WESTERN EDITION
country-guide.ca
March 15, 2013 $3.50
FARMING FLEXES ITS MUSCLES For farmers like Dan Holman, it’s a brave new world
+PLUS FARMERS OWN FEWER TRACTORS, YET THOSE TRACTORS DO MORE IF FARMERS ARE SO GENEROUS, WHY ARE CHARITIES SO WORRIED? ON THIS FARM, USED MACHINERY MEANS A CHANCE TO ADD VALUE Publications Mail Agreement Number 40069240
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FARMING FLEXES ITS MUSCLES 2012 has changed the Canadian farm landscape, and in this issue our writers focus on the power this is putting into the hands of a generation of farmers — farmers like Saskatchewan’s Dan and Stacey Holman — who have the skill and the ambition to use it.
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GONE LOCAL IN AN EXPORT PROVINCE In case you were wondering, the local food market is no place for wimps. Just ask the Boldts.
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NEXT YEAR’S MODELS Through history, breakthroughs in machinery design have impacted farm size. It’s about to happen again.
Our commitment to your privacy At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Avenue, Winnipeg, MB R3H 0H1. Occasionally we make our list of subscribers available to other reputable firms whose products and services might be of interest to you. If you would prefer not to receive such offers, please contact us at the address in the preceding paragraph, or call 1-800-665-1362.
MARCH 15, 2013
DOING MORE, SPENDING MORE It seems a contradiction. Farmers own fewer tractors, but their total investment keeps climbing.
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GUIDE HR — WHAT MAKES A REALLY GREAT LEADER? There actually is a leadership formula. Pierrette Desrosiers shows how to use it on your farm.
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GUIDE LIFE — THE EFFICIENT KITCHEN These tips will help you feed your family the food they need and love, and free up your time too.
LOCAL SALES KEEP GROWING Consumer demand for local food is showing exceptional strength. Our experts predict it’s here to stay.
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THE NEW CONFIDENCE “Dammit, it feels good,” says our Maggie Van Camp. After a bleak decade, good times roar on to the farm.
WHERE ‘USED’ IS BEST The Hall brothers in Saskatchewan add extra value to their farm by sticking to used equipment.
THE BUSINESS OF CHARITY Farmers pride themselves on their generosity. So why are rural charities so worried?
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IF IT HAPPENED TODAY If you died today, could your family find what they need to keep the farm going? Here’s your checklist.
SHARING EQUIPMENT In good times, fewer farmers share equipment. Our Gerald Pilger says it means they’re missing out.
PUBLIC IMAGE For the FCC’s Fred Wall, the challenge is to show farmers succeed in the field and as businesses.
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EVERY ISSUE 5
MACHINERY GUIDE Mid-size tractors are the foundation of Canadian agriculture, and they’re getting better all the time.
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HANSON ACRES With both a sister and a sister-in-law in the car, is there ever a right thing to say?
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GUIDE HEALTH It’s easy to take your kidneys for granted, but Marie Berry warns that it may be dangerous too.
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PETUNIA VALLEY The rumour mill hits overdrive when valley farms get snapped up. Is it the Chinese? Or Wall Street insiders?
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
“If I hadn’t liked it... ” I was sitting on a hard wooden pew in church when I first heard this story, and I was considerably younger than I am today, so you can tell that the story must have resonated to have remained fresh in my memory for so long. Perhaps you will remember it for that long too. Our minister at the time had been born and schooled in Wales, and he recalled the year when he was nearing the end of his training for the ministry there. As part of their program, the soon-to-be graduates like himself would be sent to isolated village churches on Sundays to gain some practice in the pulpit while at the same time helping the local congregations that even in those days were finding it difficult to attract and pay full-time ministers. Instead of payment, the student ministers would be treated to a huge meal by one of the church ladies after the service, and it was at just such a meal, served in a typical, thoroughly respectable Welsh farmhouse that our story took place. The table seemed constantly refilled with more and more food, and with every dish that she brought to the table, the farm wife beamed ever more, soon scuttling back to the kitchen to return with yet another plate in a seemingly endless succession. And every time, our minister, who through the week had to exist on a dull round of limp and tasteless cafeteria food, made the room echo with his praises and his gratitude. 4 country-guide.ca
“Oh, I do like to hear you say it,” the farm wife said. She then cast a glance in her husband’s direction, where his head was bent over his meal. “He,” she sniffed, “never says a word about my cooking.” “Whaddya mean!” the old farmer retorted, before remembering his visitor and softening into what seemed in his books to pass for being attentive to his wife, saying, “If I hadn’t liked it, I would have told you.” I can’t tell you how many times since, when I have been speaking to one farm meeting or another, and especially when speaking closer to home to Women’s Institutes and similar groups, I have seen the audience’s faces register their sympathy with the woman in the story. If a sigh can be communicated with a lowering of the eyes, that is what I was hearing. Much of this issue of Country Guide, as always, is devoted to the power and the productivity of the modern farm. In this issue, we talk about the great resources farmers can command today, about the amazing machinery they can put to work, and about the opportunities that lie ahead. Perhaps then it’s best to begin on a humbler note, and to recognize that even in our own kitchens, those of us in agriculture do not always respect the miracle of the food we produce, and of the families who work together to produce it. Spring and another year of miracles, will soon be upon us. Let me know what you think at 519-674-1449, or tom.button@ fbcpublishing.com.
Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562 Advertising Services Co-ordinator: Sharon Komoski (204) 944-5758 Fax (204) 944-5562 Email: ads@fbcpublishing.com Publisher: Bob Willcox Email: bob.willcox@fbcpublishing.com Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Director of Sales and Circulation: Lynda Tityk Email: lynda.tityk@fbcpublishing.com Circulation Manager: Heather Anderson Email: heather@fbcpublishing.com Designer: Jenelle Jensen Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 12 times per year by Farm Business Communications. Subscription rates in Canada — Farmer $36.75 for one year, $55 for 2 years, $79 for 3 years. Non-farmer $79 for one year. (Prices include GST) U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50. Publications Mail Agreement Number 40069240. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.
Canadian Postmaster: Return undeliverable Canadian addresses (covers only) to: Circulation Dept., PO Box 9800, Winnipeg, Manitoba R3C 3K7. U.S. Postmaster: Send address changes and undeliverable addresses (covers only) to: Circulation Dept., PO Box 9800, Winnipeg, Manitoba R3C 3K7. Subscription inquiries:
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. 5 Internet address: www.agcanada.com
ISSN 0847-9178 The editors and journalists who write, contribute and provide opinions to Country Guide and Farm Business Communications attempt to provide accurate and useful opinions, information and analysis. However, the editors, journalists, Country Guide and Farm Business Communications, cannot and do not guarantee the accuracy of the information contained in this publication and the editors as well as Country Guide and Farm Business Communications assume no responsibility for any actions or decisions taken by any reader for this publication based on any and all information provided.
march 15, 2013
Machinery
By Ralph Pearce, CG Production Editor
They may not be the biggest tractors on the farm scene, but just try running an efficient operation without at least one tractor in the 220- to 325-horsepower class. They’re the workhorses on the modern farm, with a horsepower range that is ideally matched to much of the other equipment available to farmers today. But brute horsepower isn’t the only attraction with these tractors. Often, it may not even be the most important. Instead, the tractors in the class are known for their blend of durability, efficiency and added features that contribute to comfort and ease of operation. The lineup also includes a seemingly endless list of potential upgrades, plus redesigns that are always changing and always improving. From enhanced transmissions to longer wheelbases to improved handling and stability, these tractors are built with the goal of helping you improve your performance, your productivity and your profitability.
case ih magnum series Case IH brings seven different models in one durable, hardworking line of Magnum tractors. Start with the Magnum 180 and its 234 max boosted engine horsepower, plus your choice of a standard 19-speed full-Powershift transmission, or what Case IH calls its industry-leading continuously variable transmission (CVT).
Then when you add more power — all the way to 358 engine horsepower — you get more built-in features, including added ballast to boost traction while reducing compaction. In the Magnum 235, 260 and 290, you also get a new perspective on your farm from the Surveyor cab, billed as the industry’s largest. www.caseih.com
challenger mt700d series Unveiled last August in the U.S., the Challenger MT765D’s 327 engine horsepower puts it just a notch above our 220- to 325-hp range, but it deserves to be compared in this list. All that power comes direct from its 8.4-litre diesel engine, combining plenty of power and torque with low operating input costs and low noise levels. Expectations run high with a workhorse, and Challenger says it will deliver more power to the ground — more even than with previous Challenger series — thanks to its exclusive Mobil-trac, five-axle undercarriage. That means you’re getting more traction and pulling power, no matter what the conditions in your fields. www.challenger-ag.us MARCH 15, 2013
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new holland t8 series
tailored to fit the T8 Series dimensions and its usage. With this new
transmission enhancement, you get more power, better traction and peak fuel efficiency. And with its CommandGrip controller, all of that power and efficiency rests easily in your hand. The T8 also comes with a longer wheelbase, as much as 14 per cent longer than its nearest competitor, and yet it still delivers on tight turns. www.newholland.na
john deere 7r series
versatile 260, 290 and 310
Take the power of a row-crop tractor and combine it with the easy handling of a utility tractor, and that’s what the John Deere 7R Series is asking you to judge it on. “Power dense” is the term used by the company when describing its longer wheelbase and its shorter length, resulting in better manoeuvrability, handling and stability. In the field where time and efficiency really count, the 7R Series lets you hook up to larger implements — and a larger number of implements too — with increased hitch-lift capacity. With the infinitely variable transmission (IVT), you can also maintain your ground speed with one of the lowest r.p.m.s, all designed to save you on your fuel bills. www.deere.com
Building on its reputation for size and efficiency, Versatile has started its own revolution by launching the 260, 290 and 310, a new line of front-wheel-assist row-crop tractors. Each model in this new series carries the Versatile standard — a Cummins QSL 9.0-litre engine and the variable geometry turbo (VGT) — which provides quick response in the field. Another new feature to this series is a reversing fan system that blows out the grill every 20 minutes, reducing maintenance and keeping you working. A new sloped hood design also provides excellent visibility and the cab is cited as an industry leader with more space for the operator, and more comfort. www.versatile-ag.com
New Holland says its best just got better, thanks to the addition of the AutoCommand continuously variable transmission (CVT) to its most popular model series. For 2013, AutoCommand has been
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MARCH 15, 2013
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opinion
BIG IDEA
Public image The public’s perception has never been further divorced from the reality of agriculture. The question is, should we figure out what’s to blame, or just start fixing it? By Gord Gilmour, CG Associate Editor
Agriculture in Canada has an image problem. On the one hand, farmers are seen as stalwart
Says FCC’s Fred Wall: “We need to show consumers how important agriculture is.”
one key question — are consumers thinking about farmers, or about agriculture as a business?
stewards of the land, producing safe and whole-
If they’re thinking about farmers, there’s plenty
some food. On the other, they’re viewed as so
of positive impressions just waiting to be tapped.
weather dependent and as such financial basket
In an age of cynicism and disillusionment, farmers
cases that anyone would have to be crazy to want
are still seen as honest and hard-working people
to be one.
deserving of respect and trust.
That’s according to a recent Farm Credit Can-
When the public begins to think about agricul-
ada survey of approximately 2,000 Canadian con-
ture as a business, however, their attitudes become
sumers.
a lot more troubling. That’s when the doubts and
Fred Wall, FCC’s senior director of market and
sometimes even some mistrust creeps in.
customer insight, says the results paint a chal-
For agriculture, the challenge lays in explain-
lenging picture for farmers. He also says the dif-
ing that the old stereotype and the new image all
ference in perception essentially boils down to
come together in today’s farmer.
C ountry G uide : What can you tell us about the results of this survey? From the little bit I’ve seen it appears there’s a real split in how agriculture is perceived, depending on how the questions were being framed. Fred Wall: The soft traits like whether people trust farmers really got very high marks. For example 89 per cent of those surveyed had a positive impression of farmers. There were a lot of positive feelings about farmers, though admittedly consumer understanding might be a bit shallow. The agriculture industry, on the other hand, was seen very differently, with very few people associating a word like “optimism” with it or “vibrant.” Typically the sorts of words they were associating with the industry were things like “weather dependent,” “struggling,” and “underrecognized.” I think that was very interesting and informative. I’ve worked in a few different industries prior
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to coming to FCC, and I would say I’ve never seen quite such a stark difference between perception and reality. We can even see that in the conversations that the industry has privately versus what we say publicly. When producers talk to us privately, the optimism is palpable — but when it comes to talking publicly, it’s back to things like weather dependence and so on. This isn’t a good situation for a number of different reasons. Think about the industry itself, for example. You want to be able to attract the very best people you can, the best and brightest, but that won’t be possible if there’s this sort of negative image out there about the business. It contributes to the shallow understanding that consumers have of the industry and the business of agriculture. We need to show consumers how important agriculture is, how it contributes, and how they all have a vested interest in its success.
march 15, 2013
BIG IDEA
CG: It is an interesting thing — but is it also an important thing for farmers and the industry as a whole to understand? What does it actually mean, at a practical level? FW: It means there’s a vacuum of knowledge. Where there’s a vacuum, it will always be filled, and if we don’t do it, someone else will. There’s a real desire for information about food and how it’s produced right now. And I should say that I think we’re on the side of the angels here, so to speak, but if we don’t tell our story, someone else will, and that’s dangerous. It’s more critical than ever before that we’re willing to tell our stories. That’s not somewhere you want to be. If it ever comes down to a public debate on issues surrounding agriculture and food production, you want to have defined your own story, not let someone else do that. If someone else tells your story, you’re not going to like it. CG: But tied up in that, isn’t it important for the industry to realize it has to tell the whole story, not just the parts of the story it wants to tell? Or the parts that it’s comfortable telling? I sometimes think the industry likes to embrace an image that’s not exactly accurate — like the “God Made a Farmer” Super Bowl ad. FW: (laughs) You can’t see me nodding my head over the phone, but trust me, I’m nodding my head. I think that advertisement is interesting in a couple of different ways. It definitely identifies that there is this very positive image of farmers, and it tries to associate with that and, yes, bask in the reflected glory. It’s a very clear demonstration of the recognition that there’s this enormous reservoir of goodwill towards farmers out there. But at the same time, it does contain some imagery that feels old-fashioned and dated. How you start talking to your customers is with transparency. I think by and large that’s a very useful thing. That’s one of the reasons we’ve launched the Ag More Than Ever initiative (an FCC-sponsored effort to promote the image of agriculture) — I think the barrier to telling those stories is lower than it has ever been, with things like Twitter, YouTube and other social media, it’s far simpler than it was even five years ago. This can take all sorts of different forms, like bringing farmers into classrooms, and so forth. It’s important to make people understand that this is not just a business, it’s also about people. I think it’s important for farmers to be open and be ready to tell their stories. And yes, that means the whole story, and not getting offended when people have questions or concerns.
march 15, 2013
opinion
CG: Farmers have largely relied, in the past, on their associations and organizations to do this work — but today it’s got to be more personal, doesn’t it? FW: Yes, it certainly does. I think there’s something incredibly powerful about the idea of thousands of farmers telling their own stories and being open. The personal element is so important. After all it was “God Made a Farmer” not “God Made a Farmers’ Association.” There’s a great deal of benefit to be had from engaging the public and engaging the consumer — but farmers need to individually rise to the occasion. It needs to be much more personalized. It’s very powerful to hear about Gord’s farm in Manitoba, just for example, and that makes it much easier for us to drive the dialogue and discussion. If I could boil it down to just five words for farmers it would be “be open, tell your story.”
“ If we don’t tell our story, someone else will, and that’s dangerous.” — Fred Wall
CG: It seems that in your opinion, this isn’t just all risk, is it? FW: Not at all. There is a lot of potential for positive things too. More consumers than ever before are interested in food, care about food. As I say, if we don’t tell this story, who will? I think it’s very much both a risk and opportunity — and I think in many ways doing nothing is the real risk. We know how the consumer doesn’t really understand agriculture, has the most superficial understanding of it. But we know they care about it. We have tools now that we’ve never had before to tell our stories. We also have a huge opportunity. There’s an enormous reservoir of goodwill. Farmers just have to be open about telling their stories. By and large I think it will be a very useful thing for farmers to show consumers a window into their production. CG
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management
If it happened today If you died today, would those you leave behind be able to find the papers and do the jobs they’d need to do? In answer to your requests, associate editor Maggie Van Camp updates her 2011 Country Guide article By Maggie Van Camp, CG Associate Editor he ride home from the funeral was a long, selfruminating one. My husband and I had attended a service for a farmer only slightly older than us. His wife was left to run a significant livestock operation and in the few days since his death, grey had streaked her hair and her hands shook with worry. This was more than grief and shock, it was anxiety and exhaustion. With family farms, the surviving members are left to deal with not only the tragedy of losing a loved one, but also the loss of a co-worker and key decision maker. Moreover, the work and responsibility don’t stop; animals need to be cared for and crops need to be seeded and harvested. If your parents, sibling, spouse or partner suddenly died, what would you need to know? It’s a terrible question but it’s better answered ahead than leaving your family with a barrage of unknowns. Iowa-based farm adviser Jolene Brown has a very comprehensive list of questions to plan for death at www.jolenebrown.com. Here are six to get you started.
1. Do you have a will? For most families, joint ownership and beneficiary designation, combined with a simple will, can do the job. Property such as bank accounts can easily be placed in joint title to pass to the survivor automatically. All it takes to put together a basic will is a couple of meetings with a lawyer’s assistant and a few hundred dollars. You might want to include or reassign the power of attorney which allows a selected person access to assets, such as bank accounts in case you’re alive but are mentally incapacitated. If you’re running a farm with someone, make sure they have access so they can financially keep things going without you. Also, a preferred health-care document, commonly but not legally called a living will, assigns a person to make your healthcare decisions if you’re incapacitated. It’s handled and named differently in every province. Having your wishes on paper can take the pressure off family members to make difficult decisions regarding your care, like whether to pull the plug or not. If there’s no will, the estate goes to probate and the province and lawyers control the farm assets. Probate is the court proceeding through which a will is proved to be valid and the property of the deceased is administered, including collecting the assets, distributing property to heirs, and paying their bills and taxes. Sometimes it’s better to have two wills, one for the personal stuff and one for the farm. Also, your estate is deemed sold on the day you die and is taxed as income all in one year, including whatever you earned so far that year. Additionally, if the capital property is depreciable 10 country-guide.ca
property, such as buildings and equipment, depreciation claimed in prior years is also added as income in the final return. For most farmers, selling all your assets in one year puts you into the 40 per cent income tax bracket, plus about 10 per cent of the estate would go to probate and estate fees. With some proactive planning many of these problems and costs can be avoided. A simple list given to the executor of how personal property should be divided up can also stop a lot of the quarrelling. Who gets which family heirlooms, such as art or antiques? Or does everything get sold at an auction?
2. Where are the papers filed? The remaining family may need to know the location of more than just the will. There are personal documents, such as birth, marriage and adoption certificates, social insurance number card and passport and any prenuptial agreements, divorce and separation agreements. There’s also the paperwork for off-farm investments like RRSPs, bank accounts, deeds, mortgages and leases. Is there a safety deposit box, and if so, where are the key or combination? For the farm, more than one person should know where the old tax returns, financial and business agreements and employment contracts are kept. Also, you should share where the business structure documents such as corporation bylaws, stock certificates, buy-sell agreement, and corporation minutes are filed. Where are the vehicle and land titles, along with any lease agreements?
3. What’s your secret password? Although pin number and passwords are supposed to be secret, share the farm’s passwords with another trustworthy person. From instant teller cards to credit cards to online banking, imagine the hassle and holdups if the only person who had access was suddenly not available. Additionally, if only one person knows how to keep the books, you’re inviting a problem. Multiple people do not have to enter the data, pay the bills or make deposits but it’s critical at least one other person understands the process. This includes knowing where the chequebooks are kept and ensuring the other person has signing authority on the farm accounts. Is the farm’s trading accountant under one name and who do you deal with? Someone else should know where all those order slips are kept. Imagine if the farm had bought calls and the people left didn’t know it. Similarly, someone else should be aware of approximately when and how much property taxes and current loans are due. Write down your credit cards numbers and when the monthly payments are made. MARCH 15, 2013
management 4. Who could step in? Make sure you’re replaceable, especially if you are caring for livestock. Technology has given us efficiency but not everyone can easily step in to those roles today. It might take some training and written standard operating procedures. It can be as simple as posting directions for feeding, or showing someone else where the keys are kept. Knowing where to find interim help may give the surviving family some time to sort out the bigger decisions. For example, dairy farmers should leave a list of milk relief workers and telephone numbers, Also, write down the cellphone numbers of some trusted neighbours. When you do ask for help be specific about what you need — time, date and place.
banker, broker or insurance agents. Discuss with your children or spouse who they could turn to for advice. Is there an extension specialist, business adviser or friend to trust with a very fragile situation? Some family members can be relied on in tough times. If renting out the land is the best option, talk about who would possibly rent it. Is there an unbiased person who could help with that decision? If selling is better, is there someone you trust to help?
6. What about the funeral?
Some folks want to get right into the details of the service. Others want nothing to do with it. Most people have an opinion about an open or shut casket. At least, organize cemetery plots, discuss if organs are to be donated, and don’t forget to 5. Who to trust for advice? B:8.625” sign the card. Trusting your farm’s team of professionals is crucial dur-T:8.125” Remember, it can be easier to have these discussions when ing transitions. All partners should know the farm’s profes- S:7” you’re younger and healthy. If you do, take good notes, and keep a copy in a safe place. CG sional team, including the financial adviser, lawyer, accountant,
Freedom from wild oats. New Varro™ herbicide for wheat. Freedom from Group 1 herbicide resistance. Freedom to select your preferred broadleaf partner. Freedom to re-crop back to sensitive crops like lentils.
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C-76-02/13-BCS13026-E
BUSINESS
The business of
charity Today, farm generosity seems as alive and well as at any time in the past. The question is, how long can it last?
ometimes farmers bristle against stereotypes, saying those worn-out old attitudes no longer fit the modern farm. Farmers aren’t hayseeds, they aren’t backward and rednecked, they aren’t untravelled or unschooled. But if those aspects of the stereotype are out of step with reality, what about the parts of the picture that farmers still cherish? In particular, especially in these years with soaring farm incomes, are farmers still as charitable and generous as the public has always been told, and as farmers have always believed? Looked at from many directions, the cumulative evidence is troubling. Yet at the same time, the Canadian Foodgrains Bank is having a banner year.
It turns out farmers are getting much choosier about whom they will support with their cheques and with their volunteer hours. It turns out too that it’s a trend that promises to quickly pick up speed as the next generation of farmers takes the reins, meaning the outlook for many rural charities is bleak and painful. An incredibly long list of rural-based charities rely heavily on the population demographic that farmers represent. For instance, in a 2011 study, the Rural Development Institute in Brandon, Man. found that the typical donor to the province’s community foundations, which are predominately located in rural areas, is over 40 years of age, has a career, and has a connection to or has benefited from their community in some way. That sounds like the majority of farmers. It also turns out we’re on par with other farmers around the world for our levels of giving. A report by Explore Beef Organization in the U.S. shows that about 50 per cent of farmers and ranchers donate at least $500 annually to local or national charities, and nearly one-third donate at least $1,000. This is in addition to the state and national cattle and beef groups they contribute to which, in turn, participate in national charitable events. This is reasonably consistent with Statistics Canada data which shows donors from the western provinces — cattle country — donate higher average amounts to charities than the national average (around $550 on average in Alberta, Saskatchewan and British Columbia). But of course it isn’t just cattlemen who are in a giving mood. In December, Burnbrae Farms Ltd. announced it will donate $250,000 to the Farm and Food Care Foundation, a new charity working to enhance public confidence in food and farming in Canada. Continued on page 15
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PHOTO CREDIT: HAROLD PENNER / CANADIAN FOODGRAINS BANK
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THE FUTURE OF RURAL PHILANTHROPY Traditionally, philanthropy was a sort of synonym for charity. Much more recent is the idea that it can be used for a strategic goal, such as achieving a specific change, or helping improve the public image of a corporation or group. Indeed, for many years, says a 2011 report by Brandon University’s Rural Development Institute (RDI), “philanthropy” was simply a $64 word for something everyone had been doing all along. “In Canada during the early part of the 20th century,” the report says, “philanthropy was for the wealthy and giving was for everyone else who did so at church on Sunday.” In farm country, after their store bill was paid in the fall, farmers donated to their church, the local Salvation Army, and sometimes the Red Cross. Often, the size of larger gifts had to do with the number of sons. If the family had no sons, for instance, the church might expect a bequest or endowment when the last parent died. Community foundations still rely on endowments from community members for more than half of their income, which is a worrying prospect for many rural communities that are already struggling to maintain their non-profit services and programs, but that are also on the wrong side of two recent trends. Not only are rural populations dwindling, so there are fewer aging people to leave bequests, but more and more rural dwellers are spreading their donations out beyond their local communities, contributing for instance to national or international health-based or poverty-based organizations. It’s adding up to a big enough problem that it has its own acronym — TOW, standing for what’s being called “the transfer of wealth phenomenon.” “The baby boomers’ parents are some of the highest insured and wealthiest in Canadian history,” explains Bill Ashton, director of RDI. “As they pass away the baby boomers and their kids are going to be inheriting the single largest intergenerational transfer of wealth in Canadian history.” At first, that sounds good for the charities. But, continues Ashton, “The demographics say that rural areas are aging and kids are going to the cities to find jobs. So over the next 10 or 15 years, much of the TOW is going out of the rural areas and into the urban areas.” TOW has significant consequences for rural communities and is something that many community foundations are being made more aware of as they struggle to find ways to keep potential donors, especially amongst the younger generations, engaged in the concept of giving back to the rural communities that they grew up in. The Winnipeg Foundation (WF) was the first community foundation established in Canada and is one of the largest in the country. It manages 2,500 endowment funds and helps support the 47 rural community foundations in Manitoba by offering grants and support for volunteer boards and investment options. Approximately $50 million is invested in those community foundations. “Manitoba has the most community foundations in Canada, and the Winnipeg Foundation helps communities by cost sharing the investment strategy and the expertise,”
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says Susan Hagemeister, the foundation’s director of finance. “The WF is quite unique in terms of its reach into rural areas.” WF’s Endow Manitoba program is a co-ordinated, provincewide effort to raise awareness of community foundations during the month of November and provides marketing tools and resources to each of them. It also leveraged around $2 million in scholarships for community foundations in rural Manitoba in partnership with the province of Manitoba, which provided $500,000 in matching funds. Its Youth in Philanthropy Program, which has run for many years is now being adopted by a number of rural foundations, and encourages youth at the middle or high school level to identify and become involved in fundraising efforts within their community. As farm sizes increase and rural populations drop, it’s going to be more and more vital that farmers and other rural residents support the organizations and charities that the rural fabric relies upon. The Canadian Foodgrains Bank is one of the charitable organizations that, even in the face of tough times, has always remained strong and been supported by those who perhaps understand the ups and downs of things beyond their control more than anyone. “We know that farmers face a lot of pressure and uncertainty related to weather and markets and all sorts of things,” says John Longhurst, the group’s director of resources and public engagement. “But I think farmers support the food grains bank because they are actually able to give out of the thing they do, they give out of their very lifestyle. They are farmers, they farm and we are asking them to just do what they do. It’s not like they have to go and do something different to make this money, they just have to do what their life’s calling is, which is farming. And they understand food, they know the land, they have an understanding for the land, and in that respect they are not very dissimilar to farmers in any other country, who also feel close to the land and who also understand food and want to feed their family, so there’s a real strong connection between what we do here and what we do in other countries.” As part of its 30-year anniversary celebration the food grains bank is promoting an initiative for 2013 called 30 for 30, encouraging farmers to get involved by donating 30 acres of land, 30 bushels of grain or whatever they can to help the cause. But it is perhaps the communal aspect of the food grains bank which keeps farmers and rural people involved. Its growing projects reach back to another era, embodying the essence of the pioneering, community spirit, which in the age of instant communication and globalization gives an opportunity to once again “raise the barn” with ones’ neighbours. “What makes the food grains bank unique is it’s also a celebration of the rural, farming community,” says Longhurst. “It’s something that people can do together… They are not just being asked to write a cheque, but they are gathering for an evening celebration with their neighbours to launch the project, and in the fall to have a harvest celebration. The growing projects raise funds for people who don’t have enough to eat but they also tap into and encourage the spirit in a community.”
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BUSINESS As these photos for the Morden SHARE project show, the Canadian Foodgrains Bank succeeds by bringing farmers together to do what they do best… grow food.
Continued from page 12 Dairy farmers in Ontario also increased their milk donations 150 per cent last Christmas to help address the needs of a record number of people seeking help from Ontario food banks. Yet despite such promising headlines from the farm sector, the board meetings at many Canadian charities are taking on a gloomy cast. A 2012 report by Imagine Canada (a sort of charity for the country’s charities) showed that confidence levels among Canada’s charity leaders have dropped over the previous year. In fact, the percentage of leaders predicting that their organizations will be less able to perform their missions over the near and midterm are the highest they have been since the group began its surveys. Similarly, says the report, the percentages of charities forecasting increased revenues and expenditures are at record lows. “More charities are reporting that revenues have remained about the same compared to last year,” says the report. “At the same time, fewer charities are reporting that expenditures have increased, which we interpret as efforts to curtail spending.” Yet the Canadian Foodgrains Bank, which is celebrating its 30th anniversary this year, seems to be bucking the trend. Its supporters are also as committed as ever. For example, Ben Friesen of Morden, Man. has no intention of giving up on his participation in one of the largest growing projects in Canada for the food grains bank, and he talks about how, every time he takes a truckload of grain off the grow project farm, he mentally calculates how many kids it’s going to feed. “Growing projects” comprise a number of farmers who join together to grow and harvest a crop, which is then sold with the proceeds donated to the food grains bank. Friesen is one of about nine producers in the SHARE
Continued on page 16 MARCH 15, 2013
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Continued from page 15 Growing Project at Morden, and for the past four years they have given their time, machinery, fuel and expertise to grow grain on donated land. Cash from the sale of the grain is used by the food grains bank to purchase food for starving people in Africa, Asia, Latin America and many other areas. The SHARE project will grow about 400 acres of grain this year, and it just keeps getting bigger, attracting even higher levels of support from local community members and businesses who want to help out, says Friesen. “We get a lot of cash and inkind donations to cover the expenses of the project, such as seed or fertilizer.”
The Canadian Foodgrains Bank is one of the charities that benefits most from farmer support. “People continue to generously support us,” says John Longhurst, the group’s director of resources and public engagement. “There are two or three new growing projects this year in Manitoba, two or three in Saskatchewan and one in Alberta, so we continue to see people wanting to get involved.” There are around 250 growing projects in total across Canada from British Columbia to Prince Edward Island, providing around $5 million to $6 million of grain donations every year. Together with matching funds from the Canadian government, the food grains bank provided almost $44 million in assistance in 2012, and purchased 40,000 metric tons of food and seed for 2.1 million people in 36 countries.
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Part of the attraction of the food grains bank for famers is the knowledge that it continues to have deep rural roots, even though many urban people have also become supporters. “Canadian Foodgrains Bank is a movement that grew out of the rural farming community in Canada,” says Longhurst. In the mid-1970s there were food crises in Africa and farmers in Canada, who had surpluses of food and wanted to help, had no idea how they could get the food to people who were starving. A group of Manitoba farmers approached Mennonite Central Committee (MCC) and asked if they could help them take their surplus grain and get it to starving people in Africa. MCC, together with the Canadian Wheat Board, created a mechanism so that the farmers’ donated grain could be moved
outside of the market and into communities in Africa where people desperately needed food. Although it began as an MCC program the intent was to eventually involve other churches and organizations. In 1983 MCC invited other denominations and groups to join with them and the Canadian Foodgrains Bank was established as a formal, independent, non-profit entity, whose purpose was to move grain from Canada to people who needed it overseas. The Canadian Foodgrains Bank is now owned by 15 Canadian churches and church-based agencies representing 32 different denominations and it provides a “Christian Response to Hunger.” The Continued on page 18
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Continued from page 17 organization pools resources and works with many aid agencies and partners on the ground in countries around the world. The food grains bank delivers food aid in emergency situations such as famine or natural disasters, ongoing nutritional supplementation for children in developing countries and other programs that provide local farmers with the tools, infrastructure and training they need to grow food for their own families and communities. “We do not ship food overseas anymore,” says Longhurst. “The grain that farmers donate is cashed out and then that cash is used to buy food wherever it’s needed. It’s much more efficient as we can transfer money electronically and buy food that is more
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appropriate to local people. Something else that is important to the food grains bank is that we want to support local farmers in the developing world, so we are buying the food they are growing and helping maintain their livelihoods too.” Since the very beginning the Canadian Federal Government has been an important partner with the food grains bank. Through the Canadian International Development Agency (CIDA) it provides $25 million a year in matching funds. The business community gives a lot of support to Foodgrains Bank either by donating seed and inputs or cash. Seed Depot is an independent seed distributor from Pilot Mound, Man. that is partnering with their seed dealers to donate barley and oat seed free of charge in 2013 to Manitoba growing projects.
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Seed Depot plans on making it an annual program and expanding it from next year to offer wheat, oats and barley seed in all three Prairie provinces. Owner John Smith has been donating to the food grains bank for about 15 years and has been involved himself in growing projects. He feels that the food grains bank is supported by farmers because they can identify with both the organisation and its goals. “Farmers are in the business of feeding the world and the food grains bank personalises it a lot better than what we normally do in farming,” says Smith. “Yes we feed the world but we are also trying to make a profit and grow our farms, but when we participate and donate to the food grains bank then we know we are actually feeding hungry people all over the world and it’s very tangible that way.”
Farmers are also confident, says Smith, that the food grains bank is a well-managed, responsive and responsible organisation that farmers are comfortable supporting. Each growing project is organized by local farmers who co-ordinate the projects and fundraising efforts. Each province also has a regional co-ordinator who assists with local growing projects and serves as a liaison with the food grains bank head office. Administration expenses typically are around six to eight per cent. “The reason we can do that is because we have these incredible, wonderful, generous farming groups and community groups across Canada who do everything as volunteers; who plant, who tend, who harvest crops using their own machinery, their own time, their own equipment and they do it free for us. We are extremely blessed,” says Longhurst. CG
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Charity and the young farmer The next generation will inherit $400 billion from today’s farmers. How much will go to charity? Today’s young farmers are different, and it’s not only because of the huge spike in the value of the assets they are inheriting from their parents. They’re different because they also have a different way of thinking about philanthropy. In the U.S., the Dorothy A. Johnson Center for Philanthropy has released a new report (NextGen Donors) which says that $41 trillion will transfer from the baby boomers to the millennial and gen-X generations.
In Canada, based on current land, machinery and related values, it’s likely realistic to predict that today’s farmers may leave an astonishing $400 billion to their children. However, the next generation of potential philanthropists is forming its own ideas about charitable giving and volunteering, based on ideals that differ from previous generations in some important ways. Key findings from the NextGen Donors report suggest that future donors or supporters of charitable causes will be more focused on impact, and they will want to see tangible outcomes for the support they give. Secondly they will be more likely to give based on their own values, so although they will fund many of the causes that their fami-
lies support, they will want to pave their own way and they will insist on working out their own approach. Next-gen donors are looking to be more engaged in the causes they support. “This next generation of donors doesn’t want to just write a cheque, have their name on a wall and be done with it,” the report says. “They want to really get to know the causes in which they invest. And the word “invest” is an apt one. These donors want to give money, time, and mind share to things they believe in.” Increasingly too, there will be a strong “social” connection, the report says, with younger people relying on their social networks to make decisions about their giving.
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business To get an indication whether such thinking will apply north of the border, Country Guide contacted a number of next-gen farmers to see how their thinking about charity might be aligned with the U.S. study. Admittedly, this is about as informal as a survey can get, so our recommendation is that you test it with the young farmers that you know. In our case, all of our respondents said that giving based on their own values was the most motivator for them, followed by wanting to be more engaged, paving their own way and having more focus on impact and outcomes. Our respondents said social media won’t play a role in their decisions to give, although some do make online donations. Here are some of their comments.
Next-gen donors will: Be focused on impact, wanting to see outcomes. “I am more likely to support local because I get to see the results of mine and everyone’s donations,” one young farmer told us. Said another: “I support local charities and events that affect me or my family and if there is a long-term goal for the cause.” Give based on their own personal values. Said one young farmer: “I donate to cancer research as it touches the lives of so many these days.” And, said another, “I like to promote programs that engage young people and excite them about business.” Want to be more engaged. “This is important,” said a young Manitoba farmer.
“An example of this for me is my mother is going through her Alzheimer’s journey at a young age… by having a hands-on effort I can help raise funds to assist in the Alzheimer’s Society research.” Pave their own way — not necessarily supporting the same causes their parents did. Said one respondent: “Everyone has different beliefs and things they like to support.” Use their social networks to share their causes with others and to give online. “It doesn’t matter how you give as long as you feel good about what you are doing.” (Note: The U.S. report NextGen Donors by Dorothy A. Johnson Center for Philanthropy can be found at http://www.nextgendonors.org.)
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THE NEW CONFIDENCE This is a cyclical business and surprises happen. But overall after the last few years, optimism is finally returning to Canada’s farms… and dammit it feels good By Maggie Van Camp, CG Associate Editor t was the fall of 2007 and after completing graduate studies Dan Holman and his veterinarian wife, Stacey, were looking for jobs and a place to call home. Instead of buying an expensive house in the city, they decided to invest in a farm near Dan’s parents at Luseland, Sask., an hour east of the Alberta border. Dan and Stacey were both able to get jobs within driving distance, and Dan could keep helping his dad. Besides at $450 an acre, they could almost pay for their mortgage on the half section by renting it to the family farm. That same winter Joe Hickson stood at the front of a scattered group of irritated farmers in Ontario. It had been another tough year and Hickson was visibly worn with worry. He’s a quiet man, very reserved, hard working and careful, a seed grower.
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When Hickson spoke about how farmers simply couldn’t keep surviving with the perennially pitiful grain prices, everyone listened. Hickson is well respected for his opinions, both on farming from the business point of view and as a producer. He has been featured in Eastern Canada in COUNTRY GUIDE’s production pages, for instance, and he’s been elected a director of the Grain Farmers of Ontario. In this case, though, it was what Hickson had in common with every other farmer that was most poignant. “This crisis has been brewing for so long, it’s far beyond the farm thing now,” he said. “It’s the whole rural infrastructure that’s in jeopardy.” It’s hard to believe now, it was only six years ago.
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Photo credit: jardi welsch photography
For Saskatchewan’s Dan Holman, high prices are only part of the story. Soaring productivity and sharp management drive growth too
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Commodity prices help, says Ontario’s Joe Hickson, but they won’t bring back the sales barns and rural infrastructure lost over in recent decades. Still, says Hickson, “I’ve changed my investment strategy big time.”
Continued from page 22 Crop production accounts for more than three-quarters of the output from Canada’s farms, so the incredible turnaround in commodity prices has impacted the whole industry, adding badly needed energy throughout much of our vast countrysides. “There’s definitely been an improvement in the rural economy,” says Hickson, who farms with his brother and grows 2,200 acres of pedigreed seed wheat, soybeans, barley and oats and corn near Lindsay, northeast of Toronto. After 30 years of struggling and losing hope, optimism is pulsing again through crop farmers’ veins. Even if you’re struggling to feed livestock profitably, you can’t help but feel it. “We’ve had a couple of great years, but, it seems it’s always at the expense of someone else,” says Hickson, referring to the drought-stricken areas and his neighbours in the hog and beef business. “I’ve been at this for 30 years, I know that these are great days, but I also know that a rainy day is coming,” he says. So much on the farm seems to come down to timing. Dan Holman remembers the story about how his family nearly paid for a section of land in one year in the 1970s. By the end of 2008, Dan was almost able to pay for the half section he had bought in the
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spring. More importantly, he was able to get financing to buy five more quarters the same year, before land prices started rising. In this part of Saskatchewan, land is now trading for $1,500 an acre. Since then, Dan has joined his father and mother, Rod and Gayle, operating the family farm and together they’ve grown their production capacity to five times the 2007 size, mostly by adding rental land. They expanded quickly to capture the opportunities of stronger commodity prices and scales of efficiency. But even with the best-laid financial plans and with strong commodity prices, it’s still farming, and you can still get kicked by Mother Nature. In the fall of 2011, three quarters of the Holmans’ crops were destroyed by hail. Dan’s confident voice shakes a little when he tells me how the storm wiped out almost all their farms even though they are spread out over 40 miles, and how glad he was that they had crop insurance. Today, however, farmers across the country are almost on par with average wage earners, and our net worth is the envy of most of the nation. Production and exports are helping the national trade balance. Farming is finally being seen as a financial bright spot. Many farmers would say, it’s about time. Continued on page 26 MARCH 15, 2013
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Gross farm receipts For thousands of farmers all across the country, 2012 was better than great. By press time, Statistics Canada had only collected information on the first three quarters of 2012 but so far receipts are almost $2 billion higher than for the same period the year before. In 2011, the country’s total farm cash receipts jumped 11.2 per cent from the year before bringing it up to nearly $50 billion — and that’s with flooding on the Prairies. Now, strong canola, corn, soybean and wheat prices that spiked last summer and remained strong until December should push Canadian farm gross receipts into record levels. “We’re in rare air,” says Phil Shaw, farmer and grain commentator, as he points to a graph showing the peaks in commodity prices. Leading this cash flow surge is the country’s golden child, canola. In 2011, market receipts for canola were $7.3 billion and wheat was $5.1 billion. Although yields were lower than expected last year, Rick White, general manager of the Canadian Canola Growers’ Association estimates the canola crop generated an estimated $8.4 billion in farm cash receipts. (That’s at a conservative 14 million tonnes at $600/tonne.) The economic spinoffs from just this one crop are staggering. The Canola Council of Canada calculates that growing, moving, processing canola contributes $15.4 billion annually to the total Canadian economy. “It’s having a tremendous impact,” says White.
More net income Importantly, farm productivity and efficiency have also improved. Gains seem to border on the incredible in every sector, including everything from unbelievable farrowing rates across North America to a staggering five-bushel-per-acre-per-year increase in corn yields in Ontario. It’s why there’s more than price behind the jump in total net farm income to $5.84 billion in 2011 from $1.17 billion in 2007. Average farmer income is getting closer to the average for the country. Agriculture Canada forecasted net operating income per farm (without capital cost allowance) to be about $65,000 in 2012 and average total income of farm families, including nonfarming income, at $123,498 before taxes. In 2011, the median after-tax income for Canadian households was about $55,000 a year. (Median means half of households earned more and half earned less.) For farmers like Hickson, the increase in net income has changed their lifestyle only marginally, although he admits that he has recently allowed himself one indulgence — last year he bought himself a Mustang convertible. Relative to commodity price increases, Adam Lally, owner of Lally Ford, Tilbury, Ont. hasn’t seen a huge 26 country-guide.ca
In 2011, canola surpassed wheat as Canada’s leading food export. Half of all the $40 billion in exports were grain and oilseed products, with livestock and meat representing about 20 per cent. In fact, the numbers are so big, canola is materially helping Canada’s national trade balance, says White, with about half the seed and oil produced here being exported. That’s just canola. According to the UN’s Food and Agriculture Origination, in dollar terms in 2011 Canada was the world’s No. 1 producer of lentils, oats, dry peas, canary seed, and canola. We’re also second in cranberries, blueberries and mustard, we’re fifth in barley, seventh in soybeans, and eighth in wheat and chickpeas. Generally, the shift over the last decade toward more specialty crops has been a huge boost to Canadian farm receipts. International economic think-tank, AgriBenchmark, compared wheat to specialty (including canola and pulses) crops on two representative western Canadian farms. These economists found from 2008 to 2011 the advantage was at least $40 per acre and sometimes it reached as high as $120 and more. For the Holmans, growing peas, lentils and canola instead of just wheat allowed them to manage their cash flow better during their expansion phase. “Being diversified and having good cash flow allowed us to grow,” says Dan. There’s an increase in risk, however. “More diversity means more complexity for us,” Dan says. “It’s harder for us to do a better job.”
jump in volume of sales in his dealerships in southwestern Ontario. Farmers and agricultural businesses have always been a cornerstone of his dealership’s truck business.“Farmers in general are not impulsive or reactive to these conditions,” says Lally. “I think the commodity prices will translate to more of a long-term stability and health in our rural marketplace.” “We’ve been the No. 1 F Series dealer south of Mississauga for the past two or three years and saw a slight increase in volume last year,” Lally says. “Full four-door 4x4 F-150s are the bulk of our sales and we are anticipating this being even a bigger chunk of the volume going forward.” Generally he has observed that the traditional “farmer” buyer hardly exists anymore. “There are fewer farmers, and the ones who remain are now big and are just as much businessmen and entrepreneurs as anything,” Lally says. “Trucks are more often personal transportation vehicles for these big farmers, and work trucks second. They tend to want more options, more creature comforts.” Lally has also noticed that in general farmers’ buying cycles have shortened. They used to buy a work truck and work it until it died. Now they buy something nicer and keep it nice and trade in for a new one more often. The farmers he deals with today are also more open to leasing and shorter finance terms. MARCH 15, 2013
business
Expenses Direct expenses didn’t increase as much as gross income, but they did increase. Expenses on inputs increased from $32 billion to $38 billion from 2006 to 2010, according to Statistics Canada. It’s in the tight years when slight increases in expenses really eat into your bottom line. Have we lost that flinty management? In 2011, average per-farm total operating expenses rose significantly to $292,000. Both fertilizer and machinery fuel prices were up again, this time by over 25 per cent, and feed grain prices increased by more than 30 per cent, according to the Farm Input Price Index. Canadian farmers paid roughly 77 cents in
operating expenses (not including depreciation) for every $1 in receipts they earned. That was year the Holmans’ crops were hailed out. It really brought home to Dan how important it is to control cost of production, with both direct and variable expenses. “It’s the little things,” he says. “Costs savings are choosing where to spend the money. We’re careful with machinery and other fixed costs such as rent and labour.” Hickson isn’t surprised by this expense-to-receipts ratio. The most significant increases in direct cost he’s noticed on his farm has been in fuel. He puts on a lot of kilometres on his truck for his seed sales and as a director of Grain Farmers of Ontario and Farm B:8.635” and FoodCare. T:8.125” S:7”
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business
Asset flow Since margins have improved, Hickson, like farmers across the country, has updated his equipment, and now the farm uses yield monitors and GPS. Hickson also refurbished his seed plant to handle smaller batches with separate metering scales and is now set up to add computer technology in the future. In Saskatchewan, the Holmans recently invested in bigger storage with temperature and moisture cables. They’re also running RTK guidance off a cellular network after making a deal with a locally expanding cellular provider to allow for a base station on one of their farms. Investments like these in efficiency, capacity and productivity, are happening everywhere you look. Industry Canada tracks the activities of businesses including capital assets, broken into two
$2 million net worth According to FCC, Canadian farmland increased 8.6 per cent during the first half of 2012, following average increases of 6.9 per cent and 7.4 per cent in the previous two reporting periods. However, many farmers are actively buying land and there are reports of land in pockets of the country increased by a staggering 30 per cent in the last half of the year. In Ontario, Hickson in the last year purchased some land. “I’ve changed my land investment strategy big time,” he says. On the other hand, the Holmans did their expansion earlier and are now a little less aggressive. Buying good land is like hiring good people, Dan thinks. It’s usually worth paying for extra productivity, he explains.
Net value added Primary agriculture’s contribution to GDP remains so small, Statistics Canada lumps it in with forestry, hunting and fishing, and even then it’s still less than one per cent. However, any improvement in overall productivity and net farm income packs a pretty big wallop to the rural economy — and emotionally for the industry. Another way to measure the contribution farming makes is calculate net value added. In 2011 Agriculture and Agri-Food Canada projected the country’s agriculture sector’s net value
Employees What isn’t reflected in net value added or GDP is that farm businesses are a large portion of the non-service small businesses in this country, and as exporters of products, they are a primary economic driver. Of the estimated 2.4 million Canadian businesses registered in 2011, only about a half-million produced goods, and the vast majority of small businesses are in service industries. Besides small businesses reinvest heavily in their businesses and communities, and nobody is more committed to that than farmers. Moreover, primary production is the epicentre of the much larger food-processing industry and has been in a growth phase in the last decade. In 2009, about 40 per cent of our food was processed in Canada. Food production and processing directly provided one in eight jobs, employing two million people. 28 country-guide.ca
categories, machinery and equipment, and construction. Asset flow (i.e. how much is purchased in a year) reflects reinvestment, adoption of new technology and general health of the sector. For crop production, machinery and equipment investment catapulted from $1.6 billion in 2002 to $2.5 billion in 2011. Another way to look at capital investment is to calculate the ratio of annual investment to accumulated investment. How much capital stock must be replaced depends on how quickly technology changes, how much capital is available for investment, and how competitive an industry is. This ratio for crop production decreased from $1.4 billion in 2002 to $845 million in 2011, at a compound annual rate of 5.7 per cent. For animal production, construction investment to asset values ratio decreased from $1 billion in 2002 to about $856 million in 2011, or at a 1.9 per cent annual rate.
The Holman family has ongoing discussions on how to evaluate investments. “I think by using financial ratios from last year, you miss out on a lot of vision,” says Dan. The average debt-to-asset ratio in the sector remains at 16 per cent, which represents a slight decline over the last few years. More importantly, income and productivity have grown at the same time as the debt, says Jean-Philippe Gervais, FCC’s chief agricultural economist. Compared to consumer debt, which has outpaced increases in income, farmers are generally in a better position financially. Besides, most farmers take on debt for the future, for a long time and for productive assets. “The industry is investing in improving productivity and efficiency now,” says Gervais. “We should be ready for tighter margins in the future.”
added (a measure similar to GDP) will rise by 35 per cent to $15.2 billion, and that pattern was similar in the first three quarters of 2012. The huge increase in the value of production of most agricultural commodities has simply outpaced increases in inputs and depreciation. In 2006 net value added was only about $8 billion and in 2008 doubled to almost $16 billion. Still, U.S. total production value is a humbling 10 times greater than ours. The USDA has estimated the net value added for American farmers at $166.7 billion in 2011. The annual average from 2002 to 2011 was $119 billion.
In the 2011 Census of Agriculture for the first time operators were asked for the number of paid employees working on their farms, with 34 per cent of farms reporting paid labour. Of the 297,683 paid employees, 37.6 per cent worked year round in a full- or part-time capacity and the rest were seasonal or temporary employees. The Holmans have scaled their operation to a specific number of employees, three full-time employees and five seasonal help during harvest. “We’re managing our land base to what we want our equity position and human resources to be,” says Dan. Although the number of farms decreased 10 per cent in five years to just over 200,000, the ones left are generating more production and more dollars. In 2011, 3,298 farms grossed more than $2 million, a 22 per cent increase since the 2006 census. While they represented only 1.6 per cent of all farms, they reported one-third of the total receipts CG march 15, 2013
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business
Local sales
keep growing Maybe local food doesn’t have to be a dividing point between consumers and farmers
ith more consumers feeling they know how their food should be produced, opportunities are still growing for farmers to take advantage of new markets, although it takes a willingness and ability to keep your fingers on the pulse of the market. From the farm perspective, higher grain and oilseed prices may have dulled whatever shine local food might have had, but that’s not the view in town. Jeff Fidyk, business development specialist at the Consumer Trends Food Commercialization and Marketing Knowledge Centre in Manitoba, makes his point short and sweet. “People want local food,” Fidyk says. New consumer studies bear him out. “Local food is perceived as being fresher, healthier, and more nutritious than food that isn’t local,” Fidyk says, adding that whole foods are seen as healthier than processed foods, and any processing that changes food from its natural state is perceived as posing potential health risks. Like it or not, and whether it’s true or not, that’s what an increasing share of the public thinks. What’s more, it’s what a share of the public that has money to spend tends to think. “The term ‘local’ means more to consumers than simple proximity,” Fidyk says. “Words like trust, 30 country-guide.ca
authenticity, traceability, accountability, and integrity can also be used as part of our definition of what local means to consumers… these terms are all part of the value consumers expect when they buy local and are closely associated with food safety.” Fidyk works with local farmers and entrepreneurs to develop local products at the Food Development Centre in Portage la Prairie. For farmers, it is a chance to get some value added to their crop. “Food safety is extremely important to Canadian consumers,” said Fidyk. “Every time there’s a news story about a food safety incident in another country, it tends to undermine our trust in that country’s ability to ship us safe food.” By contrast, when there are similar headlines in Canada, they tend to get backed up with reassuring stories about what the industry and government are doing to deal with the issue. Ironically, the end result is often to strengthen our trust in Canadian foods. “About 60 per cent of Canadians are more concerned about their health today than they were two years ago and about 66 per cent of Canadians are looking for and buying healthier foods at the grocery store,” Fidyk adds. “Consumers are getting away from wanting to take a supplement or pill to gain better health.” Besides, as of 2011, half of Canada’s population are aged 40. With increased age comes increased concern over one’s health and longevity. march 15, 2013
Photo credit: Anne dehaas
By Rebeca Kuropatwa
business Non-GMOs and organics too Local isn’t the only market opportunity that Fidyk is seeing on the rise. Also strong are markets for nonGMOs and organics. “Certified organic food has increased in popularity among consumers, with about 42 per cent of respondents to a Manitoba Consumer Monitor Food Panel (MCMFP) survey responding that they regularly purchased organic foods,” said Fidyk. “Organic has gone mainstream,” Fidyk says. In fact, 34.3 per cent of the consumers in the Manitoba study said they buy their organic foods in the grocery store while doing their food shopping. Overall, it’s estimated that organic food sales in Canada in 2011 increased to $2.6 billion, and growth is projected at 13 per cent per year for the next five years. To put that in perspective, Canadians paid $88 billion for food at retail stores in 2011, meaning organic was roughly three per cent of total sales. Meanwhile in the U.S., non-GMO is the fastestgrowing health and wellness claim on store-brand food labels, up 67 per cent in 2009, according to Nielsen Co. The trend of food companies hunting for a competitive edge on the grocery shelf by voluntarily launching products with non-GMO claims may be exploitative, yet it may also create markets by increasing demand for non-GMO ingredients. “Market potential for non-GMO-labelled foods is likely very similar to organic in that in the near term, they’ll likely not take over the entire market,
Is the opportunity real? It’s the one thing everyone agrees on. It isn’t easy to measure how profitable or sustainable a differentiated food market will be. “Do some research, look for forecasts, and make some estimates,” Fidyk recommends. As is the case with most things on the farm, balance seems to be part of the answer, and when making changes, nothing beats business planning and knowing what your costs of production will be. “I heard a great quote the other day from a progressive farmer,” said Gary Smart, business development specialist on the Pembina GO Team. “He told me, ‘I don’t care about having a yield monitor on the combine. I’d rather have a profit monitor.’” “Take the time to make a solid business plan, as it will greatly increase your chances of making the best possible profits on your farm, resulting in viability and sustainability of your operation,” Smart says. “Production costs should be the backbone of any business and marketing plan.” Still, there are risks with diversification. But that cuts two ways. Getting into a local food or similar market may increase your risks, but staying out of local food may increase your risks too by keeping you out of premium sectors if the volatile prices of grains and oilseeds go in the tank. march 15, 2013
but there could be niche opportunities for farmers to market non-GMO food ingredients to companies wanting to offer this feature to their customers,” Fidyk says. And given the current niche nature of non-GMO production, there would likely be valueadded potential for such ingredients. There’s probably a bit of a niche opportunity for producers to include labelling of non-GMO products from grains to beef, adds Fidyk. “We’re living in a GMO-rich environment, so for someone to buck that trend and serve the non-GMO consumers, that’s probably a good opportunity.” Labelling is another way many producers are getting value added into their product at little cost, he says. “When you look at the marketing claims that food companies put on their labels, it’s ever changing — including kosher and halal certification with more immigrants in the country.”
As a diversification specialist with Manitoba Agriculture Ministry, Craig Linde’s job is to help farmers evaluate diversification opportunities, and then execute on their plans when the opportunities are real. “The start of the process is asking farmers a lot of questions to discover where the gaps in the knowledge are,” Linde says. “This is assuming they already have a good working knowledge of their operation, good estimates of what their current costs of production are, and have already been talking to someone about putting a business plan together to get into a new-to-them crop or into a totally new crop that hasn’t been grown a lot. “The world is changing,” Linde continues. “People have different attitudes. They care more about what they’re putting into their bodies and they’re more concerned about food quality, which in itself creates its own opportunities.” Yet Linde also recalls good advice he heard from a grower who likes to grow something new almost every year. Make sure you put it at a scale large enough that it can succeed, he says, but not so big that if it doesn’t succeed it will mean your financial ruin. “It’s great to try to get into something new and learn about new crops, whether you end up going forward with it or not,” Linde says. “More diversity is of course better for resilience and long-term sustainability.” CG country-guide.ca 31
BUSINESS
GONE LOCAL in an export province When farmers decide to grab a piece of the urban food market, it’s no place for wimps By Ashleigh Mattern n the heart of downtown Saskatoon, the trendy bistro and grocery store Souleio is packed at lunchtime. The sound of lively conversation fills the room as diners place their orders for local organic soups, sandwiches, and salads. You can’t actually see a farm from Souleio, but the restaurant is probably more closely connected to farming than any other establishment in the city.
“Why are we shipping out commodities and having them processed elsewhere, and then bringing them back?” — Melanie Brodt
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Souleio is owned by Kevin and Melanie Boldt, farmer-owners of Pine View Farms All Natural Meats, located near Osler, Sask., about half an hour north of the city. “The idea behind Souleio is that operating from the farm, we can’t capture that incremental market,” says Melanie. “People are eating out more, and cooking less at home, so they’re buying more home meal replacements in groceries, or eating in restaurants. “We thought, why not be a part of that?” The Boldts established Pine View Farms in 1998 in a bid to diversify their grain and cattle operations. Now, 15 years later, they no longer farm grain. They have sold off all of their farm machinery, and invested the money into a butcher shop. “We completely refocused ourselves around producing and marketing meat, direct to the public, restaurants and butcher shops,” says Melanie. Kevin is a fourth-generation farmer, while Melanie married into the family business with a background in sales and marketing. When they bought the family farm in 1998, they knew they had some big decisions to make. At first, they continued to farm grain, even buying more land where Pine View Farms is currently located, but drought, grasshoppers, and low commodity prices from 2001 to 2003 forced their hand to a certain degree. “At the time, we had to make some business decisions about what is sustainable for our family farm. And if we want to stay in the business, how are we going to do that?” Melanie recalls. “And maybe it (the solution) looks different than your traditional farm.” In 2003, they exited grain farming, spending the next year settling everything — including family expectations. They wrote a new business plan, treating themselves like a case study, examining their strengths, their weaknesses, where they were vulnerable, what they could capitalize on, and where the opportunities were. The couple already had some experience in wandering outside traditional grain and beef markets. “There was this growing little farm-direct market that we had going on that was growing at 20 to 30 per cent per year,” says Melanie. “And so then you start to think, if we actually invested more resources into this MARCH 15, 2013
BUSINESS — like time, labour, capital — could we turn this into something that is viable that can support us?” They created budgets and projections, and researched what was happening in other parts of the world, like in the U.S., where the farm-direct market is more popular. “That was just the beginning of the boom in farmers’ markets. The local food movement hadn’t happened yet,” Melanie says. “We were really on the cusp of that. So in some ways, our timing was good.”
BELIEF, PASSION, CUSTOMER SATISFACTION Another key learning from the Boldts, however, is that all the numbers and all the business planning aren’t enough on their own. If you’re thinking of diversifying into local food or into urban food markets, their example shows, you’ve got to be passionate about it.
Otherwise, the market and its demands for your time, energy and inspiration may eat you up, instead of the other way around. Clearly, the Boldts are passionate about local, sustainable food, and they’re passionate about the work they do. “You have to do something you believe in,” says Melanie. “If you don’t believe in it, then it’s no fun.” As a business, the Boldts don’t actually have a cost advantage. What they’ve got is something that may be even more valuable: a brand that is closely aligned with the local, organic food movement. That’s because another key learning from the Boldts is that the urban food market is no place for the weak. “It’s horribly competitive, and margins are T:8.125” S:7”
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BUSINESS Continued from page 33
SMALL FARMS IN SASKATCHEWAN There weren’t many resources available for Kevin and Melanie when they started Pine View Farms in 1998. They were involved with the Outstanding Young Farmers’ Program, and they are still part of the North American Farm Direct Marketing Association, but they gleaned most of their information, support, and ideas from research, and trial and error. Unfortunately, they say, there still aren’t many resources available today for someone starting a non-traditional farm, and sometimes, Kevin adds, they feel overlooked when it comes to the government’s view of farming. “We don’t exist,” says Kevin. “They don’t put any resources towards small farming and local food.” Saskatchewan is the top agri-food exporter in Canada, but Kevin says government policy is designed to support exporting at the expense of a local market. This lack of support might be reflected in current trends: Statistics show that Saskatchewan is losing its smaller farms in a rush to achieve an internationally competitive export industry. “The number of farms continues to decline, and those farms that are left are getting bigger,” confirms Rob Brodner, farm income analyst with the Saskatchewan Ministry of Agriculture. “There are fewer farms, but they’re shifting up to higher-revenue classes — there are fewer of the hobby farms.” While small farms and local food in Saskatchewan might not be getting the support they need to thrive, there’s still interest in improving the industry. For example, the second annual Saskatchewan Food Summit in February focused on improving local food systems through changing policy. Kevin Boldt would like to see policy based on the end use, rather than on how big or small the farm is. Melanie agrees, but adds that maybe the conversation needs to shift away from differences and focus on what all farms have in common. “This whole thing — big versus small, and conventional versus organic — there’s always these seemingly opposing views and it doesn’t have to be that way,” says Melanie. “We are all in the food business.”
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tight,” Melanie says, “so how are you going to differentiate yourself from what’s already out there?” “And it just so happens, that fit into our personal philosophy, which is a bonus,” adds Kevin. The Boldts have tried a lot of different tactics over the past 15 years — including an attempt at market gardening that didn’t work out — and in hindsight, they can say what they think they did right: Marketing and branding, staying consistent, creating partnerships with other producers, and listening to their customers. “Our customers feel they can have a trust relationship with us,” says Melanie. “How that translates into a bigger business is a constant evolution.” “There is a movement for good food, local food,” says Kevin. “Saskatoon has been a little bit slow on the uptake, but our staff and our regular clients are very committed, and very good. And it’s unique in Saskatchewan. There’s no other place with the connection to the farm, and commitment to local and scratch products.” The Boldts are also committed to educating their customers about how food gets to their plate. They see themselves as providing a simple, transparent chain from farm to fork. Part of educating customers also means telling their own story, and giving farmers a voice in the bigger discussion about food. “There’re all sorts of people out there telling the story of food, or dictating how food should be produced — chefs, activists, food writers, food critics — and that’s fine, but where’s the farmer’s voice?” says Melanie. “Now we’re being told how to produce, it needs to be organic, it needs to local... but it’s coming from people who don’t understand the production model,” says Kevin. “How practical is it to have pasture-raised poultry in the middle of winter?” In answer to some of these perhaps unnecessary demands, they’ve chosen to forgo organic certification for now, believing some of the red tape to get that certification isn’t worth the effort, although they admit they would pursue certification if their customers demanded it.
BUILDING CRITICAL MASS Both Kevin and Melanie see room for growth in local, organic farming. Melanie says alternative food choices cover two to five per cent of the market in Saskatchewan, and they have “by no means” saturated that market. “There’s definitely opportunities to feed ourselves,” says Melanie. “Why are we shipping out commodities and having them processed elsewhere, and then bringing them back so we can eat them? Maybe we should look at what things we can do well here that fit our climate, that fit our agricultural systems that we have. Can we do more with that? There are possibilities. And there are niches in the market.” Melanie points out that there’s especially room for growth in locally sold produce in Saskatchewan. She says her home province is only seven per cent self-sufficient in produce, while Alberta and Manitoba are at 32 and 57 per cent, respectively. The more farmers enter the business, the more local, organic foods will become the norm, says Melanie. “If we can get to that critical level, then all of a sudden, it’s more than just a niche,” Melanie says. “The niche has matured a little bit. And that’s starting to happen.” “Lots of the grocery store chains now have a mandate to carry local products, but they can’t find them,” adds Kevin. “How can you carry them if you can’t find them? So there’s potential for the industry, particularly in produce.” But even though the Boldts have found success as providers of local, all-natural meat, the hard work never stops. As “nose to tail” farmers, they have to master a different set of skills than more traditional farms, but even though the kind of support they need isn’t always available, they still love their work. “We never want to say that we’re smarter or better,” says Kevin. “We’re all farming, we’re all just doing what we can. We happen to be in a portion of the industry that doesn’t have as much experience to fall back on. So we’re kind of making it up as we go.” CG MARCH 15, 2013
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MANAGEMENT
NEXT YEAR’S MODELS We all know what a ‘real’ farm looks like. But if the past teaches us anything, it’s that today’s changes in machinery will spark massive changes in how tomorrow’s farms will be run By Gord Gilmour, CG Associate Editor
hat’s a farm? A real farm, that is. Not some hobby farm run by a lawyer, and not a lifestyle farm owned by some back-to-the-land type. And definitely not a scrap of paper shoved in a safety deposit box by some flash-in-thepan corporate exec who’s attracted to today’s investment returns but could be gone in a flash tomorrow. No matter what sector you operate in, or where in Canada you farm, every farmer has a picture in their mind of what a farm should look like. But, as you might suspect, there’s a trick here… if you had asked your grandparents, their picture would have been different than yours. And their grandparents’ idea would have been entirely different as well. Farm models can vary greatly, depend-
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ing on when and where you’re talking about. Consider the Canadian Prairies and U.S. Great Plains, a region more or less entirely settled through at the same time. They’re among the youngest great grainproducing regions in the world, with the land having been broken only about 125 years ago, or actually less in most cases. In the early years they were a virtual living laboratory of farm models, and among the early contenders for the crown were the so-called bonanza farms. These were huge shareholder-owned operations that farmed enormous blocks of land, growing wheat for export. A number of outside forces contributed to their rise, including the availability of cheap land, the completion of railways to the growing areas, increased demand for wheat, and the first wave of agricultural mechanization.
MARCH 15, 2013
MANAGEMENT If you want to see the remains of one today, you should visit Indian Head, Sask. There, just a few hundred yards north of the townsite, on Highway 56, is a round stone barn with a 67-foot diameter, a painstaking recreation of the most striking piece of construction on what was once known as the Bell Farm. Ontario shareholders, under the leadership of Major William R. Bell, founded the farm in 1882, which was controlled by the Qu’Appelle Valley Farming Company. Even by today’s standards it was a mammoth operation with a land base of 60,000 acres. Eventually the operation settled more than 100 tenant farmers in the area, and employed large-scale operations almost unheard of at the time, with 45 binders sometimes seen operating in a single field during the harvest. The project was watched with great interest by the Canadian government at the time, and Sir John A. MacDonald was said to be a Bell Farm booster.
But while these farms might have appeared to be impressive on the surface, they were in fact brittle. Changing conditions ranging from falling markets to drying weather cycles or money that wanted to see higher returns elsewhere all combined to ultimately doom the operations, says Merle Massie, a Saskatchewan historian and post-doctoral fellow with the University of Saskatchewan. In fact, for all their lore the bonanza farms were never really dominant even in their own time. “Bonanza farms were actually few and far between,” Massie told COUNTRY GUIDE. “They were crushed by the sheer number of smaller farms.” In fact it was those ragged-trouser family farms that eventually became the prevailing farm model in the region following the Second World War. The so-called
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management Continued from page 37 ‘section farms’ were family-owned and -operated mixed farms typically working a half or a full section (320 or 640 acres). It was a surprisingly durable model. “By 1971 and the Trudeau era, the business still had a lot of half-section and section farms,” Massie says. And that was after the effects of rural electrification and increasing mechanization were already well underway, beginning the consolidation towards the large specialized operations today. These days it’s almost impossible to find one of those small mixed farms in the region, other than small niche operations in something like the organic sector. The prevailing model from sector to sector in the region now is to find something you’re good at — be it crop production, swine production or cattle finishing — and get big and efficient at producing it. In fact it’s gone so far that there are now grain operations approaching and in some cases even exceeding the size of the old bonanza farm operations. So it begs the question — is there ever an ideal model for a farm? “No,” says Massie. “That’s the whole point of agriculture — it flows and ebbs and changes.” So if we’re not at agriculture’s “end of history” moment, what can we expect of the future? A good start might be to look to the past. Not to the farm models, but rather to what drove them, to see what may drive change in the coming years. It boils down to a handful of predictable pressures, opportunities and tools, says one business specialist who’s been looking at this issue. David Sparling, who holds the Agri-Food Innovation chair at the Ivey School of Business in London, Ont., says farms typically respond to macro trends that can be broken down into four major headings: political, economic, social and technological. “Conditions change. Business models change,” is how Sparling summed it up during a recent lecture during the Syngenta-sponsored Grower University short course program this winter. On the political watch, Sparling sees several brewing trends that are clearly going to affect Canadian farmers. The WTO trade process is essentially dead, and Canadian farmers need to insist their government pursue bilateral agreements. 38 country-guide.ca
“That’s where the progress is being made today, in bilateral agreements,” Sparling says. There are also several key challenges over the next several years that could play out in ways that affect farmers. For example the euro zone will continue to deal with many challenges. All around the world, government debt levels are rising. There also appears to be mounting evidence that there could be a round of competitive currency devaluations which could have dramatic impacts, which is an economic issue that will be driven by politics. The economic drivers include the lingering after-effects of the global financial meltdown, with developed economies experiencing ongoing slow growth, though not outright recession. This has all eyes watching the developing economies like Brazil, India and China for the world’s required growth. Closer to home the question of how strong the Canadian dollar will remain is a vital one, and the answer to that question will be dependent on the fate of the price of oil, which appears to be dropping on greater U.S. domestic production from tight oil sources like oil shale. Sparling says he expects to see grain prices recover relatively quickly from any hit they take on oil- and energyrelated price falls — but says that one thing that is clear is greater grain market volatility appears to be here to stay. “I think a spread will develop, with grain stronger and oil weaker,” Sparling says. Yet it’s in the social sphere where things are poised to get really interesting and farms will face some of their biggest challenges. There’s going to be change coming from the companies that sell your products to consumers. For example, WalMart is in the process of rolling out a sustainability index for all the products it will sell in its stores. It will measure the effects of products in four key areas: energy and climate, nature and resources, material efficiency, and people and community. It’s just one retailer, but most other major chains are likely to follow. “This will come down to your farm,” Sparling says. “It will be forced down on to you by their biggest suppliers.” It’s important to note that this won’t happen in a vacuum though — Wal-Mart and companies like it aren’t charities, and they’re only doing this because they’re very good at sensing how consumer sentiment is shifting. Those consumers are
paying more attention to their food, and they’re beginning — for reasons justified or not — to lose confidence in the food system. That’s going to make it more important than ever to get agriculture’s message out, although the industry doesn’t have a great track record at it. By way of example, Sparling illustrates the relative difference in viewership between a well-known pro-agriculture website and a piece of video alleging to show inhumane slaughterhouse practices. “Look at these numbers,” Sparling says. “Here’s one from the agriculture site with two views, here’s a really popular one with 54 views. Now look at the slaughterhouse video… more than half a million views — the last time I looked it was actually close to a million views.” While some might see nothing but danger in this trend, Sparling says there are also opportunities to be found in the local, organic and ethnic markets, for example. “We need new network models to access these markets,” Sparling says. One model that already appears to be developing is farmers moving into more areas of their value chains with processing, distribution and even wholesaling becoming a more common element of farm operations, either alone or in a partnership of some sort. The technological pillar on the other hand, seems likely to produce great advances and opportunities, Sparling says. That can mean everything from the advancement and eventual maturity of the biotechnology and genetics sector to more, better and entirely different machinery on farms. “Labour has been a big issue, so what can we do? We may see the development of autonomous robots, and suddenly labour won’t be as big an issue as it used to be,” Sparling says. This is already happening, with one German company developing a roboticized grain cart that’s already in the field-testing stage. There’s plenty of evidence farmers are prepared to invest in these opportunities when they arise, Sparling says, and especially in equipment, which almost half of farms have recently invested in, according to his latest figures. He notes that those figures are skewed however, with the largest farms being far higher, ranging from 76 per cent to 83 per cent for the top three revenue groups, which range from $500,000 in annual sales to $2.5 million and up. CG march 15, 2013
Management
Sharing equipment Fewer farmers share equipment in times of high commodity prices, which means a lot of us are missing out on a great opportunity By Gerald Pilger he late 1960s and early ’70s were a difficult time for grain producers all across Canada, and perhaps especially so in the countryside around Wynyard, Sask., a couple hours straight east from Saskatoon, where a combination of poor crops and weak markets was hitting home. On top of those economic pressures, seven farm operations there faced some additional challenges. In the midst of these tough times the seven owners were nearing retirement, yet all had sons who wanted to farm. All seven farms were also relatively small, however, ranging from 600 to 1,500 acres, and all were running old equipment
MARCH 15, 2013
which needed to be replaced, but none of the farmers could justify the cost of new equipment given their limited acreages. Fortunately these farmers were willing to look for unconventional solutions to a very common problem — one which many farmers still face today. In a nutshell, the question is this: How can small to mid-size farmers acquire new, modern, efficient equipment that is sized for increasingly larger acreages? In 1971 these Wynyard farmers formally combined their operations in a newly formed cooperative with the primary goal of reducing their equipment costs. Glen Laxdal’s father was one of the original seven members of the Lakeside
Machinery Cooperative Ltd., and today Glen manages Lakeside Seeds, the seedcleaning plant that the machinery co-op built. The addition of the seed-cleaning plant on the farm has in turn opened up new global markets for seed and for crops grown on the farm. According to Laxdal, the co-operative farm business operates in the same way as it did when it was originally set up in 1971. “Instead of there being a number of individual, small farms, we operate as one large farm and all members share the production and revenues from the farm,” Continued on page 40
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management Continued from page 39 Laxdal says. “All the equipment is owned by the co-op and shared by all members.” The group has a formal structure, Laxdal adds. “There is a set of bylaws which details who can be a member, the responsibilities of membership, and how decisions are to be made.” Laxdal points out too that decisions about what to plant, when to sell, and when and how to replace equipment are made by the board of directors. The board of directors also selects one person to co-ordinate the day-to-day operation of the farm to ensure the best use is being made of the equipment. The co-operative ownership of equipment has been very successful for the farmers involved. It enabled the members to not only modernize their equipment but to scale up to larger and more efficient equipment. Equally important, however, is the fact that the equipment is better utilized, thereby reducing the equipment cost per acre. Finally, Laxdal points out the co-operative model of equipment ownership has been a great way to acquire specialized equipment — such as the seed-cleaning equipment — which would be prohibitively expensive for most individual farm operations. While joint ownership of equipment and sharing of all production from the farm may sound to some readers like socialism or a Hutterite colony, Laxdal disputes this stereotype. “Our members live in their own homes, on their own land,” Laxdal says. “We simply work together to reduce costs and achieve production and marketing advantages which increase profitability.”
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Laxdal also points out the co-op is structured so it is easy-in and easy out. “Membership has changed over the years,” he says. “Members have left the cooperative when it no longer met their needs and others have joined. There have been as few as five farms and as many as 12 farms in the co-op over the years. Currently the co-op farms about 12,000 acres in an eight- by 12-mile block in the Wynyard area. In fact, the co-operative has likely made its members more entrepreneurial than the average Canadian farmer, given their expansion into the seed-cleaning business, into Prairie-wide seed sales, into the growing and processing of new speciality crops, and into packaging and shipping of speciality products by intermodal containers around the world. As well, the co-op has teamed up with other crop-processing firms in Western Canada over the years to expand their export reach. By working together these farmers have not only reduced their debt load and cost of production but have moved up the value chain, which has increased revenues and profits.
Economics and equipment sharing Studies have shown there can be significant reduction in costs when farmers share equipment. A study by Harris and Fulton at the University of Saskatchewan in 2000 found when three 1,500-acre grain farms combined their equipment, their total machinery costs per acre would drop from $44.66 to $28.75 per acre under conventional tillage and from $37.93 to $25.36 per acre for direct seeding. The July 2002 University of Illinois news column “Sharing Farm Machinery: Careful Considerations” states that an Illinois producer farming 2,000 acres spends on average $62 per acre in machinery expenses, whereas a producer with less than 500 acres averages $76 per acre on machinery costs. The authors go on to report that the one-third of producers with the highest incomes spend an average $59 per acre on equipment costs and the one-third of producers with the lowest incomes spend an average of $71 on equipment. William Edwards, extension economist with Iowa State University, believes equipment sharing and joint ownership of equipment offer small and mid-size farm operations a way to reduce equipment costs and increase labour efficiency. Edwards is one of the authors of the 2009 Farm Machinery and Labor Sharing Manual, published as a guide to help producers evaluate the benefits of machinery and labour sharing on their farms. According to Edwards, much of the information and many of the strategies in the manual are the result of work done in Saskatchewan. This manual is available through MidWest Plan Service http://www.mwps.org/index.cfm?fuseaction=c_Products. viewProduct&productID=17841 at a cost of $25. In a 2009 Ag Decision Maker News Release entitled “Farm machinery joint ventures” Edwards listed the potential benefits of such efforts, including: • Greater annual use of large-ticket machines. • More efficient use of labour during peak field work times. • Fewer weather delays because fields are more spread out. • Opportunities to do custom work for other operators or landowners. • Greater use of individual operator skills and specialized labour. • More efficient use of repair and maintenance tools and facilities. • Volume discounts on purchases of inputs and supplies. Despite these potential benefits, however, Edwards says few farmers share equipment. “There is a culture of independence in farming so 99 per cent of farmers do not share equipment, espeMARCH 15, 2013
MANAGEMENT cially when grain prices are high and times are good.” As well, Edwards listed a number of potential drawbacks to joint machinery ownership. Concerns include: • Scheduling conflicts, especially in spring and fall when timing is critical and the equipment is needed by all owners at the same time. • Care, maintenance and poor operation by one party could increase wear and breakdowns. • Inability to use the equipment as collateral for farm finance needs. • Liability if one joint owner does not make a payment. • Determination of type, size and model of equipment needed. These concerns can be overcome by carefully choosing who you are willing to share equipment with. Do potential partners have the same attitudes toward equipment care, operation, and maintenance as you do? Do they have financial stability such that you would be comfortable in jointly owning equipment with them? Do they have similar work ethics and are they willing to share access during busy times? After finding a potential partner(s), take an inventory of the equipment you already have access to and determine exactly what equipment is needed to get the work of all parties done in a timely manner. Discuss how existing equipment will be owned and shared. (i.e. sold to the group, or owned by an individual and rented by group). Determine which type of business arrangement best meets your needs, such as joint ownership of equipment, sole ownership of equipment and rental, corporate ownership of equipment and custom farming of all lands, etc. Use professional legal and financial advisers to help draw up a formal agreement detailing ownership arrangements, how machinery use will be scheduled, how decisions about equipment purchasing and trading are made, servicing of equipment, fuelling of equipment, repairs, and most importantly, how the dissolution will be handled. This is critical should a member of the group die or quit farming. Iowa State University has created an Excel spreadsheet which growers can download and use as a cornerstone for a equipment sharing agreement: http://farmfutures.com/story-sharing-farm-equipment-load0-59626-printversion. A century ago, the amount of land that one individual could farm was largely limited by the amount of labour available to MARCH 15, 2013
plant and harvest the crop. The advent of equipment changed that. Relatively inexpensive equipment enabled farmers to farm more acres, but equipment was comparatively small and the availability of equipment tended to limit expansion. Now, advances in equipment and equipment sizing have outpaced the machine needs of many small and mid-size farmers. Couple this with the high cost of
equipment and high rental rates and land prices, and it is now availability of land which is the limiting factor on many farms. Instead of individually competing for enough land to maximize equipment, maybe it is time to work with other farmers to co-operatively match individual farms to large equipment. Now may be the time when equipment sharing makes the most sense. CG
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Where ‘used’ is best In this balance between cost and productivity, Norm (l) and Ernie Hall base their operation on used equipment By Richard Kamchen
42 country-guide.ca
t isn’t just the equipment that isn’t new on the Hall farm near Wynyard, Sask. The farm isn’t new either — it’s been in the family for over a century. And the thinking isn’t brand new either, even when it’s at its most up to date. If anything, their approach to used equipment is something of a tradition, one that brothers Norm and Ernie Hall continue to this day. “There’s been a sprinkling of new stuff brought in from time to time, but in general, there wasn’t enough money through our farm history to purchase new all the time,” says older brother Ernie. “It’s an attitude. There’re a lot of people who seem to have a ‘keeping up with the Joneses’ attitude, and that’s not something that we’ve ever paid any attention to.” The brothers seek machinery with lower hours and then try to get all the hours out of it that they can. They don’t trade something in just because it’s old, they move it when it’s worn out. Auctions are sometimes the answer, but they’ve sold privately to avoid auction commissions. To make the business proposition work, they say, they need to know what they’re buying, how to fix it, and when to get rid of it. When it comes to tractors, the brothers have shunned purchasing anything
close to new, having found used tractors basic and easy to fix. Last year, Ernie bought a 1981 Massey four-wheel drive, and two years ago, a 1982 Versatile. The older equipment comes with a built-in design bonus: It’s simple, and to a very large degree, it’s non-electronic, which means the Halls can add value to their farm operation by taking advantage of their mechanical skills. When push comes to shove, they believe, the main difference between old and new is that any problems that arise with the new are hard to ignore — but virtually impossible to repair on your own. “There’s so many sensors, even on the tractors now, the hydraulics are electronically controlled and computerized,” says Ernie. “One little ground in the tractor and all of a sudden you have no hydraulics. And there’s no getting around it, you can’t bypass that, it just has to be fixed.” That’s his main complaint with some of the so-called “bigger and better” technology; it’s more likely to leave you in the lurch. “There’s no way to get around it,” Ernie says. “If it doesn’t work, it just has to be fixed. These older ones, if it’s starting to fail, you can limp for probably the rest of the season before it finally fails or get it back to the shop.” But price is ultimately the major motivator behind looking for good, broken-in MARCH 15, 2013
Photo credit: LARS Photography, Wynyard, Sask.
management
management equipment. Ernie guesses that the price difference between the two- to three-yearold combine he bought versus the same combine brand new would be close to $100,000. He and Norm are also looking at upgrading their sprayer, and while a four-year-old machine could end up costing them $200,000, brand new could be nearly double that. “That was the goal in staying with used equipment, because you were able to afford a little bit bigger, and if you were at the right sale at the right time, the affording part of it got a lot easier,” says Ernie. “We’re keeping our debt down,” adds Norm, who also serves as president of the Agricultural Producers Association of Saskatchewan (APAS). “Our repair expenses are a little higher, our repair time is a little higher, but it’s a trade-off that we’ve made the conscious decision to make.” While low interest rates might make buying new machinery more attractive, even a modest rise in rates could put significant pressure on the farm economy. “Take farm debt of $70 billion, even if you add one per cent to that, that’s a lot of dollars coming out of the ag economy,” says Norm. “If something happens, all of a sudden that extra $700 million will hurt.” However, there are limits even to the Halls’ commitment to their buy-used formula. When it comes to seeding equipment, the Hall brothers have always bought new to maintain accuracy and make use of latest technology. The brothers keep tabs on used sales and check out auction sales too. They have also bought from receiver sales for dealerships that have gone bankrupt. It’s a matter of looking and keeping your ears to the ground, they say. In their experience, they can usually find what they need somewhere. Across Canada, new apps and computer searches can also make it faster and more efficient to track exactly the piece of equipment that a farm may be seeking. “You’ve got a huge, huge market to choose from,” Ernie says. “Up until the last couple years, we haven’t used dealers at all for purchase or for repair. Auction sales have been basically our dealers for most of our farming careers and we’ve become connoisseurs on equipment condition. You get familiar with a certain piece that you’re operating, and you soon learn what to look for as far as condition goes.” “We do go to the showroom, and MARCH 15, 2013
then you hope whoever’s buying your combine is looking after it, so when you get it it’s in good shape,” Norm jokes. The fact there’s always been a working shop on the farm has kept their purchases running in good order. Norm says mechanical experience was something he and his brother picked up over the years. Often, experience is what counts the most in keeping their machinery working. “It’s the old 4-H model: Learn to do by doing. That’s what we did. If something broke, you fixed it — especially if you broke it,” says Norm. “You learned to take care of the equipment. You were running older equipment, so you learned the noises that it makes and you listened.” With Norm busy with APAS, the farm has three employees including a mechanic. The mechanical work helps a lot in the operation’s entire endeavour because then the operation consists of more than just field jobs related to crop production. In addition, they also run a manure-spreading operation and they haul poultry litter.
There’s one mechanic who runs the poultry litter side, which requires trucks and heavy equipment, and spreader trucks are notorious for constant attention. The Halls are seed growers as well, and given they haul their own farm product with semis too, they do more trucking than most. While running older equipment is something of a feather in the cap for the brothers, they realize that what works for them may not for others. “Some of the larger farms, they simply don’t have the manpower or can’t find the manpower to keep up used equipment. For a 15,000-acre farm, it’s pretty much an impossibility to keep a fleet of old used ones running,” says Ernie. “They’d run into such time constraints when it comes to seeding and harvesting that they just can’t afford breakdowns. It has to pencil out for you.” CG
Used equipment helps the Halls attract employees with year-round jobs.
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management
Doing more, spending more The number of tractors and combines owned by Canada’s farmers is falling, but their accumulated value has never been higher By Scott Garvey, CG Machinery Editor y the time this issue of Country Guide starts getting stuffed into mailboxes across the country, most New Year’s resolutions will have been left for dead. But the calendar that spawned those empty promises also marks a good time for taking a look back at how the farm equipment industry fared over the past year. It’s safe to say all the executives at the major brands are quite content with their company’s performance over the past 12 months. Many farmers in Canada were in the mood for new sheet metal again last year. Their urban cousins apparently were too. According to the Conference Board of Canada, automotive sales from January to August in Canada surged 7.1 per cent over the same period in 2011. The total number of vehicles sold reached an impressive 1.72 million, the largest sales volume since 2002. The most interesting statistic in those numbers is that pickup truck sales surpassed passenger car sales all across the country, and especially on the Prairies. Farmers can no doubt take a large part of the credit for that. When it comes to machinery, the Association of Equipment Manufacturers notes tractor and combine sales grew in 2012 as well. Here’s how the numbers break down: Four-wheel-drive tractor sales jumped by an incredible 16.6 per cent over 2011, topping out at 1,590 machines. Canadian dealers also saw 23,648 rigid-frame tractors roll off their lots, which amounts to a jump of 3.9 per cent. Farmers took delivery of 2,911 new combines last year, too. That total represents a modest jump of 1.1 per cent above the previous year. Short-line equipment retailers seem to also be feeling the love from farmers. One Manitoba seeding and tillage equipment dealer I spoke to at a recent farm machinery show put it this way. “The biggest problem I have now is getting the product. Selling it is no problem.” He wasn’t the only one to say something along that line. Nor is that bright sales picture limited to Canada. The word from most other countries is good as well. 44 country-guide.ca
Deere still in first Here’s what it adds up to for the major manufacturers. John Deere reported year-end sales numbers for its Ag and Turf Division were up by 13 per cent over 2011. Overall net sales of equipment for Deere’s full 2012 fiscal year topped US$33.5 billion, setting a new record for the company. “In the face of continuing global economic pressure, John Deere has completed another record year,” said Samuel R. Allen, chairman and chief executive officer. “Our success reflects positive customer response to our lines of innovative equipment coupled with extensive efforts to expand our global competitive position.” Deere’s nearest rival in terms of total sales revenue is CNH Global, with its two brands New Holland and Case IH. That company’s 2012 financial year-end report has yet to be released, but the third-quarter report published at the end of October shows the firm’s fortunes trending upward. Net sales of agricultural equipment surged 12 per cent in that quarter over 2011 figures, reaching a value of US$4 billion. Amazingly, 46 per cent of all CNH’s equipment sales in this period occurred in North America, reflecting the strong demand for equipment from farmers here. Third in line for the title of biggest global ag manufacturer is AGCO. It hasn’t yet released its financial report for all of 2012 either, but third-quarter results there show net sales grew by 9.9 per cent, ballooning to US$2.3 billion. Perhaps more remarkable than those overall numbers is AGCO’s performance in North America. The company has been targeting growth in Canada and the U.S. for a while, and it seems strategic planning and marketing efforts have paid off. “North American sales increased 30.8 per cent in the first nine months of 2012 compared to the same period in 2011, excluding the impact of acquisitions and currency translation,” reads the company’s report. Even though Winnipeg-based Versatile isn’t yet playing on a scale to rival the big three, financial news there is good too. Revenues for the year increased by 27.8 per cent. “The company reached record sales MARCH 15, 2013
management
levels for the second consecutive year,” reads their financial report. “The rise in sales was due to strong demand for tractors in North America and overseas, as well as increased demand for sprayers and seeding and tillage lines introduced in recent years.”
Drive the economy Here’s where this continuing trend of hyper sales activity, which began in 2008, leaves Canadian farmers. According to the UN’s Food and Agriculture Organization (FAO), Canadian farmers’ total investment in machinery from 1992 to 2007 hovered steadily around the US$20-billion mark. But in 2008 new machinery investment lurched forward in lockstep with surging grain and oilseed prices. Since then, the farm equipment industry has looked entirely different. StatCan’s 2011 survey shows the amount of money Canadian farmers now have locked up in their equipment fleets is roughly $41.4 billion. That more than doubles 2007 data and is even significantly higher than it was during the last census in 2006, when the national investment in machinery was $36.1 billion. And that total was split among 24,000 more farms than existed in 2011. The tally of tractors owned or leased on the 190,162 working farms across this country in 2011 was 685,914. Those farmers also said they owned and leased 90,903 combines. Tractors alone now account for roughly $14 billion of capital investment, despite declining in numbers by approximately 48,000 since the 2006 survey. When it comes to Canadian combines, they’re worth about $5.2 billion, a growth in value of about $1.3 billion in the same time period. And just like tractors, their actual numbers have fallen substantially since 2006, declining by about 10,000 units. MARCH 15, 2013
The upshot of all that is farmers now have more money tied up in markedly fewer machines, so an interesting trend is at play on Canadian farms. As the number of farms declines, so does the count of machines in the national fleet. But the value of each machine is climbing significantly, as is the number of new machines being purchased. Clearly, farmers are turning to fewer, newer-model, higher-value machines to get the job done. It all means the productivity of each farmer and his or her machinery is rising rapidly — which shouldn’t really come as a surprise to anyone. And the implications of that trend reach well beyond the farmyard. To put a fine point on the impact of agricultural machinery manufacturing and trade on the global economy, the FAO notes imports of agricultural equipment to Canada by the top 10 importers between 2001 and 2009 had an approximate value of US$1.5 billion per year. That made us the third-largest importer, behind the U.S. and the Russian Federation. The value of our ag equipment exports in 2011 was roughly the same, according to Manitoba Trade and Investment’s calculations. However, here’s what all those figures don’t come right out and say. It’s no secret that when farm commodity prices are high, which they have been since 2008, producers spend a big chunk of their profits on new equipment — and pickup trucks, apparently. That increased spending is reflected in the machinery sales numbers you just read, and it stimulates the entire world’s economy pretty significantly. So when farm commodity prices are high, a lot of people reap the benefits. When they’re low, it isn’t just farmers who suffer. CG
New machinery on display at AGCO’s Jackson, Minnesota, assembly plant. Photo credit: Scott Garvey
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hr
What makes a really great leader? “Leadership is the capacity to translate vision into reality.” — Warren G. Bennis By Pierrette Desrosiers, psychologist and coach
ociety needs great leaders; agriculture needs great leaders. Few topics have been investigated as exhaustively as leadership, but it is not always clear what makes a great leader. Why does this matter? It appears that those who possess leadership qualities generate respect, and they influence others. Strong leadership positively affects the followers’ performance, satisfaction, and commitment. But what differentiates the best from the rest? According to experts who studied Fortune 1,000 companies, six psychological factors seem to make the difference: 1. Decisiveness: Good leaders make frequent decisions and take responsibility even when there is a period of uncertainty. They stand behind their decisions. 2. Competence: Leaders know their field. They know what they are talking about. People recognize their great experience, expertise, and knowledge. 3. Integrity: Leaders can be trusted. They act according to the values, beliefs, and principles they claim to hold. They “walk the talk.” Integrity generates respect. 4. Vision: Leaders have a vision and the communication skills to convey that vision to the group with passion and enthusiasm. As a result, the followers have a common purpose and are motivated to persevere even in the hard times. Without a vision, the followers are lost and confused. 5. Modesty: The most effective leaders do not suffer from “the god complex,” which is characterized by unshakable belief in and consistently inflated feelings of personal ability, privilege, or infallibility. In contrast, strong leaders don’t take the credit for success; they share it with the group. 6. Persistence: Great leaders never give up on the end goals. They are not rigid or inflexible, but they persevere and find flexible ways to succeed and reach these goals. These qualities would seem to be a requirement for any president of any big company. However, it doesn’t always happen like that. For example, when employees are interviewed for surveys, about 50 per cent rate their boss as incompetent. Moreover, when we look at our political leaders it seems obvious that many would not pass the test either. And what about entrepreneurs in agriculture? Leadership qualities are not only important if you are at the head of a large corporation; they’re also crucial if you run a small business. So, what can we do on a daily basis to improve 46 country-guide.ca
our leadership skills? Here are some questions to reflect upon that could help: 1. Decisiveness: How do I make decisions? Do I stick with them and take the complete responsibility? 2. Competence: How can I express or further develop my skills in my field? 3. Integrity: Do I act according to my values, my principles, and my beliefs? Am I truly honest with both myself and others? 4. Vision: Do I have a vision for my enterprise, my life, and my family? Do I share that vision with passion and direction? Do others understand and support it? 5. Modesty: Am I able to give credit to employees and members of my family for their contribution to the company? Or is “succeed” always conjugated for “I?” 6. Perseverance: In the face of adversity, setbacks, and challenges, what attitude do I take and communicate? Am I able to convey a message of hope? We can, of course, demand these great qualities in others, but we can also work every day to bring ourselves to this level of leadership in each area of our lives as parents, owners of businesses, CEOs, or even as citizens involved in our communities. Sometimes it is difficult to know how to act when we are in a difficult situation. It could be useful to find models that embody the leadership qualities you desire to cultivate. You can choose anyone you know, living or deceased, or even a public figure who has influenced you, and ask yourself: In this situation, how would he act or what would she say? The simple act of imagining the response of your role model will give you flexibility in your own way of reacting to complex situations. This is a technique that has been tested and gives amazing results. It prevents you from acting automatically, and encourages you to really think about your reaction. You will feel, think, and act differently as a result. And by the way, the next time you have to vote for municipal or provincial elections you can always bring that list of qualities and evaluate your leaders based on the six important categories. Who knows, maybe we will have better leaders! CG Pierrette Desrosiers is a work psychologist, professional speaker, coach and author who specializes in the agricultural industry. She comes from a family of farmers and she and her husband have farmed for more than 25 years. (www.pierrettedesrosiers. com) Email: pierrette@pierrettedesrosiers.com. MARCH 15, 2013
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NEAR-NORMAL TEMPERATURES AND PRECIPITATION
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M AV ILDE ER R T AG HA EP N RE NOR CIP M ITA AL TIO N
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COOLER THAN USUAL NEAR-NORMAL PRECIPITATION
S at torm tim y es
w e at h e r
SASKATCHEWAN March 24 through April March 24 through April to May 4, 2013 to May 4, 2013
BRITISH COLUMBIA
Mar. 24-30: Seasonal to cool. Blustery. Periodic coastal rain. Intermittent snow and rain Interior. Mar. 31-Apr. 6: Temperatures vary. Often windy, wet on the coast. Occasional rain and snow elsewhere. Apr. 7-13: Cool but milder spells bring some heavier rain except wet snow at higher elevations and north. Apr. 14-20: Fair with some rain west. Scattered rain and snow elsewhere. Highs in the teens south. Apr. 21-27: Highs hit the teens south, at times 20s in the Interior. Occasional showers. Some snow, cooler north. Apr. 28-May 4: Seasonal. Windy at times. Sunshine alternates with rain. Some snow higher levels.
ALBERTA Mar. 24-30: Often unsettled with rain or snow, chance heavy in places. Blustery. Seasonal to cool. Thawing. Mar. 31-Apr. 6: Variable temperatures. Windy. Sunny with scattered rain or snow, heavier north. Apr. 7-13: Sunshine interchanges with rain or heavier snow. Milder days see highs in the teens south. Apr. 14-20: Often sunny and windy except a couple of days with heavier rain or snow. Mild to cool. Apr. 21-27: Highs in the teens, at times 20s south. Cooler outbreaks bring rain, chance snow. Apr. 28-May 4: Thaw/freeze cycle. Fair, seasonal. Cooler, windy days bring rain, risk heavy snow. MARCH 15, 2013
Mar. 24-30: Changeable weather and temperatures. Periodic rain or snow, heavy in places. Windy. Thawing. Mar. 31-Apr. 6: Seasonal to cool. Milder days bring some rain south and snow north. Blustery. Chance heavy precipitation. Apr. 7-13: Sunshine alternates with rain or heavier snow. Windy. Variable highs at times in the teens. Apr. 14-20: Sunny except a couple of unsettled, windy days bring heavier rain or snow. Fluctuating temperatures. Apr. 21-27: Temperatures and weather vary from sunny and mild to cool and wet. Blustery. Cooler, snow north. Apr. 28-May 4: Seasonal to milder. Sunny apart from rain on a couple days. Chance snow in a few localities.
MANITOBA Mar. 24-30: Unsettled, windy at times as fair weather exchanges with snow or rain. Thawing to freezing. Mar. 31-Apr. 6: Milder, fair days alternate with cooler, windy days with some rain or snow. Chance heavy precipitation. Apr. 7-13: Highs in teens. Sunny but rain, chance of snow on a couple of occasions. Cooler, snowy north. Apr. 14-20: Often windy. Mild to cool temperatures. Sunny apart from occasional showers or heavier snow. Apr. 21-27: Frost interchanges with mild days. Blustery. Sunny but with scattered rain, risk heavier snow. Apr. 28-May 4: Sunny, often windy. A few highs in the 20s south but cooler air brings some rain, snow north.
NATIONAL HIGHLIGHTS Rapidly warming temperatures and variable weather will highlight the change of seasons in this period. Due to this variability, warm, summer-like weather can quickly become cold and wintry. In Eastern Canada, spring is expected to get a quick start as a milder, southerly circulation boosts temperatures to above-normal values. A few heavier rain and snow events are likely to accompany the milder conditions but overall precipitation totals should run close to normal. Atlantic Canada may feel the brunt of a few significant storms from time to time with heavier-than-usual precipitation in a few regions. Meantime on the opposite side of the country, British Columbia will have a slow start to spring as temperatures trend to the cool side. Sandwiched between the cool air in the West and warm air to the East, the Prairies, northwestern Ontario and northern Quebec can expect temperatures and precipitation to fluctuate but average close to longtime normal values.
Editor’s note:
Where’s my weather page? Look in every second issue for your month-long Country Guide weather forecast during the winter months when we’re publishing every two weeks. country-guide.ca 47
ACRES
By Leeann Minogue
Heading down the highway With a sister and sister-in-law in the car, is there ever a right thing to say? “Mind if I turn up the radio?” Trina asked, her hand reaching for the dial. “Please don’t!” Elaine said quickly. “If Connor wakes up I won’t get him back to sleep.” “Oh, right,” Trina said, turning in the passenger seat to look at her nephew, asleep in his car seat in the back of Elaine’s SUV. “He’s been so quiet I forgot he was back there. I wish I could spend more time with him.” “You should come home to the farm more often,” Elaine told her sister-in-law. “That 4-1/2-hour drive from Winnipeg is too much for just a two-day weekend,” Trina said. “And I don’t get a lot of time off. I have to go to work every day. It’s not like I’m farming, with the whole winter off.” Elaine wasn’t sure what to say to this, so she just kept quiet. “It’s too bad you and Jeff couldn’t meet me at Asessippi. It’s close to halfway between here and Winnipeg. And it would be great to spend a couple of days skiing with you guys.” 48 country-guide.ca
“I know,” Elaine said. “I love skiing.” “So why do you and my brother keep saying you can’t come?” Trina asked. “Conner’s too little,” Elaine said. “And it’s hard to find someone to take him for a whole weekend.” “Mom and Dad won’t do it? Mom’s always talking about what a great kid he is.” “Well,” Elaine said. “Your mom’s been really busy.” “What’s she doing all day?” Trina asked. “I thought she retired.” A few weeks earlier, Jeff and Trina’s mother, Donna, had officially retired from her job as financial record keeper, secretary, accountant and chief coffee provider at Hanson Acres. Donna hadn’t necessarily made the change because she was ready, or tired of the work, or had something else she wanted to do with her time. She did it because she knew if the next generation was going to take over the farm, they needed to start diving in and making the business their own. The change had been hard for her at first. The first MARCH 15, 2013
acres
week, Donna wandered around the house wondering what to do. At least three times every morning before 10 o’clock, she’d had to stop herself from phoning across the yard to her daughter-in-law’s house, to make sure Elaine had coffee on. Or to see if it would be helpful if Donna brought a cheese plate over. Or to make sure Elaine had cream for the coffee. Of course everything had gone fine. Donna wasn’t wild about the way Elaine sometimes pulled cookies out of a bag from the Co-op rather than baking something fresh that at least had a little fibre, but Elaine made good coffee, and nobody was complaining. Midway through her second week of retirement, Donna started to find her feet. When a friend asked if she had time to go cross-country skiing for the day, she’d almost said “no thanks,” by instinct. But then she realized that suddenly she did have time. She had time to do a lot of things she’d been saying “no thanks” to for years. Now Donna was spending every Sunday afternoon cross-country skiing with a group of women. She’d joined a book club, renewed her membership at the gym in town, started writing her own blog and she was using some videos she’d found online to teach herself to play the guitar. Of course Elaine was happy that her mother-inlaw was handling the change so gracefully, and she knew how hard Donna was working to make Elaine feel welcome as part of the farm business. But Elaine was a little sad to have lost her babysitter. “Wow,” Trina said after Elaine told her about Donna’s new life. “I guess that explains why I’ve barely seen her all weekend. I was starting to think she was avoiding me.” “She wouldn’t,” Elaine sold her sister-in-law. “We’re all glad to see you when you finally get home.” Elaine was telling the truth. She was always happy to see Trina, even if sometimes things were a bit awkward between the two women. Trina liked her job in Winnipeg, but she was living the life of someone who’d just joined the workforce — sharing an apartment with a friend, working long hours and spending most of her paycheque to buy the work clothes and kitchen appliances she’d never needed before. Meanwhile, Elaine and Jeff were living in a brand new, fully equipped house on the Hanson farm. With her house and work on the farm, Elaine was spending more time with Trina’s parents than Trina had since she’d left home for university. And since Elaine’s baby had come along, Trina’s phone calls home to her mother had included a 15-minute update on Conner’s latest cute accomplishments. “How can my stories about marketing meetings upstage a baby crawling backwards?” Trina asked her roommate one evening when she was feeling left out. march 15, 2013
On paper, Trina still had a 10 per cent share in the Hanson farm. But in real life, her involvement had pretty much ended. Trina wasn’t sure how she felt about that yet, and neither was anyone else. “It’s so hard to say the right thing,” Elaine had said to Jeff when they were getting ready for Trina’s weekend trip home. “I can’t relax — I’m too worried that anything I tell her about your family or our life out here might upset her.” “She doesn’t want to live here, but she doesn’t want to not live here,” Jeff said. “Don’t worry too much if she gets upset. It’s not about you.” “Well I hope she figures it out soon,” Elaine told her husband. “Trying not to say the wrong thing gives me a headache.” It hadn’t been anything Elaine said that had caused a problem that morning. It had been the muffin tin. “What have you been doing with that thing?” Trina had asked when Elaine took muffins out of the oven for morning coffee. “It looks a thousand years old!” “It probably is,” Elaine said. “Jeff and I found it in your grandpa’s basement when we were still living in the old farmhouse.”
It hadn’t been anything that Elaine said that had caused a problem that morning. It had been the muffin tin. “What?” Trina had asked. “That old house was cram-packed with things your grandpa didn’t move to town. It took us weeks to sort it out,” Elaine said. “I see,” Trina said, biting her lip. While she’d been scraping together change to buy a mixing bowl in Winnipeg, her sister-in-law had taken over her grandmother’s things. “Oh no,” Elaine said, when she realized what Trina was thinking. After coffee, Elaine took Trina down to the basement. They spent the better part of an hour going through the boxes of old photos and frying pans. Then, Elaine had wrapped up the ancient muffin tin for Trina, and the two had gone to town to buy a new one for Elaine. “I never would have guessed a rusty muffin tin would make me so sad,” Trina said. “I never would have guessed I’d have a life where I even needed one!” Elaine said. “Thanks,” Trina said. Then Trina pulled her smartphone out of her purse. “All right. What’s the name of Mom’s blog? Let’s find out what she’s writing.” CG country-guide.ca 49
LIFE
The efficient
kitchen No matter how good a cook you are, you can save more time in the kitchen with these tips By Helen Lammers-Helps
50 country-guide.ca
utting a healthy meal on the table every night can be a real challenge on today’s hectic farms. More often than we’d like to admit, in fact, we may find ourselves relying on prepared meals from the grocery store’s freezer section or takeout pizza. While these foods may be fine on occasion, they tend to be high in sodium, fat and preservatives. Nela McHugh, who co-owns a Simply for Life nutrition clinic with her husband Keith in Saint John, New Brunswick, says that lack of time is the No. 1 obstacle cited by her clients preventing them from eating more healthily. Over the years, McHugh, who grew up helping with her family’s catering business in her native Costa Rica, has developed recipes and techniques to help her clients prepare healthy food with a minimum of time investment. One of the most important things is to have good tools in the kitchen, says McHugh who often works with clients in their own homes to help them organize their kitchens and to teach them cooking skills. “I’ll see people trying to chop vegetables with a paring knife,” she says. She recommends investing in a good set of knives, a good cutting board and a good pot for making a big batch of soup. A slow cooker and a rice cooker are other helpful tools. Spending some time to ensure your kitchen has been set up efficiently will also save time down the road, says McHugh. For example, large spoons for stirring and spices should be kept near the stove. Dishes should go near the dishwasher. Take a few minutes to assess your kitchen to ensure things are kept in the most logical locations, she advises. Charmian Christie, a Guelph, Ont. food blogger (http:// christiescorner.com/), developer of the Kitchen Disasters & Fixes app (available on iTunes) and author of the soon-to-be-released cookbook, The Messy Baker, credits planning and inventory control with keeping her on track. Christie likes to cook from scratch so she can control what’s in her food and make healthy meals. She says it doesn’t take that much longer, but it does take more planning. Christie uses a template to create a menu plan for the coming week or two. She also creates a grocery shopping list using a template she keeps on her computer. The template is organized according to the sections of the grocery stores such as meat, produce, bakery, etc. This makes it easy to get everything on her list in one trip. “It’s surprising how many times people come home from the store and realize they forgot something and then have to make another trip out,” she says. Christie uses an app called Paprika (available for Macs and Androids) which is useful for menu planning and creating a shopping list. To help with the “I don’t know what to cook” burnout, Christie suggests enlisting the help of family members. Have the family help fill in the days of the week on the menu plan, she suggests. “You’ll have more buy-in and fewer complaints.”
MARCH 15, 2013
LIFE
Teenagers can search the Internet to look for new recipes, she adds. To keep track of what’s in her pantry, Christie keeps an inventory pinned to the pantry door that specifies how much of each item should be on hand. For example, her list includes: one bag Basmati rice, two tins tomatoes, etc. “This keeps the pantry from being too empty or too full and it saves time going to the store,” she explains. The pantry shelves are labelled to keep them orderly and so she can quickly find what she is looking for. “This saves me having to pull apart the pantry looking for a tin of tomato paste,” she says. She has a similar list for the fridge that says: three lemons, four limes, etc. When she cooks rice or quinoa, Christie makes extra and then freezes it in portion-sized quantities. She does the same with beans. Once a month, Christie cooks chicken stock and dried beans (she likes to use the pressure cooker) and then freezes them in two-cup servings for later use. She also makes large batches of lasagna ahead of time. If you’ve got family members who are eating on the run, she recommends freezing the lasagna in singlesized portions. As well, Christie keeps bags of corn and peas on hand in the freezer for use in recipes. Christie also buys some items like chicken in bulk. Be sure to divide it up into smaller portions as soon as you come home from the grocery store and label them and date them, she stresses. “Things tend to look different when they’re frozen and this way you can be sure to use up the oldest ingredients first,” says Christie. It saves the “What is in that bag?” dilemma. Christie cubes the chicken before putting it in the freezer. It defrosts and cooks more quickly, she explains. Cubed chicken can be used in stew, kabobs, a stir-fry or used in a salad. Another time saver is to precook ground beef. For example, if Christie buys 15 pounds of fresh ground beef, she will cook 10 pounds, adding taco seasoning to half of it. Then she freezes it in onepound portions for later use being sure to remove the air from the bags, and labelling each bag with what it is and the date. She’ll also make another five pounds into meatballs which are also frozen in smaller portions for later use.” For those who are working fulltime and have children, McHugh recommends setting aside one day of the week when you make a big batch of soup, a pot of chili or a casserole that you can warm up on a weeknight. She also recommends cooking a few items such as pasta, rice, quinoa, chicken breasts
MARCH 15, 2013
Resources The Internet abounds with information on bigbatch cooking. Here are some sample websites:
h ttp://www.thebigcook.com/documents/candace_ soy_ginger_salmon.pdf h ttp://www.sixsistersstuff.com/2012/09/ slow-cooker-freezer-meals-make-8-meals.html
and veggies ahead of time to save time during the week. Some like to cook enough meals in one day to last them for a month. There are many websites where you can find recipes (see the resources section above for some suggestions). If you decide to try this, be sure you have all the ingredients you need before you start cooking as well as bags and containers for storing the meals (not to mention sufficient freezer space). Christie cautions that some of these big-batch recipes may be high in sodium as they often rely on prepared soups or sauce. Be sure to check the nutritional content to ensure they are healthy recipes. To enjoy fresh-baked scones and cookies right from the oven, Christie makes up the scone or cookie batter, freezes them on cookie sheets without baking, then puts them in a plastic bag to be baked later. When she does want to bake them, she puts them on cookies sheets and bakes them for an extra three to five minutes. Another variation is to make up your own mixes for pancakes or muffins by mixing all of the dry ingredients and then just adding the wet ingredients when you want to make them. Whatever you do, find a system that works for you, make sure your family knows the rules and buys into it, says Christie. “The system has to work for you,” she says. “It doesn’t matter if it makes sense to anyone else,” she points out. “You know your space, your family’s likes and dislikes.” CG
country-guide.ca 51
h e a lt h
Don’t take your kidneys for granted By Marie Berry our two kidneys are responsible for removing waste products from your body, and you probably don’t give them much thought. They have a characteristic shape of a kidney bean and are about four inches long by two inches wide, with a thickness of about an inch. That makes them about the size of your fist. Located near the middle of your back below your rib cage, your kidneys are essential for your health. Blood carrying waste products flows through the kidneys where the waste products are filtered and removed. These waste products are stored in your bladder until they can be eliminated with excess water as urine. Every day, about 200 quarts of blood are filtered through your kidneys to produce about two quarts of urine. Kidney disease occurs when the tiny filtering units in the kidneys — called nephrons — lose their filtering capacity and become leaky. Often kidney disease has few if any symptoms, and the symptoms such as tiredness, fluid retention, weight loss, weakness, sleep problems, and changes in bathroom habits are easily attributed to other causes, not your kidneys. Kidney disease is detected with blood and urine tests, for example creatinine clearance. If protein appears in your urine, it usually is an indication that your kidneys are not working well. Kidney disease can be a gradual process occurring over years and years, and chronic kidney disease results. Kidney disease is classified by stages with Stage 1 being the least problematic and Stage 5 or “end stage renal disease” being the most severe. In end stage renal disease you have less than 15 per cent of your kidney function. It is estimated that over two million Canadians are affected by kidney disease, and each year the numbers seem to increase. Getting a good night’s sleep can be a problem sometimes, and often the reason is easy to identify and control. However, when sleeplessness becomes chronic, your health as well as your work and home life can be affected. With various new drugs being touted for sound sleep, next issue we’ll look at some of the more common remedies.
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There is no cure for kidney disease, and dialysis or a kidney transplant is needed. About half of people with end stage renal disease are on dialysis, either hemodialysis where a dialysis machine “cleans” the blood or peritoneal dialysis where the peritoneum membrane in the abdomen acts as a filter. At any one time it is estimated that about 4,000 Canadians are waiting for a kidney transplant (which is an excellent reason for you to sign your donor card). Ideally you want to keep your kidneys healthy. One in three people with diabetes have chronic kidney disease, so if you have diabetes it makes good sense to keep your diabetes under good control. High blood pressure means your kidneys need to work harder, so managing blood pressure is important too. Kidney stones can result in kidney damage, and if you are one of the 10 per cent of Canadians who are at risk, make sure that you follow your health-care professional’s advice about preventing and treating kidney stones. Some people are at increased risk for kidney disease. The older you are, the older your kidneys are, so there is an increased risk for kidney damage. Genetics or ethnic background, especially First Nations, Asian, African, Caribbean, and Hispanic, are often associated with kidney disease. You may not be able to change these factors, but you can recognize them and pay attention to measures that you can change. Make sure you drink enough fluids each day to keep your kidneys functioning. Eight glasses of water are usually recommended, although some research suggests more. Also remember the fluid content of other liquids and foods. Watch for excess sodium or salt in your diet which can make your kidneys work harder. Health Canada recommends between 1,500 and 2,300 milligrams for adults. Some drugs, especially non-steroidal anti-inflammatory drugs such as ibuprofen and naproxen are especially hard on your kidneys. Keep your doses to a minimum and consider other methods of pain relief. Smoking can worsen kidney disease. Isn’t it time you quit? So keep yourself healthy so that your kidneys stay healthy, because after all, you do want to take your kidneys for granted. Marie Berry is a lawyer/pharmacist interested in health and education. MARCH 15, 2013
When planning a trip, pilots calculate a heading to fly. Once airborne they steer that heading. If they turn one degree off the correct heading and fly for one hour, they will miss their destination by one mile. Neglecting the “one in 60 rule” has resulted in trouble for many pilots. A pilot who turns 10 degrees off the correct heading, and does not correct, will be 10 miles off track in one hour, enough to get lost. The wind is always a factor when flying. The wind may drift you off track while en route. On arrival you fly over the airport to read the wind indicator. Landings are always into the wind. If the windsock is 30 degrees below horizontal, the wind speed is six knots or less. A five-degree angle below horizontal indicates a wind of approximately 10 knots, and a windsock sticking straight out means the wind is 15 knots or stronger. I gained respect for the wind when I lived in southwestern Alberta. Air forced through a mountain pass can toss a little airplane around. Swiss scientist Daniel Bernoulli discovered that air forced through a narrow space will accelerate. Holiday trailers, even semi trailer trucks, have been blown over by these powerful winds. The joke in southern Alberta is that airports don’t use windsocks made of cloth. “We use logging chains. When the chain is sticking straight out there it is too much wind to fly.” Dry air flowing down the east side of the mountains increases in temperature dramatically over a short period of time. In Alberta this phenomenon is called a chinook. Air rushing down the Rocky Mountains toward the plains is rapidly compressed, increasing the temperature. It is common to go to bed with snow on the ground, be wakened by the sound of the wind shaking the windows, then discover bare ground in the morning. Old-timers tell about the fellow pursued by a chinook wind. The horses were pulling through two feet of snow, the front runners of the sleigh were plowing mud, and the dogs behind were running in the dust. Another yarn, which possibly originated with Baron von Munchausen, a famous teller of tall tales who was from Germany, is harder to believe. A man rode his horse to church, only to find just the steeple sticking out of the snow. He tied his horse to the steeple with the other horses, and went down a snow tunnel to attend services. When everybody emerged from the church, they found a chinook had melted the snow, and their horses were dangling from the church steeple. I am finding inspiration in a book Beauty — The Invisible Embrace by Irish writer John O’Donohue. He says, “Movement is a sign of life. It is intriguing that the presence which has the most grace and swiftness cannot be seen, namely, the wind. In the Hebrew tradition the word for wind is also the word used for God. The wind has power and huge presence. It symbolizes pure freedom. Jesus spoke about the wind: “The wind blows where it chooses, and you hear the sound of it, but you do not know where it comes from or where it goes.” O’Donohue says, “Before the human mind became fascinated with the rhythm, structure and meaning of movement, the birds knew how to enjoy and play in the wind… soaring, sliding and balancing on invisible hills and waves.” He especially enjoys spring winds. They seem “utterly buoyant, rousing and refreshing. They cleanse your mind and invigorate your body.” Suggested Scripture: Amos 4:13, John 3:8 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon. MARCH 15, 2013
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Va l l e y
News from Petunia Valley: The great land rush
ILLUSTRATION: RICK KURKOWSKI
Dan Needles is the author of “Wingfield Farm” stage plays. His column is a regular feature in Country Guide ome 30 years ago, a dentist from the city bought the old Marshall place at the bottom of the Sideroad, set up orange stakes to mark out a building lot just slightly bigger than Kublai Khan’s Golden Palace of Xanadu and bulldozed a gigantic circle to one side of it. The rumour went around that the guy was a friend of Henry Kissinger’s and Henry needed a helicopter pad to come and visit. Of course, it wasn’t a helicopter pad, just a big septic field and no helicopters have ever landed there that we know of. But 20 years later people were still willing to swear they had seen Kissinger buying trout flies in the Happy Hookah sports shop on Michigan Street. We smile about that today, just as we smile about the idea that Gordie Howe was going to build a hotel on the site of the Hall’s Hill Gun Club or that the actor Lloyd Bridges had retired from the TV series “Seahunt” to build a giant marine aquarium in the harbour. We’re much more sophisticated about that kind of chatter nowadays and we tend to wave it off as nonsense. Or are we? This spring, the rumour went around that some big foreign syndicate was buying up all the farmland in Pluto Township. A numbered company snatched up five pasture farms at a bleak crossroads called Pluto Station and paid a big price for them. It looked 54 country-guide.ca
like a land rush was going to start in earnest this year and maybe not just to cash in on the high price of canola. People said in this case a New York hedge fund had bought the land and was going to strip the topsoil, quarry the oil shale rock underneath and boil kerosene out of it. That might have produced a skeptical snort, except that it actually happened here once before. In 1855 an entrepreneur named Augustus Fortescue built a factory to sweat the kerosene out of the oil shale on the beach west of Port Petunia. A gang of 300 men blasted huge holes and freighted wagonloads of rock to The Extractor, a giant smelting machine that belched a plume of smoke visible for 30 miles. If someone hadn’t discovered petroleum the same year down near Sarnia, we might still be a big kerosene-manufacturing centre to this day. But cheap oil drove the price of kerosene down to five cents a gallon and the enterprise collapsed. No mining venture has been talked about in the Valley from that day to this. But the rising price of oil and the popularity of fracking across the northeast gave credence to the idea that there was gold under the plains of Pluto. People said the hedge fund was backed by Saudi and Chinese moneymen, people who have a 50-year investment horizon and aren’t afraid to sit on an acquisition for decades.
Sure enough, on a windy day in mid-March, a black airport limousine drove slowly down the main street of town and headed out to Pluto. A limousine in Port Petunia is like putting up a sign that says, “This way to the threeheaded chicken!” Grant Bell, the editor of the Port Petunia Gleaner grabbed his camera and went off in hot pursuit. When the limo stopped, the passenger who got out was garbed, not in the white dish-dasha of the Wahabi, but blue jeans and a leather jacket. He did speak a strange language. Grant identified him as Austrian, a young fellow about 30 who had seen the farms listed on the Internet back home and thought they were a steal compared to the prices he was facing to start a dairy farm in Schnickelfritz. So he bought them. And now he was here to look over his new holdings. Pluto Township does not show well in mid-March. The wind howls off the bay and peels the bark off a new cedar fence post in just one season. You can’t even look into the wind without tears pouring down your face. The young man stood in that wind for about 10 minutes looking at the clumps of dogwood and listening to the death rattle of the milkweeds. Then he shrugged, got back in the limo and left. The next week, all the farms at Pluto Station were back on the real estate market and the Great Petunia Valley Land Rush was over. MARCH 15, 2013
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