CGW130201

WESTERN EDITION

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February 1, 2013 $3.50

SUCCESS

ON THE FARM Scott and Jim Timmings take on a world of new possibilities PG. 30

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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.

8

CAN A MARKETING PLAN BE FLEXIBLE AND STILL BE A PLAN? Every good marketing plan does need flexibility, but it also needs discipline.

10

LIFE HAPPENS After 50 years, Dave Falk reflects on how the meaning of success changed when he left the farm.

12

23

CORN GOES GLOBAL First, South America won soybean bragging rights.

Now it’s taking over corn. Is that a bad thing?

29

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.

30

VENTURE TOGETHER Ontario’s Timmings family uses a joint venture to make their succession plan both flexible and effective.

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

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FEBRUARY 1, 2013

TELLING IT LIKE IT IS These farmers are tackling the toughest leadership job of all, setting the public straight about farming.

42

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.

45

MOBILE COMMAND Now farm machinery makers are using the smartphone in ways to put “Star Trek” to shame. Beam us up, Scotty.

50

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.

SHARED EXPECTATIONS Saskatchewan’s Franck and Kari Groeneweg are building a road to success for others to follow.

28

39

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.

BRING TO A BOIL Really? They’re growing durum in Ontario, and it’s all because of an innovative processor.

FOREIGN TO US Canadian and U.S. agriculture depend on foreign workers. That’s where the similarity ends.

18

36

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.

48

HANSON ACRES On the farm, leadership can seem as natural as waking up in the morning. Or maybe not.

52

GUIDE HEALTH If you still think drug abuse is only about the illegal stuff, it’s time for a bit of truth telling.

54

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: Gord Gilmour Cell (204) 294-9195 (204) 453-7624 Fax (204) 942-8463 Email: gord.gilmour@fbcpublishing.com Maggie Van Camp (905) 986-5342 Fax (905) 986-9991 Email: bmvancamp@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Cory Bourdeaud’hui Cell (204) 227-5274 (204) 954-1414 Email: cory@fbcpublishing.com Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com

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 23), 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 18), 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.

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

february 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

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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.

8 country-guide.ca

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.

February 1, 2013

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opinion

BIG IDEA

Life happens Some 50 years ago, a young Dave Falk told Country Guide about his big plans for success on the farm. He certainly found success.

But he left the farm to do it

By Gord Gilmour, CG Associate Editor The word success can be hard to define, whether on the farm or off. We all have different standards.

It might mean a successful career to one person, a happy family life to another, or to others, just a life lived independently and by one’s own light.

Despite the variety, success is also one of those things most of us don’t have much problem identifying. It’s definitely one of those “I know it when I see it” commodities.

Arriving at Dave and Sandra Falk’s home on the outskirts of Portage la Prairie, Man., it’s hard to miss that mark of success. The Falks clearly have a comfortable lifestyle, but more importantly there is a sense of contentment that comes from a life well lived. Both are now retired, but Dave points out with a chuckle they’re now heavily involved in

There is something a bit unique about Dave though. Just over 50 years ago, fresh out of the University of Manitoba’s agriculture program, he returned to the family farm. Shortly after that he got a phone call from longtime Country Guide contributor Elva Fletcher, who wanted to come for a visit. She was speaking to a number of young farmers and the end result was a piece entitled “Young man with a plan,” about Dave’s plans to find success on the farm.

Dave definitely found success — but not on the

community activities and are as busy as ever. In

farm. Instead a few years later he found himself

fact, as I arrive Sandra pauses to say hello, then

getting into the fertilizer business on the ground

heads out to a committee meeting.

floor, and enjoyed a decades-long career in that

They could be any one of thousands of retire-

industry, where he ran and later partly owned an

ment-age couples. In fact it’s a question that’s on

independent ag supply outlet. He also had a stint

the top of Dave’s mind. “I really can’t figure out

at the head of the industry’s association, now the

why you want to talk to me,” he says with a laugh.

Canadian Association of Agricultural Retailers.

10 country-guide.ca

february 1, 2013

BIG IDEA

opinion

Country Guide: Can you tell us a bit about your time on the farm and what led to your decision to leave it?

Dave Falk: I had returned to the farm after university and was focusing on cattle more than crops. Our land wasn’t the best land but it was good for cattle production. That was when Elva Fletcher contacted me.

I don’t even know how she found out about me, I suspect maybe she had talked to some of my instructors at the University of Manitoba. It was a few years later after Sandra and I had married and we were expecting our first child that I began to think about leaving the farm. There’s something about having a family on the way that suddenly makes you think about finding something more steady, with a bit more security. That was when I heard Bill Munro was looking for someone to come work for him in his new farm supply business.

CG: That was the very early 1960s, and the farm input business was still really in its infancy. Was it an exciting time to be getting into the business?

DF: Very much so. I was very fortunate to have a lot of opportunities as a result of that decision, and I was also very fortunate to go to work for Bill Munro. He treated me very well, almost like a second son. At one point I left the company for a short period, then was approached by Bill about coming back. We had a good conversation about it, and I explained to him that if I came back I wanted to become a part owner, because I didn’t just want to work for someone else the rest of my life. He understood that and we were able to come to an agreement. In the end Bill owned half of the company, his son owned a quarter and I owned the other quarter. Later, when Bill retired and he and his son decided to sell their interests, I worked with Ron Helwer and his family, who owned Shur-Gro in Brandon. Working with them was really good as well. Ron actually sold me a portion of his interest in the business because he wanted to work with me as an equal partner.

CG: Do you think the same sort of opportunities would be available to the young men and women of today?

DF: (laughs) That’s a bit of a tough question, but I think yes, under the right circumstances and for the right person, they could very well be. There are still independent dealers out there, and they still need the right people to help them run their businesses, especially as they become larger. The right young man or woman could find opportunities there.

There are also new types of businesses emerging that aren’t as mature and well established. It might be a bit of a risk to go to work for them, but those sorts of businesses are also where the opportunities are. Precision agriculture companies, for example, are a completely new type of farm business. I’m sure there are others I’m just not thinking of right now — agronomic services would be another.

CG: Most of us have the occasional setback in our career — can you share any of those with our readers?

DF: There were times — especially during the 1980s when our customers were really struggling — that the business struggled too. It’s funny, I said earlier that I made the decision in part because I wanted more security for my family than I thought farming would give us. Then you get out in the world of business and you realize that there aren’t any guarantees there either. During that period we had to accept that reality and do our best, just like our customers did.

CG: I sense as I speak to you, that you’re OK with how your life has gone to date. You and Sandra both seem quite happy and content. Is that a fair assessment?

DF: Oh, I think so. We’ve had a good life together, raised a family, ran a business that became successful even with its challenges. No, no complaints. I think leaving the farm was the right decision for me and my family.

Some of my classmates stayed farming and have become very successful themselves, but I don’t know if I could have done that. The quality of our land probably would have prevented it. It just wasn’t good enough in the end.

CG: You’ve clearly been very successful by anyone’s yardstick, even though it wasn’t where you were originally heading. You’ve never regretted the decision at all?

DF: (pauses) Maybe just a little bit — a few pangs — a few years after I left the farm and my father retired and sold the land. I think it would be fair to say I had a little bit of regret at the time. But not past that. I think we’ve been very fortunate. We were lucky enough to work in and own a business that was successful, so yes, I guess you could say we were successful. I’ve enjoyed my career and the people I’ve worked with. I’ve had opportunities and done things I never would have if I had stayed on the farm. Now we’re both retired and we’re taking this opportunity to become more involved in community activities. I really don’t have any complaints. Life is good. (laughs) But I still can’t figure out why you wanted to come out and talk to me. CG february 1, 2013

country-guide.ca 11

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.

12 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 14 country-guide.ca 13

business Continued from page 13 “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 14 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 15

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BUSINESS

SUCCES A FAVOURABL

DESIRED OUT

(MERRIAM WEBSTER DIC

18 country-guide.ca

FEBRUARY 1, 2013

BUSINESS

SUCCESS MADE ON THE FARM

CESS RABLE OR

By Anne Lazurko, CG Contributing Editor

OUTCOME.

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 completely separate business. The couple also grows 850 acres of corn for feed and manages close to 50 employees.

Continued on page 20 country-guide.ca 19

business

Continued from page 19 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

20 country-guide.ca

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

February 1, 2013

business

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 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, providing 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 decision 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.

Continued on page 22

February 1, 2013

country-guide.ca 21

BUSINESS

On the farm, says Amy Cronin, success means “meeting the goals we set for ourselves.”

Continued from page 21 “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 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 22 country-guide.ca

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 FEBRUARY 1, 2013

BUSINESS

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

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.

FEBRUARY 1, 2013

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

PHOTO CREDIT: CAREY SHAW

By Angela Lovell

Continued on page 24

country-guide.ca 23

business Continued from page 23 from experience about bad years. When the couple arrived here in 2003, they had 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.”

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FEBRUARY 1, 2013

business 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.

“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 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 Continued on page 26

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business

Continued from page 25 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 26 country-guide.ca

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 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 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,” FEBRUARY 1, 2013

BUSINESS 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 bookFEBRUARY 1, 2013

keeping 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 Saskatche-

wan 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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business

Corn goes global North America is losing its corn dominance, the same way it lost soybeans. Maybe that’s not such a bad thing ven though commodity prices have been above average since about 2007, the talk after every harvest is all about how prices will soon return to normal.

Instead, prices have stayed historically high, buoyed by weather cycles and especially by the U.S. government’s ethanol policy.

“Each year, that meant an average 750 million more bushels we needed to feed that industry,” says Cal Whewell, a risk management consultant with FC Stone in Perrysburg, Ohio.

After 2010, corn’s story is all about yields and opportunities. The U.S. has suffered through three years of disappointing corn yields at the same time that feed grain demand has been rising, especially in China. Suddenly, the world needs more corn and the U.S., with its fuel mandate and its lower yields, isn’t the powerhouse it once was.

“If you take a look at the yields in corn, between the added demand from 2006 to 2010, and the crop we didn’t grow in the past three years, that amounts to 5.2 billion bushels of corn,” says Whewell. “That curve has given us the pricing opportunities we’ve had and the real drive for more acres.”

In 2006, the U.S. produced 78 million acres of corn. For 2013, it’s projected to go to 97 million. At the same time, soybean acres increased from 75 million and are forecast to go to 80 million for 2013.

Interestingly, in 2007, corn took 11 million acres from soybeans, and since then, the soybean sector, in order to regain its acres, had to go elsewhere.

“We’ve lost wheat acres, we’ve lost cotton acres, and the majority of that has been picked up from conservation reserve program (CRP) acres, which have gone from a high of 37 million to 38 million acres at the start of this process down to 27 million acres projected for 2013,” says Whewell.

The other major factor affecting price and the overall market is the arrival of Brazil and Argentina, along with Russia/Ukraine. The Black Sea Region has 28 country-guide.ca

By Ralph Pearce, CG Production Editor seen significant growth in corn in the past two years. According to the USDA, 2006 marked the highest production level (3.51 million tonnes of corn) since 1987 (3.84 million tonnes). Production in Russia was up and down through the 1990s and into the 2000s, taking off in 2008 (6.68 million tonnes) before falling back to 3.0-milliontonnes range in 2009 and 2010. Then in 2011, production more than doubled to 6.68 million tonnes, only to jump another 12 per cent to 7.5 million tonnes, last year, a new high for the country.

Brazil and Argentina are in a similar position, vying for a larger share of the world trade in corn. According to Whewell, the U.S. had its best year exporting corn in 2007-08, with 62 million tonnes. That same year, Brazil and Argentina were a combined 23 million tonnes.

“Today, the U.S. is hoping, and I don’t know if we’re going to accomplish it or not, but we’re hoping to export 29 million tonnes of corn,” says Whewell. “Combined out of Brazil and Argentina this year, they’re going to export 34 million tonnes of corn. So, they’re going to do more than we did, where just five years ago, they did a third of what we did. And then the real kicker in that is Ukraine, and what I’ve read about there, the potential out of that country is mind boggling.”

Opportunity knocks For many growers, the urgency may be there to shift acres from soybeans into corn. Depending on where the farm is located, Ken Nixon might agree that moving acres or shifting to a corn-oncorn scenario makes sense.

For instance, for Corn Belt farms on sandier soils that can work the residue into the soil, continuous corn can actually increase water retention. But from Nixon’s vantage point, shifting rotations, at least here in Canada, might not be the prudent thing to do, especially with more corn being grown in the U.S. Nixon, who farms near Ilderton, Ont., agrees with Whewell’s assessment of the

emerging world players, noting that Brazil is working on further improvements to its overall export picture.

Although Argentina is in a bit better position, labour unrest in late 2012 was disrupting the country’s ability to do business on a global basis.

“Every time a traditional exporter has a hiccup, and you have to go through the second and third and fourth source, they say, ‘We have this opportunity, but we don’t have the capacity at the docks or the transfer elevators or the rail, and if we only had that, we’d be set,’” says Nixon. He adds that in spite of what looks to be a great opportunity to meet demand, reality kicks in and exposes the limitations of that trading partner’s lack of infrastructure.

Nixon replays the situation with soybeans in the 1970s, when there were really only two players: the U.S., as the supplier, and Japan, as its customer.

American soybean growers reached a point where they thought they could dictate to Japan how it would accept their soybeans.

But the Japanese had other plans, choosing instead to invest in Brazilian soybean production.

“The same thing happens with world trade, where any time there is a vacuum created, it gets filled,” Nixon says. “It might not get filled immediately. In the case of the Americans holding up the Japanese, it didn’t happen overnight, but five or six years later, all of a sudden, here are Brazil and Argentina.”

Nor do we have to go so far afield to see major shifts in the geography of corn.

It’s a sign of the times and an opportunity to grow other crops — including corn — may be shifting corn production to Western Canada.

Is that a threat to the East? Absolutely not, says Nixon.

“In southern Ontario, we have a very robust processing industry for most of our crops, and the opportunity to go to a world market, very easily, because of the water situation around us,” reasons Nixon. “That helps stabilize things, year over year.” CG february 1, 2013

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.

February 1, 2013

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. country-guide.ca 29

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 decisionmaking 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.

30 country-guide.ca

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 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 Timfebruary 1, 2013

Photo credit: Olivia Brown

By Maggie Van Camp, CG Associate Editor

business

mings 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 busifebruary 1, 2013

ness 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 Continued on page 32 country-guide.ca 31

BUSINESS Continued from page 31 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 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 inter-

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ested 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.

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 farmers, since the depreciation can go against off-farm income.

Although accrual accounting is desirable for analysis, Continued on page 34

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business

“ You need all the details worked out, and you have to be willing to give and take a little.”

— Scott Timmings Continued from page 33 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 venture for its fiscal period ending in the tax year. This has been discontinued.

One of the disadvantages of joint ventures is 34 country-guide.ca

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.

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 february 1, 2013

business 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 production 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 february 1, 2013

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 twoway 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 computers 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 whatifs,” 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 hands-on experience dealing with bigger numbers and bigger inventories and has taught them both the 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 country-guide.ca 35

business

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

36 country-guide.ca

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.

FEBRUARY 1, 2013

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

FEBRUARY 1, 2013

Continued on page 38

country-guide.ca 37

business Continued from page 37 said, ‘Smoked salmon? What are you talking about?’” 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 shortlived 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 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, 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 Ontario-grown 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 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 gluten-free pasta. A friend suggested 30 years ago that she develop glutenfree 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 glutenfree 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

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FEBRUARY 1, 2013

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 gallons of fossil fuels annually. And manure-based fuels never run out.”

So the decision by Fair Oaks Farm to open its February 1, 2013

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.

Burnbrae Farms Nor do we have to look south of the border to find inspiring examples of farmers taking on ag misinformation.

Continued on page 40 country-guide.ca 39

Management Continued from page 39 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.

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.

Breakfast on the Farm

It’s your message

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 agriculture,” she says. “Consumers are easily persuaded by

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

40 country-guide.ca

February 1, 2013

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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.

Foreign exchange movements have a direct impact on the prices Canadian farmers ultimately receive

ogy, 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 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 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 technol42 country-guide.ca

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 invenFEBRUARY 1, 2013

MANAGEMENT

FITS MY

COLOR

tory. 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.

Gary Martens SWAN RIVER, MB USING 612-ASY-0711 ON A FLEXI-COIL 5000 “I am very impressed by the performance of the BTT openers. They are built with quality and durability in mind. Most of all these openers just work; and that is what I am looking for.”

• Understand your margins You can’t protect your bottom line without knowing what the bottom line really is. Most agricultural 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.

Continued on page 44

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management

Trait Stewardship Responsibilities

Notice to Farmers

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

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

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

Continued from page 43 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 real-

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istic 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.

• 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 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. february 1, 2013

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.

“There’s a realization now that horsepower isn’t everything,” says Nathan Gregg, project manager for February 1, 2013

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 improving productivity digitally. “It’s exciting to deliver an app designed for the increasing demands Continued on page 46 country-guide.ca 45

management Continued from page 45 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.”

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

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February 1, 2013

management 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 promise 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 for-

ward 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

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country-guide.ca 47 1/3/13 9:55 AM

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 48 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 49

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.

50 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 51

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.

52 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

“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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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.

54 country-guide.ca

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.

F e b ruar y 1 , 2 0 1 3

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