know how to put it into practice. “It really is a thread in what we do,” says Franck. “It’s not so much about how you do in good years, it’s how you manage the bad years.” The Groenewegs can definitely speak from experience about bad years. When the couple arrived here in 2003, they had
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PHOTO CREDIT: CAREY SHAW
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some serious goals. They had both grown up on farms — Franck in his native France and Kari in Alberta — so both had dreams of owning their own farm some day. The couple met in Iowa where Kari was studying education at Northwest Iowa University and Franck was involved in farming at the same time as running a tractor parts import/export business. But with high land costs in the U.S. Corn Belt, it wasn’t likely they were going to be able to fulfil their farming dreams there. So they decided to purchase land in Saskatchewan where prices were more reasonable. They knew they had a lot to learn, and along with all the land buying and the buying of equipment and technology they have never lost sight of the importance of building relationships with people, which helped them get established and which they are hoping to pass along. “A great part of our success has been the people who have come alongside of us,” says Kari. “We have surrounded ourselves with people who have worked closely with us, given us ideas and strengthened our courage.” The farm has one full-time employee and various casual helpers and usually hosts a summer student from Holland, France or Germany. Motivating workers to feel a part of the farm is also a big part of the couple’s philosophy and a couple of years ago they experimented with a mentorship program, renting a quarter section of land to an employee and sharing equipment to try and help him get established. “To me success is if everybody gets something out of it,” Franck says. “When we reached the size where we needed to bring on more people it only made sense to see if our goals aligned with theirs, and to see if we could help them accomplish their personal goals through involvement in our farm. For me that’s success.” The young man has now moved on to purchase his own land. The experiment ended up as a learning experience for everyone involved and has helped Franck refine his ideas about what his goals are and how he will refine the farm-sharing idea for the next time. Continued on page 16
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Continued from page 15 “Our goal was always to farm on our own with land. The difficult part of it is to make sure that this is what the person you are working with also wants,” says Franck. “They may say yes, that is what they really want to do and not realize what is involved. So I would say we want to be very careful about how to involve a person because everyone is satisfied differently with their level of risk and involvement. At this point we would like to involve somebody else in farm sharing, somebody who wants to farm but doesn’t have land of their own. We would sublease some acres to them and then the 16 country-guide.ca
profits on those acres would be theirs and they could also perhaps use some of our equipment if they needed it.” A lot of the motivation for the farmsharing idea comes from remembering how hard it was for them to acquire land to get started. “We probably have more of a chance to attract land than a young farmer just starting out, which was something I never understood when I was a starting farmer,” says Franck. “I needed acres but it seemed that the big, established guys always got the acres even if they didn’t need them.” To Franck, that’s where the win/win can happen. The hopeful farmer gets a start, and the Groenewegs also gain by
attracting someone who is highly motivated to work. “But it has to be the right match of personality, relationship and timing as well,” Franck says. “For us the ideal candidate would be somebody who wants to farm that is probably coming out of university and has had some education in grain production but there is no room at home or it is too expensive somewhere else, but here he or she would have an opportunity to start out on our farm.” It will also be someone with tenacity, because as noted above, an early lesson for the Groenewegs was all about how much you have to want to farm in order to make it happen. In 2004, just as they were starting, an August frost significantly reduced the quality of their grain crop, seriously affecting their cash flow into 2005 and 2006. In typical Groeneweg fashion they saw an opportunity in the challenge. In 2005 they bought a grain-burning stove so they could use their low-quality grain to heat their own home. When they realised that there were other people in the same situation as them, the Groenewegs decided to start a business selling the stoves, which as it turned out, was a good decision. “We went to the Farm Progress Show in 2005 and a lot of people were interested in the grain-burning stoves,” says Franck. “Then Hurricane Katrina hit in the fall and the price of natural gas went up 40 per cent. So it was the perfect time to start that particular business and it provided cash flow and optimism and helped keep us afloat.” Starting out on their own was challenging enough, but because they didn’t come from the area, they also lacked the support network of friends and family that local younger farmers have when they are taking over the family farm or buying new land. Franck and Kari, however were quick to develop their own network and discover mentors willing to give them advice. “When I was looking for information I would go to a research station, have coffee with neighbours, go to dealerships and sooner or later I found people who would want to take us under their wing,” says Franck. “It was amazing at the time. We had a neighbour who felt that he needed to help us out — and it was true help — it wasn’t like telling us what to do but he was constantly listening to what we were saying and if he thought February 1, 2013
BUSINESS there was some advice he could give, he would say something and it would be good, sincere advice.” At the same time they found the challenge of starting out alone refreshing. “We were starting with a clean slate,” says Franck, who feels it gave them the opportunity to look at fresh ideas and not be bound by preconceived notions about the way things should be done. The Internet was a great informational resource for them and they still use social media tools, mainly Twitter, to communicate and grow their network, although Franck has learned it can also be a distraction that needs to be used wisely. “It has been a great thing for information sharing with other farmers,” Franck says, “but it’s important to find the balance that makes it valuable and doesn’t take away from our productivity.” Perseverance and an unending optimism for their farm and the future of agriculture have helped the Groenewegs expand Green Atlantic Farms from 1,880 acres to 7,500 acres in eight years. They have about an equal mix of owned and rented land on which they grow spring wheat, canary seed, canola, flax and peas. But they are always looking for new crops and new opportunities, which led them to grow hemp and faba beans for the first time in 2012. Characteristically it was answering another challenge, this time from a neighbour, which led them into hemp production. About three years ago a neighbour called them because he was having trouble harvesting his new hemp crop. It was getting wrapped up in his combine and he
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just couldn’t get it off. So he asked Franck if he would give it a try with his conventional CX New Holland combine. “We looked at it as a little bit of a challenge,” says Franck. “We were done with our harvest and I thought well, it’s only 20 acres, what could go so bad? I can go there and try it and maybe learn something.” Franck’s combine worked perfectly and he came away with an interest in the crop that led him to grow it this year, but he was careful to wait until he judged the time was right. “There seemed a little bit more of a market for it and we had the right equipment and this past year the contracts were appealing, so at that point it made sense to grow a little of it,” says Franck. Another important theme for the Groenewegs is to be early adopters of technology. “There are pros and cons,” Franck says, “but I feel that quite often with technology the early adopters gain the most. Not exactly when they first adopt it because there is a learning process but immediately following that, when you get a handle on the technology while nobody else out there has that handle, it’s a huge payback at that point.” As an example they were one of the first farms to purchase a recently released product, called PinPoint from CapstanAg, and have worked with the company to evaluate it. The product allows individual tips of the sprayer to be shut off as needed rather than whole section of the boom at a time to give more precise overlap control. But Franck has found its turn speed compensation system to be of most benefit to him. Over the years the Groenewegs have
custom designed seeding equipment, invested in a rubber-track tractor to reduce compaction on their sensitive clay soils and addressed a lack of storage at the farm by bagging grain, which Franck says has also lowered his fuel consumption during harvest and increased efficiency. Rising land prices have also been a factor in re-evaluating their goals for the farm’s growth. “Somewhat because of land prices we probably have lowered our expectation of growth a little bit, not so much that we wouldn’t take on opportunities, but the opportunities don’t show up as often,” says Franck. A couple of years ago the Groenewegs’ aim was to expand to around 20,000 acres but now they feel they are at the point where they have grown enough to be comfortable and the time is right to concentrate on other things that are important in their lives. Kari is an essential part of the farm team and has her hands full balancing the farm bookkeeping duties with being a mom and home educator to the couple’s four children — Luke (eight), Julia (six), Emma (four) and Solange (two). Franck meanwhile is getting more involved in a number of farm organizations. He is past president of the Indian Head Agricultural Research Foundation and a director of the Saskatchewan Canola Development Commission, Canadian Canola Growers Association and the Grain Growers of Canada. “By having a good spectrum of ages and backgrounds I think it makes these organizations advance better,” says Franck, who pauses once again to add another win-win perspective, “I learn a lot in return.” CG
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Bring to a boil This standard cooking strategy is exactly how Elena Quistini is creating new markets for Ontario-grown pasta. (Yes, you heard that right — Ontario durum!)
hen I bump into Canada’s Pasta Queen at the Toronto Grocery Innovations show, where Country Guide has sent me on the prowl for new foods and new food products that might represent realistic opportunities for farmers, she is excitedly promoting, well… pasta. She is the Pasta Queen, after all. But Elena Quistini isn’t promoting just any pasta. While to some people, pasta is pasta is pasta, Quistini will tell you that’s not the case, and that’s why, as long as 30 years ago, she saw an opportunity to make and sell fresh pasta. But pasta — even fresh pasta — is hardly a niche product these days, and over the last three decades Quistini has seen a lot of companies enter the pasta business. Some are here at the show today. But while their exhibits try to catch the attention of passersby with glitzy booths, flashy videos and unique packaging, her table is as simple as her promise: great pasta that is made locally. Besides touting the fact that the company is located in Toronto, she’s promoting something new that takes the local cachet to the next level. Her trademarked Flavours of Ontario line of pasta is made with Ontario-grown ingredients. “I’ve talked the talk, now
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I’ve got to do it too,” she says as she explains the line is made with 80 per cent Ontario-grown ingredients. If it’s successful, she’ll have taken a widely available processed product — pasta — and turned it into a unique product by changing the source of commodities going into it. This time, though, she’ll have succeeded by getting Ontario’s farmers to produce durum — for which the province has an indifferent track record, at best — within easy freight distance of Canada’s West, one of the world’s top durum producers.
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Photo credit: Anne de Haas
By Steven Biggs, CG Contributing Editor
business
Pasta Queen
Reinventing pasta for 30 years
The Pasta Quistini brochure proclaims the company as “Home of the Pasta Queen.” Quistini explains that this nickname, Pasta Queen, stems from a 1980s Toronto Star article about her business that coined the moniker for its headline. In her office are mounted articles and awards. She doesn’t say anything about them until I ask, but then she lights up as she explains them. She obviously enjoys this business. As she talks about the beginnings of the company in 1981, Quistini says, “We were the darlings in the marketplace,” explaining that at the time, fresh pasta was unique. Today, the federally registered plant produces mainly pasta, but also other items including, for example, cabbage rolls, soup, and pesto. Nor is all the pasta destined for retail. Some is portion packed and 90 per cent precooked for the restaurant market. On the day I tour the plant, there’s a sweet yet aromatic smell. They’re making basil pesto and cabbage rolls; the sweetness is boiling cabbage, while the aromatic smell is chopped basil for pesto. With 22 employees, the company has just under $5 million in sales. It’s a family affair, with Elena Quistini as president, where she manages sales and product development, while her husband Orlando is vice-president, responsible for processing and equipment.
Quistini believes in the importance of being nimble, and of not getting stuck in ruts and preconceptions. “What we’ve had to do a couple of times over the last 30 years is to reinvent ourselves,” she says, adding, “We had to reinvent ourselves because we can’t compete with the bigger companies.” While it’s true that they were the first fresh pasta company 30 years ago, for instance, and that only a few companies initially followed suit, within about five years there were 50 companies making fresh pasta. “The pie got smaller and smaller,” she sighs. Adding colour to their pasta was one such reinvention. “We were the ones who introduced red, white, and green rotini,” she says as she explains how, at the time, the marketplace was dominated by egg pasta with a yellow colour. When watching an operator changing a machine from making green to white pasta, she saw a bicoloured noodle emerge… and that gave them the idea of tricoloured pasta. It stood out from the crowd — for a while. “Everybody in the world makes tricoloured now,” she laughs. Innovation means keeping an open mind, she says, describing how Orlando came up with the idea of smoked salmon pasta. “I said, ‘Smoked salmon? What are you talking about?’”
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Continued on page 20
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business he considers it a specialty product — and the challenge for farmers is maintaining the identity in the food chain in order to get a premium price. “We’re trying to find opportunities like that for grain farmers,” he says. Quistini gets her durum from C&M Seeds, an Ontario seed company with a durum variety grown under contract. While her experience sourcing Ontariogrown durum has been positive, that’s not been her experience with all ingredients. “Meat has been our biggest challenge to find,” she laments. There’s no shortage of chickens in Ontario, she explains, but as a federally registered plant, she can use only federally inspected chicken. That creates a problem because the federally regulated plants she’s talked to usually source Ontario chicken… but they won’t guarantee it. Yet she wants a guarantee so she can pursue local certification.
Win some lose some
Continued from page 19 she recounts. But the product was a hit despite her initial reaction. Sometimes innovation fails. She gives the example of pasta with black peppercorns in it. “They kept popping out,” she recalls as she talks about the short-lived product. “I’ve had failures, but that’s OK because at least we tried,” she says. She figures there’s no point getting married to a set way of doing things.
Reinventing into local One of the latest reinventions, i.e. the local-food focus, has been both a ray of hope and a stumbling block for the company. On the one hand, despite being a local company, Quistini has found it challenging to get product into the institutional sector in the Toronto area. At the same time, as a non-local, she’s excluded from cities such as Buffalo, where she is told she has competitive prices and a great product — but the mandate is to support suppliers from that area. Quistini says that the company has invested four years into developing its Taste of Ontario line of products, which it specifically developed with an eye to getting into institutional markets. The time seemed right for such a product line 20 country-guide.ca
when, in 2009, the City of Toronto implemented a pilot local-procurement policy. First, she says, she had to be sure the new products met nutritional guidelines and pricing needs of institutions. Next, she said, they chose items that are already being purchased by institutions from food suppliers. The difference is that her product contains Ontario ingredients. She’s cautiously optimistic about what the sector will say to Taste of Ontario. “We’re starting to see doors opening,” she says, adding, “Change is hard.” An added layer of complexity is that many institutional buyers work through food distribution companies.
Finding local supplies Quistini is pumped about Ontario durum wheat, proclaiming it produces pasta that’s “Bouncy, flavourful, and tasty.” “The semolina grown in Ontario is a far superior quality to anything grown in the world,” she declares. “We didn’t grow any durum in Ontario,” says Crosby Devitt, manager of research and market development at Grain Farmers of Ontario, as he explains that traditionally, durum has been grown in drier areas of the Canadian Prairies. “The varieties didn’t suit our climate,” he adds. Still not commonly grown here,
I call Quistini a couple of weeks after my tour of the plant for an update about marketplace reaction to the new pasta line. She sounds disappointed as she tells me that she has found out a lot of city-run institutions are now looking at outsourcing their food services, which complicates the introduction. But her voice picks up as we also talk about her recently released line of glutenfree pasta. A friend suggested 30 years ago that she develop gluten-free products, but she didn’t until now. She wishes she had acted sooner, but then adds, “We’ve been ahead of the curve many times, and it’s not always the best place to be.” The new gluten-free products are corn, buckwheat, and rice based. What’s made this reinvention especially challenging is that manufacturing must take place in a separate area from the rest of the products, using separate equipment. The first order of gluten-free pasta was shipped to a small chain of grocery stores the week before my followup call — and the chain had already placed a second order. Now she is fielding calls from restaurateurs who want the product. For Quistini, reinventing pasta and having new products for events such as the Grocery Innovations show has been an ongoing part of competing against bigger companies. She’s waiting to see if the Flavours of Ontario line will catch on now, or if it’s ahead of the curve. In the meantime, early indications are that the gluten-free line will be a winner. CG FEBRUARY 1, 2013
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FEBRUARY 2013 The ‘cash’ in cash cropping The tillage fix Back to basics On the horizon After 2012 Cover question Precision corn Chicago shifts gears #PestPatrol
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On the edges of the field Canadians have no idea how big a miracle is happening all around them. Year after year, the numbers get more incredible, yet nowhere do they get more incredible than in corn. Even for those of us who have grown up watching the crop, it’s amazing. To be absolutely honest, I simply did not know that our hybrids had it in them to produce some of the astronomic yields that Canada has seen even under difficult conditions over the last several years. As bad as the U.S. drought was, it’s a testament to farmers and to agriculture that the North American crop was anywhere near as big as it turned out to be. Even more impressive, however, has been the reaction of our farmers. Our farmers, after all, are the real genetics that are driving agriculture. Farmers like Ontario’s Chad Stanton aren’t sitting back and saying, “Sheesh, didn’t we get lucky.” Instead, they’re saying, “How do we make sure it happens again?” Or, to put it in the words Chad used when we interviewed him for this CORN GUIDE’s lead story, “OK, we’ve reached 200 (bushels per acre). Now, how do we get to 250? Or 300?” Corn Guide, February 2013
Just imagine the pressure on society if farmers today weren’t being so fantastically productive. Despite that, we’re increasingly aware now that farm sustainability now hinges on a politicized and volatile business environment. Scientists tell us to watch the shoreline. In the deep water, as on the farm, conditions seem to stay more or less constant and the fish swim about more or less as they always have, while on the dry ground above, the trees and animals seem to trudge along more or less in equilibrium with their environment. It’s at the water’s edge where the important stuff happens, because it’s at the edge where you see the struggle for resources and wealth that is actually underway. There’s no need to get too graphic here; we’ve all seen the NATIONAL GEOGRAPHIC documentaries. Whatever the weather in 2013, I have no doubt that I will once again be amazed at how many bushels farmers pull out of it. Like the rest of you, however, I will also be anxiously watching the shoreline. Let’s hope society knows where its interests lie. Tom Button, CG Editor tom.button@fbcpublishing.com 3
Cornguide
The ‘cash’ in cash cropping When corn is king, does it really make sense to plant anything else? We asked three top farmers By Ralph Pearce, CG Production Editor
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purred on by the drought in 2012, the headline from the past 18 months has been the unprecedented boom in commodity prices, making it hard to remember that just a year ago commodity brokers were forecasting corn would hover between $3.75 and $4.25, pinned there by that huge corn factory called the U.S. Midwest and its power to flood the world market. A year later, corn is indeed in a holding pattern, but not at $4. What has become Year 2 of an extended drought for the Great Plains and parts of the Western Corn Belt has corn prices still up near historic highs, with corn showing a taste for producing farm profits that out-soar both soybeans and wheat. Market theory says that these prices are as much a signal to producers as to buyers. So, should farmers be dropping everything else and shifting every acre into corn in 2013? With its big yields and big returns, corn’s reputation as the king of the cash crops is well entrenched among farmers. It’s also arguable that more attention is paid to corn. Planting equipment is sized for getting corn in the ground, combines and grain carts are sized to take it off, and grain bins are sized to handle the harvest.
Wherever corn gets established, it becomes the crop that makes the rules. Yet although the temptation is there to run with corn from fencerow to fencerow this year, the logistics, the long-term effects on soil health, not to mention spreading the workload, mean that real success, even with high commodity prices, starts with the old mantra: “rotation, rotation, rotation.” That’s the practice foremost on the mind of Gary DeBorger. Farming as he does on 3,000 acres near Forest, Ont., his corn acres are definitely the highest in numbers. His standard is 1,100 acres for corn, and while he concedes that he may flex his acres by around 300, he’s reluctant to stray much beyond that number. “I’m not a proponent of corn on corn,” DeBorger says. “To me, the key to longterm success is rotation. Corn is such a high-revenue generator, but you can take a 15 per cent hit on corn yields if you don’t rotate.” DeBorger has a unique perspective on his land, referring to his farm as a 3,000acre test plot. He’s done extensive testing on his Brookston clay-loam soils, and he knows the value of maintaining his rotation, and of using a plow on his corn (he’s no till on his soybeans and wheat). Corn Guide, February 2013
Temperatures where he’s located in the lee of Lake Huron can vary 10° compared to London, less than an hour to the southeast. With roughly 2,500 acres of crops to get in the ground in spring, DeBorger faces the challenge of some lessthan-favourable growing conditions, especially with cold, northerly winds that can linger into April and May. Sticking to his conventional practices and standard rotations, he’s content with the amount of residue that he has to deal with. “I have fewer replants when I plant in those conventional situations,” says DeBorger. “If I’m going to have trouble, it’s going to be in no-till corn. But because we plow a reasonable amount, it’s not something we’re concerned about. We’re usually harvesting in September and the stalks have broken down enough by spring.” Working with animals Maintaining rotations is also an important practice for spreading the workload on the farm, and for Kevin Eisses, the allure of increasing corn acres has to be balanced against his workload, especially considering he’s a dairy producer. With 2,500 acres between himself and his uncle, who’s a poultry producer, spreading that workload and being able to feed their cows and birds is the primary focus. “Generally, we don’t sway too much on our corn acres, although there are some farms where we might analyze over the winter which commodity would be more profitable, and right now, it does favour corn,” says Eisses, who farms near Innisfil, Ont. “But we know from past experiences that it’s not going to stay that way. Sometimes you’re better off just staying with what you do, because if you start chasing something and your rotation gets out of whack, you can get into trouble.” Eisses refers to a couple of years ago when they ended up having to plant their wheat crop farther from their livestock barns than in previous years. It created some challenges in logistics when it came time to spread manure from the dairy and poultry operations. As it turned out, there were some hayfields close by which benefited from the manure application. Still, it was a lesson learned for them. With time so tight on modern farms, the cropping plan has got to harmonize with every other aspect of the operation. It’s difficult to chase one commodity in favour of another when you need to balance whole-farm management. “If you didn’t have that livestock base, Corn Guide, February 2013
The market wants corn, but on the DeBorger farm, agronomics are the foundation of profitability, and they say “rotate, rotate, rotate.”
you could be swayed by those prices, especially in a year like 2012, where there was the drought and yet the corn seemed to handle it better,” says Eisses. “The reality is that there isn’t a bad situation with respect to the commodity prices right now. It’s either good or better.” Eisses also knows of some growers who don’t like the amount of work that goes with producing a corn crop. They just want to get the combine and the wagons stowed away in October. And as corn volume increases, it can create challenges for storage, be it on-farm or at the elevator, not to mention transportation and other potential bottlenecks. “Plus with more corn, you never know what the fall’s going to be like,” says Eisses, noting that in many areas the 2012 harvest was pulled out of a wet October and November. One word When Chad Stanton is asked for his assessment of corn’s allure and the effect of current pricing, he readily concedes the genetics and the pricing are enough to convince some growers to radically change their cropping practices. But he also distills the discussion down to one word — management. “Is corn the key to success? It is a big part of success — to grow good corn,” says Stanton, who farms 850 acres in Plympton-Wyoming, Ont. “But management in my mind is definitely the bigger factor in success. Without good management, it’s just not going to happen for you.” Stanton stays the course on his rotations, the same as Eisses and DeBorger. When it comes to growing corn, he has a
process that he follows fairly strictly. He plows his wheat stubble, applies sufficient fertility, and plants a high population, protecting it with fungicide. Each step plays its part in the eventual yield for that corn crop, he believes, and if he misses or falls short on any one of those steps, he’s certain he’ll lose yield. Just because you can’t shift your acres to corn doesn’t mean, however, that you can’t set your sights on growing more. Even with concerns about sufficient moisture in 2012, there were growers on good soils who were averaging 200 bushels per acre. A decade ago, Stanton says anyone would have been hard pressed to convince him that 200 bushels was a possibility in Ontario. Now, he’s one of those growers who says, “OK, so we’ve reached 200. How do we get to 250? Or 300?” “It’s totally fair to call corn ‘king of the cash crops’ because it is, and it’s easy math. But that doesn’t give you a reason to go with continuous corn,” Stanton says. “You can grow corn on corn with the genetics they’ve lined up. But you’re looking one mile down the road instead of 15 miles down the road.” Stanton also knows history is on his side, because he has seen it in action. For much of the last 20 years, farmers in his region migrated to continuous soybeans because corn was barely meeting the cost of production. The damage that was done to the soil was undeniable, and so was its impact. “I saw that happening first hand, and those nice loamy soils on those farms were getting tighter and tighter after five or six years of soybeans,” says Stanton. “Monoculture, in my opinion, is not the way to go.” CG 5
Cornguide
With bigger yields, higher populations and thicker crop residues, tillage is roaring back
A
decade ago, the no-till question seemed a classic no-brainer. Now it’s one more sign of how fast the world is changing. Tillage is making a comeback, and this time, more experts are lining up to say it’s exactly the right thing to do, citing everything from economics to the sheer practicality of farming in today’s high-residue conditions. It goes beyond the notion that the tillage pendulum is swinging back, away from no-till or reduced-till practices, or that tillage is needed for weed or pest management. Simply put, tillage may become necessary as yields continue to increase. Jim Boak, national sales manager for Salford Farm Machinery, in Salford, Ont., notes that from an agronomic perspective, there are multiple reasons why corn needs the plow. As yields have soared beyond the 200-bushel mark, the amount of residue left in the fields is becoming a greater challenge for the subsequent crop, whether it’s a second or continuous crop of corn, or a rotational crop such as soybeans. “At 258 bushels per acre, you have roughly 34,000 lbs. of residue, just in the stalks,” says Boak, who tested this himself, sun drying some stalks to confirm the results. “I got them as dry as they could get during a two-week period, and each 6
The tillage fix By Ralph Pearce, CG Production Editor stalk still weighed about one pound… and that was without the root mass.” Using that as a guideline, a harvested plant population of 35,000 is roughly equivalent to 17.5 tons, or nearly 16 tonnes of residue per acre. Boak maintains that such a mat of dried leaves and stalks requires some sort of tillage to help with decomposition. Another trend that Boak is watching — and perhaps it goes hand in hand with this residue issue — is that as price and profits increase, so does tillage. He knows of some equipment company executives who have charted this as a trend. Boak agrees some farmers have soils conducive to no till, including relatively flat ground with low annual precipitation. Crop rotation and crop heat units are also major influences. Still, many of the old assumptions seem in flux, and Boak notes there are corn on corn and some continuous corn growers who claim that as their yields increase, their input costs decrease. Although he can cite the examples of Francis Childs and Herman Warsaw, or the research of Fred Below from the University of Illinois, Boak also acknowledges that there are considerable differences between soil and farming conditions in the U.S. Midwest and Ontario, including the reliance on irrigation in the Midwest. “Not every farmer is able to go no till,”
says Boak. “Growers have to look at their own list of yield-limiting factors on their farms.” A neighbour’s perspective Harry McCune comes at this discussion from a different perspective. He grows continuous corn, even to the extent that he insists the best way to lower your corn yields is to grow soybeans. “If you think about it, corn grows as a grass, not a legume,” says McCune, who farms in Bureau County in western Illinois. “You might get better corn after soybeans, but only because there’s less residue. All of these soils were built for grasses, so tillage is what’s needed.” McCune, who farms 3,500 acres — all of it corn — makes no apologies for his reliance on tillage. Instead, he’s an advocate for responsible use of a tillage program. “As long as we leave some residue on the soil, and we’re conscientious about what we’re doing, there’s a place for tillage,” McCune says, adding that farmers are more aware of what’s happening in the soil, and that they’re doing their jobs with a greater sense of purpose. “Years ago, when we were working the soils, we were making many trips over the field in the springtime,” McCune says. “Now, the number of those trips has been cut back. We don’t have the soil compaction going on, and that’s allowing water to infiltrate.” CG Corn Guide, February 2013
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Cornguide
Back to basics In an era of big innovations, it turns out that it’s how you do the little things that counts By Ralph Pearce, CG Production Editor
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armers are always looking for a better way. Call it an edge or an innovation. Even just call it a change or a modification. They’re looking for anything that boosts efficiency, produces more bushels, and generates more net revenue. After a couple decades of enormous changes in genetics, machinery and tillage systems, however, there’s a trend that’s taking shape that earlier farmers knew all about. It preaches fine tuning, and a return to the fundamentals. Such gradual tweaking is less costly, the thinking goes, and when considered as part of a long-term approach it carries a “slowand-steady” benefit, letting the producer better understand how the whole system will work together before tinkering too much with any one part of it. Whether the innovations are mechanical, agronomic or management oriented, growing your on-farm efficiency may be more achievable if your goal is a two per cent gain every year for 10 years than if you’re trying to grow by four per cent a year for five years. Over past decades, farmers have sped up the rate at which they evaluate new genetics from the seed companies. They’ve felt they had to, or they would miss out on new profit opportunities. Now, however, everybody from the crop protection sector to machinery makers seems to be unveiling new breakthroughs at the same speed. This doesn’t mean there’s anything
wrong with the rush of new technologies on to the market. But it does mean that more and more farmers are going back to basics, and they’re putting even more effort into acquiring solid, useful information for making their decisions. Besides, as the potential yield and revenue numbers in agriculture climb, there’s a growing recognition that the importance of getting the essential agronomics right climbs just as fast, and probably faster. Colin Smith, a dealer with Croplan Genetics, tells the story of a field demonstration held in 2012 near Wallaceburg, Ont. Word that farmers were initially hesitant to attend the day’s events began to filter back to the dealers hosting the demonstration. Some farmers explained that they thought only the company’s latest hybrids would be on display. But when they were told the agenda would feature information on agronomics such as planting depth, hybrid selection and population densities, the response started to grow. Smith is an advocate of providing farmers with more information on their seed genetics. Generally, however, few seed companies offer much information on their competitors, so most growers aren’t getting comparative data on which they can base their planting decisions (Croplan is introducing its R7 Tool computer program to provide comparisons of its hybrids with those of its leading competitors).
Corn Guide, February 2013
What good is the information? Is information the only thing standing between farmers and 300-bushel yields? Absolutely not. But it might be what’s keeping them from making the next 10or 20-bushel jump. “Getting back to basics means doing a lot of the little things that guys are beginning to do,” says Smith. In turn, those little things are often dependent on information. A tissue-testing program is one way for farmers to verify the activity of their soil program, says Smith, and it should also facilitate in-season applications if and when needed. But the bottom line is that a good soil program will detect and correct any deficiencies. It’s a slight shift in mindset to help the grower understand what’s happening, and to make the proper recommendation instead of trying to purchase an additive. Smith talks about meeting a researcher from Quebec who was developing herbicides and pesticides. To Smith’s surprise, the researcher gave him a number of old texts on agricultural and plant development, published in the late-1960s and early-’70s, and based on research carried out as far back as the 1950s. “It was amazing how much we knew back then,” says Smith. “Even covering off how nitrogen is absorbed through the plant or how nitrogen is broken down by the soil microbial system — a lot of that’s been forgotten.” When discussing some of that knowledge on fertility, Smith believes the one area that will change in the next decade is our efficiency ratings on fertility. For instance, the crop takes up only five to 10 per cent of applied phosphorus, 20 to 40 per cent of potassium and around 30 per
Corn Guide, February 2013
cent of nitrogen. So there’s room for improvement on that front. “There’s work being done already,” says Smith, who points to federal research into the use of nanotechnology to deliver nutrients to crops. “The science is sound, it’s just whether it’s practical. It’s not that we need more fertilizer, we just need to find out how to make the fertilizer we’re using at the proper rate more efficient.” Better educated growers Age is another back-to-basics driver, but probably not in the way you might first think. Instead, it’s because so many young farmers are returning to the farm, and they’re so much more scientifically educated than their parents and grandparents were. That’s the contention of Kevin Van Netten, an independent crop consultant and certified crop adviser with South Coast Agronomy in Simcoe, Ont. Young farmers are returning to the farm equipped with more than just a university degree. They’re also applying what they learned from their summer jobs. “A lot of them have been doing summer internships with the seed and chemical companies,” says Van Netten. “Their grandfathers and great-grandfathers did things without necessarily knowing why they were doing them, only that those things worked. Now, the younger farmers are learning the science.” In the past, adds Van Netten, 100-acre fields were divided into smaller parcels, with spring cereals grown in two or three plots, with other sections growing feed corn and forages. Crops were rotated and there were guidelines that were followed to maintain good growth. Now, those 10-acre boundar-
ies are gone, and farmers are managing larger fields and they are having to adjust by applying nutrients back on their soils or contemplating the benefits of drainage. One interesting change that Van Netten has noticed, compared to 10 or more years ago, is the return of liming. Decades ago, there were more lime spreaders seen on farms. “But now we know what lime does and what a balanced soil can do,” says Van Netten, noting the job that extension personnel have done in explaining the benefits of good soil fertility. “Ten to 15 years ago, there were government programs that supported people to do no till. Now, with yield monitors, growers are focused, and they’re paying better attention to soil health and plant health.” What, why and how Tom Snyder has a unique position when talking about the basics and how they relate to current management practices. As the operator of Grand River Planters in Caledonia, Ont., and a dealer for Precision Planting equipment, it would seem logical that Snyder wants to be in a sold-out position with his equipment. But Snyder is also a sweet corn grower, and what he thinks about mechanical innovations is the same thing that he thinks, for instance, about genetics. “The success of new breeding is going to depend on getting into the ground properly,” says Snyder. “The genetics have brought us a long ways. I mean, we came through the drought with some incredible yields, and that tells me that it’s an exciting time to be involved in agriculture, but it also comes with a heap of responsibilities.” CG
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CORNGUIDE
ON THE
HORIZON
If you think the pace of change is fast now, then hold on to your hat By Jeanine Moyer
W
hen they’re filling their planters with integrated refuge seed that will shave hours of field work and paper pushing off their slate, growers don’t have much time to stop and think about how far the corn industry has come in the last few years. The same goes when they’re in their combines, harvesting corn plots like the one at Wingham, Ont. this fall that went 226 bushels per acre — an unheard of yield a decade ago, but now just another good score. The reality is the industry has come an amazingly long way in a very short time. Thanks to genetics and agronomic practices, corn has witnessed tremendous improvements. Even more impressively, the momentum is still building. Looking forward to the next few years, there are plans to deliver even higher yields, harness genetics solutions to combat even more pests and diseases, develop more diversified markets for corn, and increase overall productivity. It’s a mouthful, but the track record means that it may all be achievable. “We’re already further ahead than we predicted,” says Steven King, DuPont Pioneer corn research director for Canada. “Yield levels are approaching 300 bushels per acre in some areas and we’re going to see more growers reaching this yield potential in the next five to 10 years.” Greg Stewart, corn industry program lead with the Ontario Agriculture Ministry says genetics deserve most of the credit for the huge increases that growers are seeing in their yields today compared to 10 or 20 years ago. But it isn’t only genetics. Agriculture is firing on all cylinders, and in the case of corn in particular, big chunks of the praise also have to go to outstanding advances in agronomic practices, as well as the increasing uniformity of fields.
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Says Stewart: “Equipment and technology are allowing growers to do a more uniform job of things like tillage, getting the right seed depth and reducing gaps or misses in spreading fertilizer or residue.” INVESTING IN RESEARCH King says his team at DuPont Pioneer is working to deliver solutions to simplify corn production for growers within 10 years, focusing on performance predictability and pest protection. Looking further ahead, King predicts that improvements in drought tolerance and in the efficiency of nitrogen use will mean even higher, more consistent yields for growers. “We have to keep our eyes on everything,” says King, noting that DuPont Pioneer, like many other seed companies, is involved in varying levels of research in all agronomic areas of corn production. King says that while it’s hard to react quickly to dramatic changes in production, weather, diseases or pests, his company has a large and diverse enough research pipeline to address changes. Their breeding process can take eight to 10 years, meaning they have to anticipate what growers will need before they know themselves. And of course, DuPont Pioneer is not alone. One of the most impressive features of today’s corn seed market is that despite two generations of mergers and acquisitions, it remains the focus of hot competition. Drought tolerance is one example of ongoing development and King says the dry 2012 growing season provided researchers with a valuable opportunity to research and identify plant genetics to tolerate hot and dry conditions. All the majors are in the race. Monsanto is developing DroughtGuard hybrids and Syngenta is developing its Agrisure Artesian trait. Pioneer DuPont has already launched the drought tolerant brand, AQUAmax, a hybrid that can better
tolerate extreme drought conditions, and growers can look for select hybrids carrying drought-resistant offerings in Canada. But there’s more to seed than genetics. Gord Surgeoner, president of Ontario Agri-Food Technologies predicts seed treatments will play an increasingly important role in corn yields and productivity. He says seed treatments already exist that can speed up plant emergence and encourage faster plant development by as much as two weeks. DESIGNED AND PLACED Agronomic practices can’t be overlooked. In fact, precision agriculture can complement genetic development. “We just haven’t tapped into it yet,” says Stewart. “Imagine using different seeds for different parts of a field.” Designer corn sounds like a fancy term now, but could be the way of future corn production, according to Barry Senft, CEO of the Grain Farmers of Ontario (GFO). He predicts breeding and growing specific traits for the end-user, like hybrids with increased efficiency in the fermentation process of ethanol production, will become popular and create value in the product chain. MAINTAIN THE MOMENTUM Ethanol has had a huge impact on corn demand in the past five to 10 years, helping to increase prices and demand, says Senft. In the next decade, he predicts market diversification will intensify, often driven by farm groups, and it will raise demand and prices even further. “There’s no doubt, corn will continue to be an important part of the farming rotation, and there’s lot of exciting things happening,” says Senft. Surgeoner agrees saying, “It’s safe to say growers can expect even more changes in the way they grow corn in coming years.” CG Corn Guide, February 2013
The future, today
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Here’s an educated guess at what your future will look like
here’s no end to where sci-
have tried and basically given up.
ence can take the agricul-
Azotic however, says that it is
tural industry, and today’s
working with patented technol-
• Offer a cost benefit to growers
most impossible dreams could soon
ogy based on naturally occurring,
through a reduction in the use
be routine on-farm practices. For
nitrogen-fixing bacteria that take
of nitrogen-based fertilizers
example, take Azotic Technologies
up and use nitrogen from the air.
• A re environmentally friendly and contain no toxins
Gord Surgeoner, president of
Ltd. from the United Kingdom. It is
The strategy is similar to inocula-
developing new technologies that
Ontario Agri-Food Technologies
tion, and Azotic believes there will
will not only allow corn to fix its own
believes growers will reap big
be huge benefits not only for farm-
nitrogen from the air, but promote
gains when such new technolo-
ers, but for the environment as well.
gies come to market.
plant growth and vigour at the same time. Scientists have dreamed for years of tricking grass crops into fixing their own N, the way that legumes such as soybeans learned to do via evolution. In fact, a number of companies
According to its website at
Science will create smarter,
www.azotictechnologies.com, the
more self-sufficient plants that
company says its nitrogen-fixing
reduce the need for crop inputs,
bacteria:
and it will transform the future of
• Provide every cell in the plant
corn production, Surgeoner says.
with the ability to fix nitrogen
Incredibly, nitrogen-fixing corn is
• Replace approximately 60 per
only one example, and not even
cent of plant’s nitrogen needs
the furthest out there.
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Corn Guide, February 2013
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11
Cornguide
What is your soil’s fertility status after last year’s weird and sometimes woolly weather? By Ralph Pearce, CG Production Editor
After 2012 I
n the wake of last year’s sporadic drought conditions north of the border, there are plenty of questions getting asked as producers grapple with management decisions heading into April. Will moisture levels be closer to normal in 2013? Will corn and other commodity prices stay strong? And… is the nitrogen, phosphorus and potassium that I applied last spring and summer still there? As always, some of the answers depend on where you call home. Late-fall precipitation has done much to recharge soil moisture levels in many areas, although not enough to totally allay concerns about a continued drought.
The marketing question depends a lot on weather too, or course. At the very least, it’s safe to say prices will be unsettled in 2013, with markets getting spooked if there’s even a mention of the “d” word in the U.S. Midwest. The fertility question, though, is one that we might be able to be a lot more concrete about, because when it comes to the availability of inputs applied last year, the short and quick answer is that nitrogen will need to be replaced but potassium and phosphorus are likely still there in the soil, in one form or another. Typically, nitrogen doesn’t last long, either because it’s taken up by the crop or
“A lot will depend on how severely the drought affected a particular farm in 2012.” — Tom Bruulsema
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Corn Guide, February 2013
because it’s lost due to chemical processes, meaning mainly leaching and denitrification. But that can still leave you guessing, so it may be a good year to go with a more detailed soil test that will provide the most precise detail on your fields. Go with the obvious Expert advice on available nutrients and on how to get maximum value from soil tests has seemingly been everywhere, particularly late in 2012. Various farm publications and news services devoted considerable coverage to the subject through the fall months. Some warned of inaccuracies in test results for potassium (K), noting that although it may not show up in soil tests, the applied K is nonetheless present in plant residues, waiting for a little precipitation to release it from decaying corn stalks. Other stories on the subject delved into concerns surrounding residual nitrates, silage and residues. There has even been work done on the effects of drought-induced herbicide carry-over. Although it’s an added cost, there’s nothing like the certainty that comes with a soil test — specifically, a pre-sidedress soil nitrate test (PSNT) — done in the spring. And as Tom Bruulsema, director with the International Plant Nutrition Institute notes, there are several factors to consider for soil testing, especially coming out of a drought situation. “A lot is going to depend on how severely the drought affected a particular farm in 2012,” says Bruulsema, who is based in Guelph, Ont. “If drought reduced the yield considerably, and the crop was still harvested as grain or not harvested at all, then nutrient plant removal would have been less, and we would expect some of the nutrients which were applied for the crop would still be in the soil.” Phosphorus and potassium are the two nutrients which should be in abundant supply, but even those levels should be assessed going into the spring. For the most part, sandy soils with low cation-exchange capacity (CEC) will see greater mobility for P and K, and especially for K. In that case, a grower may need to test more frequently than with soils that are of a finer texture. Also on the list of factors is higher pricing, for both crops and fertilizers. Testing can provide some insight which could push yields even higher in a good year. Corn Guide, February 2013
Crop removal is yet another factor that Bruulsema highlights as part of the decision-making process going forward into spring. When and why the crop was harvested will have an impact on what’s available. “Some corn crops weren’t harvested for grain but were taken off as silage, and that’s a completely different calculation, especially where the amount of potassium would increase if you’re taking the whole plant off the field,” Bruulsema
LIGHT YEARS AHEAD
says. “You want to be giving that some consideration as well.” Despite the trend towards corn on corn or even continuous corn, those planting corn after a failed or less-thanstellar soybean crop could find an added N credit. That comes from a September 2012 article written by Bruulsema. In it, he states that such an N credit could come from one or two sources: either the Continued on page 14
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Continued from page 13
biological N fixation that comes from a nodulated soybean crop or the pool of mineralized N in the soil. During times of drought however, nodulation can decrease and mineralization can slow down, meaning the subsequent corn crop has less of an N credit to mine. Again, a soil test will determine the extent to which that credit can be applied to a subsequent corn crop. Like checking oil So is it really such a new concept to recommend a soil test, even after a droughty year such as 2012? Not as far as Keith Reid is concerned. In fact, many of the observations made about available nutrients for subsequent crops or the benefits of soil sampling are very well known. For Reid, a soil researcher with Agriculture and Agri-Food Canada, soil testing is as natural as keeping your eye on the oil level in your truck or tractor. “There are some growers who are putting on moderate amounts of fertilizer every year, and they’re probably still close to the same amount, and they keep getting the same answer,” says Reid. “So there are some who begin to question whether it’s worth doing if they’re getting the same result.” Don’t forget too that one of the reasons why you check the oil level in a vehicle is because you know you might be losing oil in ways you can’t see, and which may not be obvious. A soils test can often pinpoint issues that aren’t waving red flags. And with fertilizers, if they 14
“Evaluating and implementing adequate soil fertility programs is an intricate and increasingly important part of profitable crop production.” — Jim Gowland were applied but weren’t harvested in one form or another, they have to be accounted for. “If you look at the cost of fertilizers,” Reid says, “on a gross dollar per acre basis, with the current crop yields and commodity prices, soil testing is an inexpensive way to keep track of what’s happening in the soil.” Borrow from the bank For Jim Gowland, there is no one blanket statement that can apply to fertility programs or nutrient levels in the soil. Different producers will see different results from last year’s drought, depending on the severity of the drought on particular soils and on whether the grower is sticking to a three-crop rotation or pushing continuous corn. This year, another factor in Gowland’s region around Teeswater, Ont., was the amount of double cropping that was done in 2012. With a shortage of quality forage across Ontario, some of those fields of barlage were planted into wheat stubble as a double-crop marketing opportunity, while other growers were feeding it directly to their own livestock. “There were some awesome-looking barlage crops for feed too,” says Gowland, who operates a 2,100-acre field crop enterprise consisting of 800 acres of corn, 900 acres of identity-preserved soybeans
and roughly 400 acres of wheat. “But there needs to be some recognition and awareness by growers of the amount of nutrients withdrawn with well-yielding added double crops.” In an exchange of fertility models, Reid has his oil check analogy, while Gowland sees the overall impact of scrimping on fertility as a not-soresponsible loan from a bank. Gowland also believes it is very important to soil test regularly, recording long-term data on a field-by-field basis and special attention must be taken to the trend lines for fertility levels in those fields. Plus, growers are keeping their eyes on fertilizer costs. But that’s not all, Gowland says. The strength of new crop genetics can change expectations too. “With increased advancements in genetics and biotech events, evaluating and implementing adequate soil fertility programs is an intricate and increasingly important part of profitable crop production.” As well, no matter what crop production system a grower uses, all our experts agree that there needs to be continued emphasis on responsible utilization of all crop nutrients, whether they come in the form of commercial fertilizer, manure or green crops. Of course, the fact that all this has to occur within what seems like an increasingly unpredictable global climate is just one more challenge, among the many others. CG Corn Guide, February 2013
Cornguide
It looks like oilseed radish can break up compaction and add nutrients, but… By Ralph Pearce, CG Production Editor
W
hat began as a bid to find a cover crop that can cure compacted soils and also build organic matter for the benefit of future crops is now becoming a little more complicated… and worthy of more research. The challenge is that some of the complications are driving farmers away from planting a certain variety of oilseed radish. Actually, the naming of the plant may be the start of the confusion. “Oilseed radish” has been cited as a cover crop option in reports from the Ontario Agriculture Ministry since the early to mid-2000s. In research papers from the University of Maryland, meanwhile, the same species is referred to as “forage radish.” And more recently, it’s come to the market as the trademarked Tillage Radish, grown in plots and tested by a handful of growers across Ontario. Whatever its brand name or variety, oilseed radish does boast some rather impressive properties, including heavy top growth and a very large tap root that can penetrate 12 to 20 inches, with a thin lower part that can extend as deep as six feet. Planted in the late summer or early fall, the crop’s thick, mat-like top growth is credited with suppressing late-growing Corn Guide, February 2013
Cover question fall and winter annuals. It dies off quickly as temperatures fall below -7 C, with the plant mass releasing a supply of available soil nitrogen that can last well into the following spring. Once the plant dies off, the macropores formed in the soil by the thick tap root act as a conduit for air and moisture to the lower levels of the soil profile — and often deep into the subsoil. Plus, with the deeper penetration, a radish cover crop can fracture plow pans. Research from the U.S. has also found significant yield increases in following crops. Winter wheat saw a five- to 12-bushel-per-acre advantage from a cover crop of radish, seeded at a rate of two to three pounds per acre. Soybeans saw yield bumps of up 10 per cent, and corn planted after radish notched an 11 per cent yield increase. Researchers at the University of Maryland reported a 12-bushel increase for corn and eight-bushel increase for soybeans, and also said that across 70 comparisons over five years, they never recorded a yield decrease in the radish rotation. As well, Ed Winkle, a longtime Ohio Valley no-till farmer, also tested Tillage Radish, and in 2009, he found a 22-bushel advantage in no-till corn after radish and an eight-bushel yield bump in no-till soybeans after radish. Some of the research from the U.S. also cites anecdotal reports from farmers
that oilseed radish can drive yield increases in drought conditions. Some negatives too Scott Banks, emerging crops specialist with the Ontario Agriculture Ministry, agrees that there’s been some interest in oilseed radish by extension personnel, researchers and farmers in Ontario, but he’s also the first to concede there’s been a problem with the thin filament-like root penetrating and plugging drainage tiles. “We did have one farmer who tried it following barley,” says Banks, who is based in Kemptville, Ontario. “He put it in in the fall and had pretty good growth, and actually brought some to the Leeds Soil and Crop Improvement Association meeting. Initially he was pretty keen on it, but with his tiles plugged, he’s off it now.” In fact, Banks has had some trouble generating interest in working with farmer co-operators, for that very reason. Setting up a trial can be a challenge because there is the potential distraction of working with it in the field while worrying about its effect on drainage tiles. “It’s great for soil structure, it helps build soil organic matter and it breaks up compaction… all of which can actually help drainage,” says Banks, noting that it might do well in fields where there is no drainage. “We’d love to work more with this crop but the truth is, we just haven’t had a lot of experience with it.” CG 15
Cornguide
In our followup report we ask, can the new Precision Planting technology really help you get more from your seed? By Ralph Pearce, CG Production Editor
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Precision corn P
recision planting in corn isn’t exactly a new concept. Planter manufacturers have grappled with seed singulation and emergence for decades. Today, however, there’s real meaning in the precision promise, and growers can look to technology to save them money and time, and also to improve crop emergence and productivity. In part, the problem has always been that no field is perfectly uniform. Soil texture and structure vary. But it isn’t only the field that varies. Our machinery does too. Conventional down-pressure settings introduce inconsistencies, and standard metering systems can often create extra hurdles to uniform planting and even emergence. Then seasonal and year-to-year variability comes into the picture. You might find the perfect combination of down pressure and seed depth to use under perfect conditions, but how often are conditions perfect? Now, precision planting in corn is promising to take us beyond all that. The question is, can the proprietary name — Precision Planting — live up to the hype? Nearly 20 years ago, Gregg Sauder, a farmer from central Illinois, began developing systems to provide better singulation and superior depth control across any and all soil conditions. It’s to the point that today, his efforts have yielded a line of precision systems and controls that are sold by a growing team of dealers across North America, and that are being used by a loyal group of growers who have cut costs and improved productivity using the technology. As you’ll read, in fact, the people with the most experience with Precision Planting technology tend to be farmers who became dealers after early experiments with the system. The most popular technology from Precision Planting’s product line is the 20/20 SeedSense unit, a monitor which provides a wealth of readings to farmers as they plant their corn. The screen can provide information on seed population, percentage of singulation, percentage of skips/ multiples. It can also report on down force, and it can provide cumulative at-a-glance assessments of all row units, or insights into the specific performance of individual row units one at a time. The SeedSense
unit can also differentiate between different-size seeds, and then direct growers to adjust their speed accordingly. It’s all designed to be user friendly too, with colour coding for instance, where green means go, and yellow and red are indicators that attention is needed to get things back on the right track. The soil challenge Greg Millard is a farmer who is sold on Precision Planting for his operation and now is a dealer for the company. Farming near Vernon, Ont., south of Ottawa, Millard participated in a unique two-year plot trial on his farm, with help from Paul Sullivan, a certified crop adviser from Kinburn, west of Ottawa. Millard’s farm is a no-till operation with a three-crop rotation (primarily corn and soybeans, with spring wheat or edible beans) and soils that range from mostly silt-loam to silty clay-loams, with muck soils in parts of his fields. In 2010, Millard and Sullivan tested various planting parameters, ranging from down pressure and plant populations to the effects of speed on planter performance. For the tests, a Precision Planting 20/20 SeedSense monitor and a 20/20 AirForce control unit were configured to compare the precision system to conventional methods, including four separate down-force settings. The research was repeated the following year with a larger sample of co-operators. The second year brought in different crop rotations too, as well as a wider array of planting conditions and different soil and management scenarios. As much as Millard wanted a confirmation of the firstyear results, he also wanted to Canadianize the initial research data garnered from dealers and farmers in Illinois and Indiana. Although he was interested in the results of variable-rate seeding (testing at a standard 35,500 plants per acre, as well as 34,000 and 38,000), Millard was more impressed by the results from the AirForce unit that controls down force and effectively balances planter depth from one soil type to another. “In the middle of one field, it’s muck, and at the two ends of the field, it’s a clayloam,” says Millard. “When I got into the muck, I was going three inches deep (with Corn Guide, February 2013
Could down-force monitors have made this into a uniform field?
conventional down pressure) and there was nothing I could do about it, because I needed the down-force weight set on that row unit for the clay loam. “Ever since I went to this air-bag system that controls the weight on that row unit automatically,” he now reports, “the corn on my muck soils is coming out of the ground at the same time as the plants in the clay on the opposite end of the field.” The first time Millard had used a Precision Planting unit, he had gone for the SeedSense monitor. That was 2008, and in addition to checking his seed depth and speed, it gave him the actual weight readouts on the row units, although there was no way of controlling that weight individually. It wasn’t until the following year that he added the AirForce system, with its airbag sensors that automatically adjust the weight on each row unit, providing more uniform depth of planting and improved emergence. Now that he’s used it for a few years, Millard is finding that issues such as sidewall smearing, uneven emergence and hatchet roots on developing plants are greatly reduced. “I’m the type who will try it first, and if it’s not going to work, I don’t want to be selling the product,” says Millard, who regularly hosts workshops on the use of Precision Planting equipment, including one for beginners and another for those Corn Guide, February 2013
who have an AirForce or SeedSense unit (or both). “I tell my customers, ‘This monitor has a price tag on it, and the first few days, you will be overwhelmed by the information, but don’t let it get to you.’ That’s where I have to get them on the first day or two, to focus on a couple of issues, and that’s it, because you will be blown away by the information that’s there.” New insights into planting For Paul Sullivan, many of the advantages of the Precision Planting systems are summed up in the statement a customer of Millard’s made recently at a meeting in Avonmore. The farmer said that the technology got him off the planter to make adjustments that he wouldn’t otherwise have known to make until after the corn plant came up. “The things that I was seeing, that were costing my clients money in their corn stands, we’ve been able to reduce by using some of that technology that’s there, right now,” says Sullivan, citing seed placement as an important component of precision agriculture. “It makes sense because it gives them the opportunity to see what’s happening, not only with the seed that’s going in, but how it’s going in and what the environment is around the planting where that seed is going. As farms are amalgamated and fields get bigger, there’s such variation in the soil con-
ditions at planting time, that this technology allows us to have some ability to see what changes might be made to the seed that’s placed in the ground. “These bigger planters that are out there, guys just aren’t getting off to do anything to the planters,” Sullivan says. “The reality is they have to go, and this technology is giving them an idea of how things are going in the field before they get a lot of acres planted.” The technology has the ability to consider, monitor and adjust to parameters in the soil, on the machine and across the field that growers have never really been able to control before, and it is providing fresh insights into the planting process. According to Sullivan, in Millard’s first year with the SeedSense unit, the monitor told him he needed a lot of down pressure to compensate for tighter soils due to the amount of frost in the ground. The next year, the SeedSense monitor told him that he had far too much down pressure on the row units, all because the ground was mellower. The effects of sidewall smearing are also something Sullivan points to as justification for the investment in down-pressure adjustment and monitoring down force. One year, one of his clients had a problem with every field where the seed slots had reopened. How much yield is lost because of excessive down pressure leading to sidewall smearing? Continued on page 18
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Continued from page 17
“We talk about early weed control in corn being important because it affects the root,” says Sullivan. “But the physical placement of the seed in the soil, if that’s affecting the root, then it’s not hard to understand that that has to have some impact on how that corn plant gets started.” You can measure that For years, growers have driven at a set speed or planted to a set depth, even where there may have been good reasons to adjust speed or depth for different fields or field conditions. The same is true for weights on the planter units, although that number has been hard to quantify. But Millard recalls asking one grower who was adjusting his speed w ith the SeedSense system why he changed from one field to the next. “He said, ‘I changed hybrids, and the hybrids were two different seed sizes, and your 20/20 (SeedSense) told me that once I got to this seed size, in order to get the singulation and the dollar signs on the right side of the red line, I had to slow down,’” says Millard (who also sells seed for DuPont-Pioneer Hi-Bred.) Millard adds that the same thinking applies to down-force pressure on the row units, where tighter soils automatically command higher weights. “But if you get that planter with a load of seed and a load of insecticide or a mini-load of MAP, that unit’s running really heavy. And they just set it at 400 lbs. and they know they’re in the ground, but then they get those hatchet roots that can’t bust that sidewall they made because they were carrying too much weight on those gauge wheels.” Millard and Sullivan also tested some conditions that aren’t likely to occur, just to have a benchmark to compare to conventional and extreme parameters. It’s also important to know that as good as this technology sounds and looks, Millard emphasizes that growers still need to get out of the tractor to ground-truth what they’re doing, and to confirm that the planter is doing exactly what the monitor says it is. But even that process is a time saver, relative to what a grower might have to do without the precision units. The spectre of $4 corn Some may question the viability of precise planting technologies, especially when land and commodity prices are relatively high. The tendency might be to just get on the land once it’s fit, and liter18
In corn, information is becoming the next big yield maker. Growers know they need uniform stands for optimum yields, but the insurmountable challenge has always been that it’s virtually impossible to set up planting equipment to do a uniform job across fields that are variable, not to mention weather patterns that can change ground conditions while you work. Now technology means you can know in real time exactly what’s going on with each planter unit, and make adjustments on the fly.
ally “drive on.” But Tom Snyder believes now is the perfect time to learn to use the technology efficiently before corn prices return to something in the $4 range. Like Millard and Sullivan, Snyder tried to measure the impact of precision agricultural practices for his operation. Another of the “farmer-turned-dealer” set, Snyder runs his own farm with 65 acres of sweet corn near Caledonia, Ont., and also manages Grand River Planters, including Precision Planting technology. He believes more in making small changes in management practices, instead of large-scale or sweeping alterations. The Precision Planting systems are, in his opinion, game changers for an operation that makes incremental adjustments that can quickly add up to improved performance. “I’ve never seen a monitor that can give me singulation details in sweet corn,” says Snyder, noting that sweet corn seed is considerably different from grain corn seed, and that singulation in sweet corn is a constant battle. “We had the monitor, and there’s value there for me — I’ll get that money back in a year, just on singulation details. But what I was shocked to see was how far off I was with down force, and I was disappointed with how frustrating it was to manage my down force with springs, with the numbers in the cab. So now I know what I’m doing, but not being able to hit that target is what made us decide to go to the AirForce.” Snyder has done his own on-farm research and broken it down to the effect on kernels planted and 1,000ths-of-anacre measurements (and that same incre-
ment is cited in Millard and Sullivan’s Year 2 research). On his farm, Snyder maintains that every kernel can be equated to an ear of corn, an important unit for sweet corn. In grain corn, that value is more likely to be expressed in bushels per acre, and in Illinois, the loss of a kernel translates into roughly seven bushels for every 1,000 ears lost per acre. Snyder has done the math for his area and has found that it’s closer to 560 kernels or 5.6 bushels per 1,000 ears. “Every kernel that we put in the ground should net us back 560 kernels, so every one that’s not put in right is costing us those 560 kernels,” Snyder says. “I want growers to look at their operations and ask, ‘Where can I gain my next 1,000th, with one ear per yield check or 1,000 ears per acre?’ Whether that’s with guidance or whether that’s with tillage, or whatever that’s with, I think information is the key.” It’s part of the search for efficiencies that can add to a farm’s bottom line. If a system can allow a grower to drive faster or save seed through improved singulation, or boost emergence by reducing sidewall smearing, it all translates to the same thing: improved profitability. (Results of the 2010 plot research conducted by Greg Millard and Paul Sullivan are available from the Precision Planting website, at http://www.precisionplant-
ing.com/Service-Education/Service/ Grant-Program.aspx. Copies of both the
2010 and 2011 studies are also available via email, at greg.millard@plantpioneer. com or ptsullivan@xplornet.com). CG Corn Guide, February 2013
Conference 2013
February 26 & 27, 2013 Tuesday & Wednesday
Lamplighter Inn London, Ontario
The Power of Cover Crops
The Journey to Sustainability
The Courage to Change is in All of Us Claude Ouimet, Senior VP, Interface “All of us, individuals and companies, have the power and courage to change, to be the change and to do something to address the global environmental crisis.”
Dave Brandt, Cover Crop Innovator
The Future of Nitrogen Management Peter Scharf, University of Missouri
“My crystal ball shows better understanding and diagnosis of optimal N fertilizer rate, and less loss to the environment.”
Precision Cropping Workshop
Refine Inputs, Promote Soil Health, Feed More Precision Ag: Where are We Now? Fitting the Pieces Together Speaker: Dr. John Fulton, University of Auburn plus Top Technical Tips and Case Studies with several industry and technical representatives.
Drill vs Planter Farmer Panel
Can a planter solve all of your reduced tillage problems? How much additional seed is required for no-till soybeans when using a drill compared to a planter? Will vertical tillage make a drill perform like a planter? What are the logistical headaches for using one planter for both crops? Answers to these and other mind altering questions in this lively session. No Till For Extreme Yields Dean Glenney Ontario Corn Champion Unmanned Aerial Vehicles Felix Weber
For more information or to register… www.ifao.com or call 519-986-3560
Conference Prices
$250 – Early Bird to Feb 5th
includes banquet and entertainer Day 1 Only – $150 Day 2 Only – $125
Major Conference Sponsors
Cornguide
Chicago shifts gears S
The great demand-driven market has slipped into
reverse, which means you need to figure out the price where you’re comfortable and profitable
By Philip Shaw
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ometimes unexpected events come along that change everything in the corn market. Last year was the perfect example. By January, weather was already having an impact. South America’s corn outlook had been wracked by a tough year. Already it was clear that world corn stocks would fall, and that we would need a big American crop to restore those stocks and continue building demand. What did we get? In 2012, one of the worst droughts in American history fried the U.S. corn crop. Yields fell more than 40 bushels an acre below the trend line, and you know the rest of the story. Markets reeled, corn prices exploded and expectations totally changed. But that was 2012. Now, it is a new day. We’re into 2013, and it’s time to take a hard look at the new realities. For corn growers, the question is what to do? Last year parts of the Canadian Corn Belt suffered bits and pieces of the drought that seared the U.S. Midwest. However, at the end of the day Ontario for example, produced some 338.5 million bushels of corn with an average yield of approximately 153.2 bushels per acre. It was a good year for corn producers, especially when corn prices have spent so many months in the top five per cent of the past five-year historical average price range. What strategies and marketing plans should be put in place now for the corn crop which we will produce this year? What are the possible scenarios which may play out in the corn market in 2013? How do corn producers mitigate the risk? Or, do we just close our eyes and hope for the best? There are myriad options available when considering a marketing plan for this year’s corn, but a lot still boils down to how you read the upcoming production season. Do you sell a portion of your 2013 corn now, based on the newcrop values available? Or do you wait, measuring the production risk as you go through your season, monitoring the
various weather events that may impact crop prices worldwide? Where are you profitable and comfortable in this corn price environment? It’s one salient question that needs to be asked as you plan your corn-marketing strategy for 2013. Darin Newsom, a senior grain analyst with DTN Progressive Farmer of Omaha Nebraska, says recent USDA reports confirm both that while this is the first time that global demand has fallen for corn, it’s also the third year in a row that demand inside the U.S. has dropped. That is very telling for the corn market. Prices have become more volatile since 2008, which means corn demand has been in the crosshairs, and what we’re seeing is that when futures prices go over $6, $7 and even $8 a bushel, they do in fact ration demand.
Corn Guide, February 2013
The market for corn is shrinking. In fact, this has been happening over the last several years, and in 2012 there was a reduction of approximately 1.3 billion bushels in corn demand from the previous year. This was a cumulative drop from ethanol, feed and residual use. The great corn demand-driven market, which began in the mid-2000s sparked by ethanol, may in fact be turning around. The U.S. is the world’s dominant supplier of corn. In December, the USDA reported total U.S. 2012 production at 10.725 billion bushels, making it one of the smallest harvests in many years. At the same time, corn usage is pegged at 11.167 billion bushels. In other words, corn continues to be used up faster than it is being produced. This is reflected in the U.S. stocks to use ratio of 5.4 per cent. The average price projected in the United States for 2012-13 (old crop) from the USDA is $7.40 per bushel. For those who had corn this year, it was one for the ages. The question is, can the U.S. turn this trend around on the supply side and produce a “bin buster” in 2013? If this happens it will mean they will finally have more supply than they are using and ending stocks will rise significantly. It’s the quintessential question in our corn-marketing plans for 2013. Of course the flip side of that equation is, how low do corn prices need to drop so corn demand will start rising? Is the corn market caught up with other commodities that are losing their lustre in the investment world? Clearly, there are questions out there Corn Guide, February 2013
about the demand for commodities, as well as whether corn demand will come back strong at lower price values. For those considering all the risk ahead, marketing much of their corn at present new-crop values may be a consideration. There are many corn supply bears out there who are saying the United States will produce greater than 98 million acres of corn at trend line yields with a crop of over 14.8 billion bushels coming off 2013 fields. This would be the biggest crop ever and it is one reason why new-crop values are so much lower than old-crop values. Futures markets measure the future, and with snow in our fields now, it sees everybody in the United States is planting corn for next year. That is easy to understand. What is more difficult to get past is the emotional argument of farmers not wanting to accept less than they got last year. There is huge potential for oversupply in 2013, but will this be balanced by farmer resistance to sell? There is much production risk to play out over 2013, but surely a portion of your production could be priced now. Nobody knows what’s ahead, but if you are profitable and comfortable now at these price levels, placing a percentage of your potential crop never hurts. It is all crystal ball gazing regarding potential supply in the United States, but part of your job now may be to mitigate price risk. If we are to assume a big corn crop in the United States in 2013, a few scenarios may play out.
Between January and March 2013, corn futures may stay in a sideways range possibly getting as low as $6.80 per bushel. Possibly in April to June, we may see our best chance for an oldcrop rally and with that an increased chance for non-commercial speculative demand to boost prices. In the July to September period, there’s a good chance we will see a top with prices drifting lower depending on how the crop looks and what kind of crop potential is out there. In the October to December 2013 period, it is likely we will see harvest lows in the futures market, possibly between $5.75 and $6.15 per bushel, which would put Ontario cash prices at that time close to $5 a bushel. Of course there is much production risk between then and now and any marketing plan will need to take that into consideration. Nobody knows what price will do. Hedging the futures risk as well as using options should always be a consideration, but that will complicate the marketing decision. These are agricultural prices; they’re always up and down, and the marketing sweet spot is truly elusive. Will there be profitable opportunities to price corn throughout 2013? That may depend on your own daily market intelligence and having the marketing plan to go with it. As 2013 begins, however, we know that profitable corn prices for both old crop and new crop are there to be had. The challenge moving ahead is to market where you are profitable and comfortable. CG 21
Cornguide
#PestPatrol with Mike Cowbrough, OMAFRA
Crop production apps and calculators worth a look for 2013
P
erhaps your significant other gave you a tablet computer for Christmas. After weeks of playing Angry Birds or trolling YouTube.com for “funny tractor accidents” (which is actually worth a look) you have decided it might be a good idea to add some agricultural applications to your screen space. At least then you’d give the illusion of using the device for work purposes. Here are four Ontariobased applications worth a look.
Corn Nitrogen Calculator What it does: Provides you with the most economical rate of nitrogen based on your soil type, previous crop, anticipated corn yield, price of nitrogen and selling price.
Weedpro75 What it does: Weedpro75 ranks herbicide programs for corn, soybeans and cereals based on the weeds you wish to control and the value of your crop.
Cool features: You can run through different scenarios and when finished a summary can be printed off or saved for your records.
Cool features: You can create an account that saves all your field information. It also allows you to sort through herbicide rankings based on price, weed control or environmental impact.
Platforms: Can only be used on tablet computers (iPad), laptop or desktop computers.
Platforms: Can be used on any type of smartphone, tablet, laptop or desktop computer.
Where can I get it: www.gocorn.net
Where can I get it: www.weedpro75.com
GFO SellSmart What it does: Provides local price information, head-to-head price comparisons and price alerts for corn, soybean and wheat.
Aphid Advisor What it does: Aphid Advisor provides management advice for soybean aphid control based on the number of aphids and natural enemies in the field.
Cool features: You can set a selling price you want for each crop and then you’ll get a notification when each crop hits that set price.
Cool features: You can view aphid populations by country based on the data other users have entered.
Platforms: Android, BlackBerry and iPhone. Where can I get it: www.gfo.ca/sellsmart
Platforms: iPhone or BlackBerry smartphones. Where can I get it: www.aphidapp.com
Have a question you want answered? Hashtag #PestPatrol on twitter.com to @cowbrough or email Mike at mike.cowbrough@ontario.ca
22
Corn Guide, February 2013
Spotlight on Crop AdvAnCeS Crop Advances is an annual report that summarizes applied research projects involving the OMAFRA Field Crop team, in partnership with commodity groups, industry and the OSCIA. www.ontariosoilcrop.org/en/resources/cropadvances.htm
Soybean yields from no-till fields comparable to other tillage practices By Lilian Schaer New research shows that no-till can achieve equal soybean yields to conventional tillage practices. A study led by the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), showed that excellent yields and profits can be achieved without conducting primary tillage when growing soybeans. “Two thirds of Ontario’s soybean production has traditionally been grown under no-till or reduced tillage systems, but many growers have expressed dissatisfaction with their yield performance using no-till,” says Horst Bohner, OMAFRA Soybean Specialist. “Through this project we wanted to learn whether no-till practices are resulting in lower soybean yields in today’s high corn residue fields.” How was the research conducted? Researchers conducted both small plot and field scale replicated trails over the two-year project. Plots were tilled at the trial sites the preceding fall and again in the spring, and planted shortly after spring tillage. Two small scale trials were conducted each year, along with four field scale trials in 2011 and five in 2012. Soil moisture and temperature assessments were conducted along with yield analysis.
Bohner. “No-till proved to be an effective production system at each of the trials harvested over the two years of this study.” The yield reductions in no-till being reported by growers may often be due to reduced plant stands. A no-till plot where the seeding rate was increased by 30 per cent in 2012 resulted in a yield of 38.5 bushels per acre over the 35 bushels per acre in no-till with a normal seeding rate. By comparison, the best tillage treatment – fall disc ripper and spring cultivate – yielded 37.8 bushels per acre. “Although this theory was only tested in 2012, initial results strongly suggest that one of the ways to overcome possible yield reductions in no-till may be simply to increase seeding rates in no till,” says Bohner. Stuart Wright, a Wellington County dairy and cash crop producer, had two plots on his farm where various tillage practices were tested during the project.
What did the study find? “In this study, we found no evidence of significantly reduced yields in no-till. So far, it appears the best way to achieve high yields, profits, and maintain the environmental benefits of no-till is to remain in a no till system,” says
ontArio Soil And Crop iMproveMent ASSoCiAtion
“The bottom line was no-till came out pretty well,” he says. “You can solve a lot of problems by just pulling a moldboard plow through the ground, but if you can accomplish the same things with reduced till or no-till, you’re not only encouraging soil preservation but also saving time and reducing fuel use and emissions with fewer passes over the field.” Where can I get more information? More information on this project can be found in Crop Advances at http://bit.ly/WXSeb7. How was the research funded? Support for this project was provided by the Farm Innovation Program, funded in part through Growing Forward, a federalprovincial-territorial initiative. Project contributions were also made by the University of Guelph, the Environmental Sustainability Directed Research Program, Grain Farmers of Ontario and John Deere. OSCIA assisted with communication of research results.
Top tips for farmers No-till can achieve equal yields to conventional tillage when growing soybeans.
Yield loss sometimes associated with no-till may be due to reduced plant stands in no-till.
Reduced till can provide excellent soil drying and warming as well as small yield advantages.
Mission: Facilitate responsible economic management of soil, water, air and crops through development and communication of innovative farming practices
www.ontariosoilcrop.org/default.htm
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TOOLMAN
Can a marketing plan be flexible and still be a plan? By Errol Anderson arkets with their changing prices are moving targets. In a way, your farm is a moving target too. Yield outlooks change; financial conditions change. So when you prepare a market plan, think of it as a work in progress. But that doesn’t mean your plan isn’t really a plan. In fact, the central purpose of the plan doesn’t change at all. It will still force you to keep your eye on the ball and to stay disciplined from a business point of view. A marketing plan is most often led by farm finances. To assess a strategy, there are three key elements to keep an eye on, including your level of debt, your bill payment schedule and your cost of production. Integrating a marketing plan ultimately starts with the balance sheet. By calculating net worth or owner’s equity, you begin to measure risk. You may want to draw up a delivery plan as well. Simply record any reasons that will affect your decision to start the auger and head for town. Jot down bills to be paid, storage problems that need to be dealt with, or the right price you’ll accept. Calculating your cost of production is essential for any selling road map. Know how much profit you need to live on. Now you have a starting point. But a selling road map is always changing. Each month, review your price targets. Keep close track of inventory and evaluate your success as a marketer. To help, always document why you decided to sell. Now let’s look at the pricing side of the ledger. An effective farm pricing plan usually involves a mixture of cash contracts with the added horsepower of a commodity trading account. Local buyers have done an excellent job of providing several cash contracting alternatives, and some contracts closely mimic the use of a commodity trading account. There are times when a cash contract is the best alternative, and there are times when a commodity trading account is the best marketing choice. Here’s an example of pricing goals that may be incorporated into a spring pricing plan. Canola Marketing Goals: April 1, 2013 Goal #1: To follow a definite marketing plan. Goal #2: To add 15 per cent to my cash price by hedging or basis gain. Goal #3: To spread my decisions over several selling periods. For instance, you may target prices at which you’ll be flat priced or hedged through a broker. You may decide to price 10 per cent of your expected new-crop canola at $11.50 per bushel. February 1, 2013
Then 25 per cent will be priced or hedged at $12 and up to 35 per cent at $12.50 prior to seeding. Now, let’s look at the decision process. The decision to sell starts with the fundamentals. How are supply-and-demand factors affecting the market? Surround yourself with a network of market opinion, but also be aware that fundamentals are only part of what you need to know to make a pricing decision. Monitoring charts also gives clues to price direction. It’s important to respect the price trend of the market. Lines of support and resistance drawn on commodity charts by technical analysts are powerful tools. Using a commodity broker can bring in a valuable source of information for a pricing decision. Should you sell on the cash or futures market? Farmers who understand basis make extra profit here. You’ve made the decision to sell some grain. Now you have a choice. Should you sell to the local buyer or sell a futures contract (hedge) directly through a commodity broker? Since cash markets run in close parallel to futures markets, a sell signal on the futures usually means sell on the cash market. Grain buyer competition in the West often heats after harvest. Basis narrows. If local basis bids are attractive, this is a signal to consider delivering on the cash market. If basis bids are wide, this is a signal to sell the futures or purchase put options to guard price downside. The decision to sell on the cash or futures market is simply a basis decision. If the basis is weak and wide, hedge. Don’t deliver. Once the basis narrows later in the winter, deliver the physical grain and buy back your hedge with your broker. Remember, the amount the basis narrows during the life of your hedge improves the bottom line. How much to forward price depends largely upon your farm’s financial health. Those in a low-equity position are much more likely to forward contract and hedge more aggressively to ensure a profit. Once the crop is in the field and closer to harvest, they may preprice up to 50 per cent of expected new-crop production. The key, whether forward pricing new crop or selling old crop, is to price in small quantities. This gives your plan some flexibility. Planning your sales, understanding basis and hedging, and then shopping the market all contribute to the end result… profit. But remember, it also takes flexibility in a market plan to pull it off. So be disciplined, but also know when it’s important to be flexible. CG Errol Anderson is a Calgary-based commodity broker and author of the daily “ProMarket Wire” risk management report. You can reach him at 1-888-216-2490. country-guide.ca 21
business
Venture together For the Timmings family, a joint venture provides the flexibility to take charge of succession and farm growth
hen we meet, Jim and Scott Timmings sit across from me in the busy restaurant, and the father and son talk about their farm over the drone of country music. The framework of their story is shared by many farm families across this country — kid went to ag college, more than one offspring in the family could be interested in the farm, Mom and Dad hold an expanding asset base, and everyone is cautiously optimistic. As the conversation develops, it’s clear the two are connected on a deep level. I hear the same blend of hope, financial competency, excitement and a little worry from both of them. Even though their farm is incorporated, Jim and Denise Timmings from Guelph, Ont. set up a joint venture in 2011 to allow son Scott to get a start on his farming career. It’s not the answer for everyone, but it can be a way for the older generation to transfer some knowledge and to start sharing decision-making while the younger generation builds up assets and learns the business. Joint ventures are operating structures, but unlike partnerships or corporations, they don’t require a business number. Nor do they own anything or pay income taxes. With clear joint ventures, like the one the Timmings have set up, the individuals own the assets and share what revenues are left over after expenses. The joint venture agreement is simply the framework for the parties to work together, explains Jim. “The principle is that each party provides resources to jointly work together.” Informal joint ventures dot the agricultural landscape across this country, co-ordinating all sorts of activities from sharing equipment to buying breeding stock to outright farming together. They can be set up in seemingly a million different ways depending on different situations and they can be used for whole farms, a portion of the farm, or even just a specific component, such as a combine. Increasingly, joint ventures are also used by older farmers so they have more time off and can ease toward retirement. One attraction is that joint ventures can allow the younger generation to start farming at a competitive 22 country-guide.ca
scale with relatively little capital, so Shannon Lueke, a financial consultant with MNP in Saskatchewan, says it makes sense that using this structure to transition farms is becoming more common. “It lets the parties keep the assets separate,” Lueke says, “and yet it gives the younger generation a chance to start building up equity.” Interestingly, this is the second time Jim Timmings has used a joint venture for a startup. The first time was 30 years ago when he was in college. Jim and another young crop farmer entered into a joint venture with their neighbour, Peter Hannam. The new farmers supplied the labour and management to the farming joint venture while Hannam, who had taken on the time-consuming presidency of the Ontario Federation of Agriculture, supplied the land and equipment. It was Jim’s chance to capture economies of scale, since his own family’s land base was smaller, yet an unexpected added bonus was that Hannam became his mentor and later the two entered into other business collaborations. In 1980, Timmings became part of a new farm supply corporation called Woodrill Ltd. which now has two locations. He was also in on First Line Seeds, a company credited with expanding the soybean crop in Canada, and which Monsanto bought in the 1990s. In those early ’90s, the Timmings amicably split off their farming operation from the original joint venture and set up their own corporation, Timstar Farms Ltd. That brings up another potential advantage for joint ventures. They are more easily dissolved than either a partnership or corporation because they don’t own assets, have loans or pay income tax. Instead the individual participants have the ownership and pay the taxes, so when it’s time to wind down the agreement, each party simply retains their individually owned assets, plus their share of farm inventory, less operating costs. There’s no taxable disposition of assets. “Joint ventures can be simple,” says Jim. “They’re easy to get into and out of.” Since management is separate from ownership in joint ventures, it makes them an ideal structure to transfer decision-making power before wealth. And february 1, 2013
Photo credit: Olivia Brown
By Maggie Van Camp, CG Associate Editor
business
since the joint venture can more easily dissolve, it is also a good structure to test a business relationship. When Scott graduated from the University of Guelph with a desire to farm, the Timmings went to their accountant for advice on how to do it. The accountant turned to Jim and said that since a joint venture worked well the first time, why not use the same strategy to kick-start succession? So instead of giving or having Scott buy shares in the farm corporation, the Timmings created an agreement to team together. As it had been for his father, it became a way for Scott to build up some capital and get his feet wet in the business without taking on huge debt. It also leaves the door open for the Timmings’ other three children, if they are interested in farming. “We have not really gone very far with succession planning,” says Jim. Besides, Jim, who is still in his 50s, can remain an owner and operator, passing on key management skills to his son while actively farming. “I’m happy to have the opportunity to farm, and I have a really good mentor,” sums up Scott. february 1, 2013
Jim’s farm corporation provides land and equipment, and they estimate they each worked about the same, contributing 50 per cent of labour and management, and Scott is starting to build up a machinery line. At the end of the year, they simple halve what’s left over after expenses. Scott reinvests his profits in the business, mainly in equipment. It’s a slick incentive because over time Scott will increase the percentage of his share of the equipment while also updating the equipment. This then becomes a positive feedback loop. The updated machinery will help the farm increase its efficiency, which will help boost its profitability, which will help Scott invest in updating more machinery… Also, by rolling Scott’s income into equipment, his portion of the assets is increasing and gives him what investment bankers call “skin in the game.” It also separates revenue-generating, depreciable assets from appreciating investments such as land. This can be an important accounting tactic for starting farmContinued on page 24 country-guide.ca 23
BUSINESS Continued from page 23 ers, since the depreciation can go against off-farm income. Although accrual accounting is desirable for analysis, with new farmers cash accounting can sometimes be tax beneficial. For the Timmings, it’s also a matter of dividing assets for practical and philosophical reasons. The joint venture pays rent to Jim’s corporation for the land and of course, land can be rented for much cheaper than paying a mortgage on it. Land is a long-term investment asset, but it is the people, inputs and equipment that create revenues, says Jim. Separating land ownership from other assets may also help them maximize capital gains exemptions with their other children. The capital gains exemption applies only to those lands sold or transferred within family. The joint venturers, like the Timmings, aren’t paid a salary. It’s not an expense, it’s just part of the income-splitting formula. Incidentally, the Canada Revenue Agency policy for the reporting of income from a joint venture changed last March. Previously, in certain cases, the CRA allowed joint ventures to establish a fiscal period different from the tax year of the joint venture participants, and participants in these joint ventures were allowed to include in their income for a tax year the income earned by the joint
“You need all the details worked out, and you have to be willing to give and take a little.” — Scott Timmings venture for its fiscal period ending in the tax year. This has been discontinued. One of the disadvantages of joint ventures is that there’s more accounting and it needs to be transparent to all involved. At the end of the fiscal year a joint venture statement must be created to figure out how much it made or lost. Revenue and expenses are on this statement and the assets belong to the venturers in a clear joint venture agreement. Then the net revenues are allocated to each party, depending on what the agreement laid out. Following this, each party pays and must do their own income tax. Some joint venture agreements change incrementally in defined ways. For example, while some agreements simply split revenues among the parties, or revisit this every year, others may reduce the percentage of revenues taken by the older generation over time. “It’s better to outline it right up front. You don’t want to have an argument about it every Jan. 1,” says MNP’s Lueke. This brings up another point. Joint ventures are only for a given time frame. Typically, joint venture agreements are for five years, says Lueke, although they can be for however long the parties wish. But they always have an end. 24 country-guide.ca
Although joint ventures are very flexible, it’s important to get all the kinks worked out in a written agreement. According to Ontario’s Ministry of Agriculture, Food and Rural Affairs’ fact sheet “Farm Business Joint Ventures” (available at www. omafra.gov.on.ca) these agreements include the objective of the joint venture, the contribution, role and involvement of each party, and allocation of revenues and expenses from the project. They also nail down how long the joint venture will exist, how the project will be managed, and what events can trigger the withdrawal or the termination of the project. Importantly, the discussions over how to set up the joint venture can help shine a light on each party’s expectations and priorities, topics that are often avoided in many succession discussions. For example, if you expect wages similar to what you could get off farm or have land valued at the top, there will be little or nothing left at the end of the year. “You need all the details worked out,” says Scott. “And you have to be willing to give and take a little.” In fact, the Ontario fact sheet also suggests in the case of a parent-child joint venture where contributions to the venture are more likely to be unequal, a clause can be added to the document outlining how a decision would be reached where there is no mutual agreement. Of course, there are costs to a joint venture relationship too, over and above the extra bookwork. A joint venture means you lose some decision-making independence, and it requires extra communication. Interestingly, though, those “negatives” also happen to also be prerequisites for a smooth business succession. Even though Jim has collaborated throughout his career, he’s candid that this can be the most challenging and rewarding part of running a joint venture with his own son. “We have joint discussions and each of us bends a little,” says Jim. “It helps to bounce ideas off someone who’s intimately involved.” For the Timmings, having two heads talk and tackle their budgets and marketing has forced them to justify their sell and buy positions in more detail. Although they have some general established sales for inventory control, when something happens on the markets, they call each other. Since both are working at Woodrill Ltd. full time they’re both continually surrounded by market and production information. So if the market moves, they’re on the phone talking. Prior to seeding, Scott creates the cost-of-production budgets which Jim reviews and discusses. That’s overlaid with historical sales based on storage capacity. “We are constantly watching our inventory evaluation, asking, why are we holding this stuff?” says Jim. Then the Timmings use basis contracts to plan the logistics and futures to hedge the price risk. Jim says farmers may be used to marketing to protect cost of production, but that doesn’t set them up to take advantage of spiking bull markets. “Cost of proFEBRUARY 1, 2013
BUSINESS duction has nothing to do with what the market offers,” says Jim. “There’s also so much value to separating basis and futures. “I’m surprised that the markets have stayed so strong for as long as they have,” says Jim. “The margins will soon be reduced with increasing land, machinery and input costs.” While working at the elevator, Scott has seen this roller-coaster market take its toll on farmers’ emotions. “Some farmers can’t sleep until their grain is priced,” he says. “I’m being trained by Dad to have patience.” Employees work on the farm while Scott and Jim are at the elevator and Jim sometimes works from a remote elevator office on their farm. Between the two of them, they orchestrate the operation by two-way radio and are available for specific questions via cellphone. The two-ways enable everyone to hear the plan and where everyone is at or any breakdowns or problems. On the farm in the mornings and after work, father and son set everything up for the day’s work. Scott makes sure all the on-tractor and combine com-
puters are ready to go for the day. He has also added a level of technological skill to their yield monitors and maps by injecting variety information. Similarly, Jim has used Excel spreadsheets to review and organize the plans for the farm, but that too has taken a leap forward with Scott’s computer skills. “He’s made it so much smoother to run what-ifs,” Jim says. Indeed those spreadsheets are getting an extra workout within the joint venture. If Scott wants to buy a piece of equipment, he does an incremental cost/benefit analysis on the spreadsheet. Their annual budgets always cashflow on worst-case situations. “We don’t want an unplanned expense to lay us on our back,” says Jim. “If prices come down, and corn prices are $3, we know we’re going to be able to survive.” Not only does the elevator business immerse both generations in market information, it has allowed them B:8.625” hands-on experience dealing with bigger T:8.125” numbers and bigger inventories and has taught them both the S:7”importance of staying on top of their numbers.
“We know what our current ratio has to be. We know if our budgets are off. We know what our cash flow is like. We use these to figure out the issues ahead of time,” says Jim. Although the bank loans department crunches the ratios that they need, the Timmings keep the information to plug into those ratios quickly and easily on hand. “We keep records almost live so at any time we can say here are our results,” says Jim. “We do it to manage our business and then just give those numbers to the bank. If you go in prepared, they are more receptive.” One of the advantages of a joint venture is that it creates a separate credit identity for the new farmer but it’s linked to the historical success of the older generation. “It helped to have Dad’s good history of meeting budgets,” says Scott. For Scott being included in this process has given him some much-needed experience in debt management and the power of credit. “I understand good versus bad debt,” Scott says. “Good debt creates equity and earnings… and the future.” CG
By 2050, there will be 9,000,000,000 hungry people and less farmland than there’s ever been. On August 19–25, 2013, the world’s youth will gather at the global 4-H Youth Ag-Summit to advance solutions to this growing crisis of agricultural sustainability.
Come to the table. Your perspective could change the course of history. Apply now at youthagsummit.com.
S:5”
If you’re 18–25, you should send us your thoughts. We might just send you to Calgary, Canada (expenses paid) to share them with 120 other bright young minds and industry leaders.
management
Mobile command Now that farm equipment manufacturers see the smartphone as your new central command post, the opportunities are amazing By Scott Garvey, CG Machinery Editor
e’ve developed an app for that,” Mark Kyrick says as he stands in a Kansas wheat field. “You can download it for free.” Kyrick, a product specialist with Amity Technologies, shows us that when a seed blockage develops in the Sunflower 9700 air drill, the unit sends an instant wireless signal to an iPad in the tractor cab. “That’s the way of the future,” he says. Today’s “wave” of integration of smartphones and tablets into the digital strategies of the major equipment manufacturers is quickly becoming a tsunami. Some of the familiar brands and a number of aftermarket suppliers are now riding its crest, and they’re rapidly introducing new agricultural apps and expanding the uses for mobile devices. Actually, having an iPad receive a simple seed blockage signal from an implement’s wireless ECU may be among the most basic functions those devices are put to in future. It’s small potatoes compared to other possibilities that are emerging. Equipment manufacturers now see mobile devices as something akin to Captain Kirk’s “Star Trek” communicator — except they’ve one-upped the Enterprise. While Kirk had to call Mr. Scott and ask to be tied into the ship’s computer, today’s smartphone users can have direct access to all the world’s computers through the Internet right from the farm field — assuming they can get a wireless signal. In short, integrating mobile devices is now all about generating efficiencies. With the stream of new telematics and management systems coming online each year, a growing resource of real-time data along with machinery command-and-control capability is already as close as the clip on your belt. All it takes to access it is a touch on the smartphone screen. Arguably, John Deere is pushing hardest on this front — so far. It began promoting its FarmSight strategy more than a year ago, even before many of the system’s features were market ready. The company seemed to be jumping in early to get producers thinking about the possibilities of a new kind of increased productivity, one that is realized through digital technology rather than brute horsepower. 26 country-guide.ca
“There’s a realization now that horsepower isn’t everything,” says Nathan Gregg, project manager for applied agricultural services at the Prairie Agricultural Machinery Institute. “For at least 10-plus years, that’s been the marketing schtick of manufacturers: throw more horsepower at it. And now, too, there’s a new generation of farmers who are more technologically savvy and interested in that (digital) technology.” “We believe this is a hinge point that is critical to the future of agriculture,” David Everitt, Deere’s former ag and turf division president told a “technology summit” last June in Des Moines. What everything hinges on, in Everitt’s view, is fulfilling the promise offered by digital technology to create farming efficiencies in an entirely new way. For its part, Deere plans to help make that happen and get an early foothold in the promising digital marketplace by creating an “infrastructure,” as Everitt describes it, that allows for seamless integrating all the data and management functions a farm manager needs into one system. The company’s new myJohnDeere.com website is that infrastructure for an all-encompassing system that accepts not only input from Deere systems, but third-party data as well. The goal is to provide farmers with each bit of management information they need in one place with programs that will talk to each other. Now, Deere has just released a mobile app so farmers can access and control all that data from their tablet or smartphone, whether they’re in the office or the tractor cab. But Deere’s competition isn’t asleep on this front. AGCO has gone mobile with their AGCOMMAND telematics system too. The company just released a new app, which is available at Apple’s App Store. It puts control of the system into a mobile device. And the list of features offered by AGCOMMAND is growing. Although AGCOMMAND doesn’t yet offer the level of diversity available in Deere’s system, its built-in radar system tells you what the weather is like where your machines are operating, or gives you turn-by-turn directions to track down your machines, wherever they may be working. But just like Deere’s Everitt, the major executives at AGCO are also starting to talk publicly about February 1, 2013
management
But all this digital efficiency relies on wireless service, and the current cellular coverage in many rural areas of North America is less than stellar. We may actually be falling behind Africa in that regard. “The funny thing is, the coverage for cellphones all over Africa is very, very impressive,” said Richenhagen during an interview last July. Across rural Canada, coverage is still hit and miss, and establishing a top-notch cellular infrastructure for farmers may soon become critical. Demand for digital transmission capacity from cellphone users, both rural and urban, is already threatening to choke existing networks. In Saskatchewan, that realization prompted Premier Brad Wall to comment on it in the November, 2011, throne speech in the province’s legislature. “Dropped cellphone calls are still a problem,” the legislature was told as Wall developed a prom-
“ There’s a misunderstanding among the public of just how tech savvy farmers are.” — Nathan Gregg improving productivity digitally. “It’s exciting to deliver an app designed for the increasing demands of professional farmers and the dealer network that supports them,” said Martin Richenhagen, chairman, president and CEO of AGCO. “Professional farmers and agriculture enterprises can increase their productivity through this new wireless agriculture management tool that focuses on fleet management, vehicle health and overall machine uptime.” There’s no arguing the possibilities for exploiting mobile digital technology are exciting. “It (the smartphone) is becoming a more important tool,” says Gregg. “I think there are going to be other types of uses we’re just getting into.” One of those other uses is transforming the smartphone into a virtual mechanic. Vermeer has recently announced it is strategically placing 2D codes on some of its balers to provide operators with direct links to online video to show how to perform a certain function or to provide service tips. Operators who run into twine problems on the company’s Rebel 20 Series balers can scan one of the 2D codes on a sticker near the twine mechanism with their smartphone and instantly get information showing how to route twine through the mechanism. “The 2D codes were added to give operators a quick and convenient way to see how these processes are done,” says Joe Michaels, director of forage solutions at Vermeer. “Connecting to helpful demonstration videos on your smartphone is a great way to use 2D code technology. It’s help in your pocket.” February 1, 2013
ise to increase investment and upgrade existing infrastructure and technology. But whether or not those investments are positioned to serve rural, sparsely populated areas where farm machinery operates is a key question. With fewer users in rural regions, telecommunications services there generate less profit, providing little incentive to quickly improve networks. “We announced 55 new towers which will take us into 2012,” said Michelle Englot, director of external communications for Sasktel in an interview late in 2011. “There’ll still be some white (no coverage) areas we’re evaluating the economics of.” But from a producer’s point of view, the economic returns offered by good wireless coverage over all of a farm’s fields may soon look very different, especially as digital innovation moves forward and farm management becomes increasingly reliant on that technology. The question in rural areas all across the country now seems to be this: Will those outside agriculture understand the importance of providing farmers with a high level of cellular service, one capable of maximizing the advantage offered by all of those exciting possibilities that machinery companies are racing to introduce to the market? Gregg sums it up this way: “I don’t think there’s a recognition that farmers are using this technology and those tools. There’s a misunderstanding among the public of just how tech savvy farmers are and how dependent they are on technology.” CG country-guide.ca 27
Management
Telling it like it is These farmers are tackling the leadership job that seems toughest of all, setting the public straight about farming By Gerald Pilger
griculture is under attack. Public concerns about food safety, animal welfare, environmental stewardship, GMOs and other modern farming practices are growing because articulate and well-funded critics of modern agriculture dominate the message received by the 98 per cent of the population who have little to no first-hand knowledge of a modern farm. Even more disturbing is that very few primary producers refute these threats to their farms, their livelihood and the agricultural industry, and an even smaller number of farmers promote their farms and farming to consumers. Fair Oaks Farm should inspire us all. Gary Corbett, Fair Oaks’ chief executive officer, is adamant. “Every farmer has to take the opportunity to engage the public every chance they get,” Corbett says. “Agriculture is facing a perfect storm.” Corbett lays much of the blame for consumer ignorance squarely at the feet of farmers. “By nature, most farmers are very independent and they resist interaction with the public. In fact many producers believe farming ends at the farm gate,” Corbett says. “This philosophy has to change. Farmers have to engage the public.”
Fair Oaks Farm Fair Oaks Farm is walking the talk. In 2004, Fair Oaks Farm opened the farm to visits from the public. Last year over half a million people came. Make no mistake, Fair Oaks is no petting zoo. Nor is it a rural retreat built to capture tourist dollars. First and foremost, Fair Oaks is a very large, commercial, privately owned, family-farm operation located an hour’s drive south of Chicago. The farm produces 2.8 million pounds of milk per year from a milking herd of 35,000 cows. This is enough milk to meet the fluid milk needs of the cities of Chicago and Indianapolis. The mountain of manure produced by the dairy enterprise and the farm’s 40,000-head beef feedlot is converted in on-farm digesters into biogas, which is then burned to meet all of the electrical needs of the farm and to fuel the farm’s trucking fleet. “We fuel the largest fleet of natural gas-powered trucks in the United States,” Corbett says. “The natural gas we burn in the trucks replaces two million gal28 country-guide.ca
lons of fossil fuels annually. And manure-based fuels never run out.” So the decision by Fair Oaks Farm to open its doors to the public was neither an attempt to diversify the farm nor seen as a business opportunity. Rather it was an attempt by the six farm families who jointly own Fair Oaks Farm to take on the critics of modern agricultural practices. “We wanted to open up a dialogue with consumers about modern farming practices. We wanted to show consumers where their food comes from. We wanted to show them that we care as much about their food as they do,” says Corbett. “We felt the best way to do this was to invite people to come to our farm to see for themselves how their food is produced.” The farm families found consumers are actually very astute, and while a short visit doesn’t give enough time to address all their concerns, it certainly gives those who visit enough confidence about modern farming practices to check food safety off their worry list. Corbett acknowledges that although the opening of the farm was planned and began as a non-profit educational experience, it has grown into a profitable enterprise. For example, the free ice-cream cones that visitors received at the end of their visit created a demand for purchasing farm-fresh ice cream, which led to the establishment of an on-farm dairy products store. Fair Oaks Farm tours have been so successful at spreading the word about modern farming and food safety, agricultural commodity associations are now building their own showcase farms, some of them on Fair Oaks’ land. This spring, a 3,000-sow farrowing barn is set to open at Fair Oaks to give the public the opportunity to see where their pork comes from. The barn is a two-story structure with a commercial farrow operation located on the lower floor. The public views the operation through the wall-to-wall glass floor of the upper level. This glass separation allows visitors to view the sows and piglets without risk of disease transfer between the pigs and public. To experience a small part of the Fair Oaks Farm tour check out the video Fair Oaks Farms Adventure Center — America’s Heartland at http://www.youtube. com/watch?v=JJRy82i8e5Q. February 1, 2013
Management Burnbrae Farms Nor do we have to look south of the border to find inspiring examples of farmers taking on ag misinformation. In November, Burnbrae Farms, a family-owned and -operated farm and the largest egg producer in Canada, announced a $250,0000 donation to the Farm and Food Care Foundation headquartered in Guelph, Ont. “The donation is to counter the misinformation the consumer is receiving about Canadian agriculture and to make sure the right information gets out there,” says Margaret Hudson, president of Burnbrae Farms. The donation is to be made in five annual payments with the first instalment being used to support the foundation’s Virtual Farm Tours. These tours bring actual farm operations to consumers through online videos of the farm operations. The purpose of the videos is to introduce real farmers to consumers and to increase the confidence of the public in food and farming in Canada. The donation will allow for the creation of more video tours. “Farmers need to be proactive and tell consumers that farmers are people committed to doing the right thing,” Hudson says. “There is a real need for farmers to become fully engaged with consumers. Farmers have to be more open about their farm operations and business.” Hudson says technology has made it possible for every farmer to interact with consumers. “Farmers who own a phone can connect with consumers easily,” she says. “Use your phone to make a video of your farm. Post it on YouTube, on your blog, or send it to non-farmers in your contact list via Twitter. If you are an older farmer and not comfortable with social media, ask young farmers to help.” Says Hudson: “Farmers must be more open, proactive, and positive about our industry and get that message out!” One of the many farm videos featuring Burnbrae Farms can be found at: http://www.youtube.com/ watch?v=31B9ckke_4M. Links to all virtual farm tours produced by Farm and Food Care can be found at: www.virtualfarmtours.ca.
Breakfast on the Farm In the past four years, over 40,000 people have had breakfast on a working commercial farm through Michigan State University’s Breakfast on the Farm program. A survey of breakfast participants found over 46 per cent of them had not been on a farm in at least 20 years. Survey comments show that these events are having a very positive impact on participants and their view of agriculture and farming. “I learned more in half a day at the farm than in the two weeks we studied agriculture in school,” one young visitor wrote. The job is a big one. Nancy Thelen, the university’s extension director, describes how out of touch consumers are about agriculture and food production. “Only 1.8 per cent of the (U.S.) population lives or works on a farm and there is a lack of knowledge about agriculFebruary 1, 2013
ture,” she says. “Consumers are easily persuaded by other groups that have untruthful messages, misconceptions and negative videos.” The Breakfast on the Farm program was implemented to counter such misinformation by giving the public the opportunity to spend a morning on a modern commercial farm. Michigan farmers interested in hosting a breakfast apply via the university. Each farm applicant is then evaluated for environmental stewardship, animal care, and food safety practices. From these applicants, a diverse group of farms are selected and MSU co-ordinates the funding, planning, and setup needed for hosting a breakfast on the selected farms. Education is the prime focus of the day with displays set up to provide information about farming and agriculture, along with self-guided tours of the host farm. In 2012, eight farms across the state hosted such breakfasts. Thelen says the host farmers are very passionate about farming and agriculture. Most applicants say they don’t really have the time or resources to do something like this, but when MSU helps with the co-ordination it becomes something that, as one hosts told Thelen, “we have to do.” Afterwards, Thelen says, the hosts are amazed at how thankful people are for getting the opportunity to visit their farm and how their attitudes about farming and agriculture change after the visit. Basically, the hosts get to watch the transformation happen right in front of them. “It is every food producer’s responsibility to bridge the gap between producers and consumers,” Thelen says. “Farm visits are a great way to do this. One-onone conversations, social media, blogging, tweeting and uploading videos are other things farmers can do to tell consumers the truth about farming and agriculture.” “There are three key messages that farmers need to share,” adds Thelen. “Farmers care for their animals, they care for the land, and they produce safe and high-quality products.” The MSU Isabella County Farm Bureau’s Breakfast on the Farm Event is featured on this YouTube link: http://www.youtube.com/watch?v=5qnedPqUI-c.
It’s your message Back in Illinois, Fair Oaks’ Corbett believes more farmers can and should get involved. “Farmers engaging the public has to happen,” Corbett says. “A part of every farm’s normal business practice must be to interact with the consumer. It is part of your job as a farmer.” The agricultural industry has nothing to apologize for, Corbett says. Most farmers can be and are extremely proud of what they do. So why don’t farmers speak out about their operations and the industry? Why don’t farmers follow these industry leaders and invite the public to their farms or post videos of their operations to counter the bad rap that critics of modern farm practices are voicing? What are you doing on your farm to promote agriculture and the safe food message? Are you doing your part? CG country-guide.ca 29
MANAGEMENT
Protecting crop profits from foreign exchange risk The first in a two-part series on managing foreign exchange risk By Mark Kelly and James Percival, Western Union Business Solutions n recent years, unpredictability has reached new heights for the Canadian farmer. Erratic weather conditions combined with unstable feed, fertilizer and market prices have given a whole new meaning to risk in farming. Now more than ever, it has become crucial for farmers to adopt effective risk management strategies where possible. Often missed however, is the fact that volatile foreign exchange (FX) movements have a direct impact on the prices Canadian farmers ultimately receive for their production. Integrating an effective FX hedging program is therefore an important part of any farm’s overall risk management, and should not be overlooked.
Common misconceptions about FX risk “I’m not exposed to FX risk because I receive Canadian dollars for my production” — Most agricultural commodities sold on international markets are priced in U.S. dollars (USD), regardless of where they are delivered. This means that even if you don’t ship your production directly into the United States, the price you receive for your crop will rise or fall with the USD exchange rate. Tools such as non-deliverable forwards and options have been developed to help you protect your margins against an adverse movement in the USD/Canadian dollar (CAD) exchange rate, even if you don’t ultimately receive U.S. dollars. “My farm isn’t big enough” — The notion that creating and implementing an effective FX hedging program is something that is only available or suited to large corporate farms is utterly false. Advancements not only in market accessibility and technology, but also in the competitive landscape for FX services now mean that regardless of size or financial strength, every Canadian agribusiness can have access to a wide variety of FX hedging solutions and professional consultation. “The margin I’d need to put up to implement an FX hedging program will stress my working capital” — If your farm is like most of those in Canada, you run on a cash-light, asset-rich basis. FX hedging programs can be designed to take this into consideration, helping you to protect against risk without tying up your working capital. Service providers that 30 country-guide.ca
offer agribusiness-specific trading accounts with zero deposit terms are available to Canadian farmers of all sizes. Most Canadian farm operations are exposed to FX risk due to price discovery for most agricultural commodities being in USD. The size of your farm doesn’t limit your ability to effectively manage FX risk. Implementing an FX hedging program doesn’t have to impact your working capital.
Best practices The next step in managing your farm’s foreign exchange risk is to develop a hedging policy that outlines your farm’s best practices for managing this risk. This doesn’t mean you need to spend hours putting together an onerous 200-page manifesto. It can be a simple one-page document that addresses the what, when, and how of managing your farm’s foreign exchange exposure. In the end, what matters is that it is understandable, feasible to implement, and relevant to your farm’s operations. Nor do you have to go at it alone. Finding a service provider with the knowledge and willingness to help you manage the process will go a long way to ensuring your hedging program’s success.
• “What’s my foreign exchange risk?” The first step to developing a hedging policy is determining what is at risk. For Canadian farmers this amounts to the projected value of their future crop production plus what is currently in inventory. Again, the value at risk to FX fluctuations doesn’t just include what you expect to export directly, if you export at all, but also includes the projected value of your crops that have price discovery in USD terms. After you’ve estimated the value of your production at risk, the next step is to examine the impact foreign exchange has on your bottom line. This will help you determine what percentage of your overall exposure you should look at hedging.
• Understand your margins You can’t protect your bottom line without knowing what the bottom line really is. Most agriFEBRUARY 1, 2013
management
cultural businesses have very narrow margins, meaning the margin for error is extremely small. So, start by thinking about your risk tolerances in percentage terms: Do you need to protect 60 per cent of your revenues in order to ensure that your farm covers its expenses and remains profitable into the future? Or is it 90 per cent? This type of analysis for some farmers may already be done as part of their operating budgeting and crop-planning process and can therefore be easily referenced. After you understand what the bottom line is, think about how much exchange rates have to move before your margins slip below this threshold. When multiplied against your projected operating income, will a five per cent exchange rate move push you below your profitability threshold? What about a 10 per cent move? Simple sensitivity analysis will go a long way here in helping you determine what amount you should hedge.
• “When should I hedge?” After analyzing your farm’s value of production at risk and financial capacity to withstand that risk, the answer to the question of when to hedge should become clearer. First and foremost, a hedge should always be initiated at an exchange rate that ensures your budgeted operating margin is protected, and not based on the speculation that the hedge will result in a gain. In the same breath, it’s also important that your budgeted exchange rate be a realistic one relative to current market conditions. Using a budgeted USD/CAD exchange rate of $1.20 for the year when the market is trading below parity is highly unlikely to become reality given the currency pair’s past volatility. Using an unrealistic exchange rate will skew your actual results versus what was budgeted, defeating the purpose of the budgeting process in the first place, and ultimately leave your farm exposed to risk.
market independent of what the other is doing. As an example, the Canadian dollar typically experiences seasonal weakness from November to February, making this a good time for the farmer to hedge their FX exposure and protect their budgeted rate. Grains and oilseeds prices on the other hand have historically experienced strength from April to October. Therefore, it is often the case that the farmer is better off hedging their FX exposure in the fourth to first quarters of the year and their commodity price exposure in the second to third quarters. CG Based in Winnipeg, Mark G.J. Kelly is sr. business development executive, agriculture, and James Percival is corporate foreign exchange specialist, agriculture for Western Union Business Solutions, a world leader in helping farms of all sizes manage foreign exchange and cross-border payments in 140 currencies and 200 countries. Mark specializes in currency risk management solutions for agricultural clients, and James designs holistic agricultural foreign exchange risk management strategies. Contact them at 877-475-2226 or: mark.kelly@business.westernunion.com , james. percival@westernunion.com.
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• Separating the foreign exchange hedge from the commodity price hedge Given that by this point you’ve done your crop planning for next year, estimated yields and forecasted the value of your production, you should now look at implementing a hedging strategy to protect your budgeted exchange rate. Separating the FX hedging decision from the commodity price hedging decision at this point allows you to take advantage of the opportunities that arise in each february 1, 2013
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ACRES
By Leeann Minogue
Involved from the start On the farm, leadership can seem as natural as the place where you live. Or maybe not... eff hadn’t really noticed, until Elaine pointed it out over breakfast at the Saskatoon Inn on the third day of the Crop Production Show. “Of course there aren’t many women in charge,” he said. “Aren’t you looking around these rooms? There’s way more men than women at those meetings. Women aren’t interested.” “I’m interested. I’m a woman. And it’s not like there’re no women here. There’re all kinds of women here,” Elaine said. “I guess,” Jeff said, looking around the restaurant. “Is that our waitress? We should get her to bring our bill so we don’t have to walk into the room late.” Later that morning, during the break, Jeff was at a table at the back catching up with an old roommate from university when Elaine found herself in the coffee lineup behind Vicki Dutton. Vicki had just been elected to her second term as a director on the board of Saskatchewan Pulse Growers. “I thought you made a great comment at the mike during the AGM on Monday,” Elaine said shyly. “Thanks,” Vicki told her. That was enough to 32 country-guide.ca
break the ice for a short talk about new board policies while the two women waited their turn at the coffee urn. Elaine eventually worked up the nerve to ask Vicki how she’d gotten involved with farm politics. “All the great solutions farmers had in the hallways were never voiced at the meetings,” Vicki said. That made Elaine smile. “I’ve noticed that.” “It used to frustrate me,” Vicki said. “The good ideas were never formally discussed. So I began to voice those concerns.” “That makes sense,” Elaine nodded. “You should think about getting involved,” Vicki told her. “Your voice can make a difference, you know. But make sure to find some great mentors who will give you good advice when you need it.” The two women reached the stack of coffee cups just as the meeting was being called back to order. Jeff and Elaine left Saskatoon after lunch that day. The CBC was warning about bad weather, and neither of them was interested in making the trip after dark. Elaine didn’t say much during the drive. FEBRUARY 1, 2013
acres
When they got back to Jeff’s parent’s farmhouse, Jeff’s mother Donna greeted them at the door. “Why don’t you two come in and have supper before you take Conner home? I’m just about to take a roast out of the oven.” “Are you sure?” Elaine asked her mother-in-law. “Of course,” Donna said. “Come in and tell us all about the farm show.” Jeff and Elaine’s son Conner came at them at a full run, shouting, “Mommy! Daddy!” After a flurry of hugs, coats, beef slicing and table setting, all five of them and Jeff’s grandfather Ed, were sitting around the supper table. “Did you get a good look at the new combines?” Dale asked his son while he dished some mashed potatoes onto his plate. “Just barely. I could hardly get Elaine out of the hotel,” Jeff said. “So Conner’s going to have a brother after all,” Grandpa Ed chuckled. “That’s not what I meant,” Jeff said. “The meetings were at the hotel. Seed Growers. Flax Growers. Pulse Growers. Elaine dragged me to all of them.” “That’s good,” Donna said. “She was taking notes. Asking questions,” Jeff said. “There’s a lot of interesting changes going on,” Elaine said. “Things that’ll make a difference to our business.” “Waste of time, worrying about that stuff,” said Grandpa Ed. “What’s in it for you? You aren’t going to be able to change anything. You’re better off spending your time building up your own farm.” “That’s exactly what you said when I was on the board of the Saskatchewan Seed Growers Association,” Dale said. “I was right then, and I’m right now,” Ed said. “Sure, they paid your expenses, but there was no end to the time you put in. I don’t think a day went by that the phone wasn’t ringing off the hook, with somebody calling you to complain about one thing or another.” “I kind of miss getting all those calls,” Dale said. “I talked to seed growers all over the province. It was a great way to find out what was going on.” “All I’m saying,” Ed went on, “is that if you were going to put in that kind of time, you might as well have gotten yourself a paying job.” “I have a job,” Dale said. “And I think knowing more about policies and new varieties helped me make better decisions around here. Not to mention meeting all those guys. If we have questions about prices, or seed supply, there’s all kinds of people I can phone up.” “Huh,” Ed grouched. “Pass the beet pickles, would you? All I’m saying is that you should mend your own fences before you go putting up fences for other people.” “I don’t know what that means, Dad” Dale said. “But I’ll tell you one thing. That organization has FEBRUARY 1, 2013
“ I know what I’d like back,” Ed said. “All that time you spent driving back and forth to Regina and Saskatoon while I slaved away out here on my own, keeping this place running.” lobbied for regulations and programs that have been good for the bottom line on this farm. It didn’t hurt me to spend a couple of years doing my share giving something back.” “Huh. I know what I’d like back,” Ed said. “All that time you spent driving back and forth to Regina and Saskatoon while I slaved away out here on my own, keeping this place running.” Dale just shook his head, and refilled his water glass. “Maybe you should get involved, Elaine,” Donna said. “You know a lot about farm policies. You like to learn. And this is a good time, with Dale and I still on the farm. Maybe you should join some committees. Let your name stand for a board position.” “I don’t know,” Elaine said. “How would I find time? Ed’s got a point about the driving. It’s 90 minutes to Regina, let alone going all the way to Saskatoon for meetings. And what if I had to go to Winnipeg, or Ottawa? Who would watch Conner? I wouldn’t want to step up if I couldn’t do a good job of it.” “Conner has two parents. And Dale and I are always happy to have him here,” Donna said. “We could think of it as a long-term investment in the farm.” “Long-term investment in buying more fuel for the gas tanks,” Ed muttered, while the rest of the family pretended not to hear him. “I’ve got a lot going on already,” Elaine said. “Managing the farm books. Going to enough meetings to keep up my agronomy designation. Teaching that pilates class. Playschool board meetings. The Weyburn Beta Theta group made me their treasurer. And besides, what do I know about leadership?” “Do you hear yourself talking?” Jeff laughed. “Don’t you think someone who does all those things is a leader?” “Oh. Yeah,” Elaine said sheepishly, beginning to think that maybe this was going to be possible. “I just don’t understand why you’d spend so much time at something like this,” Ed said. “Away from the family. Away from the farm.” Then he stood up from the table. “I have to get going or I’ll be late for the Masons meeting. I’m the Worshipful Master this year, you know.” CG country-guide.ca 33
Life
Your family assets Do you have the right business documents in place? By Helen Lammers-Helps
o one likes paying fees to lawyers and accountants, but spending a few thousand today to put the appropriate legal documents in place could save you many thousands of dollars in the future. More important, it could save your family. Families can be torn apart by conflict when the necessary wills and the partnership, shareholder and buy-sell agreements aren’t in place. In fact, it happens all too often on the farm. It’s estimated that two-thirds of farmers don’t even have a will, says Peter Remillard, a lawyer with a farm practice in eastern Ontario. When a farmer dies without a will, the farm and his or her assets may not be distributed the way they would have liked. Remillard gives the following example. A mother decided to transfer all of her assets into joint ownership with her son who manages the farm. The mother wanted the son, upon her death, to pay each of his three sisters who are not involved in the farm $100,000 each. He promised that he would do so. In the meantime, he married but his wife didn’t like his sisters. After the mother’s death, the sisters requested their shares, as per their mother’s wishes but the brother’s wife convinced him not to follow through. The sisters have nothing on paper to back up their claim and did not receive the inheritance their mother wished them to receive. One of the advantages of consulting a lawyer is that they have experience with scenarios that you may not have thought of. For example, if your son takes over the farm, you might hold the mortgage but you might also want the outstanding balance owing on your death to be split with the other non-farming children. The complication is that you want to ensure this doesn’t jeopardize the ongoing farm operation. It would be prudent then to allow the farming child to extend the term of the mortgage for a defined period of time after your death so he would not be forced to immediately remortgage the farm to pay off the other siblings, says Remillard. Allan Haubrich, who has 41 years of experience with farm clients in the Saskatoon area, says it’s important to have a will so the executor can step in immediately to sign cheques and “vote their shares.” “This puts someone in charge. Otherwise nobody has the power to act until the courts appoint an administrator,” says Haubrich who also recommends naming a power of attorney who can act in the event of a disability. 34 country-guide.ca
Remillard recommends against using a will kit from the stationery store. “These do not lend themselves to anything but the most simplistic estate and nine times out of 10 they are not completed properly and have wording that is confusing, ambiguous and unenforceable,” he says. Wills should be reviewed every five to seven years. Of the farmers who have wills, many of those wills are stale, Remillard says. That doesn’t mean they are invalid, they just don’t reflect their current circumstances and wishes. For example, are the executors, beneficiaries and trustees who you identified still the right ones? In fact, Remillard recommends that you make it part of standard practice to review your will whenever you refinance. A will is just one of several important business documents that farmers should have in place to protect not only their farm businesses but also their family relationships. Remillard estimates 70 per cent of partners don’t have partnership agreements. It’s important for partners to agree to terms while everyone is getting along, he says. What happens if a partner becomes disabled, dies, or wants out? Can a son take over his father’s share? If one partner dies, how long does the surviving partner get to pay off the partner’s spouse — 30 days or 10 years? And at what interest rate? These are examples of the possible scenarios that should be spelled out in a partnership agreement, Remillard says. “If it’s not there, that’s not good.” One of the advantages of a partnership agreement is that you can include a clause to say the partnership survives the death of one of the partners, which has useful tax consequences, says Haubrich. Family members should also have partnership agreements to describe their business relationship, says Haubrich. That includes siblings, parents, children, and even spouses, he says. Haubrich gives the example of a woman whose husband had been farming in partnership with his brother. When her husband died there was no partnership agreement in place and she had no proof of the extent of the partnership and the surviving brother used that to his advantage, says Haubrich. When mixing business and marriage, especially in multi-generation operations, property rights can be problematic, says Remillard. In a multi-generation operation, the other partners will want to restrict the claim of a spouse but a lot of people don’t want to February 1, 2013
Life
sign prenuptial agreements or other domestic contracts, he says. This can be a real source of contention for those planning to wed. In another example where a domestic contract that covers marital property rights may be warranted, parents may worry when a child has been given a substantial discount on the purchase price of part of the farm. They may fear that the child’s spouse will be entitled to half that discount in the event the marriage breaks up and the farm is sold at market value. Remillard stresses that each party should have their own legal advice before signing any documents to ensure they understand the contract’s implications and that their own interests are protected. Many people aren’t aware that some provinces do not grant the same property rights to commonlaw spouses as those who have been formally married. It’s important for common-law spouses who are active in the farm to ensure their interests have been protected through the appropriate domestic contracts. These contracts are also important in the case of second and third marriages where significant assets have been accumulated prior to marriage, says Remillard. This ensures the protection of assets for the children of the first marriage, he explains. Buy-sell agreements, even when a farm is being transferred from one generation to the next, should cover what happens in the event of death, disability, divorce and disputes. For example, parents need to make sure they are properly protected if a child becomes disabled or there is a separation or divorce. February 1, 2013
“The parents need to watch out they don’t become an unsecured creditor,” Remillard says. Farmers have tended to do business on a handshake but now that farms are getting to be such big business it’s good practice to have leases and other business arrangements in writing, says Haubrich. “People’s memories aren’t that good and emotions tend to run high.” There is a greater likelihood that the terms of the agreement will be fulfilled if there are defined agreements in place, Haubrich adds. “There may also be tax benefits for having agreements in place.” Having properly executed business agreements in place will ensure that your farm can continue to operate in the way that you envision if something goes wrong. Experienced lawyers are aware of many possible scenarios that you haven’t thought of and can ensure your intentions will be followed. “Independent legal advice ensures that what needs to be addressed is done so properly, with everyone fully appreciating what their rights and responsibilities are,” says Remillard. “You want to get it right the first time.” To find a lawyer you feel comfortable with, Remillard recommends asking friends and family for a referral. A lawyer who advises farmers must be comfortable in multiple disciplines including real estate, family law, estate planning, and business law, he says. He also recommends asking for an estimate of fees up front so there are no surprises. CG Resources: http://yourlawfirm.ca/resourcesdownloads.html country-guide.ca 35
HR
How’s your willpower? It turns out you can increase the amount of willpower that you can call on during the day. Here’s how By Pierrette Desrosiers, psychologist and coach
e all know that we need discipline to be successful at achieving personal or professional goals. Discipline is the ability to do what you have to do, even when you don’t feel like it, because you know the task is necessary. However, it’s easier to talk about discipline than to consistently act with it. It often doesn’t come naturally to us, especially when we’re tired or have been working for a long time. Willpower is the missing piece that we need to maintain discipline. We need willpower to stay focused on critical tasks even when we are bored, and we need it to resist temptations, which can range from checking email 50 times a day, to procrastinating, eating too much junk food, or even succumbing to the bigger impulses, such as pulls towards drug or alcohol abuse, unwise sex, spending too much money or giving in to anger. Some people say, “I can’t persevere because I don’t have willpower.” But is this really the case? Can we increase our willpower, and, if so, how do we do it? Let’s go over what science tells us about willpower: You have a finite amount of willpower that decreases as you use it. Even in a single individual, the level of willpower he or she can draw on often varies during the course of a day. The reason for this is simple: you tend to run out of willpower as the day wears on. You draw from the same bucket of willpower for all your tasks during the day. This includes such things as paying bills, resisting delicious-looking cheesecake, turning down a beer, or refraining from unnecessarily checking your email. This means that our self-control gets sapped by the many decisions, distractions, and stresses we face in a given day. Willpower is like a muscle — it gets tired from exercise. But, like a muscle, you can exercise it and make it stronger. How can we increase our willpower? The solution is simple. Anything that reduces stress, boosts your mood, or recharges your energy can heighten your self-control. Here are some suggestions:
1. Eat a snack. One reason willpower runs out is because it’s energy expensive. The brain uses more energy for self-control than for just about anything else. If your blood sugar drops, your brain is less able to focus and control your impulses. One way to fix this is to eat a snack that provides more lasting energy, such as fruit, cheese, nuts, dark chocolate, or yogurt. 36 country-guide.ca
2. Take an afternoon nap. When you’re sleep deprived your brain has an especially hard time ignoring distractions and controlling impulses. A scheduled, midday “power nap” can change everything, even preventing many accidents. A brief nap (about 15 to 20 minutes) can reduce stress, improve mood, and restore focus.
3. Get sufficient sleep at night. Willpower is often highest in the morning because the brain is refreshed by sleep. Be sure to get enough sleep — ideally seven to eight hours.
4. Schedule your day by your energy level. Don’t ask yourself to make an important decision when your energy level is low. Your brain is too tired to think clearly and you could make a major mistake.
5. Limit temptations. Use your energy or willpower to build an environment that will limit the temptation. It is easier to not eat junk food if you don’t buy it than it is to resist when your favourite kind of ice cream is in the house.
6. Breathe slowly and consciously. Slow down your breathing to a rhythm of four to six breaths per minute to calm yourself down. Don’t forget: stress is the enemy of willpower.
7. Move your body. If you work in an office or you have to be in a tractor for hours, be sure to move for at least five minutes every hour (walking is great for this, if it’s possible) to re-establish your energy level. Taking this kind of short break can help you to see a situation very differently.
8. Develop your awareness.
Set an alarm three times a day to remind yourself to stop, think, and look at what you are doing. Ask yourself: What am I doing now? Does it help me to reach my goal? If yes, pursue. If not, readjust. 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. February 1, 2013
“How can their parents forgive God?” The speaker is angry and I understand why. An obviously deranged young man in Newtown, Connecticut killed 27 people, most of them elementary school students, with a powerful assault weapon. “Why did God allow it to happen?” When tragedy happens, we look for someone to blame. If we are robbed, we blame the thief. If we lose a job, we blame our employer or the economy. If we are divorced, we blame our ex or ourselves. When someone is diagnosed with Alzheimer’s disease, whom do we blame? Who is at fault when floods, earthquakes or huge storms tear homes apart? If God is all powerful, why isn’t God on the hook for bad things? Why doesn’t God prevent suffering and destruction? Where was God when the shooter entered that elementary school with intent to kill children? The Book of Job in the Bible is about being angry with God. Job has everything: children, wealth and good health. Then calamity strikes. Job’s children are killed. Invading armies steal the wealth he has spent a lifetime collecting. His health falls apart “with sores from head to toe.” Job, bothered by these devastating losses, struggles with the deep questions of life. Job asks the same questions we ask, “Why? O God, why have you done this?” Job’s friends come to visit him. They don’t come to comfort, but to explain his suffering. Perhaps the friends are under the illusion that if suffering can be explained, it can be avoided. The friends tell Job, “You must have done something to deserve this.” This is no comfort. Job has done nothing wrong to deserve his heartache. Neither have the refugees in Afghanistan. Neither have families whose loved ones are killed by drunk drivers. Neither have children killed by rockets in Israel or Gaza, or children gunned down in their school classrooms. Job’s friends suggest that suffering sensitizes us and leaves us more compassionate. I find this hard to accept. If suffering is the price we pay to be compassionate, the price is too high. In his book Lament for a Son, Nicholas Wolterstorff is told that his son fell off a mountain he was climbing because God shook the mountain. That is like saying a child is hit by a car because God turned the steering wheel. Then Job’s friends argue that suffering reveals true character. I have a hard time with this one also. I don’t believe in a God obsessed with testing humanity. We might try to explain the mess we are in by blaming ourselves. In other words, we suffer because we create a mess of our own choosing. This explanation does not hold up either, certainly not in the emergency rooms of life. Children do not choose to get leukemia. A pedestrian hit by a bus does not choose a broken leg. Some say suffering is simply a part of human life. If we accept this premise, we need to answer questions about our responsibility. Do we allow suffering to increase? What do we need to do to alleviate suffering? Eventually Job gets fed up with the explanations of his friends. What he really wants is what all of us want — hope. The question “Why?” will probably never be answered. Hope does not come from what we understand, but from how we deal with the mysteries, and the tragedies, of life. Suggested Scripture: Job 6:4-7:11, Psalm 37 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. February 1, 2013
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h e a lt h
Tolerance, dependency, addiction What’s the difference? By Marie Berry rug misuse can range all the way from “street use” of narcotics to the more innocent-sounding taking of an antihistamine because it has sedation side-effects and will help you get a good night’s sleep. Ideally any drug should only be used for what it is intended to do — i.e. you should only use your antihistamine for allergy symptoms — and for the shortest possible time. Understanding some terms will help. Tolerance develops when you need to take more and more of any drug in order to function normally, to alleviate your symptoms, or to achieve the “high” that you seek. Dependency develops over time and is the compulsive and repetitive use of drugs. Addiction can have either or both physical and psychological dependency or cravings. With dependency and addiction, when you stop taking the drug, withdrawal symptoms occur. Drug abuse results from tolerance, dependency, or addiction, and just as the term indicates, it involves the inappropriate use of drugs. Three general categories of drugs are most often abused: social drugs, prescription drugs, and illicit or illegal drugs. Alcohol, nicotine, and caffeine are examples of social drugs, i.e. they do not require prescriptions and are used throughout society. Prescription drug abuse can develop slowly over time, and because you are within the health-care system, you may not realize you have developed a dependency which has the potential to lead to drug abuse. When you think of illicit or illegal drugs you probably think of drugs like the inhalants, cocaine, “crystal meth,” crack cocaine and cannabis as well as ecstacy and heroin. Nearly 80 per cent of Canadians have had an alcoholic beverage at least once in their lifetime. However, with chronic, heavy consumption liver disease can occur. It’s also estimated that Canadians drink an averGetting pregnant can be easy for some women, but for others it may not be so. A variety of factors can impact fertility, and a variety of products are available to help. Next month, we’ll look at some of these as well as some measures that you can take to increase your chances. Send Marie your thoughts and questions: editor@country-guide.ca. 38 country-guide.ca
age of 2.8 cups of coffee each day, and if you consider the caffeine in carbonated beverages and foods like chocolate, then caffeine is first among social drugs. It may not seem to you like a drug, but if you have tried stopping your coffee intake, you may have experienced a headache, a common withdrawal symptom from your tolerance to caffeine. Rates of smoking in Canada have declined to an estimated 20 per cent of the population, but if you do smoke, you will recognize the habit as an addiction with withdrawal symptoms. Prescription drug abuse may start simply with your use of a medication for an ache, pain, or other symptom. With time, you may start using more and more to achieve the same relief, or you may notice that when you take the drug you feel better or even experience euphoria. Narcotic pain relievers such as morphine, oxycodone, and codeine have a high abuse potential. Abuse of tranquillizers such as alprazolam, diazepam, and lorazepam and stimulants including methylphenidate is common. These drugs act in the brain or central nervous system where they produce the “highs.” Unfortunately with these drugs, the difference between a therapeutic and an abuse dose can be small. Teenagers, older adults, women, and Aboriginal people seem to have the highest risk for prescription drug abuse. Perhaps, older adults and women have this increased risk because these two groups tend to take more different types of medication. The belief that prescription drug abuse is less harmful that other drug abuse is held by many people, but is untrue. Any type of drug abuse is costly in both money and resources. Illicit drugs are the ones that you probably think of most often when you hear the term drug abuse. However the incidence of use is about 10 per cent, which is much lower than many other drugs. But because these street drugs are not legal, they have the potential to be contaminated or of varying potency, which can create lethal consequences. Some illicit drugs are inhaled or injected, which also come with health risks. Most of all, make sure you and your family are aware of the dangers and the warning signs of drug abuse, and remember that a wide variety of types of drugs can be abused. As they say, knowledge is power, and this is especially true with drug abuse. Marie Berry is a lawyer/pharmacist interested in health care and education. February 1, 2013
Va l l e y
The Empty Diner
ILLUSTRATION: RICK KURKOWSKI
Dan Needles is the author of “Wingfield Farm” stage plays. His column is a regular feature in Country Guide am breakfasting on my own these days, which is never a good idea. The Kingbird Cafe is deserted because every single one of the neighbours has cashed in a few loads of grain at the elevator and booked a trip south. Everyone, of course, but Vern Bunton. Vern and Elma arranged another of those farm swaps they do for a holiday. Right now they’re milking cows on Vancouver Island for some people they met in an Internet chat room. Their new friends are learning to run a snow blower for the first time and having so much fun they are taking work away from the township snowplow on the Petunia Valley Sideroad. My wife and I chose to stay home this year because for writers there has been no sudden spike in the price of pithy prose. The market for words peaked way back in the 1990s and has been drifting gently downhill ever since, travelling in lockstep with hog prices, RIM stocks and GIC rates. I’m not complaining. My Anglican soul recoils from the idea of another tropical all-inclusive shared with crowds in withering heat. After last summer’s drought I don’t think I will be completely cooled off until April. My wife is not so sure. She has been spending more time in the basement in a recently renovated plant room she uses to hold all the potted palms, oleanders and other tender plants she brings inside for the winter. She arranges them along the wall in stacks under fairly powerful grow lights. My goldfish go in there too, in a tank that is filtered through a gravel water garden of hostas and day lilies. This year, I dumped a couple of wheelbarrows of beach sand on the floor and set out a deck chair for her. With the heat turned up and the water trickling over the rocks, the effect is quite tropical. F e b ruar y 1 , 2 0 1 3
Before he left, Vern noticed the fierce glow one night and called me up. “If you’re trying to supplement your income with a grow-op, you’re behind the times,” he said. “The hippies up on the hill are ripping out their marijuana plants and putting in Roundup Ready corn.” Does nothing stay the same? For all of my adult life I have listened to farmers complain that markets have long since decoupled from reality. For years they have been asking, “How could a bushel of wheat sell for the same as a double-double at Tim’s?” They aren’t asking that question anymore, at least not since beans climbed above the price of a Starbucks Triple Ristretto Venti Half-Soy Non fat Decaf Organic Chocolate Brownie Iced Vanilla Gingerbread Frappuccino, whatever that is. And the answer remains that yes, a whole lot stays very much the same as it ever was. I’m sitting here in the Kingbird Cafe, which has been operating under various names and management since the Depression. The guys I sit with in the corner booth have been complaining about basically the same things ever since I moved in 35 years ago. Feeding people in a little hole-inthe-wall restaurant is an idea that the
Romans invented. The bacon and eggs on my plate date back to the domestication of animals maybe 8,000 years ago. I’m wearing shoes and clothes fabricated out of leather and animal fibres, ideas that stretch back to the Paleolithic era. The jokes we tell in the diner date even further back, to the early Cretaceous period. The point is, it doesn’t matter what new fiscal cliff looms on the horizon, chances are very high that a lot about the future is going to look pretty much the same as it does right now. This seems like an important thought to me and I’m sorry there is no one with me today to share it. So there you are. This is the risk of dining alone. Your thoughts wander like children in a cornfield maze. It is a reminder that no matter how many acres and sections we till up, we still need the neighbours to keep us from living in our heads too much. Is there anything fresh and new for 2013? I think there is. For the first time in my association with farming in this country, my immediate circle of friends is not moaning about the death of agriculture. That alone is worth popping the cork on a bottle of champagne. country-guide.ca 39
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