CGW130415

WESTERN EDITION

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April 2013 $3.50

HERE THEY GROW

This research proves multi-generation farms more profitable PG.22

+PLUS USE OUR CHECKLIST TO SCORE BUSINESS WINS THIS SUMMER NEW STRATEGY PUTS LAND IN PARTNERSHIP TO REDUCE TAXES HERE’S HOW TO MAXIMIZE YOUR AGRISTABILITY PERFORMANCE Publications Mail Agreement Number 40069240

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Take Command.

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CONTENTS

APRIL 2013

PG. 22 THE SUCCESSION EFFECT Research proves that when farms take on a successor, they grow faster, invest more in technology, and are more profitable too. We review the numbers, and go to the Foster farm near Ottawa for a case study in action.

EVERY ISSUE

BUSINESS

6

10

MACHINERY GUIDE Self-propelled sprayers are getting huge attention from machinery makers, plus endless innovations.

48

HANSON ACRES

GUIDE HEALTH

14

PETUNIA VALLEY

18

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APRIL 2013

40

TAKING CONTROL

29

ON THE MOVE

42

THE DEALS ARE GONE Despite the headlines, there may not be any real bargains left in Canada’s farmland market.

36

NEW LAND PARTNERSHIP

THAT GLUT OF USED TRACTORS With red hot sales of new farm machinery, dealer inventories of used equipment are swelling.

44

WHERE’S THE MAGIC BULLET? So if there’s more used equipment, prices should be plummeting, right?

Well, maybe not.

Canada’s influx of immigrant farmers is drying up. Only 15 arrived in first eight months of 2012.

34

FIGURING OUT AGRISTABILITY Gerald Pilger wades into the AgriStability labyrinth to find strategies that pay off for your farm.

These Saskatchewan farmers bypass local elevators, going straight to Quaker Oats on their own rail line.

With the middle disappearing between left and right, and between urban and rural, Dan looks for sanity.

Our commitment to your privacy

SUMMER BUSINESS CHECKLIST

MAKE NO SMALL PLANS The world’s big equipment makers are on a roll of record profits. Here’s how they’ll keep it going.

You use winter to get ready for spring.

Now use summer to prep for more business gains next fall.

It turns out potassium is as vital for our bodies as it is for our crops.

Here’s how to get yours.

54

38

Instead of aiming for a bigger piece of the pie, maybe it’s time to try making the pie bigger.

Why should it be today, of all days, that the blasted bearing on the blasted auger has to burn up?

52

VALUE CHAINS

50

GUIDE LIFE — BUILD A STRONGER FAMILY Just because you’re family doesn’t mean you should get away with unprofessional job attitudes.

With land prices climbing, the best way to avoid heavy capital gains may be to form partnerships.

country-guide.ca 3

desk EDITORIAL STAFF Editor: Tom Button 12827 Klondyke Line, Ridgetown, ON N0P 2C0 (519) 674-1449 Fax (519) 674-5229 Email: tom.button@fbcpublishing.com Associate Editors: Gord Gilmour Fax (204) 942-8463 (204) 453-7624 Email: gord.gilmour@fbcpublishing.com Maggie Van Camp (905) 986-5342 Fax (905) 986-9991 Email: bmvancamp@fbcpublishing.com Production Editor: Ralph Pearce (226) 448-4351 Email: ralph.pearce@fbcpublishing.com ADVERTISING SALES Cory Bourdeaud’hui Cell (204) 227-5274 (204) 954-1414 Email: cory@fbcpublishing.com Lillie Ann Morris (905) 838-2826 Email: lamorris@xplornet.com Head Office: 1666 Dublin Ave., Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562

Tom Button is editor of Country Guide magazine

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

The miraculous story

Designer: Jenelle Jensen

I’m a student of local history. Almost everyone in agriculture is, and like me, they’re forever impressed by the feats our ancestors performed relying only on their indomitable wills and bodies hard as nails.

I’ve always considered it a bit selfindulgent though when people ask, “What would they think of us today?”

The truth is, there has been so much revolutionary change, they’d be at a loss to know quite what to think. But there is another question that interests me.

Of all the differences, what would the pioneers think was the greatest change?

When you ask a classroom full of kids, as I sometimes get a chance to do, the predictable answers come flying back at you.

“Computers,” shouts one. “Televisons,” says another. “Cars,” shouts a third.

I tell them I don’t believe a word of it.

Instead, what would amaze our ancestors most is our food, the sheer, thrilling abundance of it, the unbelievable quality of it and the unimaginable diversity of it. It’s beyond dreaming.

My father, in a story repeated a million times across the country, suffered his way through springs in the early-Depression years. This was in Ontario and he would begin to itch when the garden peas came into flower. It had been so long since he had tasted anything properly green, and he would itch some more as the pods began to fill, knowing what a thrashing he would get from his mother if he dared to raid the patch right then. Instead, he 4 country-guide.ca

needed to wait until the pods were old and stringy, and every last bit of sweetness had passed out of the peas and been replaced by every last ounce of dry-matter yield before the eating could begin.

Well, today of course, his grandchildren reach into the freezer or drive to the supermarket in town, and never think twice.

I sat once with Earl Butz, U.S. ag secretary under Nixon and Ford, who seemed to be having a reflective sort of day, and he recalled as a young boy returning to their Indiana farm with his family in a buggy after church. The parson had spoken of the feeding of the 5,000, and Earl said something to his parents along the lines of, “Geez, I wish I could have tasted some of that miracle food.”

“It’s all a miracle,” his father said, “every last mouthful that we grow.”

Earl remembered that all his life, and I’ve remembered it nearly half a lifetime since he told me.

Just because we praise the intelligence and scientific acumen of modern farmers, the same way we praised the willpower and nail-hard bodies of those who went before, it doesn’t mean we’re blind to the miracle of spring.

Next month, I’ll return to writing about the facts of farming. But before then, I hope that you too taste the pleasure of giving up a stray hour to thinking about miracles.

Let me know what you’re thinking. I’m at tom.button@fbcpublishing.com.

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

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..

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Call toll-free 1-800-665-1362 or email: subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks PRINTED IN CANADA Vol. 132 No. 7 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.

april 2013

Always read and follow label directions. INFERNO and the INFERNO DUO logo are trademarks of Arysta LifeScience North America, LLC. Arysta LifeScience and the Arysta LifeScience logo are registered trademarks of Arysta LifeScience Corporation. All other products mentioned herein are trademarks of their respective companies. ©2013 Arysta LifeScience North America, LLC. INF-002

Tough broadleaves and flushing grassy weeds have met their match. No burndown product is more ruthless against problem weeds in spring wheat than new INFERNO™ DUO. Two active ingredients working together with glyphosate get hard-to-kill weeds like dandelion, hawk’s beard, foxtail barley and Roundup Ready® canola, while giving you longer lasting residual control of grassy weeds like green foxtail and up to two weeks for wild oats. INFERNO DUO. It takes burndown to the next level.

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Machinery

By Ralph Pearce, CG Production Editor

Nothing smells as good fresh-turned soil in April. You can feel the life of it in your hands, knowing that in no time at all your crops will be up and growing… and you’ll be scouting for weeds, diseases and pests. No matter what the crop, the need to protect it has never been greater, so we turned out attention this issue to self-propelled sprayers, featuring six entries from five different manufacturers.

Now’s the best time to prepare for spring and summer, but don’t neglect to check the company websites for more detail on these and other models. Innovations are reaching the production line at record speed.

 rogator high-clearance

telemetry, you get data-recording and management tools including machine location, operator performance, engine hours and fuel

Last summer, AGCO announced the launch of three RoGator High-Clearance sprayers for 2013. The lineup creates opportunities for more-efficient spraying based on several standard and optional upgrades, including AGCO’s exclusive telemetry system AGCOMMAND, dubbed a standard feature but one that requires a subscription to the Advanced Service system. With AGCOMMAND

www.agcocorp.com/rogator

case ih patriot 2240 class 2

apache as 1025

Farms may be getting bigger, but Case IH is doing things a little differently with the latest addition to the Patriot lineup, the 2240, a Class 2, self-propelled sprayer. Smaller, lighter and with narrower track spacing, this new Patriot model is neatly designed for growers with smaller fields. It keeps the cab-forward, rearengine design that’s so popular with its larger 3230, 3330 and 4430 counterparts, yet offers “big sprayer features” including the optional automatic boom section control and automatic boom height control, as well as AFS AccuGuide autoguidance and AIM Command spray systems. www.caseih.com

Equipment Technologies says it has listened to its customers and is delivering standard and optional design enhancements on its 2013 Apache sprayer models. Among the standard enhancements are new Tier 4i emissions requirements, thanks to a 173-hp Cummins engine with exhaust gas recirculation and a variable geometry turbocharger. With a factory-installed field computer, you can also have improved boom section control, and an improved sight gauge is now located at the operator’s eye level. www.etsprayers.com

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consumption. The RG900, RG1100 and RG1300 also have the Norac UC5 spray height control system as an option. GatorTrak four-wheel steering also improves in-field manoeuvrability, reducing crop damage and soil disturbance.

April 2013

 terragator flotation applicator

hagie dts10

Greater accuracy and better pattern consistency are the latest upgrades to TerraGator’s Flotation Applicator. AGCO has taken what works with the existing TerraGator design and made it better on its TG7300, TG8300, TG9300 and TG8400. For starters, there’s more power, from 330 to 425 horsepower on all four models, plus AirMax Precision and AirMax Precision 2 dry-application systems. As on the RoGator, the AGCOMMAND telemetry system is available with the Advanced Service subscription and has the capability of generating field-specific information, including GPS boundaries. The Viper Pro system is another option that enables applicators to handle more than 10 products, enhancing selection, timing and coverage. www.agcocorp.com/terragator

Although it’s a relative newcomer to Canada, Hagie introduced its first self-propelled sprayer in 1947 and now offers seven different models. Through the years, the company has brought innovations such as the Terra Hug and Hydra Hug systems to the market, and the company’s pledge is to continue enhancing and improving its designs and specifications. The Hagie DTS10 offers three options for boom widths with 60-, 60/80- and 90-foot designs. And if time is short but the field is big, the 60/100 and the 90/120 booms are available for maximum spray coverage.

The DTS10 also provides the option of a 1,000-gallon twin-tank design, perfect for carrying 500 gallons of two different products, or 1,000 gallons for just one. www.hagie.com

 miller nitro and condor series New for 2013, Miller St. Nazianz is rolling out its new Miller Nitro 5000 and Condor GC series sprayers, complete with enhancements that build on the customer satisfaction that has been generated by the Nitro 4000 and Condor G series. One thing that is new is the Miller SprayView cab (and optional Premium SprayView cab). With a larger, roomier operator environment, it not only boasts greater visibility but the company has also enhanced the ergonomic design of the armrest and joystick controls. Both standard and optional lighting systems also provide a clearer view on the job in the field, and the Nitro 5000 comes with a variety of tank sizes, boom widths and horsepower configurations. In all, there are seven models in the Nitro 5000 series and two in the Condor GC series. www.millerstn.com A pr i l 2 0 1 3

country-guide.ca 7

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opinion

BIG IDEA

Value chains Too often, business boils down to trying to grab a bigger piece of the pie — when the better strategy may be to make the pie bigger by working together with other players

By Gord Gilmour, CG Associate Editor

Farmers have always been thought of as pricetakers, not price-makers.

locking self-interest stretches between farmers and consumers, and it’s here where sharing knowledge,

They produce bulk raw ingredients that others

co-operating and working together as farmers, pro-

add value to, which helps explain why farmers have

cessors and retailers — to name just a few of the

so often warned themselves to be on the lookout. If

key players — can pay everyone dividends.

anyone downstream is hungry for a bigger piece of

To put it all into context, Country Guide recently

the pie, the only way they can get more is by giving

spoke to Margurite Thiessen, a value chain specialist

less to the farmer.

with Alberta Agriculture and Rural Development. We

In recent years, however, a new way of thinking

wanted to know more about this new way of looking at

has emerged. It recognizes how a chain of inter-

the world, and why it makes sense for farmers.

Country Guide: Let’s start at the beginning.

What is a value chain, and how does it work?

Margurite Thiessen: It’s one of those things with a lot of different definitions, but the one we’ve settled on here, just to maintain clarity, is “Alliances of enterprises working together to achieve more in the marketplace.” It’s a structure that increases things like the competitiveness and profitability of the businesses in the value chain.

By establishing closer alliances and interactions in the whole chain, everybody benefits. It’s growing a bigger pie.

going to have the kind of information they need to identify and capture opportunities, avoid potential problems, and be more profitable.

That’s happening everywhere throughout the industry, locally and globally. Even right here in Canada, our markets are becoming more and more complex. Canada has become more diverse, and this can mean new opportunities.

One of the most important things a value chain can do for a farmer is give them the insight and the realization that everyone doesn’t have the same tastes and preferences.

CG: Tell us a bit about that. What are some of the typical benefits that the various members of value chains capture?

MT: The first reason they should participate is because our markets in agriculture and food are getting more complex. If farmers don’t work in value chains, there’s a very good chance they’re not

CG: Can farmers be full participants in these value chains? Or will they always just be ingredient suppliers on some level?

MT: Yes, they can. How that looks will depend on just what role they decide and want to play, and what sort of value they’re bringing to the end product.

There are two groups here in Alberta, Spring

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april 2013

BIG IDEA Creek Ranch and Prairie Heritage, which are both groups of independent beef producers who work together to brand their product and sell it through restaurants and retailers.

If you look at that from the viewpoint of the other participants in that chain, the ranchers are bringing quite a lot to the table. They’re providing a quality product that really enhances the dining experience. They’re also providing a very interesting story for a restaurant owner or retailer to tell. It goes well beyond just supplying meat.

Then there’s the interesting potential of crosspromotion. We certainly see that in both the Spring Creek Ranch and Prairie Heritage model. You’ll see restaurants promoting the beef, and you’ll also see beef producers promoting locations where their products are available.

On the production side, they always know where the product came from, and when problems do arise, they can be corrected very quickly. The retailers and restaurants are also very good at identifying customer preferences and they know a fair bit about the science of shopping and how to modify consumer behaviour.

That’s very important information for a producer to have access to.

CG: I think this is a very important part of the value chain model — getting better information back to farmers.

MT: Oh yes... and in fact a lot of times the message doesn’t even get there at all. Take the example of grain producers. When they deliver grain to an elevator it’s intermingled and blended to meet grade specifications. They never really know what producer grew it, and a producer very rarely gets any feedback on the quality of his products. Under those circumstances how could you expect a farmer to, for example, identify a high-value market opportunity?

CG: I can certainly see it in something like these beef producers, but what about a more basic commodity like grains?

MT: Again, what it looks like exactly is going to vary a lot depending on the people involved and what they want and the roles they’re comfortable with.

I think that grain growers who started thinking along these lines might find a lot more opportunities than they would expect, especially in areas like natural foods, functional foods, nutraceuticals, and cosmetics. In this sector being an “ingredient” supplier is actually a huge role.

How they get involved is going to depend on what their decisions are — what problems they identify, what solutions they find, what they want to deliver. Typically when farmers do get involved it’s because they’ve identified a problem or challenge, and then come up with a solution. Then they’ve approached other individuals and organizations to ask to work with them to solve this shared problem. april 2013

opinion

CG: That raises an interesting point to me — the examples all seem to involve farmers working together.

MT: Definitely. This is an area where farmers will really benefit by working together and if they don’t, it will frequently be very difficult for them to access markets.

For example, Ontario peach growers partnered with Vineland Growers Co-op and Loblaws to identify opportunities and find innovative ways to meet them.

They went so far as to go and visit other fruit growing regions and look at what they were doing, and then did some basic R&D on which of these practices would best fit their local geography and climate. The whole project was about finding ways to work with the value chain and enable Ontario stone fruit-growers to gain access to the market. If individual producers had tried that on their own, I really doubt they’d have had any luck working with Loblaws — they simply couldn’t have supplied the market.

CG: Can you tell us a bit about why, if there’s such a strong case for them, farmers might resist getting involved in such ventures?

MT: On the farmer side there are a few key issues. The biggest one is mistrust, usually because of past experience when, for example, their information was used against them. Lack of leadership, and perhaps a lack on confidence in their leadership skills, also stop farmers from doing this. There’s also the difficulty of managing a value chain — they’re not easy to establish and maintain. I think there’s also an issue around skills and knowledge — farmers haven’t had to do this in the past so they don’t have the information necessary to make good decisions and they don’t always know where to get it. Once they are set up they also have to then ensure that they can deliver. There they might want to start with a bit of a smaller group and test it out.

CG: What would your take-home message to farmers be on the topic of value chains?

MT: To puruse a value chain, you should talk to the people who have been there already. There are also plenty of resources, all across the country. Just about every province has someone working on this, and there’s the federal government and other organizations like the Value Chain Management Centre in Ontario.

The information farmers want and need is out there. CG

For more information on value chains, take a look at AARD’s value chain website: www.valuechain.alberta.ca.

Three recently launched YouTube videos are also available on Alberta Agriculture’s YouTube channel, which you can access by visiting: http://www.youtube.com/user/AlbertaAgriculture.

You can then search for the term “customer focused collaboration” and the first three videos will be about value chains.

country-guide.ca 11

DoIng morE. usIng lEss.

A series on being ready for the farming challenges ahead

The Case IH Agronomic Design initiative Listening to customers is part the development process

o

ver the past decade, Case IH has been listening closely to producers. Their customerdriven product development process means that as soon as they launch a new product, they are asking producers how it can be made even better. Then the innovation process repeats. But another element goes into every piece of Case IH equipment as well – Agronomic Design.

That is why Case IH delivers agronomically engineered technology that is designed to help you plant faster and earlier, plus achieve uniform emergence— which studies agree is a key agronomic driver for productivity and profit.

“It’s something we’ve always done,” says Jim Walker, Vice President of Case IH North America Agricultural Equipment.

“We have a unique focus and ability to find ways to help producers improve their soilseed-plant growing environment, so we put a name to it – Agronomic Design. It allows us to tie together parallel activities with the shared focus of maximizing the yield and ROI potential of our customers.”

The Case IH Agronomic Design initiative unites ongoing work in multiple disciplines within Case IH, including customer research, product development, field support, training and marketing. In addition to ongoing product development work, Case IH Agronomic Design efforts include sharing information and expertise to help producers make the most of each seed’s yield potential.

“We’re committed to delivering more agronomic advantages to farmers through both equipment technology and our people, who are equipped with years of field expertise,” Walker adds. “We want to help customers be ready to make the most of every seed’s yield potential, and that’s the value of Case IH Agronomic Design.”

Agronomic Design Equipment Innovations Case IH Agronomic Design extends across the entire Case IH line, and is evident in existing equipment, as well as in the newest Case IH products:

Steiger rowtrac: The four-track design of the new Case IH Steiger Rowtrac tractor adapts Quadtrac advantages for row-crop scenarios. It distributes loads evenly across the length of each track, even when heavy loads put force on rear tracks. It minimizes compaction with more flotation, turns tight without berming and pulls harder with less rutting, all to maintain soil tilth and improve seedbed conditions.

Four tracks transfer more power to the ground than two, and the Steiger Rowtrac will provide more options and greater flexibility for customers. With equal-sized, independent, oscillating drives on all four corners, farmers can get in their fields sooner, especially in adverse field conditions. The wheelbase has been extended from 154 to 160 inches, so each track has more ground contact, resulting in better transfer of power to the ground. In addition, the unique design delivers less ground pressure, better traction and the most comfortable ride in the industry.

PreciSion DiSk Drill: This all-new single disk drill easily cuts through residue and opens a uniform seed trench across varying soil and tillage conditions. It also accurately delivers the seed and closes and seals the trench for improved germination and plant-stand establishment.

The Case IH Precision Disk parallel-link row unit design helps ensure unmatched seed placement accuracy for improved

caseih.com

emergence and stand establishment.

Patent-pending variable down-pressure springs apply the right amount of pressure on individual row units to ensure better penetration across varying residue and soil conditions. In addition, the forward-facing seed tube design directs the seed, working in conjunction with the scraper, for more consistent placement in the bottom of the seed trench.

Patriot 2240 SPrayerS: These sprayers deliver near-equal weight distribution, when the tank is full and continuously as it empties, to help customers get into fields earlier. Field tests have shown that Patriot sprayers can provide field access two or three days sooner than competitive sprayers, along with less rutting and soil compaction. In addition, the Patriot 2240 sprayer is smaller and more nimble for maneuverability in tight fields. It features exclusive AIM Command spray technology to deliver even, consistent coverage, and better drift control.

The Patriot 2240 also joins the Efficient Power family, delivering more productivity with less fuel. Fuel economy is another area where the Patriot 2240 shines. The new sprayer comes with a Tier 4A-compliant 165 HP, 6.7-liter Case IH FPT engine. This Selective Catalytic Reduction (SCR)-only system has already successfully proven it can offer fuel savings of up to 10 percent over Tier 3 engines.

The Agronomic Advantage “Crop yields are the product of both seed genetics and real world growing conditions,” says Walker. “Improving the soil-seed-plant growing environment helps producers maximize both their yield and ROI potential.”

Case IH Tractor Specialists are a true competitive advantage. The job of two-thirds of all our experts is to be on-site with you, helping you get the most power and productivity out of your Steiger® tractor. And they are backed by 24/7/365 precision farming support.

The world of farming is changing. And our experts will be right there with you to ensure you’re ready. Visit www.caseih.com/meet-expertscg413 to learn more.

be ready.

©2013 CNH America LLC. All rights reserved. Case IH is a registered trademark of CNH America LLC. www.caseih.com

BUSINESS

Summer business checklist You use the winter to get ready for spring. Now, use the summer to get ready for the winter business season

By Maggie Van Camp, CG Associate Editor ith a sigh of relief mixed with equal parts of pride and exhaustion, you climb down from the tractor seat. The fertilizer is spread, the crop is growing and the weeds are under control. It’s time to recuperate at last and to enjoy some time with your family.

But hold on a moment. It isn’t only the crops that grow during the spring and summer. Great ideas, keen observations and the kinds of insights that can shape your farm’s future are ripe for the picking too.

And here’s the best part. Now, when you’re still in full gear in the summer, can be the perfect time to start planning and prioritizing so that you’ll get every last ounce of benefit out of the winter business season that’s just around the proverbial corner.

Still not sure? Then read on…

“In many ways it is like being an athlete, and summer is game day,” says Jerry Bouma of Toma & Bouma Management Consultants in Edmonton.

When you’re in the thick of operations, Bouma means, you’ve got the year’s best opportunity to see

CHECKLIST  IDENTIFY IMPROVEMENTS  BE READY FOR UNEXPECTED OPPORTUNITIES  BE THE FIRST TO ENROL  TOUCH BASE WITH EMPLOYEES  THINK TRANSITION  SET A MEETING TO FORMALIZE PLANS

14 country-guide.ca

what works and what doesn’t, which in turn is critical for planning.

Whether they know it or not, top farmers are constantly reviewing their farm’s vision. They’re assessing how well their current plan is working out. They’re evaluating and gathering data and identifying opportunities. And just when a lot is happening on the farm, they’re subconsciously thinking about it, rating it, and imagining new opportunities even more.

Several years ago Bouma was involved in a survey of leading farmers in Western Canada. The research concluded that each of these farmers had a vision for their business, each was confident, motivated, and showed strong leadership, and each excelled at managing risk, finances, marketing and people.

They were proactive at forming alliances, improving production, seeking out innovation and managing environmental issues. They were on top of management and planning.

“Leading managers and farmers are planning all the time,” says Bouma.

At the core of planning is a three-step process, says Bouma. First you define a clear vision toward which you’re working or aspiring. Second, you gather information, data, and insights that you need to evaluate your current position, while at the same time identifying the key initiatives that are critical toward achieving your vision. Finally, you develop the actual plan itself.

Summer planning tends to be very informal, setting the stage for winter action. It involves picking a few key business priorities and mulling them over before you start digging into the nuts and bolts. It is also a time for observation, listening and noticing impacts.

This summer, spend a little time on the following six business initiatives. They can help fuel your winter business planning, smoothe your pathway to change, and expand your opportunities for growth.

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business

 Identify improvements

 Be ready for unexpected

There’s no better time to get a grip on what is working well, what needs to be improved and what needs to be discontinued than when you’ve just lived through the repercussions. During a break in the action, jot down the ideas you’ve had. When you spend so many hours in a tractor or a pickup, you can think of lots of ideas that evaporate and disappear before the day is over.

Some of them may seem like small ideas. But because everything on the farm is so interconnected, sometimes it’s the small ideas that create a trail that leads to the great big ones.

So keep track in May and June. Then, start choosing some as your business priorities for next winter. For example, maybe after paying income tax in the spring, you want to focus on incorporating your business, and you can use the summer to figure out who you will turn to for more information and for professional advice. Or if you struggled hiring someone, you might want to work on recruitment.

Successful farmers take charge. They introduce new ways of doing things better and more efficiently.

This includes adopting new technologies and genetics or even seeking out important new findings from business researchers and thinkers.

Then, get a rope around your desire to make change. Lasso it when it’s bucking.

The reality is that some opportunities for investment aren’t budgeted for, and successful farmers are often the ones who can jump on these chances.

Although summer isn’t the time for a full financial planning session, it might be ideal for reviewing your costs and how they compare to forecast.

“Make a budget at the beginning of the year and track it month by month with your bank statement,” says Art Lange, financial consultant at Sherwood Park, Alta.

Reviewing actual costs and plugging them into your budget will help keep you on top of the farm’s cash flow position and marketing requirements.

Then decisions on purchases, marketing and production are made based on profitability projections, both short and long term.

Although not much land is traded with standing crops, being financially prepared allows for deals to be done whatever the time of the year. Access to credit can be pre-planned, says Lange, either by using vendor credit and grain advances or by keeping in touch with your loan manager.

Above all, don’t forget to take care of your emotional health. “Financial performance is important, but farmers need a family life too,” says Lange.

 Be the first to enrol Summer is an excellent time to determine exactly what you need to learn, and then to prioritize education needs for family and employees. Setting a midsummer deadline for people to select skills enhancement and educational opportunities will improve the chances of being accepted into certain programs and give people a dose of focus and motivation during harvest.

Some courses have summer deadlines and incentives for signing up early. Agri-Food Management Excellence (formerly the education part of the George Morris Centre) offers early-bird C-TEAM applicants a five per cent discount if they apply by July 15, although applications are accepted until three weeks before the course starts in December.

Professional development should be a part of a farm’s business plan, says Heather Broughton, who is a principal at AME Inc. and part-owner of SWG Farms in Alberta. “The agricultural industry is changing quickly and in order to stay competitive and ahead of the game, learning needs to be a continuous process.”

Broughton has personally seen how powerful it can be to purposely plan to take time to step out of the day-to-day operations of a farm and learn how to incorporate ideas and skills to strengthen the business. She has completed the C-TEAM program and the TEPAP program through Texas A & M. April 2013

opportunities

At www.agritalent.ca is a list of potential courses that helps you select topics and locations. Also, if geography is an issue, several companies and agencies have built a fairly large collection of learning videos. FCC has some at www.fcc.ca/multimedia, the Agricultural Management Institute’s series is at www. takeanewapproach.ca and there are good webinars at Farm Management Canada at www.farmcentre.com.

Also keep in mind that learning opportunities have become more mobile. For example, several agricultural companies have been producing podcasts which are particularly popular in the busy spring and summer months. That includes the FCC Edge audio podcast, designed for farmers to listen to while on the go using their smartphones or mp3 players.

“Today’s best and brightest farmers are very intentional in their personal growth strategy,” says Mike Tisdall, who manages the FCC learning team.

“Learning is an important component in your farm’s business growth strategy.”

FCC offers over 160 learning events all across Canada from November to March. This past year, 13,000 individuals attended these events, an increase in over 1,500 from last year.

“If you want to grow your farm,” says Tisdall, “you need to start by growing yourself.”

Continued on page 16 country-guide.ca 15

business

 Touch base with employees Before you fire up the fishing boat, take a moment to open up communication with your employees. Although full performance reviews in the summer might not work so well, taking time to talk to your employees while they are actively engaged in their in-season work is a perfect opportunity to connect with them and keep them charged up by ensuring they know how important their work is.

Bouma’s best management practices survey indicated that only about half of top producers conducted formal performance appraisals. However, open communication with employees is really important and it can be quite informal.

Human resource experts say there’s only one answer to the question of when to communicate with employees, including family. It's, “Often.”

Listening to and speaking with employees about how they’re doing and how that relates to your farm’s visions can be motivating. Staying connected

 Think transition This summer might be the right time to start exploring whether you want to sell the farm to an external party or transfer the farm within the family, says Grant Robinson, accountant and coach for Successcare in Guelph, Ont. Start with that single choice, Robinson recommends, and keep an open mind.

Next you need to define what you and your spouse want in the future for your business, your family and your ownership. It’s a conversation you can have on your front porch on a quiet evening or while you’re on a summer drive together. What’s important to you and your spouse? How do you want to retire? Is keeping the land in the family important to both of you?

Robinson has created a pathway of choices for the Agriculture Management Institute at http://www. takeanewapproach.ca/farmers/choose-farm-succession. aspx. Window by window, you select one of two

 Set a meeting to formalize plans “Perhaps the most important decisions to be made in the summer might be answering: When do we plan to sit down and do more formal planning?” says Bouma.

For best results, Bouma suggests setting a time and place with a minimum of distractions for sometime during the next winter. Some farmers prefer to conduct their planning on site with their management team, which can include employees, spouses, siblings or children. Others prefer to go to an off16 country-guide.ca

also allows managers and employees to address little problems as they occur.

Remember too that telling employees the good job they're doing this summer may make it easier for them to accept constructive criticism later.

A complete formal human resource management system takes time and effort, not something you can throw together between loads of hay. If you don’t have one, summer is a good time to make it a priority for next winter’s to-do list. It’s also a great time to identify the challenges the farm faces and then determine if employee incentives or training will help.

For future reference, the Canadian Agricultural Human Resources Council has created online stepby-step instructions on how to create an HR plan for your farm, including how to set compensation and safety standards and, templates for things like job advertising and termination letters. Available as of April 1, 2013 for $99 you can source it at http://www. cahrc-ccrha.ca/skills-training/agricultural-hr-toolkit.

choices, leading to options, examples, and worksheets. It’s a slick, anonymous way to steer through a very complex, confusing and emotional decision.

Only once you get through these preliminary choices, work out the framework of a plan for making your choice happen.

Don’t expect everyone to jump on the idea or make quick decisions without much information. Robinson has met farmers who in the middle of a busy day wandered up to their sons and asked if they’re in or out.

They didn’t give them any information about the business, yet they expected an immediate, confident answer.

For similar reasons, Robinson says it isn’t wise to call a family meeting when everyone’s busy or right before someone goes on holidays. “It’s like throwing a bomb in the room,” he says.

This summer might be a good time to select a date in the winter to meet with the stakeholders to share relevant facts and get input from the next generation. Just don’t keep it to yourself.

site retreat location where they can fully engage in planning without the noise of everyday business.

When you set the date and place, also select who needs to be involved in the plan. There’s gathering input from people in advance and then there’s selecting who needs to be part of the plan. It’s important to consider who should have ownership in the plan.

“You can have the best plan in the world,” says Bouma, “but if it requires a team to execute and the team is not part of the planning process, you have a problem.” CG April 2013

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business

Taking control Farmers in east-central Saskatchewan have bypassed the elevator system and struck their own deal with a Quaker Oats mill in Cedar Rapids, Iowa

By Gord Gilmour, CG Associate Editor few years ago Carson Shymanski was trying to find a solution to a pair of problems. First, in an effort to keep it open for producer car loading, his family, along with 45 other shareholders in the area, had purchased a spur line scheduled for abandonment by CN Rail.

The Torch River Rail line, which runs 28 miles through the east-central Saskatchewan parkland between the communities of Choiceland and Nipawin, was seeing some traffic, mainly wheat bound for offshore markets. However, the volume wasn’t likely to be enough to keep the operation sustainable over the long term, especially with a big question mark hanging over the future of the Canadian Wheat Board.

Second, farmers in the area were growing a significant quantity of high-quality oats destined for the human food market. But the grain companies that were acting as intermediaries between them and the processors were taking delivery at centralized collection points that were often a long truck trip away — something that quickly ate into the bottom line back at the farm.

So, rather than simply accept this as the way things always are in a commodity crop, Shymanski did something different. He sat down at his computer and began composing emails to companies he knew bought oats.

18 country-guide.ca

“I wrote every company I could think of that bought oats,” Shymanski told Country Guide during a recent telephone conversation. “We wanted to find a way to save some money on freight costs, and to sell oats a bit closer to home.”

That meant making contact with some pretty big companies — household names like General Mills and Quaker as well as Can Oat Milling. Shymanski admits he wasn’t sure what sort of reaction he would get, but several weeks later an email response arrived from the big brand on the block — Quaker Oats.

“It turned out that we were looking at working more closely with oat buyers at exactly the same time Quaker wanted to find a way to work more closely with farmers,” Shymanski says.

Quaker, as it happens, was running into some of the limitations of the western Canadian elevator and grain-grading system. Simply put, elevators are all about accumulating grain deliveries from farmers and then blending those deliveries to meet specs like the well-established grades set by the Canadian Grain Commission.

It’s such an integral part of the system that the blending has actually become a major profit centre for the grain companies. That might be fine for something like wheat that’s ground into flour. But it’s definitely not so great for a product like rolled oats.

“Oats aren’t a ground product, so if you do that kind of blending what you’re going to wind up with are good oats and bad oats combined together in a bowl — and that just doesn’t work,” Shymanski says.

This was where the company and the farmers found common ground. Quaker wanted a better handle on the quality of oats that would be coming into their Cedar Rapids, Iowa plant and the farmers wanted a direct relationship with the customer that would bypass the established grain-handling system, save them money and generate traffic for the new farmer-owned rail line. It’s a classic win-win situation that perfectly illustrates the power of farmers getting more involved in the value chain, says one Ontario-based value chain specialist.

Until late this winter Martin Gooch was the head of the Value Chain Centre at Guelph’s George Morris Centre, a business-oriented agriculture think-tank.

As of April 1, that organization has become affiliated April 2013

business

with the global group Value Chain Management International. He says he’s only heard about the group Shymanski is part of, but says it’s a very good example of the practical application of the theory.

“This is an excellent example of value chain management in practice,” Gooch told Country Guide.

“Good on them.”

The key to its success would appear to be both parties having a problem that the other is a solution to. Farmers needed the company to buy the oats through producer cars — but the company needed the farmers just as much. In fact, a company as large as Quaker Oats has many good reasons to want to engage growers more closely, says Gooch.

“It helps them manage their risks, potentially reduce their costs, and gives them greater opportunities to innovate both within their own processes and in meeting customer needs,” Gooch says.

The key ingredient in a closer relationship between farmers and their customers is better information, flowing both ways, Gooch adds. One example of a similar agreement is the U.K. bakery Warburtons, which has had a buying program that sees them source wheat from Prairie growers directly through the former Canadian Wheat Board.

“Their head of purchasing has told me that he wants to know everything that’s going on, both good and bad, with that crop,” Gooch says. “It’s not a question of good or bad news, actually, it’s objective news.”

By knowing what’s coming down the pipe the company can adapt its operations to changing conditions more nimbly than its competition, something that’s proven to be a valuable tool.

Shymanki’s father Ron, who is president of Torch River Rail line, says the farmers in the area have also learned a lot about what Quaker wants and needs from its oat growers, aided in no small part by the company coming to town and setting up a lab at Torch River Rail’s facilities with its grading equipment.

“They come in the fall with all their grading equipment and set up in our shop,” Ron says. “They stay for two or three days — we call it ‘grading days’ — and farmers can bring in samples.”

As a result the company knows a whole lot more about the oats that will be rolling into their plant from the Canadian rail cars — and the farmers have a much deeper understanding of what the company is looking for.

“We’re more in touch with what they need and why they have the specs they have, and what they can and can’t have,” Ron says.

For example, the company actually wanted lighter test weights than the Prairie grain industry considered prime quality. They were more interested in a uniform lot that they could mill efficiently. In some cases the final answers were unexpected and took all the participants in new directions.

“The variety we wound up growing is Morgan, which was one Quaker initially didn’t like,” Ron says.

April 2013

“ I wrote every company I could think of that bought oats,” recalls Carson Shymanski. “We wanted to find a way.”

“It’s a bit harder to hull,” his son Carson adds.

“That was a problem when they were getting it in blends, but they found when that’s all they were getting, they just had to increase the r.p.m. of their hulling equipment a little bit and it worked fine.”

It’s by forming closer associations like these where problems are mutually solved that better relationships are formed — a lesson that’s long been learned in sectors outside agriculture, VCM International’s Martin Gooch says.

“As an industry we are decades behind others in the way we purposely strengthen our customer relations and use this as a way to increase profit,” Gooch says.

There are typically two barriers to getting more involved in the value chain from the farm level Gooch says — and both of them are bad news.

First there are farmers who don’t have confidence in themselves and their products and therefore they take a more passive role and accept the status quo, letting others market their products for them. They’re also frequently fearful that if they do share information they’ll be taken advantage of and wind up falling behind — although a recent piece of research suggests the opposite is actually true.

Gooch cites a recent study his organization completed for a client that examined the attributes of farmers engaged in value chains, rather than simply accepting commodity prices.

“Farmers who have established closer relationships with their customers are more profitable, have greater opportunities, can more efficiently adapt to change — there are many benefits that accrue,” Gooch says. “We absolutely know that empirically now.”

Some hesitation about getting into a whole new type of a relationship with customers is understandable, but Gooch has less patience for his second irritant — farmers who think this isn’t a game growers should be playing.

Continued on page 20 country-guide.ca 19

BUSINESS Continued from page 19 “They need to get into the 21st century,” Gooch says. “If you’re not always looking for ways to build better relationships with customers, increase profits and identify how to improve your business — I’m sorry, but there’s only yourself to blame.”

Back in Saskatchewan, Ron and Carson Shymanski can look to the numbers to show just how farmers have responded to this new player in the oat market. Initially Carson thought the numbers would be low… he hoped in the first year, 2009, they might ship something fairly modest — say 30 or 40 cars. Instead they wound

20 country-guide.ca 19456-03 DAS_Simplicity 15.125X6.5.indd 1

up shipping 260. This year they’re expecting to ship more than 400 cars and the shipping base has grown well beyond the 46 shareholders in the railway.

“I’m not sure I’d say it’s the vast majority, but it’s certainly a solid majority of non-shareholders shipping to Quaker,” says Ron. He explains that was always the model the railway shareholders favoured where the infrastructure remained open to all, but shareholders may, in the future, be rewarded for taking the risk through dividend payments.

One aspect of the Torch River Rail example that Gooch encourages other growers to pay particular attention to is how the farmers have formed an

informal collaboration built around the railway, then expanded from there as needed. Many of the most successful models are ones that develop like this, incrementally, as the market grows.

“I can think of another example of this — a livestock producer that I know quite well,” Gooch says. “He became very successful on his own, developing a close relationship with a particular retailer. His product went over well as he worked with the retailer, and they began asking for more product. At the same time other producers approached him and asked him to handle their products.”

The key take-home message in both of these examples is how an informal

APRIL 2013

BUSINESS producer network enabled farmers to interact meaningfully with a much larger entity, be it a major food processor or national-level retailer, Gooch says.

Ron Shymanski says farmers from around the province are starting to think a bit differently about how to market their grain and taking a more active role in the supply chain. Recently he was asked by a group in the Birch Hills, Saskatchewan area — about 100 miles to the southeast — facing a similar rail line abandonment proposal to come and tell them a bit about the ins and outs of Torch River Rail and its association with a larger company sourcing grain.

“They asked me to come to a couple

of meetings they were holding and they wanted to know if we had any advice and to share our experiences,” Ron says.

He says he expects to see more of this sort of activity in the coming years as growers look for new ways to engage their customers. He cites the green nature of railways compared to truck transport, the elimination of the middleman and better information flow between buyer and seller, as well as the ability for this system to fit into modern IP efforts.

“They can basically trace this right back to the field where it was grown,” Ron says.

“There’re just so many positive things. I really do think we’re going to have to do a lot more of this sort of stuff in the future.”

His son Carson agrees, and says every indication is that the companies themselves are recognizing the value of this new and more integrated chain — and their future intentions seem to back that up.

“Quaker says they’re looking to get something like a third of their oats directly from farmers,” Carson says.

No doubt farmers in the region will continue to ship plenty of grain through the main line elevators — but the example of Torch River Rail suggests a new model may be emerging.

It’s one that proves farmers can deal directly with even the largest of companies… and in the end everyone seems to come out ahead. CG

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country-guide.ca 21 3/11/13 7:15 AM

business

The

succession effect The numbers prove it. Tackling succession may seem like a diversion, but it actually makes a farm more profitable

By Maggie Van Camp, CG Associate Editor

22 country-guide.ca

At the same time, says Lobley, retirement has an almost mirror-image effect compared to succession.

Like succession, retirement is a process, occurring across a series of events.

In effect, there are the two processes underway simultaneously, and the two complement each other.

So if that’s true, however, what happens when there is no successor? Again, Lobley makes his point quickly and unemotionally.

When there’s no successor designated, says Lobley, the farm stalls and then regresses, and instead of living off profits, the farmer inevitably begins cannibalizing the farm’s capital.

Growth through succession Succession stimulates growth two ways, Lobley says. Farmers like Jim and Lynda Foster plan for succession in part by building up enough assets to make succession possible, and by adopting enough new technology so the next generation can continue to farm.

But there are other factors at play too. One that stands out is that larger farms run by more highly educated farmers are more likely to be taken over by one or more children.

Also, larger farms probably attract more successors, and because of the succession effect they continue to grow, making them more attractive to the next generation, and creating enough income and equity to ensure Mom and Dad have a worry-free retirement.

Conversely, farms without a successor are likely smaller to begin with, and as the farmers get older, they tend to fall further behind technologically. In the end, they set off smaller bits of land sort of as retirement farms for themselves.

The family brand The power of the knowledge transfer between generations is part of this succession effect. Successors have an edge if they have a source of detailedintimate information about the farm and the Continued on page 24

Photo credit: Robin Andrew • unposed photography

hen I visit, the energy around the old kitchen table is so strong, I can almost touch it. The Foster family from Carleton Place near Ottawa is gathered together and they are talking about the farm. More precisely, they are talking about business growth and about asset management, and they are thinking about it in terms of how they can score some wins by matching their skill sets, and in terms of what they can accomplish as a team.

Successors son Mark (27) and daughter Melinda (25) vibrate with plans and vision, and they rise to the need to deal with setbacks, eagerly confronting challenges.

It’s a moment that captues the very heart of the phrase “the succession effect,” a term that farm succession researchers in Israel coined in 1995 when they studied the statistics and discovered that while farmers may fear that succession planning will be bad for the farm because it takes so much of their time away from actual day-to-day management, the opposite is actually true.

It turns out in fact that farm growth and profitability get a boost from succession and from the process of transferring management, assets and knowledge.

Canadian evidence backs it up. A couple of years ago, Agriculture and Agri-Food Canada released a report called Profile of Young Farmers in Canada, where economists found that on average, key stats including profit margins, revenue per dollar of assets, and return on assets were all higher for farms with at least one young farmer.

“The succession effect” is a worldwide phenomenon, transforming rural landscapes, communities and farm businesses around the globe, says succession researcher Matt Lobley, professor at University of Exeter in England.

“Farming remains almost exclusively an inherited occupation,” says Lobley, adding, “The transfer of business control and ownership to the next generation is arguably one of the most critical stages in the development of the business.”

April 2013

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Fresh from the barn, Melinda knows the Foster farm could never have expanded so fast if she and brother Mark hadn’t returned.

business Continued from page 22 community, says Lobley. “They (the parents) are also useful interpreters of local climate, history, environment and community. You don’t get that with corporations, and there’s a great value to that.”

For generations, the family farm has encountered wide-ranging external challenges but has still preserved the line of succession to the next generation, and the farm successors tend to recognize they have also inherited a responsibility to family tradition and the local community.

“Deeply imbedded in communities, the family farmers have a rooted stake. They’re part of the social fabric,” says Lobley.

At the same time, it’s easy to romanticize this, and we can get caught putting pressure on farm businesses to make decisions based on tradition or family ties, meaning we risk losing our business objectivity. Ghosts and future generations shouldn’t run a farm.

Back on the Foster family farm, the

successors respectfully interject ideas and fresh perspective as Jim tells the family farm story. His father bought the 100acre farm we’re meeting on in 1944, and fresh from agriculture college, he was brimming with new ideas and vision.

His own father (i.e. Jim’s grandfather) balked at burying money into tile drainage, but after one good crop he was sold on the idea. Soon they became partners, built a free-stall barn and parlour, and expanded their land base.

Jim then adds, however, that despite that experience, his own father would not give up the control of the purse strings until he was much older.

It’s a familiar enough story, and as he tells it, a grandchild plays on the floor beside the table and Jim proudly shows me a picture of their four children, Erin, Greg, Mark and Melinda. As a start, Jim and Lynda wanted to provide each of their children with a post-secondary education, help to buy their first car and give each a building lot off the farm.

All the children were engaged on the farm but each was encouraged to have backup employment skills.

After high school, Mark drove all sorts of equipment for a local construction company for a few years. Melinda graduated with an environmental science and geology degree from Queens University.

She feels having a background in environmental studies is a natural fit for a farmer.

“As the largest group of natural resource managers on the planet, farmers are at the interface of the changing relationship between humans and the environment,” says Lobley.

Now three generations of Fosters have been involved in the community and on local farm groups. Having a good family name rooted in the community can be incredibly helpful for a starting farmer. Name recognition can open doors and establish trust with new customers and landlords. “Our family branding is strong,” says Mark.

The successor effect When Lobley worked with researchers and survey data from around the world to identify trends in succession, he consistently found that having a successor provides incentive for expansion and forward planning.

He also found, however, that these changes are often driven by new ideas and vision that the younger generation brings back to the business.

This is what he terms the successor effect.

Like a shock wave, the successor effect hit the Fosters’ farm, and it’s never been the same since.

In 2002, then 18-year-old Mark’s new snowmobile was stolen from the farmyard. He had worked hard to save for the sled and was emotionally crushed by the loss, but when the insurance cheque came in a few weeks later, he didn’t head to the snowmobile dealership. Instead he approached his dad with a plan. That year together with the sled insurance money and some help from an Environmental Farm Plan grant, they bought a no-till drill.

The no-till drill became a custom operation which in turn led to more opportunities to rent more land. This purchase

Melinda manages the expanded dairy operation, but according to objectives approved by the family, just as Mark manages the cropping with the same responsibility to report.

24 country-guide.ca

April 2013

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also spurred Jim to update the tractor and the sprayer, which led to more custom work and in turn, opportunities to rent more land. Mark started doing some snow removal with the tractors. Eventually the farm bought a combine and a high hoe which again led to more custom work and acquiring more land.

A couple of years into this, Mark started working for the farm company full time. The farm leveraged his machinery know-how, energy and hunger for expanding their land base.

In Canada’s 2008 Farm Financial Survey, farms with at least one young operator had a much higher net operating income than other farms. Multiple-generation farms, which are generally larger and more established, had the highest level of net operating income, averagApril 2013

ing $116,000. Farms operated solely by young farmers had an average net operating income of about $30,000.

In 2007, the Fosters formed a corporation, with Grandma Vera (Grandpa had already passed away), Mark, Jim and Lynda as shareholders. The farm was supporting three generations and by this time, Melinda was becoming a key cog on the dairy management side of their business.

Three years later, the Fosters were working over 1,000 acres and their 60-cow dairy barn was overcrowded.

They needed a new facility and were negotiating with builders and bankers.

Although only physically working on the farm on the summers and weekends, Melinda was making many dairy management decisions from her dorm room in Kingston during the week.

With the energy to attack multiple business ventures, Mark is emblematic of the benefits of giving the next generation big jobs early on.

It was then that things got really hectic.

A neighbouring 100-cow dairy farm came unexpectedly up for sale, complete with quota and 385 acres. It would have been easier to build the barn as planned but even with a small expansion plan, these capital expenditures didn’t increase net income. Besides, by buying an ongoing operation they could expand instantly, and income would start on the first day they started paying for it.

By now, Melinda was definitely keen to become part of the family farm and put her detail-oriented analytical skills to the Continued on page 26 country-guide.ca 25

business

Continued from page 25 test. She graduated and joined the team in 2011. The family decided to take the plunge and buy the operation, with the plan to shift dairy production over to the newer, bigger barn.

Expansion succession According to international succession surveys, a significant proportion of investment decisions are taken around the time successors come back to the business.

Then after a proving period, the successors are made legal partners and there’s another burst of spending. “There’s definitely a link between successors coming back to the farm and spending,” says Lobley. “There’s an incentive to provide additional income, so within five to 10 years there’s concentrated reinvestment.”

Lobley says traditionally, changes to farm size, location and practices are stimulated by the farm family cycle.

These events, such as marriage, divorce, death, birth, trigger rounds of investments. Land is acquired, technology is adopted and capital is invested.

26 country-guide.ca

The succession works because the family has learned how to think like a team, say Mark, Lynda, Jim and Melinda Foster In part this is due to the vision and the know-how that the younger generation brings to the operation. However, it’s also due to some long-term planning and some heavy-duty leveraging of inherited equity by the transitioning generation, sometimes well before the child decides to farm. In fact, research from Belgium actually nailed down an age — 45 — from when early designation of a successor or successors gives an incentive to invest and improve management.

Recently, U.S. farm economists positively correlated total farm assets to the designation of a successor. It seems that the designation of a successor opens farm perspectives, and suddenly the business has a longer planning horizon, measured in generations rather than years.

Risk is measured differently and longterm survival becomes more important

than short-term gain. It also includes a bigger appetite for expansion so two or more families can coexist on the farm during the transfer period.

Succession and expansion add unknowns, and there can be new risks associated with change and arising out of such things as transfer of management and expansion, mixing new personalities, adding debt load and multiplying the unknowns associated with farming. For example, the Fosters’ crops were hit hard by drought last summer. That unplanned loss was mitigated with crop insurance and was relatively small compared to another unexpected event.

Between the time the Fosters bought and got possession of the 100-cow dairy farm, the DFO changed the rules about Continued on page 28 April 2013

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business Continued from page 26 transferring quota. They had planned to sell 40 units of their home-farm quota and add the remaining 30 units to the new barn. Suddenly the quota could not be moved, it had to be sold and rebought on the exchange. That would have been fine, but the cap on the price meant that very little quota was exchanging. Their expansion plans were caught in a farm political catch-22.

With some much-needed bridge financing from FCC, the Fosters managed two separate barns for a year and a half. Although the change in plans put the farm into an undesirable debt position, the cash flow was excellent. With a payroll of 14 mostly part-time employees, the family scrambled to help manage both barns, do custom work and manage a much-larger land base. “At the time it was a big jump to take it all on,” says Mark. “We didn’t have time for stress.”

This unplanned circumstance allowed them to slowly cull cows out of the 100cow commercial herd and replace them with younger purebred stock from the home farm. “We used sexed semen to ensure we had more female replacements to infiltrate the other barn,” says Melinda.

However, with the milk board rule changes, the demand and price for commercial milk cows fell. The cows that they had bought with the farm were suddenly worth a lot less on their books.

AgriStability helped them get through those livestock financial losses that year.

They are not alone in this need.

According to the AAFC Profile of Young Farmers in Canada report for mostly larger, multi-generational young farms, support programs are important bridges.

“In 2010 it wasn’t a great crop year and without the help of our employees, it would have been tough to get through,” says Mark.

Transfer of power By this time, the farm management had been passed on to Mark and Melinda, throwing them right into some intensive decision-making. Jim is still very involved in all aspects of the farm and helps guide decisions as a mentor.

Lynda is transitioning some of the farm books and administration to Mark’s wife, Kate. In typical family farm management style, they work together to make improvements and get through the busy seasons.

28 country-guide.ca

The stats are clear, Lobley says. Farms that transfer responsibility early grow faster, higher profits It’s Melinda who oversaw the barn and parlour renovations, and made numerous changes in management but all four of them agreed to them and they all pitched in to help. Their goal was to create a calm, comfortable environment for the cows to help increase production. This past fall, Melinda moved the herd to three-times-aday milking and along with the improvements to the structure and attention to details, average production increased to over 40 litres per cow per day.

Under Mark’s management, the Fosters now farm 1,600 acres. They still have the custom spraying and planting sideline too, and also run a DeKalb seed dealership. With the added variety and agronomic information and on-farm demonstration plots, Mark thinks that having the seed enterprise has helped him improve yields. They’ve recently invested too in a new corn planter complete with precision agriculture technology.

With major acquisitions and changes like these, the family makes decisions together, with the bottom line always financial. Although they don’t always agree, Melinda says it helps that they set goals for the whole farm together.

A neighbour farmer gave her a little insight on how to approach decisionmaking with a sibling. He said he didn’t always agree with his brother, and sometimes he got mad at him. However, he always knew that his brother would do the job with his best interest at heart.

When they do mess up — and we all do eventually — each is responsible to fix the problem and change the system so it doesn’t happen again. Jim says he tries to question positively. To minimize bill payment errors and truly understand direct costs, parties involved in purchases must review bills and sign them before Lynda writes the cheques.

“We don’t pretend that we’re perfect,” says Jim. “The hardest part is having to live with ourselves when we make a mistake.”

Lobley isolated survey data on parents like the Fosters who give the younger generation financial responsibility earlier.

Although the next generation has to start at the bottom of the developmental ladder,

they are delegated financial decisions and knowledge at a younger age. “There are examples of really enlightened parents,” Lobley says. “They tend to be larger businesses with discreet areas of businesses.”

The hierarchy of responsibility transfer is the same in most countries, although the rate is different. Consistently, responsibility for major financial decisions is the last thing transferred to the next generation. In some cases it isn’t transferred until the older generation dies.

In countries such as Japan and England, it’s common for farmers in their 50s and 60s to not yet have full financial control. “Then it’s a big challenge for the sustainability of the business,” says Lobley. “They don’t develop the managerial and entrepreneurial skills and they don’t know how to run a business. Plus most people are winding down in their 50s.”

Lobley found that the timing of the actual transfer of assets differs between countries and has to do with culture and whether a country has a formal retirement scheme for farmers. “When the older generation is unwilling to talk about transfer, that’s when the family farm succession can be flawed,” he says.

The Fosters are currently adding Melinda as a shareholder and they are redoing their latest succession plan.

They’ve actually made two attempts at it after the first adviser left them frustrated with too many questions. The most productive meeting they’ve had was with their lawyer, accountant and financial adviser all around their kitchen table together. Although it was an expensive couple of hours, it cut down on the relaying of information and allowed the whole group to hash out options so they were all on the same page.

“It’s a process,” says Lynda. “It just keeps going.”

The Fosters say it’s important to include the non-farming siblings in the process and discuss their plans up front.

Lynda and Jim spoke with their nonfarming children separately right at the beginning of the process. “They (Erin and Greg) understand that there’s a lot of risk,” says Melinda “And how hard we have to work for growth.” CG April 2013

business

On the move

Canada’s influx of immigrant farmers is drying up.

Only 15 arrived in the whole country in the first eight months of last year. Is that a good thing, or bad?

By Angela Lovell hen the Haynes family emigrated from England to Canada in 1997, they had two priorities.

They wanted to farm, and they wanted to have cattle. Beyond that, they were open to all of the ideas and opportunities that their new home might present.

It’s incredible to have that much freedom, and Roger and Marie Haynes and their four children took advantage of it. The had planned on farming in southern Ontario, for instance, but decided to head farther west because Ontario was just too much like home.

When they got as far as the Neepawa area in southwestern Manitoba, they liked what they saw, and they purchased three quarter sections of land that August and started to put down roots.

Except for the details, it’s the kind of story that has been commonplace in the Canadian countryside for two centuries or more.

It may also be a story that is for all practical purposes coming to an end.

April 2013

The irony is, the tap is turning itself off at the very same time that Ottawa is making it easier for new farmers to qualify for permanent resident status.

In 1997, gaining that status was no cinch for the Haynes family. That didn’t begin to change until 2002 when the Immigration and Refugee Protection Act established a standard of relevant experience which included individuals with farm management experience. Now, farmers who want to immigrate to Canada and establish a farm can obtain permanent resident status through the Business Immigration Program under the self-employed category.

It still isn’t automatic, but now their hurdles are clear. They must prove they have the experience, the intention and the financial resources to purchase and manage a farm in Canada.

In the end, that didn’t really change anything for the Haynes family. Back in Evesham, England, they had operated a dairy farm. As well, Roger and his Continued on page 30 country-guide.ca 29

business Continued from page 29 brother ran the largest corn silage contracting service in the U.K., and Marie and Roger also ran a tractor parts business, all of which meant they had little trouble getting the necessary permissions to come to Canada, even prior to the new rules.

Between 2002 and September 2012, according to Citizenship and Immigration Canada, there were a total of 650 permanent resident applications granted under the employment category of farmers and farm managers.

These numbers have steadily declined from a high of 110 in 2002 to only 15 through September in 2012.

The figures seem to correspond with the experience of some ex-pats who purchased farms following aggressive recruiting drives by Canadian realtors seeking farm buyers in the late 1990s. At a time when land prices were rising steeply in Europe, farmland in Canada seemed a bargain too good to pass up for some.

It was definitely a factor in Robert and Pearl McBride’s decision to leave County Down in Northern Ireland and purchase a farm near Dauphin in the Parkland area of Manitoba in May 1997. “In Ireland land was so expensive and here there was more opportunity to expand,” recalls Robert. “The real estate people in Manitoba were advertising in Ireland, and at that stage there were a lot more farms like the one we bought for sale then, than there are now.

“There were probably four or five times as many farms,” Robert says. “And the dollar was good at the time as well.”

“ Canada is still a young person’s country,” says Robert Haynes. “If you work hard, you will make it.”

But getting the immigration papers and buying the farm was just the beginning for both the Haynes and the McBride families. Then they began the arduous process of setting aside most of what they thought they knew about farming, and re-learning how to farm in Canada.

One of the first things to strike the Haynes was how more laid back farming seemed on the Canadian Prairies than the intensive, heavily regulated agricultural system they had come from. “We noticed how many farmers here were in their 70s and 80s,” says Roger. “We tried to think of farmers that we knew in the U.K. who were over 65. Farming just kills them over there because the stress is so great.”

It took a while to get used to a more relaxed style of farming. Still in U.K. farming mode, when they arrived on their farm, they immediately contacted the local rural municipality. “We got the RM to come out. We said, ‘we are going to put cattle facilities here, what do we have to do about effluent control?’” recalls Marie. “They looked blankly at us and basically said, ‘Nothing.’”

It was a huge contrast from the rigid bureaucracy, 30 country-guide.ca

regulation and paperwork they had lived with on a daily basis at home. “In the U.K., we farmed down to the River Avon and we made silage and we had a dairy farm,” says Marie. “If we had a pint of effluent get into that river we would have been in trouble.”

The Haynes agree that a lot of things have changed since they first arrived in Manitoba. They now have an environmental farm plan and they have voluntarily built dirty water containment ponds and a clean water system that runs captured rainwater from the buildings’ eavestroughs into a dugout to provide drinking water for the cattle.

“No dirty water leaves this farm,” says Roger, who also maintains the spring runway that crosses his land by fencing the cattle out and using a pump system to provide water to his rotationally grazed paddocks.

Still, the attitude that the farmer is the best person to know how to preserve their land and the environment runs deep across the country. Nor is that the only difference.

All on a handshake Business in Canada is generally conducted in a more informal manner too, say the Haynes, who were used to having everything in writing — from quotes to contracts to bank financing. They were uncomfortable at first with the phone conversations and verbal agreements that constituted their business dealings in Manitoba. And Marie found a big discrepancy in attitudes towards women in the agricultural business world.

Used to selling tractor parts across the globe, she was floored when a condescending salesman at the tractor parts dealer argued with her about the replacement bearing she wanted to purchase to repair their tractor.

It took a vehemently insistent Marie and the appearance of the store manager to finally get her the exact part she had requested.

“They seemed to have the attitude that a woman shouldn’t have that sort of knowledge,” says Marie.

Interestingly Pearl McBride’s experiences were exactly the opposite, perhaps demonstrating that cultural differences exist even within the same supposedly similar ethnic groups. Women in Ireland were not often as involved in farm production as they are in Canada, and although Pearl had driven tractors at home she had never driven a combine until she came to Canada.

“People back home were very shocked to hear that I had started to drive the combine when I came here,” Pearl recalls. “I remember the time I first got on a tractor with a 40-foot cultivator, I took a few trees out because I wasn’t used to the width of the machinery. It took a couple of years to get used to the size of the machinery.”

All farming is local The Haynes’ first year of farming was relatively successful. They grew a decent canola crop and some barley that fetched a good price with a local hog farmer, and they surprised more than a few local naysayers when they decided to plant corn.

“When we grew corn here in 1998, we couldn’t April 2013

BUSINESS even insure it because they said you can’t grow it here,” says Roger. “It turned out to be the best crop of corn silage we had grown since we began growing it in the U.K. in 1961.” Corn acres in Manitoba have gradually increased since then, making Roger seem something of a pioneer, but he says few people realize that although Manitoba has a shorter growing season than the U.K., it actually has more corn heat units than the U.K. does.

The McBrides had switched from cattle production to grain farming, and although the crops were basically similar to those grown in Ireland, the growing conditions weren’t. “We had never thought much about hail, but this is a bad area for hail so we had to take out insurance,” says Robert.

For the McBrides and their three daughters the biggest changes were the scale of farming and the seasonality. “We had come from 130 acres and we originally bought 1,300 acres,” says Robert. “One quarter of land here was bigger than our whole farm in Ireland. The equipment was a lot bigger and that took some getting used to. And we were used to farming all year round. We were used to plowing or doing field work in the winter.”

The McBrides have increased their land base to 2,600 acres in the last 15 years, and marketing the grain they produce on that land has been another interesting experience, both with and without the Canadian Wheat Board. They remain surprised by the volatility of Canadian markets.

“Prices vary so much,” Robert says. “In Ireland if you had a couple of cattle to go to the market, the price didn’t fluctuate much. Here you can make more money in the office on the right day than you can in the fields. It has become much more of a business here than a way of life.”

As the McBrides settled into learning the complexities of Prairie grain farming with the help of their neighbours, the Haynes still wanted to add cattle, but still hadn’t fenced the property so decided to grow some cash crops for a couple more years. Things looked promising going into the spring of 1999 until it began to rain and never stopped. The couple didn’t sow a single seed and had no farm income that year. Things were going much better in 2000 until they got four inches of rain in September on their swathed barley crop. “We got 93 per cent germination in the swath,” says Marie.

“So we went another year with no income.”

Marie decided she would have to find an off-farm job, a common practice on Canadian family farms, which was something new to the Haynes. Marie secured a job with Child and Family Services of Manitoba and meanwhile Roger went ahead with the planned cow-calf operation, but the run of bad luck continued. Just after purchasing some cows in 2002, BSE hit. “We knew exactly what BSE was because we had it in our dairy herd in England,” says Roger. They also knew that, Continued on page 32

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Arriving in 1997, Roger and Marie Haynes were part of the last major wave of immigrant farmers to reach Canada, even though rules have loosened since then.

Continued from page 31 contrary to what many other producers were saying, the crisis would not be over quickly. Eventually they had to sell two of their three quarters of land.

Also in 2002 Marie underwent the beginning of a string of health issues, but the family kept their eyes on the future. Explains Roger, “We were attempting to do a cow-calf operation with all this going on and began experimenting to try and find the way forward, because I do not believe that what is going on in agriculture here is the way forward.”

Far from being organic farmers, the Haynes believe there is a need to carefully manage resources to maintain water quality and rebuild soil health, which they feel is being rapidly degraded on the Prairies by overreliance on artificial fertilizers and existing production practices.

“I am interested in soil health, plant health, animal health and human health,” says Roger, who is aiming for an integrated and diverse farm production system that properly manages water and manure, creates its own fertility using cover crops and rotational grazing, and can be self-sustaining for the future. “We only farm a quarter section and have 30 head of cattle,” says Roger. “I have two sons who work off the farm but are interested in farming and before we even start to look at expansion we need to know that what we are thinking about can work.”

Roger also believes that Manitoba farmers are well positioned to exploit some unique opportunities as long as they can look beyond the traditional, conventional way of doing things. For the past few years the Haynes have been experimenting with planting willows as a source of biomass. It began as a quest for an economical heat source for their experimental green-

32 country-guide.ca

house, which uses a unique insulated material manufactured in Germany. The aim was to be able to grow year round in Manitoba’s climate. Certain hybrid willow species can grow eight feet in 12 weeks and reach a height of 20 to 22 feet within three years. They are low maintenance and are used extensively to produce renewable energy in countries such as Sweden. The problem is trying to maintain good germination rates in replanted cuttings to provide an adequate supply.

Willow plantations average about 5,000 trees per acre.

“If we can get the germination rates up it could be a very viable alternative crop for Manitoba farmers,” says Roger. “We didn’t set out with this in mind, but there is a huge market for wood pellets in Europe and we are in a tremendous position here in Manitoba to ship through the Port of Churchill. We have another advantage here in that we get frozen ground and harvesting is not a problem. In places like Sweden they are having problems harvesting.”

Besides a farming system that is totally different, lifestyle changes have also brought challenges.

Mosquitoes in summer and long, harsh winters are probably what most ex-pats living on the Prairies will complain about. But they do often come with something of a silver lining, says Pearl.

“Until we came to Canada we never heard silence and we never saw darkness,” says Marie. “There was always an orange glow in the sky from streetlight pollution and wherever we were we could always hear traffic. Here we’ve got clean air, good water and lovely countryside. We would never go back to England.”

“I would say to any young people thinking of emigrating that Canada is still a young person’s country,” says Robert. “There are so many opportunities for young people whether it’s in farming or there are lots of jobs. If you work hard you will make it here.” CG April 2013

Photo credit: Sandy Black

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13-03-08 4:21 PM

management

The deals are gone There may not be any farmland bargains left.

At least, they aren’t where the hype says you should look

By Amy Petherick Forget what you might have heard. Appraisers across the country say you aren’t going to find any farmland bargains.

Last fall, when Re/Max released its Market Trends Report; Farm Edition 2012, it sparked a flurry of media attention. The report ranked regions across Canada and seemed to identify areas to look if you want to buy land cheap. Although such figures can always fire up a good debate, appraisers are skeptical whether they have any more value than that.

Most of all, they object to any suggestion that there are still regions where “great deals” can be found.

They want buyers to get used to the idea that usually, they’ll pay for what they get in today’s market.

Nova Scotia’s Annapolis Valley In the Re/Max report released last September, Annapolis Valley was fingered as one place in Canada where farmland was a bargain, selling between $1,000 and $2,000 per acre. The following month a wellestablished farm real estate agent told a local newspaper that his most recent sale was for $4,500 per acre, and he hadn’t sold for less than $2,000 per acre in years.

Because sales details in Atlantic Canada are not made public, it’s tough to know for sure.

Michael Foster is an independent appraiser in Nova Scotia who has worked in the agriculture industry for 35 years. If anyone has a very good understanding of farmland values across the country, Foster believes that Farm Credit Canada (FCC) would know best. “Farmland does not necessarily get sold through a real estate company,” Foster points out. “Often it gets sold farmer to farmer, which is harder to get a handle on.”

Complicating the issue further, Foster says too many publicly available sources of information fail to represent all farmland values accurately. A highpriced parcel of land in one part of Annapolis Valley that is well-drained, Class 2 soil, is capable of grow34 country-guide.ca

ing row crops, and has irrigation and a water supply available, should never be lumped into the same category as a poor piece of pasture in the same area.

“Sure, some land may have sold for $1,000 per acre and some for $4,500 per acre, but that doesn’t capture the whole market,” Foster says. “You can’t generalize like that. There is a wide swing of values in the area, because of the soil capabilities.”

Foster admits he gets a lot of calls asking for the general price of agricultural land in the valley. But the volume of 2012 sale records available from FCC makes him skeptical. If land was such a bargain, he’d expect to see a flurry of sales. Simply put, that flurry is nowhere in sight.

Ontario’s Grey County Two Ontario regions were specifically identified

by Re/Max’s report and FCC’s Farm Land Trends report, released last October, including New Liskeard and Grey County. Re/Max said farmers were migrating to these areas because they were finding land at more affordable prices.

Ryan Parker, an appraiser located in southwestern Ontario, says there was a stretch when it was true. For a while, groups of farmers near Elmira and Waterloo were selling land for around $12,000 per April 2013

MANAGEMENT acre and buying for $8,000 or so in Grey County, where land had been trading until then at about $6,000 per acre.

Those days are gone, Parker says.

“There used to be deals to be had in Grey-Bruce even a year ago, but those gaps are really starting to close,” he says.

“There’s the odd small area but they’re so few and far between, it’s pretty tough to put your thumb on it.”

Parker was receiving so many land value inquiries, he wrote his own report for southwestern Ontario. He found that Essex is the only county that hasn’t increased that fast, saying it always tends to be a slow-moving market. But even there he doesn’t think there are many deals to be had. The productivity between that land and Grey County becomes more closely aligned every year.

“It used to be that you couldn’t even get dry corn up there (Grey County) and now they grow edible beans,” says Parker. “I think the disappearance of low-value land is partly because of corn and soybean technology advances.”

It’s only a natural for land of equal production value to approach equal pricing, a premise that is equalizing prices especially as logistical and infrastructure issues are tackled. According to Parker, this is driving up prices in cash crop areas just as fast as in areas where there’s serious competition among supply management farmers. “Small little areas where there aren’t many supplymanaged farmers are where you’d have a better chance of getting a deal,” Parker says before adding, “but deal is a pretty strong word.”

Based on base data from 2011, land would be assessed somewhere between $341.95-$1,025.85 per acre, according to its potential profitability. “We’ve compared our numbers to Farm Credit, so we’re in the general range, and we’re using provincial average numbers.”

But Suchan points out that assessment value and market value are different things. He says they do see where

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Northern Alberta and Saskatchewan Across the Prairies, better data shows a strong link between farmland pricing and the parcel’s productive capability and soil quality. In turn, says tax appraiser Steve Suchan, the numbers help prove that great bargains have become rare.

In that sector, Suchan says land is valued on a point system, with the highest productivity rating at 105 points and marginal land rated around 35 points.

“For property assessment purposes, we don’t use sale prices specifically, and ag land assessments are based on soil productivity,” says Suchan.

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an increase in bidders does increase the potential range in market values. That seems to hold true in other areas of the Prairies too, like in Peace River where 32 sales forced a spread between the maximum and minimum figures of $3,250 per acre.

Even in these more remote areas, it seems, those who really want the best value will have to be willing to pay for it. CG

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management

New land partnerships In this first of two columns on new land transfer strategies for today’s farm environment, we look at when it might pay to put assets into a land partnership. Next issue, it’s land trusts

By Madeleine Baerg ver the past five years, at the same time that their land has grown in value faster then ever before, far too many farmers have stopped planning for the transfer of their agricultural land. The cause is all too easy to understand. There is simply too much financial uncertainty in many cases to be comfortable thinking about such long-term measures as succession planning.

“Eight or nine years ago, people appeared to be more proactive in their planning,” says Greg Gartner, a tax lawyer with Moodys Gartner Tax Law LLP in Edmonton. “But now, the old tools don’t work, given that the capital gains deduction doesn’t cover much in the way of land appreciation anymore, and parents aren’t comfortable giving up operating control or ownership especially given the fiscal uncertainty.

“People are just hanging on to their land,” says Gartner, who also acts as tax counsel to Alberta Agriculture and Rural Development. “We are seeing a lot more inertia.”

The problem, of course, is that not planning is hardly a great strategy either.

“There’s a reason wills and estate lawyers make

“ Once there’s value on the table, people start scrapping,” says Alberta lawyer Greg Gartner.

“You don’t want that for your kids.” a heck of a good living,” says Gartner. “Once there’s value on the table, people start scrapping. You don’t want that for your kids.”

Two land transfer strategies, though currently quite uncommon, are likely to become popular among farmers over the coming few years. They are land partnerships and trusts.

In this first of two of a two-part Land Transfer Strategy series, we’ll consider why a land partnership may work for your farm. Stay tuned next issue for a look at trusts.

36 country-guide.ca

Land partnerships Back a decade ago, transferring land between family members operating inside a partnership didn’t end with a wait by the mailbox for a giant tax bill. At the time, land prices were low enough that the $500,000-per-person lifetime capital gains exemption covered most of the land appreciation, keeping money in farmers’ pockets.

Over the last few years, however, land prices have grown so steeply that today’s $750,000 exemption, even when doubled between a couple, rarely covers the total increase in land value. What this means is that the government is gaining an increasingly large portion of farmland appreciation value.

Like Gartner, Merle Good has spent an entire career studying taxation. In fact he is just days away from retiring from his role as tax specialist with the Alberta Agriculture Ministry and will begin a new life as a private consultant starting June 1.

With agile minds, Good and Gartner regularly “play” with tax scenarios, stretching their brains around common and not-so-common tax challenges. (“Sometimes I think he only pays me to speak at the annual ag tax conference he co-ordinates so he has time to pick my brain and bounce around scenarios and tax ideas,” says Gartner with a laugh.)

This puzzling through of tax scenarios brought both Good and Gartner to a new idea. In certain situations, rolling land into a partnership agreement is an ideal way to save significant tax dollars while ensuring all parties’ priorities are fairly maintained.

“Yes, this required some outside-the-box thinking. But once we started analyzing how this could work, we realized just how effective it could be,” says Good. “Nobody is using this structure right now because it’s not on anyone’s radar as an option. But get the word out, and I guarantee it’ll be commonplace, maybe even the norm, in very short order.”

Imagine this common scenario: child wants to join parent back home on the farm. Mom and Dad own the farming land which, at the time of child’s start in farming, has a value of $2 million. Given that child is planning to work beside parents for the next decade or two, it may be considered reasonable that child benefits from land appreciation. However, the parents have needs too. First and foremost, their April 2013

MANAGEMENT

retirement needs to stay secure: if any of the dreaded 3Ds (death, divorce or debt) fall upon the child, the parents’ asset value needs to be assured. As well, the parents may also want to find a structure that allows the older generation to maintain decisionmaking control.

Option one is a sole proprietorship. The easiest structure, it requires no business structure setup of any kind. The child remains essentially an employee.

Parents maintain total control, and all land value appreciation goes directly and exclusively to them.

Mom and Dad might like this approach, but the problem is that it isn’t a good system for encouraging a child’s enthusiasm and commitment to farming, since the operating structure does not ensure the younger generation’s needs are met.

Option two is incorporation. Used extensively by farmers, it does have two drawbacks. First, it is complicated and costly to set up and maintain. Secondly, should the people involved go their separate ways, one-third of the value of any land held by the company could be lost to taxation.

Option three — and Good and Gartner’s top pick in situations where the players agree some land appreciation should go to the successor — is a landholding partnership. While operating partnerships are common in agriculture, the concept of holding land inside the partnership is quite new.

If the parents in our example roll their $2 million worth of land into the partnership, they can take back a $2-million capital account, effectively freezing their asset value just as it would be if it were frozen in a corporation with preferred shares. Then, as land value increases to, say, $4 million, the increase can be split according to prearranged terms. (“We can arrange the details of the partnership in any way you can imagine them,” says Gartner.)

Upon the parents’ death (or when parent determines), the original $2-million capital account can be rolled over tax free to the on-farm child and/or to that child and his or her off-farm siblings in any way parent predetermines.

Additionally, the partnership can be structured to guarantee voting interest, allowing decision-making control to remain with the older generation until a

APRIL 2013

set date or a determined percentage of the partnership is bought out by the younger generation. And, should the partners choose to unwind the structure and dissolve their operating relationship, the land can generally be removed from the partnership with no taxation.

“A partnership is a very simple, basic structure to set up but it offers a lot of flexibility in that any parameters can be put to the agreement and made binding,” says Gartner. “If you want to share capital appreciation, and have flexibility over decision-making and asset splitting at estate time, a partnership that includes land is the way to go. (So long as your daughter-in-law doesn’t leave and try to take the farm with her. That’s where a trust may be a better option).”

The partnership strategy is even more useful in non-traditional succession planning.

“I do like intergenerational farm transfers, but the government has some provisions to allow for that kind of straight transfer,” says Good. “But, where the really big bang for the buck on this setup comes is in uncle-to-nephew situations. In an uncleto-nephew transfer, you can’t roll land down tax free. But this structure can solve that.”

If the uncle puts operating land into the partnership and sets up an agreement within the partnership that the nephew gets all growth interest, the uncle will have effectively frozen his estate. If the nephew then starts to pay out the uncle through the partnership, he can start gaining ownership on the land.

Assume that uncle places a $2-million piece of property into the partnership when he and the nephew begin farming together. If the nephew gets growth interest, and pays uncle $50,000 a year for 20 years, uncle’s estate will only be taxed for the remaining $1 million in land value, since $1 million in original capital value and all the appreciation has already passed to nephew.

This article won’t be the last time you hear this unique fix to capital gains taxation. In fact, Good and Gartner will be presenting this suggestion to over 700 Albertan accountants in the next six months.

Just tell them you heard it here first. CG

country-guide.ca 37

management

Make no small plans The world’s biggest equipment manufacturers certainly aren’t thinking small. Here’s how they plan to sustain their astonishing recent growth

By Scott Garvey, CG Machinery Editor ith 2012 behind us, executives at the major equipment manufacturers have tallied their impressive year-end profits and made their congratulations. But now the question is, can they keep those numbers climbing in 2013? With year-over-year gains piling up, that may not be easy.

For John Deere and CNH Global, that also build construction equipment, their agriculture divisions have carried profit growth forward and made up for soft sales numbers on the construction side. But it turns out the same medicine might be the right prescription for both their lagging construction sector sales and their topped-out ag machinery numbers.

It’s time to push even harder into emerging economies.

“Just to give you some idea of the scale of these opportunities, Global Insight estimates that almost half of the worldwide construction growth and nearly three-fourths of the agricultural growth in the next several years will take place in emerging economies,” said Samuel Allen, John Deere’s CEO, in a speech at the Association of Equipment Manufacturers annual conference back in November. “Ag equipment will remain our largest business sector and undoubtedly become more global in scale.”

John Deere has announced seven new tractor factories... none of them in North America “More global” means his company — and likely the others as well — will look to milk more profit from non-traditional markets. “The John Deere Strategy… places even more emphasis on global expansion,” Allen said.

But as global expansion moves forward, Canada and the U.S. still represent the most important equipment market for Deere. In that same speech, Allen referred to Canadian and American farmers as the brand’s “core customers.”

Other CEOs understand North America’s profit potential, too. In his recent briefing to analysts, 38 country-guide.ca

AGCO CEO Martin Richenhagen quoted World Bank statistics that show mechanization in Canada and the U.S. leads the world. In Canada, we love tractors. We own 1,824 of them per 1,000 farmers and ag industry workers. That makes us a leader, with the U.S. falling in line behind us at 1,586.

To understand how significant our level of mechanization is, compare those stats to the developing countries. In China, there are a mere three tractors per 1,000 farmers. In Africa, there are five. So, as we cycle through tractor and equipment purchases here, we represent an immediate and significant source of revenue for manufacturers.

But those tiny tractor numbers in the emerging world represent something that no longer exists in our market: enormous growth potential. Here’s why.

In that same presentation, Richenhagen also cited the fact that population distribution in those emerging economies is shifting from rural to urban, which means the source of cheap labour that had been the power behind agricultural production is vanishing, which in turn is driving the need for mechanization there too.

The scale of that trend is beyond impressive.

In 2010 the World Bank put the rural population in China at 52 per cent of its total. By 2030, that number will fall to 35 per cent, reflecting the relocation of another 200 million rural Chinese into the country’s cities.

So imagine the potential for tractor sales if China needs to move toward anything near the same level of mechanization we have here in North America.

Then add India, Brazil, Russia… It’s not hard to understand why the majors see off-shore potential.

“My own company today is making more investments in more places than ever before,” said Allen.

“In just over a year’s time, we have announced plans to establish seven factories in markets critical to our future growth — three in China, two in Brazil, and one each in India and Russia.”

Then there is Africa, a topic that stirs excitement in Richenhagen. When I asked him about AGCO’s efforts there during a press conference at the company’s Jackson, Minnesota, plant last summer, his enthusiasm was clearly evident. He’s been a driving force behind mechanizing agriculture (and AGCO’s presence) on that continent.

For two years now, AGCO has sponsored an annual summit in Berlin aimed at spurring overall April 2013

management African development. “Africa is the key to the challenges of the future,” Richenhagen said during his opening speech at the 2012 event.

But growing business in emerging markets isn’t just a matter of moving in and setting up shop. The hurdles can be enormous.

“While the issues are similar everywhere, the experience outside the U.S. tends to be much more variable and less predictable,” said Allen. “Two years ago, Deere was able to start up its Russian factory near Moscow in a short nine months, largely because of a very positive relationship with the national and local governments. Government entities there are extremely interested in modernizing agriculture and supporting the related economic opportunities.

“Such co-operation is not always the case,” Allen cautioned. “We’ve spent as much as two years in other places just securing the necessary permits to purchase the land to start the construction. It can be a lengthy and painstaking process.”

And there may be significant cultural impediments.

“We may face challenges as a result of the pervasiveness of corruption and other irregularities in business practices in certain regions,” reads CNH Global’s annual report discussing the risks the firm expects to encounter with its expansion into emerging markets.

To mitigate the hazards, companies must move carefully. “To this point, Deere subscribes to what business author Jim Collins calls ‘bullets before cannonballs,’” said Allen. “That means starting out with small, highly targeted investments, or ‘bullets.’

On most occasions, we partner with established indigenous companies when entering new geographic markets, or ease into new market segments either through partnerships or selective acquisitions.

“Assuming these initial steps are successful,” Allen said, “we move ahead with a more substantial commitment and high-impact investments. For Deere, this approach has proved to be a prudent way to balance risks and rewards.”

But back here at home, serving those core customers has required new investment as well. Richenhagen has made it clear AGCO wants to capitalize on being able to stamp “made in America” on more of the Massey Ferguson and Challenger equipment the company delivers to Canadian and U.S. dealers, which is important when marketing machinery south of the border.

Deere knows that too, and production of its North American machines will remain located in the U.S. for the foreseeable future. “Of the dozen or so major capital projects underway in our company today, almost half is in the United States,” noted Allen. “For the most part, these are factories that make some of our highest-value products, such as large tractors.”

Perhaps the biggest change made to production in North American plants lately is the schedule they now use to build equipment. “At Deere, we worked closely with our dealers and suppliers… to move factory production from a ‘push’ to a ‘pull,’ or build-toorder system,” said Allen.

April 2013

Number of tractors per 1,000 famers

Canada

U.S.A

China

Africa

1,824

3

1,586

5

“The build-to-order transition took several years to put in place. However, Deere now produces a high percentage of its large equipment such as tractors, combines, and loaders in response to individual-customer orders.” That minimizes the company’s need to finance unsold inventory.

But now that all the major brands are enjoying record sales numbers with their existing distribution networks, why bother accepting the risk of unstable governments, corruption and cultural oddities in emerging economies when the real profits are still here at home? The following comment from Allen explains his reason — and maybe it applies to all three CEOs at each of the major brands, even if it isn’t what you might expect.

“A sound strategy should involve no small degree of stretch; it should be ambitious,” Allen told his audience. “To that end, we should keep in mind the words of the noted Chicago architect Daniel Burnham, who famously said, ‘Make no small plans.’”

Many are familiar with that statement. But less well known is what he said next. After make no small plans, Burnham said, “They have no magic to stir men’s hearts.” CG country-guide.ca 39

management

Figuring out AgriStability This important federal program remains poorly understood on too many farms — perhaps on your farm too. Here’s why it may prove so relevant

By Gerald Pilger cross Canada, farmers are wondering if AgriStability still has a fit on their farms. As I wrote in the last issue of Country Guide, government funding of AgriStability has been significantly cut under Growing Forward 2. However, instead of lamenting these cuts, it is more important farmers evaluate the revised 2013 AgriStability program to decide if this risk management program is needed for their farm business.

Here is the conversation farmers should be having about 2013 AgriStability.

Q1: What exactly is AgriStability under Growing Forward 2?

First and foremost AgriStability is a marginbased program. A producer who is enrolled in AgriStability receives a government payment when their actual margin declines by more than 30 per cent from their reference (historical) margin.

AgriStability does not guarantee a level of revenue and does not guarantee a farmer will make a profit.

Will AgriStability pay on your farm? The only way to know is to work out the numbers for yourself Q2: What is margin?

Margin is the difference between revenue and expenses. If revenue exceeds expenses, you have a positive margin. When expenses exceed revenues, your margin is negative.

Q3: What is reference margin?

Your reference margin is the olympic average of your margins over the last five years. (Best and worst margins are excluded and the remaining three are averaged.)

tion (i.e. seed, pesticides, fertilizers, fuel and arm’s length labour) are included in the calculation. Fixed costs like land rent, equipment (repairs, purchases, and even leases), hired custom work, building costs, taxes, capital cost allowance, and a host of other expenses are NOT included. So, having a profitable reference margin does not necessarily mean you have a profitable farm business.

Second, if you have experienced a number of years of declining or poor margins due to uninsured production losses, poor prices, or high costs, your reference margin may be so low that it does not provide the necessary coverage to meet the rising input costs farmers are facing.

Third, under Growing Forward 2, limits have now been placed on the reference margin. If the total of the allowable expenses are less than the olympic average reference margin, then the reference margin is limited to the allowable expenses.

Q5: If a farm has had high margins, does AgriStability provide better protection?

No question about it. The reference margin is different for every farm. Every producer must look at their own historical margins and also weigh the risk of their 2013 margin dropping by more than 30 per cent from your personal margin history.

Q6: If AgriStability provides more protection for some farmers than others, do these farmers have to pay more?

Like the protection, the costs to participate in AgriStability are individualized. Everyone has to pay an administration fee of $55 annually. As well, there is a premium of $315 per $100,000 of reference margin. These fees are due April 30 each year.

This seems like a very low cost for insuring that your variable costs are covered. The actual premium is low but producers who participate in AgriStability may pay substantial accounting fees to complete their AgriStability applications and supplementary forms and to track inventory. Furthermore, part of any indemnity payment made to a producer is withheld in lieu of having farmers pay higher premiums for coverage.

Q4: If you receive a payment when your margin declines more than 30 per cent, does this not guarantee a profit?

Q7: By enrolling in AgriStability, am I guaranteed to receive 70 per cent of my calculated margin?

No, for three reasons. Most importantly, not all expenses are included in the calculation of the margin. Most variable costs directly related to produc-

Not exactly. Unlike most insurance programs, the premium AgriStability charges does not offset the producer’s share of the indemnity risk.

40 country-guide.ca

April 2013

management Instead, the government withholds 30 per cent of any indemnity payment made. In effect, the farmer is self-insuring the first 30 per cent of any margin decline and then an additional 30 per cent of any further declines.

So the maximum AgriStability payment you can receive from the government is actually 70 per cent of 70 per cent (i.e. 49 per cent) of your reference margin.

Q8: Do I need AgriStability?

You are the only one who can answer this question. Without doubt, AgriStability will protect you from severe margin declines resulting from poor production, falling prices, market interruptions and rising input costs. But you can protect yourself from three of these problems through other insurance.

Production insurance will cover production problems. You can use the futures and options markets to protect against falling prices. If you live in Alberta or Ontario you can purchase revenue insurance which mitigates falling prices. You can use contracts to protect against market interruptions.

However, there is a real dollar cost for these risk management tools, whereas the risk management cost is deferred through AgriStability until you are in a claim position.

The rising cost of inputs is the one factor for which there are few risk management options and which AgriStability provides protection for. Is this a risk you want insurance to cover?

Finally, as I pointed out in the last issue, there is at least one private industry insurer who now offers a margin-based insurance product.

Q9: Are there other factors I should consider in deciding whether to participate in AgriStability in 2013?

At a recent Alberta Financial Services Corporation meeting addressing the 2013 AgriStability changes, the presenters brought up one more point farmers need to weigh in the balance.

This same point is made on the AFSC AgriStability website http://www.afsc.ca/Default. aspx?cid=3068&lang=1.

Here is the direct quote: “Participation in AgriStability may be a requirement for participating in the Advance Payment Program, or in accessing other credit.”

As I asked in the last issue of Country Guide, how much insurance do you really need, and what type of insurance best meets those needs? Does the 2013 AgriStability provide the risk management you need? CG

Get a broader view of agriculture.

Watch AGCanadaTV. Gain a new perspective on your farm, your family and your future with this informative, e-Learning video series from Farm Credit Canada.

Videos include an interview with three time olympic gold medalist, Hayley Wickenheiser as she discusses the importance of following your passion and how to perform under pressure.

Don’t miss any of these informative videos – visit www.agcanada.com/video AGCanadaTV is sponsored by The DuPont Oval Logo is a registered trademark of DuPont. ®, TM, SM Trademarks and service marks licensed to Pioneer Hi-Bred Limited. © 2013, PHL.

April 2013

country-guide.ca 41

business

That glut of used tractors More new farm machinery sales mean an oversupply of used

By Richard Kamchen

sed farm machinery and equipment inventories are rising in Canada, especially in the West, as farmers make more trade-ins to upgrade to new. A lot of customers are buying a piece of equipment one year and trading it in the next, says Jim Wood, vice-president of Rocky Mountain Equipment, a Prairie-wide dealership. It’s becoming a trend in the industry where the farmer either pays cash every year or finances it.

“A lot of the manufacturers have waivers, so let’s say you buy it in October, you can put some money down and then most of the manufacturers will carry it on a finance waiver until the next new season, which is usually September,” explains Wood.

“From there, they can either keep it or trade it in for another one, and do the next same thing again.”

Steven Dyck, president of southern Alberta’s Western Tractor Company, also notes that the large charter banks are becoming far more aggressive than they’ve ever been.

“Some of these large-scale farmers have sizable lines of credit that allow them to revolve their equipment annually, and they have extremely competitive rates out there, so the financing options are becoming far more flexible,” Dyck says.

It’s not just better profits that are prompting sales of new equipment. As the complexity and size of operations grow, many farmers want to keep up with the latest technology while avoiding dealing with breakdowns not under warranty, according to Dyck.

“They just want to have to deal with an annual cost of flipping their machinery out. That allows them to really limit their service and aftermarket parts cost,” says Dyck. “And if they continue that flip on an annual basis, it’s a very marginal cost to move up to the new model year, and they factor that into their budgets every year, and it’s done.”

Southern Alberta is a very competitive marketplace and dealers are aggressively offering multi-unit deals, growing their market considerably since some flip as many as 15 to 20 new pieces of equipment a year.

Statistics on used equipment are closely guarded, but Dyck estimates the volume of new equipment sold in southern Alberta has tripled in the last three or four years. But those expanded sales come at a price, with much more used equipment hitting the marketplace, and Dyck says a dealer must sell as much or more used compared to new just to stay on top of that used inventory.

42 country-guide.ca

Used combines are the biggest headache, since that’s where the glut of previously owned equipment lives. One reason is that combines are a very seasonal product. Plus, because they’re a big-ticket item, they are often a requirement in multi-unit deals, even if the buyer doesn’t need a new unit.

In the end, dealers accumulate more used combines than they do tractors, swathers, or seeding and spraying equipment, Dyck says.

As long as producers are making profits, they’ll continue making frequent flips and in turn, add to a burgeoning premium used market. In times of prosperity, farmers who previously bought mid-range used might go for the premium. The key is to lift everybody else up a notch as well.

“Because farming has been better lately, we’re seeing a trend of guys moving up to what they normally didn’t buy,” says Cam Kay, general manager of a three-location group called Agland in the Lloydminster, Alta. area, explaining farmers are generally buying newer. “Guys are just spending more money.”

Still, the primary used equipment segment is the mid-range, says Stoltz Sales and Service general manager Marlin Stoltz in Listowel, Ont. “There’s only a small portion of the population that are capable of buying the nearly new used equipment,” Stoltz says. “More farmers are in that middle category, buying that five- to 10-year-old equipment. So when you have that nearly new, which happens with the flips and multiples, there’s a limited number of buyers for that market.”

With fewer purchasers, that unit can depreciate on the lot as it waits for a buyer.

Another danger in dealers getting bogged down in used is if there’s a sudden shift in farmers’ fortunes, like the drought that hit the U.S. last year.

“You do not want to be caught with a lot of used inventory because that’s where a significant amount of the dealer’s investment lives,” warns Dyck. “There’s a lot of dealer resources wrapped up in used equipment.”

There’s also a risk in accumulating large used equipment, which tends to be more difficult to move.

Bob Downham, president of Ontario’s Connect Equipment Co., says dealers will always find someone to buy the new as farmers look to improve efficiencies, but there will be a limited number of potential buyers for the large pieces of equipment they’re trading in.

“There’s a correlation between the size of equipApril 2013

business

Showrooms may be crowded with new units, but long lines of used equipment sit in the back lot. ment and the available buyers,” says Downham. “A lot of people wanting to buy used combines are the moderately sized farms, and they simply wouldn’t want a Class IX combine (462-plus horsepower).

They only want a Class VI (268-322-hp) or VII (323374-hp) combine. And those combines are more readily sold to that second, third end-user.”

The diminishing number of farmers is only adding to the problem of selling those large machines.

“You’ve got larger and larger farmers using larger and larger equipment, and therefore when it comes to disposing of the used equipment, it’s going into a diminished population base,” says Downham.

Who’s at fault?

Downham believes the farm equipment industry is heavily dependent on taking trade-ins and that some dealers have created their own problems.

“They have options to control their destiny and their used inventory. Nobody forced them into taking the deals resulting in the glut,” Downham says, adding used pricing isn’t regulated by a pure mathematical formula, but rather by what the market will pay for an available unit. “Supply and demand regulates this, just like housing, in-season produce, etc. This problem is controllable.”

When farmers come into a dealer with numerous family members ready to trade in their equipment every year, they’re going to get a good deal, but the dealer ends up buying more used equipment in that transaction than if they dealt with just one customer.

“If we’re trying to sell equipment at too low a difference,” says Downham, “it automatically creates this glut.”

The situation isn’t unique to the West, although Stoltz notes that with smaller farm operations in April 2013

Ontario, there are fewer multi-unit deals and therefore a reduced opportunity to accumulate used.

Nevertheless, Downham has seen dealers make questionable trade-ins in the province, such as a brand new tractor being traded for an older one even up as part of a multi-unit transaction.

“Was there a forced cycle there that forced one more used tractor on the market than would have naturally got there? If you do this a hundred times over, what have you got?” Downham asks.

But pressure from manufacturers to sell more new is also a significant factor in the creation of a glut of used. If one dealership is making a lot of new sales in a marketplace, its area looks more buoyant and manufacturers will expect the other dealers in the region to keep their market share at an equal level.

One dealer who didn’t wish to be named thought manufacturers are encouraging dealers to prematurely get farmers out of their equipment and buy new.

“They’re all striving for higher market shares, so they encourage the flips sooner than later,” the dealer said.

Downham says his used equipment inventory has been stable in dollar value for the last two to three years: “I could triple my business today without even blinking — all I’ve got to do is pay too much for the used.”

Agland’s Kay says if dealers believe their used inventories are climbing too high, they need to either find a way to move it or take in less.

“A lot of dealers are just saying I can only sell 30 new combines this year because I can only handle 30 trades by the time it’s all washed out,” says Kay, who also serves as president of the Canada West Equipment Dealers Association. “We try to sell the right amount of new equipment so that we don’t bury ourselves in used.” CG country-guide.ca 43

business

Where’s the magic bullet?

Farm machinery dealers are desperately seeking their way out of the used machinery glut

By Richard Kamchen ore farm equipment dealers are looking for a magic wand that they can just wave in order to cut into their growing used inventories. Perhaps, although most machinery will still get sold domestically, they’ll end up settling for a boat ticket instead.

“Dealers are becoming more aware that it’s a world market, and there’s more options out there for moving the used,” says Cam Kay, president of the Canada West Equipment Dealers Association.

What’s on the mind of just about every dealer is how to move used machines off their lot, says Steven Dyck, president of Western Tractor Co. in southern Alberta. Complicating their efforts is that their AORs — areas of responsibility, or geographic marketplaces in which they sell new — can’t absorb all the used equipment they’ve accumulated, given that their local machine population has grown so tremendously over the last number of years.

44 country-guide.ca

“So, what we’ve been looking at is identifying other avenues aside from selling it into our existing territory, or liquidating it through auctions,” Dyck says, adding the latter is a last resort where he could wind up with as much as a 15 to 20 per cent loss.

One of those avenues is overseas trade. “To do it correctly, you have to have a good understanding of the logistics and transport side of it,” Dyck cautions.

“Getting it there, getting it there securely, cost effectively and on a timely basis.”

Western Tractor is working with Export Development Canada, whose trade commissioners globally help the company find and create connections between third-party agents known as international jockeys, who are basically out there identifying dealerships and individuals wishing to buy equipment.

“We’re looking for them, but they’re also looking for us, so positioning our website internationally and making sure that it’s visible to those individuals is one of the ways in which we can reach out April 2013

BUSINESS there,” says Dyck. “I fully expect that that’s going to grow as a percentage of our business over the next number of years. It has to.”

The company has already transacted some international business, recently selling swathers to Mongolia, and last year sent five swathers to Australia. In the years ahead, Dyck predicts BRIC nations (Brazil, Russia, India and China) will seek better-quality equipment as they continue ramping up their productivity.

“We’re not doing it on a large scale yet, but I can tell you that it is one of the key focuses for our dealership in the next three years,” says Dyck.

Not everyone, however, is gung-ho about overseas trade.

Jim Wood, vice-president of agriculture at Rocky Mountain Dealerships says he hasn’t found any destinations that are easy to export to. And given what he considers prohibitive costs, he’d prefer to sell closer to home.

“My philosophy is we should try to sell it at home rather than auction it in a separate country just to get rid

of it. You’re probably better off giving your local customer a better deal,” Wood says.

He adds that disease concerns from destination countries force the dealers to steam clean their used machines to the point they’re in nearly new condition, which isn’t particularly cost effective.

Dyck admits combines are probably the most challenging piece of equipment because so much can live inside them. To clean them to a level where they’re sanitized enough for international shipment is probably the biggest headache for a dealer.

Wood says that can make the transaction less than cost effective, especially when added to the cost of shipment.

“There’s such a huge demand over in Russia and Ukraine for equipment, but it’s not like the channels of moving equipment are as easy as from Canada to the U.S.,” Wood says. “By the time you take it in on trade in Western Continued on page 46

Trait Stewardship Responsibilities

Notice to Farmers

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

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

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

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business

Continued from page 45 Canada, and then pay somebody to move it and export it to a different country, in the end it’s a losing proposition, unless you can get more for it (than domestically). We haven’t really looked at exporting a whole lot.”

Bob Downham, president of Ontario’s Connect Equipment Co., says his firm has sold to Europe, Africa and Australia, but adds sales like that aren’t going to be any kind of norm but rather an exception.

“Even from Ontario, it’s $1,500 to the port, another $5,500 for the boat ride,” Downham says of exports to Europe, adding the equipment also has to be cost competitive, and he’s found used equipment there is generally cheaper than here. “It’s all possible, but it goes back to the economics of it.”

But those overseas avenues still represent potential. Right now, not every international customer may be able to afford that $300,000 combine, but they certainly can afford a $70,000 or $100,000 one, and compared to the technology and quality of what they may have been using the last 10 to 15 years, it’s a significant upgrade, Dyck notes.

Farmers “may be better buyers than we are sellers,” says Ontario dealer Bob Downham. “This is not a business for the weak at heart, that’s for sure.”

“The complexity of the whole agricultural equipment industry is growing so substantially, particularly as the world market develops,” Dyck says.

The changes will be dramatic over the next five to 10 years, and companies wanting to establish themselves overseas will need to act quickly. “There’s a huge race on in those emerging nations, especially those BRIC nations, and they’ve got to get out there and create that presence.”

Part of what makes overseas sales more appealing and perhaps more necessary is the fact little to no used equipment is moving into the U.S. “When the dollar was in the 65- to 75-cents range, we were pumping equipment down south like it was going out of style,” says Kay, who’s also general manager of Agland in Alberta. “Everybody was. But it was the dollar exchange that was doing it. Now that things have changed and our dollar is a lot stronger, there’s not as much financial advantage, so we can’t do it.”

46 country-guide.ca

Dyck points out the stronger Canadian dollar has created a reverse situation where a number of customers have been shopping south of the border: “With the Internet, it’s created a global marketplace for individuals to buy equipment.”

Downham, however, stresses the cost of buying new equipment is also reduced significantly with a Canadian dollar at or near par, so dealers shouldn’t be surprised their used values would fall as well.

“Dealers who expect used to maintain values we experienced with past exchange rate levels are clearly reflecting on the past, not the now,” Downham says. “We are part of the North American marketplace, and our equipment costing and retail pricing is determined by that marketplace, both new and used. Markets and pricing levels are… based on supply and demand.”

The U.S. could become a more attractive destination again if the loonie takes a plunge but, right now, there’s plenty of used equipment in the American marketplace as it is. With the U.S. drought, and resulting cash crunch, numerous farmers needed to liquidate their assets: “So what happens is much like what happens when a housing boom goes bust — the value of that equipment diminishes considerably,” Dyck says.

But for all the talk of selling outside the country, most used equipment sales remain within Canada’s borders.

“I think probably still 95 per cent of the equipment is being sold through the dealer lots, and the balance through auctions,” says Kay. “Some might be going overseas, but a very small percentage.”

Even with farmers flipping their used machines in favour of new, Dyck says many are still buying older, reliable equipment as a backup so that if one of their machines goes down, they can keep running.

“Every hour of downtime can cost thousands and thousands of dollars. So oftentimes they’re putting extra equipment in place to be able to maintain that uptime,” Dyck says.

And there’s also an older used marketplace for small- to medium-scale farmers, as well as for those smaller operators adding to their fleet as they expand their acreage.

But with abundant information available to producers making prices transparent, dealers are forced to be extremely competitive. The marketplace is North American-wide, with American and domestic customers looking at equipment from both sides of the border.

“This is a very small community when it comes to farm machinery,” says Downham. “Farmers know the market very well. They’re managing their dollars and they may be better buyers than we are sellers. This is not a business for the weak at heart, that’s for sure.” CG April 2013

w e at h e r NEAR NORMAL

Cool Wet spells

NEAR-NORMAL TEMPERATURES AND PRECIPITATION

ild M et ds W io r pe BRITISH COLUMBIA

Stor my at tim es

ld Coowy Sn

ol Co et ks W rea tb ou

A BIT COOLER THAN NORMAL AVERAGE PRECIPITATION

MILDER THAN NORMAL

MIL DE WE NEA R THA TTE R T N R T O A NOR HA LIT MA N N TLE L OR MA L

COOLER THAN NORMAL

ild M et s W ell sp

June 2-8: Seasonable and pleasant most days although two or three warmer days trigger showers or heavier thunderstorms.

Blustery.

days expect showers, thunderstorms, some heavy. Frost risk, mainly central and north.

May 26-June 1: Pleasant days exchange with a few showers or heavier thunderstorms this week. Fluctuating temperatures.

June 2-8: Seasonal and sunny most days but showers or heavier thunderstorms occur on two or three occasions. Breezy.

April 28 through May to June 8, 2013

Apr. 28-May 4: Seasonal to cool. Fair overall but rain, mixed with snow at higher levels on two to three days. Windy at times.

May 5-11: Sunny but scattered rain, heavy in places. Highs in the teens west, near 20 Interior. Frost, snow at higher levels.

May 12-18: Fair apart from heavier showers on two to three days. Variable temperatures. Blustery at times. Frost pockets inland.

May 19-25: Generally sunny except for off-and-on shower activity. Seasonal to cool and windy from time to time.

May 26-June 1: Warm, sunny days exchange with cooler, showery days.

Chance heavier rain in places. Blustery.

June 2-8: Highs in the upper teens on the coast and north to 20s Interior. Sunny aside from scattered heavier shower activity.

ALBERTA Apr. 28-May 4: Variable weather and temperatures as mild, sunny days interchange with cooler, wet, windy ones. Frost areas.

May 5-11: Highs often in the teens.

Sunny aside from heavier rain, chance snow on two to three occasions. Blustery.

May 12-18: Changeable. Fair, cool with patchy frost but a couple of warmer days bring showers, thunderstorms. Risk of snow.

May 19-25: Sunny, breezy. Highs in the teens and 20s set off heavier showers or thunderstorms. Slight risk of frost and snow in places.

May 26-June 1: Sunny, windy most days but showers and thunderstorms on a couple of days. Seasonal to cool.

April 2013

SASKATCHEWAN Apr. 28-May 4: Variable weather and temperatures. Windy at times. Sunshine exchanges with occasional rain or snow.

May 5-11: Pleasant temperatures but two or three cooler, windy days bring rain, chance snow. Nighttime frost patches.

May 12-18: Highs often in the teens.

Lows at times near zero. Sunny with showers or thunderstorms. Chance snow in places.

May 19-25: Warm to cool with a frost risk, mostly central and north. Sunny with scattered showers, thunderstorms.

May 26-June 1: Seasonal to occasionally cool. Sunny, windy aside from scattered showers or heavier thunderstorms.

June 2-8: Sunny, pleasant days are interrupted by showers or heavy thunderstorms on two to three occasions. Blustery.

MANITOBA Apr. 28-May 4: Weather and temperatures vary as mild, sunny days alternate with some rain or snow. Occasionally windy.

May 5-11: Sunny, mild but a couple of cooler, windy days bring some rain, chance of snow. Frost pockets.

May 12-18: Seasonal with some lows near zero. Sunshine dominates but with a few showers or thunderstorms. Chance snow in places.

May 19-25: Temperatures vary. On warmer

April 28 through May to June 8, 2013 NATIONAL HIGHLIGHTS Springtime weather conditions will fluctuate widely in this six-week period as warmer winds are driven back by colder outbreaks from time to time. These changeable conditions will be accompanied by snow, frost and rain in April in many parts of Canada but will be replaced by showers and thundershowers in May. A few heavy thunderstorms will have the potential of causing heavy rain, strong winds and hail. In British Columbia, a cool and occasionally wet pattern will delay the onset of spring somewhat. A contrasting mild circulation from southern Ontario eastward to the Atlantic Provinces is likely to result in milderthan-usual temperatures and near-to or abovenormal precipitation. More typical springtime weather is anticipated across the Prairies and Northwestern Ontario with temperatures and precipitation running close to normal values.

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

ACRES

By Leeann Minogue

Dale loses a bearing Why, on this day of all days, does the whole world fall on his shoulders alone? hen Dale saw the police car come up over the rise he looked at his speedometer and hit the brakes.

“Whoa!” Dale’s grandson Connor called from the back.

He’d been jerked forward in his car seat. Dale hadn’t realized he’d been going so fast. Good thing there was nobody behind him. And good thing the cops didn’t stop him. He’d have to pay more attention. He set the cruise control at a more reasonable speed and kept on heading for Regina.

Two hours earlier, Dale had been out in the yard with Reg Wilson, the trucker hauling fertilizer to Hanson Acres. Reg’s truck was almost unloaded and he was telling Dale about his cousin’s job up in Fort McMurray when they heard the awful grinding sound. Thankfully, the auger held out until they got all the fertilizer off Reg’s truck and into the bin.

After some inspection, some cursing, more inspection and more cursing, Dale figured out that a bearing had gone on the auger.

They couldn’t afford to have this auger out of commission for long. With Reg bringing in fertilizer, two different farmers on their way to Hanson Acres to pick up seed they’d booked earlier and a neighbour planning to pick up some flax that the Han48 country-guide.ca

sons had cleaned, they couldn’t get by without it.

Dale would have to find a new bearing.

“I have to be responsible for everything,” Dale muttered to himself. “Can’t rely on anybody when things need to get done.”

Dale’s wife, Donna, had taken off to the mountains, spring skiing with four women friends. Dale couldn’t believe it. “In April? You’re leaving the farm in April?”

Donna had never been spring skiing before.

Since she’d retired from keeping the farm books and passed on the job to her daughter-in-law, she’d been trying all kinds of new things, and spending more and more time with old friends she hadn’t had time for in past.

“They’ve asked me every year for 10 years,” Donna had said firmly. “This year, I’m going.”

Maybe Dale’s father Ed could have gone to the city for the bearing, but Dale hated to ask. It had been a rough spring for Ed, hobbling around on crutches with a broken ankle. And Ed had taken it hard when a couple from Estevan had hauled his old house off of the farm and moved it south to an acreage. The last straw had come when Ed’s old friend Blake Hamilton had died. Ed has always said he didn’t like Blake much, but the death upset APRIL 2013

ACRES him just the same. Ed was definitely slowing down. Dale wasn’t sure how much help he’d be on the farm this season.

Dale’s daughter-in-law couldn’t make the trip to Regina. She was in Winnipeg at a seed growers’ meeting. Dale had been supportive when Elaine expressed an interest in getting involved with a farm organization, but now that she was spending time going to meetings when they could’ve used her at the farm, Dale finally understood why his own father had complained so much when Dale had been a board member.

Dale’s son Jeff was home, but Jeff was working flat out, handling seed customers and looking after their toddler while Elaine was away. “Geez, Dad,” Jeff had said. “I can’t go to town. We’ve got customers coming. You’d better take Connor with you. He’ll get in less trouble riding in the truck with you than out in the cleaning plant with me.”

“Five people out here, and I’m the only one who can get anything done,” Dale mumbled to himself, as he and Connor pulled into the city.

If you asked him in the winter, Dale would tell you spring was his favourite time of year.

“Nobody ever lost a crop in April,” he’d say. He liked the promise of a new start. A new opportunity to seed exactly the right varieties in just the right fields. Dreaming of above-average yields with high prices.

In theory, he loved spring.

In practice, it was one thing after another. The phone ringing off the hook with people trying to find last-minute seed.

Customers coming to pick up seed. Some showing up late or forgetting to come when they said they would. Their own seeding equipment wasn’t ready to hit the field, and they were still trying to round up their own fertilizer and chemical. Dale had a list of things to do as long as his arm.

Meanwhile, after the spring melt the Hanson yard was a mud bath. Dale couldn’t keep his boots clean, never mind his truck.

And now, here he was, wasting his day driving his filthy truck all over Saskatchewan to pick up parts for something that shouldn’t even be broken. And babysitting to boot.

When he got to the edge of town, Dale made the mistake of driving down Albert Street.

“Hungry!” Connor started yelling, as soon as he spotted the golden arches.

“We’ll stop on the way back,” Dale said.

Dale cursed the noon hour traffic all the way through Regina.

Finally, he made it to the dealership.

He waited at the parts counter for almost half an hour — checking his watch and trying to keep Connor amused while the parts man hunted for the right bearing. Finally he admitted they didn’t have it in stock, so Dale and Connor were back in the truck to try the next place.

“Damn dealers don’t keep anything on hand,” Dale mumbled.

“Damn! Damn! Hungry!” Connor shouted from the backseat.

Two stops later, Dale finally found a partsman with the right bearing.

“Thank goodness!” he said while the man behind the counter wrote out the invoice. “Now we can get back to work.”

Then Dale reached into his back pocket and pulled out… nothing.

He’d forgotten his wallet.

At first he was too speechless even to curse. Then Dale let out a string of words that made the partsman blush. Two salesmen came out from their offices to see what was going on.

APRIL 2013

At first, Dale was too speechless even to curse. Then he let out a string of words that made the parts man blush Connor repeated three of his grandpa’s best words, and added, “Hungry!”

Dale left Connor with the laughing salesmen while he raced out to his truck to get a cheque from the stash they kept in the glove box. But the stash was gone. Dale must’ve used the last one.

Dale stood beside his truck in the parking lot at the dealership taking deep breaths. How much more of this could he take before he gave himself a heart attack?

He went back inside to check on Connor and phone Jeff.

After about 15 rings, Dale realized that Jeff either didn’t have his phone with him or couldn’t hear it ring. With no other options, he tried Donna’s number. She picked up on the fifth ring.

“Missing me?” she answered, having seen his name on the phone. “I don’t have much time to talk. I’m on the chair lift — I’ll have to hang up when we get to the top.”

Dale wrote down the numbers from Donna’s credit card and passed them over the counter to the parts man. One of the salesmen slipped Connor a $20 bill. “Buy your grandpa lunch, kid.

This time of year is rough on farmers.” CG

> Empty Pesticide Container Recycling Program

There are many reasons to rinse. #1

Only rinsed containers can be recycled

#2

Rinsed containers ensure clean collection sites

#3

Use all the chemicals you purchase

#4

Rinsing is essential for safe collection site handling

#5

Maintain your farm’s good reputation

#6

Unrinsed containers may not be accepted

No excuse not to!

{

For more information or to find a collection site near you visit cleanfarms.ca

Now, take your empty fertilizer containers along for the ride! country-guide.ca 49

LIFE

Build a stronger family Being family is no excuse for poor behaviour — on your part or anyone else’s

By Helen Lammers-Helps

im Soldan is blunt. “The success or failure of a family farm business does not rest on the amount of milk in the tank or grain in the bin,” the Chilliwack, B.C. farm adviser tells me. “It rests with the family team and its ability to work and relate together effectively.”

If you build your house on loose soil, it’s going to fall down, continues Soldan. The same goes for the family farm. You need to build your family farm business on a strong foundation, and that foundation must set out the family’s values, goals, roles and responsibilities, and it must formalize the communication process.

Soldan developed this guiding principle after working with farm families first as a district agriculturalist in Alberta and then for the past 20 years in his own business focusing on the “people part” of the farm family business.

Soldan says the family is the engine that drives the family farm business. And, he adds, you must look after the engine if you hope to be successful.

Abbotsford, B.C. dairy farmers Fred and Maggie Brandsma sought out Jim Soldan’s expertise as they entered into the process of transferring ownership to their two sons, Chris and Richard. “He was recommended by our accountant,” explains Fred who was also aware of many farm transfers that hadn’t gone smoothly. “It can get ugly,” says Fred. “We wanted to make sure we covered all the bases early on.

“Working with Jim helped us to realize that partnerships take work, they don’t just happen,” says Fred. “It made me realize that we could do everything perfectly when it came to production but if we didn’t look after the people in the business it would fail.”

Soldan is a strong proponent of family-operated farms. When family-run businesses put as much effort into the “engine” of the business (the family members) as they do into production, the family business can be the closest thing one can get to heaven on earth, he believes. “But in family-run businesses 50 country-guide.ca

where this is not the case, it can be the deepest part of hell for everyone involved.”

Soldan’s passion is rooted in his own experience as part of a family farm established more than 100 years ago in east-central Alberta. It was hearing about his grandfather working with his brothers, then seeing his dad farm with his father, as well as his own experience working with his father and his brothers that caused him to coin the phrase: “It doesn’t have to be this way.”

When you want to transfer the farm, working with the accountant and lawyer are important, says Soldan, “but logistically flawless tax strategies simply do not make for a thriving, sustainable, multigenerational family business.”

Soldan says his work complements that of the lawyer and accountant. “Our work is to do the planning with the family to help them decide how they want it to look down the road as they live and work together, and then the accountants and lawyers set that out in a legal way,” he says.

Soldan spends 20 to 30 hours working directly with families to help them determine roles and responsibilities, how ownership will be transferred, the role of technology, risk tolerance, production standards, family values, and similar issues.

He starts by interviewing family members and garnering responses to a family-specific questionnaire, followed by training in communications, conflict management and team building. A lot of time is spent developing and documenting relationship and communications guidelines, codes for operation and conduct, values, policies and procedures, goals and a generational needs assessment.

“It’s all carried out in an environment that allows family members to see the value of effective communication in a safe and learning environment where critique and help to improve are carried out with respect, concern and love,” says Soldan.

Time and again, we are told that communication APRIL 2013

LIFE

is essential to operating a successful farm, especially during the transition from one generation to the next, but in reality we aren’t very good at it, says Soldan.

Only seven per cent of a message is communicated in words. The other 93 per cent is communicated with the tone of voice and body language.

Soldan spends serious time with his clients helping them to develop effective communication skills. People learn to understand what the other is saying by considering both the content and emotion behind it, before presenting their own point, says Soldan.

The general rule of thumb is that 50 per cent of farms do not make a successful transition to the second generation and 90 per cent fail to make it to the third, says Soldan, who encourages his clients to formalize communication by setting aside time regularly for meetings.

“Farmers need to give communication top priority along with production demands,” Soldan says.

He helps families create a set of rules for communication that they agree to abide by. “Being family is no excuse for poor behaviour,” he quips.

While Fred and Maggie Brandsma felt that they had pretty good communication before working with Soldan, there was room for improvement. Fred and his sons have always met every morning after chores to discuss the day-to-day stuff but now they aim to have formal meetings on a biweekly basis where they talk about financial statements, cropping decisions, and other business matters as well as any personal concerns.

There will be lots to talk about and lots of decisions to be made over the next few years for the Brandsmas.

Their plan is to move the farm to the Salmon Arm area to get away from the pressures of urban development in their current location near Abbotsford. After the move Fred and Maggie hope to transfer ownership to Richard and Chris and his wife, Laura.

APRIL 2013

Early in the process of working with the Brandsmas, Soldan sought the input of the Brandsmas’ four daughters who are not involved in the farm. “It gave them a chance to raise their voices,” says Maggie.

“We learned a lot working with Jim,” says Fred.

Maggie agrees. “One of the things I learned is the importance of catching the little things,” she says.

“Sometimes it’s an accumulation of little things that can cause someone to explode. You have to deal with the personal stuff right away.”

To better understand their natural operating styles, Soldan had all the family members involved in the farm complete a Personal Style Indicator (PSI).

The PSI helps everyone see their natural preferences toward time, people, tasks and situations. It helps you understand your strengths and challenges and knowing others’ PSI patterns helps you adapt to their natural operating styles, explains Maggie.

Maggie says the other benefit of having laid a foundation for communication is that it’s making it easier for her and for Fred to let go. “The boys love to farm… it’s in their blood,” she says. “But this helps you know where everybody’s at.”

It’s a pretty intense process, says Fred, referring to the sessions spent with Soldan. “You go over it again and again but it makes it second nature,” he says.

“It’s a part of how we operate now.”

And the next generation will take this foundation with it as it goes forward with the next stage of the farm business.

It’s not easy to have the tough discussions around transferring farm ownership. Too often these discussions get ignored but today’s smart managers know that putting a framework in place for the people part of the business will keep things running smoothly. CG

RESOURCES Many of Soldan’s concepts were captured in A GUIDE FOR DEVELOPING BEST PRACTICES FOR FARMING WITH FAMILY which he co-authored for the B.C. Ministry of Agriculture and the Canadian Farm Business Management Council. It can be downloaded at http://www.agf.gov.bc.ca/.

country-guide.ca 51

h e a lt h

Potassium — an essential mineral

By Marie Berry otassium is the third most abundant mineral in your body next to calcium and sodium. It is termed an essential mineral because it is essential to life. It acts as an electrolyte conducting electricity throughout the body, and if you realize that electricity is needed for muscle and nerve conduction you will understand how essential it is. Your heartbeat, nervous system functioning, and muscle contractions all involve potassium.

Potassium is also involved along with sodium in water and acid-base balance within the body. You need a normal balance or homeostasis to maintain good health, and your metabolism and respiration account for this regulation. Critically ill people, for example those in intensive care hospital units, usually do not have homeostasis and need intravenous electrolytes including potassium.

One-third of Canadians get too little potassium from their daily diets Potassium is required for cardiovascular and muscle health. Maintenance of good potassium levels helps keep blood pressure under control and reduces your risk for stroke. Researchers have also looked at its role in a variety of conditions such as bowel diseases, cancer, arthritis, digestion, and brain functioning, although no certain links have been scientifically shown as of yet.

The recommended daily intake for adults is 4,700 milligrams, which is easily obtained from a healthy diet. However it is estimated that as many as a third of Canadians don’t obtain enough, most often without any problems.

Potassium is found in the soil, so fruits and vegetables are good sources, but many people don’t eat the daily recommendation — seven to 10 servings depending upon your age and sex. Count your servings of fruits and vegetables today, and see how close you come!

Besides banana, there are many good sources.

Squash, potatoes with their skins, spinach, kidney

beans, raisins, and oranges are all rich in potassium.

Some foods are fortified with potassium, and reading food labels will help you identify these.

Obtaining potassium through your diet is best in that food sources are most compatible with your body. Potassium is readily absorbed from your gastrointestinal track and excreted through your kidneys.

Hypokalemia is low potassium levels and hyperkalemia is high potassium levels. Unfortunately, both conditions can impact your overall health, but have few symptoms. A blood test will reveal potassium levels with 3.5 to 5.3 mmol/ l being the normal range. Muscle fatigue, weakness, and abnormal heartbeats mark hyperkalemia, while weakness, fatigue, muscle cramps and constipation are associated with hypokalemia. You can see that these symptoms could easily be attributed to other causes.

Because your kidneys are responsible for excreting potassium, any condition that affects them can affect potassium levels. With kidney disease, older age (when kidneys don’t work as well) and drugs like angiotensin converting enzyme or ACE inhibitors which help the kidneys maintain potassium levels, potassium levels can be higher than normal. On the other hand, diuretics or water pills help the kidney flush potassium along with excess fluid and thereby produce lower levels. Another cause of hypokalemia is poor gastrointestinal absorption, associated for example with diarrhea, overuse of laxatives, and bowel disorders such as irritable bowel disease.

Supplements are available, and if you have low potassium levels they may be prescribed. Because potassium can cause stomach irritation, supplements are often formulated as sustained release or enteric coated tablets to provide stomach protection and to release potassium lower in the intestine. These need to be taken with a full glass of water and the tablets cannot be broken or crushed. Effervescent tablets that can be dissolved in water and liquid preparations are also available, but the liquid has an unpleasant taste.

Ideally, you want to obtain your potassium from your diet, which means you need to eat your fruits and vegetables. Good dietary habits can certainly contribute to good health.

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

Incontinence is not something you want to talk about or admit to, yet it is much more common than you think. Often people don’t seek assistance because they either are too embarrassed or are under the impression that nothing can be done. Not so! Next month, we’ll look at some common causes of incontinence and some remedies — both pharmaceutical and non-drug.

52 country-guide.ca

APRIL 2013

“My name is Pi. I have been in a shipwreck. I am on a lifeboat alone with a tiger. Please send help.” The principal character in the story “Life of Pi” finds himself adrift in the ocean, the only person on a small boat with a ferocious Bengal tiger. He resorts to an age-old device to send a message. He puts a note in a tin can, seals it, and sets it adrift.

The effort is futile and he spends months alone and desperate.

In the process he has a spiritual experience which brings him closer to God. A friend of mine forwards a series of questions by email, a new question every day. Each question invites me to consider who I am, what I value most in life, and what I want out of life. Some questions relate to past experiences, “What’s something you’re glad your parents taught you?” Others ask about the present, “Who gives you inspiration?” Others refer to the future, “Who would you most enjoy visiting with?”

I appreciate these emails because they simply pose questions. They do not give advice, offer solutions or promote any cause. I can take time to consider the question or I can push the “delete” button.

Speaking of the handy delete button, I have been reflecting how often we use the delete function in life, either deliberately or subconsciously. We can remove questions from the hard drive of our computer, but we cannot remove the hard questions from our lives. One of the email questions asks, “Is there anything in your life you would like to do over again?”

This question might haunt us, but trying to answer leads to frustration and futility. Questions about the future are more valuable, “What three things would you like to do before you die?” is followed by the question, “If this is the last day of your life, which three persons would you like to spend the day with?”

Jesus taught by telling stories and asking questions. I think that if he had been absolutely clear about each situation he encountered, preachers would never have found work. Because he stimulates our thinking, challenges our spirits and invites us to look for deeper meaning in life, his words endure and we continue to be inspired by him after more than 2,000 years.

John Westerhoff, an American teacher and writer, tells a story about a tribe of people who lived a few miles from a glorious island. They had heard about wonderful food and beaches on the island but none had ever been there. One year they hired swimming instructors to teach them the necessary skills to reach the mythical place of beauty and wealth. On the day they were scheduled to leave, they showed up with hundreds of pounds of cabbage. Their teachers asked, “Why do you need these?” They answered, “To eat when we get there.”

None of them reached the idyllic island.

Pi found God while stranded alone and facing danger every day. We find God in ordinary living and the people God has placed around us. We ask our own questions. Where does our search for true happiness lead? What do we need to leave behind as we travel? Perhaps our place of beauty and truth is not far away. We simply need to ask more questions. We might encounter new truths about life and about God. Suggested Scripture: Matthew 7:7-8, Revelation 3:18-22 Rod Andrews is a retired Anglican bishop. He lives in Saskatoon.

APRIL 2013

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country-guide.ca 53

Va l l e y

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

His column is a regular feature in Country Guide

ILLUSTRATION: RICK KURKOWSKI

read a lot these days about the disconnect between consumers and farmers. “Seventy-two Per Cent of Consumers Know Nothing About Farming,” shouts one headline. “Big Farming Makes Us Sick and Fat,” yells another. In a farm paper it scolds, “Farmers Pay High Price for Cheap Food Policy.” On the same day the Urban Daily wails, “Why are Food Prices So High?”

My wife saw me scrunching up the Toronto Sun and stuffing it into the fireplace with unusual enthusiasm and asked me what was the matter.

“A woman wrote a letter to the editor saying she is horrified by the increasing number of coyote shootings by city police.”

“What are the police supposed to do?” she asked.

“She thinks they should use tasers.”

I should buy the next few issues to read the replies, I suppose. But it doesn’t really help. We are a nation of grousers. Never mind the trolls under the bridge who dominate the Comments section of every news outlet in the country. Right here in my own house there’s a big gap in understanding about everything from aid to the Third World to the correct way to recycle a tin can.

At the supper table we have two vegetarians and two duck hunters. We have dog people and we have cat people. Some of us (usually adults) have two-minute showers with the fan on and some of us (usually teenagers) “steam-box” until the shingles curl on the roof.

There are some fundamental theological questions that will probably never be resolved, like

54 country-guide.ca

whether silverware goes into the dishwasher with the handles up or down, but we try nonetheless every night to thrash these matters out in the faint hope that some day we will reach agreement.

Over the years, I have noticed a thinning out of the middle ground that used to exist between the nutbars of the extreme right and the crazies of the radical left. There is no genial, muddling, silent majority anymore and no safe subject for that matter. It seems every opinion must be shouted. The past issue of our own Petunia Valley Gleaner roared about the “Growing Evidence of Recycling Abuse” at the landfill site. Really? Am I supposed to drop the newspaper and head down to city hall with a pitchfork and a torch to protest the perfidy of residents who are tossing cat poop into their organic green bins?

The world now divides up into two groups on every subject and stands 2-1/2 sword lengths apart, hurling abuse at each other. Even if you want to talk about growing chrysanthemums or collecting stamps you risk a clout over the head with a rolled-up newspaper or an umbrella.

Just last week, I was cruising an online discussion about a heritage breed of chicken. “Perhaps we should restrict breeding efforts only to members of the association,” suggested one post. “Communist!” shouted the next post. In a discussion like that, all you can do is back slowly out of the chat room.

The unpleasantness in the air is due to a number of things. There is a clear and growing sense among people I meet that we are losing control of public and household finances. We have run into trouble with our domestic economies because we have pursued, for far too long, things that aren’t particularly good for us. The poet and essayist Wendell Berry calls it “our forlorn modern progress toward something indefinitely, and often unrealizably, better.”

He might have been looking at the dashboard of a new tractor when he said that, a display of screens, buttons, lights and beeps that cannot be mastered without a two-day tutorial, pausing only for sleep and prayer.

We have also shed a lot of our common sense by shoving difficult decisions into closets. Urbanites may shudder at the thought of any kind of gun ownership, but in the countryside a gun is still seen as a tool for making intelligent choices. We know that in the natural world where we make our living, it is a zero sum game. If we don’t make a decision, the coyote or the raccoon will make it for us and there will be no chicken for dinner.

Try making that fine point in front of a placard-waving crowd…

April 2013

Found new equipment –

online.

Your business depends on the internet.

You can depend on Xplornet.

These days, a fast, reliable Internet connection is a must for most every business. Xplornet offers wireless business Internet connectivity across Canada, including many places where wireline service is unavailable. And we offer peace of mind, through our reliable network, which leverages the latest technologies, like 4G. With Xplornet’s Business Internet Solutions, your business is connected. Ready for high-speed? Call Xplornet today at 1-877-217-9142 to get started!

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• choose from a range of business-grade packages, with speeds up to 5 mbps.2 or choose a residential plan, starting from just $54.99/month.

• 30-day money back guarantee.

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FREE

Basic installation and no EquipmEnt to buy!1 4G Business plans starting from $84.99/month.1

For All oF Canada

xplornet.com 1.877.217.9142

Limited time offer. Subject to change without notice; where 4G Satellite service is available. If installation requirements go beyond the scope of a basic installation, additional fees may apply. Term contract required. Activation fees apply. Early termination fees apply. Subject to site check. Site check fee may apply. Taxes will apply. See dealer for details. 2Actual speed online may vary with your technical configuration, Internet traffic, server and other factors. Traffic management applies to all packages. 3For complete details of Xplornet’s traffic management policies and 30-day money-back guarantee, visit xplornet.com. Xplornet® is a trade-mark of Xplornet Communications Inc. © Xplornet Communications Inc., 2013.

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FBC SAT CGW EQUIP ADMAT 01/2013

HigH-Speed internet

Tune your disease conTrol To The way you farm.

New DuPont™ Acapela™ fungicide has a one-of-a-kind action that puts you in control, delivering reliable protection under a variety of conditions.

Multiple disease threats? Acapela™ works on many important diseases, including leaf rust, powdery mildew, Septoria leaf blotch and tan spot, for healthier crops and higher yield potential.

Inconsistent staging? Acapela™ features best-in-class movement properties for superior coverage.

It travels across, into and around the leaf with strong preventative, residual and post-infection action.

Weather threatening? Spray away and count on Acapela™ for excellent rainfastness if you need it.

DuPont™ Acapela™

New DuPont™ Acapela™ fungicide. Like music to your crop.

For more information about Acapela™, please visit acapela.dupont.ca As with all crop protection products, read and follow label instructions carefully.

The DuPont Oval Logo, DuPont™, The miracles of science™ and Acapela™ are registered trademarks or trademarks of E. I. du Pont de Nemours and Company. E. I. du Pont Canada Company is a licensee. Member of CropLife Canada. © Copyright 2013 E. I. du Pont Canada Company. All rights reserved.

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