Farmforum winter 2008

farm forum goes online

INSIDE: Bring the world to your farm

p. 18 herbicide resistance explained

FarmFORUM www.farmforum.cA

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fieldwork goes

hands-off

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How to farm the Internet >> Technology: Beat the farm labour crunch >> Business: Stop resistant weeds before they spread >> Production: >> Farm Life: Meet Canada’s outstanding young farmers

Farm Forum.cA | 1

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10/07-5840-01B

FarmFORUM

volume 22 | issue 1 | winter 2008

contents >> PRINT TECHNOLOGY

BUSINESS

PRODUCTION

FARM LIFE

FarmFORUM www.farmforum.ca Publisher Bayer CropScience Editor Sherry Butt

COVER STORY

Fieldwork goes hands-off

8

Technology is a beautiful thing. Especially if it saves you time and money and lowers operator stress.

14

Land ownership gets a new look

Farmland is attracting more non-farm investors. This trend spells opportunities for expansion-minded farmers.

16

Stop resistant weeds before they spread Integrated crop management is key to preventing herbicide resistance.

22 In search of excellence Perseverance, ingenuity and commitment to community describe our outstanding young farmers.

4 The new Farm Forum: two great ways to read - print and web 6 Protect your profit: set up your 2008 tax strategies now 18 Bring the world to your farm: Internet use among farmers is on the rise 22 Get creative to beat the farm labour crunch: use incentives other than money

contents >> WEB

FarmFORUM.ca

Associate Editor Dave Wreford Contributors Sherry Butt Kate Rowland Holly Spicer Graphic Design Aaron Mumby Design Farm Forum is published seasonally by Bayer CropScience.

Contact Farm Forum at: Bayer CropScience #100 - 3131 114 Ave. S.E. Calgary, AB T2Z 3X2 T. 1 888-283-6847 F. 1 888-570-9378 E. farmforum@bayercropscience.com www.bayercropscience.ca Contents of this publication are copyrighted and may be reproduced only with written permission of the publisher, Bayer CropScience.

The views expressed are not necessarily those of the publisher.

Publications Mail Agreement Number 40743517 Registered in Canada Copyright 2008 Website www.farmforum.ca

GPS goes universal Virtually every industry is using GPS

www.farmforum.ca/aboutGPS

Herbicide resistance explained

A new crop of outstanding young farmers

How weeds become resistant

Meet the 2007 regional winners from across Canada

www.farmforum.ca/HRexplained

www.farmforum.ca/OYFwinners

On the cover With an industry-exclusive AccuSteer precision steering system, small-frame STX Series Steiger models can maneuver like an MFD tractor in row-crop applications with the extra power and performance of a 4WD tractor.

AccuSteer-equipped Case IH tractors have a turning radius of 12.4 feet, better than many rigid frame row crop tractors. AccuSteer also helps reduce side-to-side motion on implements.

Photo courtesy CASE IH.

Farm Forum.ca | 3

s h o r t ta k e s

Editor’s Note

Agriculture is entering a new era and so is Farm Forum We are now online: www.farmforum.ca Farm Forum will continue to provide great stories and relevant information to support your on-farm business decisions and help you celebrate the many unique aspects of farm life. But now the publication has enhanced its look and its ability to provide you with more information.

One of the first things you will notice about the magazine is the new design and layout, featuring key business topics and exciting stories; each of which is supported by additional stories and information online. This allows you to dig deeper and give you a greater sense of today’s industry.

On the website, you will also be able to access past and current stories, useful links to other informative sites and share readings with friends via e-mail.

These are exciting times for Canadian agriculture and for Bayer CropScience. We pride ourselves on being innovative market leaders who provide products such as InVigor hybrid canola, the market leader, and Infinity herbicide, the first new mode of action to Canada’s broadleaf herbicide market in 20 years. In the last five years, Bayer has introduced over 20 new products to Canadian growers and we will continue to provide value-added innovation through new product launches and customer relationships in the future.

We are enthusiastic about our role in strengthening Canadian agriculture in a very competitive global marketplace. We hope you enjoy Farm Forum’s enhancements and we look forward to your input and feedback. FF 4 | Farm Forum | Winter 2008

As full-fledged members of the global business community, farmers now depend on up-to-the-minute information to make their farming operations successful.

Farm Forum is responding. We’ve brought print and web content together in one cohesive package.

Articles in our print component, now in your hands, contain information aimed squarely at farm business operators.

At the end of each story, you’ll find an online resource box with links to related stories and additional information. Website content is developed to enhance our print product through extra coverage of subject matter.

We have an exciting line-up for our first issue of 2008, starting with the cover story on GPS guidance systems and particularly automatic steering.

Guidance systems are now proven profit makers. More affordable and more reliable than ever, they bring significant time and input savings, along with lower operator stress.

Many farmers can expect extra money in their pockets this year thanks to improved crop prices and decent 2007 yields. In Protect your profit on page 6 we outline options for handling extra cash.

Ownership constraints have been lifted on Saskatchewan farmland as you’ll read on page 14. This change is attracting non-farm investors and offering opportunities for expansionminded farmers to crop more land.

If resistant weeds are wreaking havoc on your farm, check page 16 to see how integrated crop management strategies can help prevent herbicide resistance.

In our technology column on page 18, discover how improved high-speed Internet access is changing the way farmers operate. And in our business column take a look at creative ways to attract and retain employees.

Finally, a former winner in the Outstanding Young Farmers’ Program competition talks about the merits of the program and how its members offer guidance and support to each other. FF

Grower’s best friend Nobody gets broadleaf weeds like Buctril® M. Ask any farmer. Year after year, Buctril M takes care of those tough to control broadleaf weeds like wild buckwheat. And now Buctril M goes even further for you because it comes in 1000 and 2000 acre BigBoys shuttles, for big convenience and big savings.

Always read and follow label directions. Buctril® is a registered trademark of Bayer. Bayer CropScience is a member of CropLife Canada.

11/07-6487E

business

Protect your profit Set up your 2008 tax strategies now By Kate Rowland

Improved grain and oilseed prices along with bumper 2007 yields in some areas are bringing many farmers a welcome financial boost. Incomes in 2008 will be higher than in recent years - much higher in some cases. With a little strategic planning, that hard-earned cash can keep you and your farming operation firmly in the black not just now but into the more distant future.

Whether you pay off accumulated debt from previous less profitable years, beef up your line of equipment or invest in a retirement program such as an RRSP, remember that almost everything you do has tax consequences. That advice comes from ag tax specialist Ron Friesen at Meyers Norris Penny LLP. More specifically, for farmers who are sole proprietors or partners reporting farm income on a cash basis on their personal tax returns, it’s important to plan financial strategies early. Earned income for the year mostly needs to be allocated by the end of December for tax savings.

While simple debt reduction — making extra principal payments — can reduce your indebtedness, these payments are not deductible on your income tax as a sole proprietor or family farm partnership. Plus, says Friesen, first you have to generate the income before you can spend it on principal payments. However, de6 | Farm Forum | Winter 2008

pending on the size of your operation, if you incorporate thus reducing your tax rate, the resulting tax savings may mean you can pay down your debt with the freed up capital.

In general, when your taxable income is increasing, Friesen suggests looking at income deferral options, or bringing forward necessary cash expenses. Start now.

Waiting until the final months of the year may limit your room to control tax ex-

Whether you pay off accumulated debt from previous less profitable years, beef up your line of equipment or invest in a retirement program such as an RRSP, remember that almost everything you do has tax consequences. posure. A key point to remember when calculating income for taxes, he notes, “is that the taxable event comes when you sell the crop, not when you produce it.”

Also, it’s important to be sure you’re following taxation rules when making

necessary cash expenses in one taxation year for use in the following year. For instance, if you purchase new farm machinery with this year’s proceeds, it has to be available for use in the same calendar year. As well, Friesen points out, on large capital items you may claim only 15 percent depreciation in the year of purchase.

“You might wish to analyze purchase versus leasing options, and see where the numbers fall.”

On that note, leasing has become a popular way to bring in new or updated equipment without a large up-front capital outlay. A number of leasing options are available, and they include a variety of purchase options at lease end.

Always look at the immediate and deferred cash flow and tax consequences of these deals.

“As customers expand the size of their operations and increase the technology of their equipment, we would expect to see more leasing since it often provides enhanced cash flow, greater flexibility, and tax advantages,” says Jim Meenagh, manager of planning and communications for John Deere Credit.

Farm equipment leasing has become so popular that dealerships aren’t alone in offering equipment leases these days. Recent amendments to Alberta’s Farm Implement Act, which allow financial institutions to offer leases without needing a farm implement dealer’s license to do so, have opened up the leasing market to give farmers more financing choices. Similar legislation already exists in other prairie provinces. Regardless of where you choose to lease, dealers and distributors will continue to provide war-

photos courtesy new holland north america

for their retirement. RRSPs (registered retirement savings plans) offer full tax deferral until age 71. If you have extra income to invest in 2008, consider catching up on unused RRSP contribution room.

You get a deduction (not a tax credit as with CPP) at your marginal tax rate. And contributions made until the end of February, 2008, can be deducted from 2007 income if that makes tax sense. You will find your 2007 RRSP contribution limit on your 2006 income tax assessment.

When family members earn a paycheque from the family farm, Friesen suggests you think carefully about what is a reasonable wage. “If kids are on call at the farm, remember to factor that in.

Don’t be super-aggressive (in your calculations), but be reasonable.”

Whatever your plans are in terms of tax management or investment op-

tions, it’s imperative to check out all your alternatives with a trusted professional.

While extra cash in any year is always welcome, it’s vitally important before you spend to ascertain your bottom line in each scenario, and figure out which strategy offers the best tax savings without creating an imbalance in family and farm needs. FF farmforum.cA

ranties and parts to their clients.

With more lenders entering the market, you have more opportunity to compare financing options and see who can offer you the best lease.

If you’re considering buying new equipment, it’s important to first check the fine print of any existing financial arrangement you have with your lender.

Some farm financing contracts contain restrictive covenants requiring you to get the prior approval of your lender before making additional capital purchases.

If new equipment isn’t in the plan for this year, there are other places to invest your gains in ways that reduce tax exposure. Check family needs first, both in terms of providing for your own retirement, as well as ensuring you’re paying family members a reasonable wage for on-farm work. Family salaries are an allowable expense against farm income.

With today’s high living costs and lengthening life expectancies, selfemployed income-earners need to use any and all available tax allowances to provide

for more information visit us online online articles Equipment leases conserve capital www.farmforum.ca/leasing Think incorporation if income jumps www.farmforum.ca/incorporating additional resources Meyers Norris Penny LLP online library www.farmforum.ca/MNPlibrary John Deere Credit leasing options www.farmforum.ca/leasingoptions

When there’s extra cash, new farm equipment tops the wish list. Check out New Holland’s T9000 series tractor shown here and on page 6 New Holland’s CR series IntelliView Plus II Monitor and CR9000 series combine.

Farm Forum.ca | 7

cover story

Fieldwork goes

hands

off 8 | Farm Forum | Winter 2008

By Sherry Butt

Technology is a beautiful thing. Especially if it saves you time and money, and lowers operator stress.

photo courtesy john deere

The GreenStarTM 2 System from John Deere offers the GreenStar 2 2600 Display featuring vibrant color on a touch screen. The easy-touse interface makes precision ag integration simple with John Deere machines as well as some non-John Deere equipment.

That’s exactly what GPS guidance systems and in particular, automatic steering, are now doing for farmers.

In an industry that’s sometimes hesitant to adopt new technologies, farmers have embraced these relatively new innovations and put them to use in virtually every farming operation, from planting to harvesting. Now they’re reaping the rewards — the most impressive being significant input cost savings.

The whole notion of precision agriculture, a term used to describe farming using GPS technology to monitor crop yields and guide application of crop inputs, started as a research project by a small team at Stanford University in California, explains Curtis Hay, supervisor, engineering, for John Deere. The group was doing some initial investigation into steering tractors using differential GPS (DGPS), which is GPS corrected for errors. It quickly turned into a burgeoning business when people started to realize the benefits of reducing input costs, eliminating overlap and reducing operator fatigue.

“There are several companies now in the precision ag business,” says Hay. “Use has grown by leaps and bounds since the late 90s. In fact, precision ag is a major focus now for GPS receiver manufacturers.”

Just a few years ago it was the innovators with larger farms who used GPS guidance systems in their operations, says Jeff Farrar, ground agriculture marketing manager with Hemisphere GPS, makers of Outback Guidance systems. “Such is not the case today, with products like the Outback S-Lite where smaller 500-acre operations can expect a quick return on Farm Forum.ca | 9

cover story

investment due to soaring input costs.”

Laura Dierickx-Robson, marketing representative with John Deere adds, “I believe a guidance system can help any operation, big or small, become more productive and efficient.” Just some of the benefits include reduced driver fatigue, better accuracy at night or in poor visibility and consistent efficiency regardless of who is operating the equipment.

GPS guidance systems can be used for virtually every farming operation — in the spring for planting, during the summer for spraying and in the fall during harvest and for tillage, to name a few.

Dan Enns, a grain and oilseed grower whose operation is located just southwest of Winnipeg, has used GPS guidance systems since they were first introduced about 10 years ago. Enns started with a manual lightbar system and upgraded as the technology improved. He’s now using a GPS guidance system with automatic steering. The best feature, in Enns’ opinion, is having his equipment do the steer-

ing for him. “I would not work a field without autosteering anymore,” he says.

“It relieves you from the task of driving, which reduces your fatigue at the end of the day.”

In terms of dollars and cents, adds Enns, the biggest benefit of a GPS guidance system is the reduction in input costs due to less overlap.

University studies have shown that ag equipment operators tend to overlap 5% to 10%, averaged over an entire day, which could mean up to four feet of overlap with a 40-foot implement, says Dierickx-Robson.

“Think about how much 5% to 10% more fuel, fertilizer, seed, chemicals, equipment wear and time might cost your operation. Now, go down to one to two inches of overlap, which can be accomplished when a guidance system is being used, and see how (this) can pay off.”

Regardless of who supplies your GPS guidance system, all have similar components: a GPS receiver, some type of

display screen and/or lightbar, software to make it all work, and a steering kit if you’ve chosen the automated steering option. But what really makes the system hum is GPS. GPS is the technology that allows you to determine the precise location of your farm vehicle on your property, says Hay. Once you know where you are, that information is used to determine a direction or heading to where you need to go.

“GPS is used to calculate A-B points and then the guidance system ensures that the vehicle travels down a prescribed line,” he explains, whether that be straight, curved or in circles. And some of the newer guidance systems will account for pitching or rolling or terrain variations.

“GPS by itself is prone to a lot of errors,” adds Hay, “so if a farmer is interested in centimeter-level positioning, GPS by itself probably won’t give him the performance he needs.” To take out a lot of the errors, GPS receivers retrieve correction data from satellites. photo courtesy hemisphere gps

Cutline, goes here.Cutline, goes here.Cutline, goes here.

10 | Farm Forum | Winter 2008

Outback S2 GPS Guidance System - the next generation of Outback keeps you on track.

farmforum.cA

for more information visit us online online articles Pay more, get more www.farmforum.ca/guidancetips GPS goes universal www.farmforum.ca/aboutGPS additional resources John Deere GPS Guidance Systems www.farmforum.ca/johndeereguidance Outback guidance systems www.farmforum.ca/outbackguidance

©iStockphoto.com/Cristian Matei

“The quality of the correction data is what gives you better accuracy in the field,” says Sara Gratny, systems engineer with John Deere. Equipment suppliers offer various levels of accuracy with their guidance systems. For instance, she says, John Deere offers three levels of accuracy through its Starfire satellite network. SF1 is a free signal that gives you pass-to-pass accuracy of plus or minus 13 inches; SF2 is offered by subscription and gives you pass-to-pass accuracy of plus or minus four inches; and RTK (real time kinematic), which is a ground-based correctional signal, gives you sub-inch accuracy.

Of course, any cost savings will depend on your farming operation and the guidance system you choose. And as GPS guidance technology progresses, farmers will continue to see more and more applications.

Now, says Gratny, one such application is the ability of guidance systems to recognize the approach of a field boundary and trigger an equipment operation sequence.

“The guidance system will slow down the tractor, raise the implement, take you on a turn, come back, lower the implement and then continue steering you on your predetermined pass,” she says. “You are hands-free throughout the whole field and there’s no need to ever grab that steering wheel.”

As with all high-tech equipment, the more people using it, the faster the prices come down. “Basic GPS systems using just a (free satellite signal) for correction and requiring manual steering can be bought for under $1,000 US Advanced Autosteer using dual-frequency RTK with data correcting and variable-rate technology can exceed $40,000 US.” says Farrar.

As costs continue to go down, performance continues to improve, and competition increases, farmers who haven’t made big investments in precision ag can now get into the game, says Hay. “I think the real winner with all of these technical improvements is the farmer.” FF

GPS goes universal The Global Positioning System (GPS) owned by the U.S. Department of Defense is made up of 24 satellites that circle the earth twice a day. From very precise orbits, about 22,000 km above the earth’s surface, they constantly transmit signals to GPS receivers on the ground.

A GPS receiver on the ground uses triangulation to calculate its exact location. To fix a 2D position (latitude and longitude) the receiver must be locked on to signals from at least three satellites.

To determine a 3D position (latitude, longitude and altitude) the receiver needs to be locked on to at least four signals.

Once its exact position is determined, a GPS receiver can calculate speed, bearing, distance to destination, etc. for whatever machine it’s mounted on.

“The original intent of GPS was primarily for military purposes,” says Curtis Hay, supervisor, engineering, with John Deere. “What’s happened from the early 90s through to today is that use of the system by the civilian community has really outpaced what any of the military planners had anticipated.”

The use of GPS can be seen in virtually every industry including agriculture, automotive, aviation, shipping and mining to name a few. “The automotive industry is actually one of the fastest growing users of commercial GPS in the world,” says Hay. GPS by itself is prone to loss of accuracy from the effects of atmospheric disturbances, satellite orbit errors or timing errors. Three types of services are available to provide GPS signal corrections and improve accuracy to varying degrees: radio beacons, space-based augmentation systems, and privately owned satellites.

The Canadian Coast Guard’s radio beacon coverage along the nation’s coastlines, Great Lakes and St. Lawrence Seaway is free to anyone with the appropriate equipment.

One example of a space-based augmentation system is the WAAS (Wide Area Augmentation System), which broadcasts correction signals from satellites. A WAAS-capable receiver can give you position accuracy of better than three meters, 95% of the time. The WAAS service is free.

Privately owned satellite systems provide correction signals to anyone subscribing to their services. These systems offer the highest accuracy. FF Here are some interesting GPS facts: The first GPS satellite was launched in 1978 A full constellation of 24 satellites was achieved in 1994 Each satellite is built to last about 10 years.

Replacements are constantly being built and launched into orbit A GPS satellite weighs about 2,000 pounds and is about 17 feet across with its solar panels extended.

Farm Forum.cA | 11

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12/07-6392-01A

business

Land ownership gets a new look Farmland is attracting more non-farm investors. This trend spells opportunities for expansion-minded farmers By Kate Rowland Saskatchewan is open for business.

And one of the commodities on offer is agricultural land. Buyers both from inside and outside Canada like the idea and are stepping up to make land part of their diversified investment portfolios.

They’re not alone in benefiting from this new type of farm ownership. Farmers looking to “grow” their production capacity without having to buy more land can now lease additional acres from Agriculture Development Corporation (ADC), a Regina-based farmland investment and management company. Likewise, farmers looking for an exit strategy have an additional potential buyer in ADC. The company has taken the lead in offering investment opportunities in Saskatchewan farmland through limited partnerships designed to generate flowthrough tax deductions, an income stream and significant capital gains potential for its investors.

“It’s a real opportunity for farmers to tap into a different source of capital,” says Brad Farquhar, vice president of ADC. Leasing land, he explains, lets you expand without having to come up with a down payment or worry about whether your balance sheet can take on more debt. “It comes down to allocation of capital. Our farmers think it’s a great way to expand without having to go into debt.”

“I looked at it as an investment decision,” says Darren Watson who, along with his parents, sold some of their combined farm property in Avonlea, south of Regina, to ADC on a leaseback contract two years ago and continued to work it.

Watson and his family wanted to diversify their assets and this provided them with an opportunity to do just that.

Renting, he says, can offer a better utilization of fixed costs. “When you pay rent, you know what your actual cost is in dollar terms,” and adds, “It’s just a capital decision. You don’t need to own land to farm.”

However, he cautions, “Like any contract, it has to work for both parties.”

The key in a sale and leaseback or rental 14 | Farm Forum | Winter 2008

©iStockphoto.com/Lise Gagne

When they compare bottom lines, some farmers figure it’s better to lease rather than buy land. Leasing frees up capital for machinery and crop inputs. situation, he says, is that you have a bit could retire on what their land would give of control. You no longer own the land them. “Fast-forward to today and it’s not but you are still farming it. In the mean- a game for the timid. Today, (we’re findtime you have freed up capital for other ing) the ability to stay in (agriculture) is investment opportunities whether that be based on your access to capital.” more land elsewhere or a variety of other But that doesn’t mean there isn’t room options. any longer for family farms, Ziegler adds. In Saskatchewan’s changLeasing land lets you fact, many different types ing farmland investment landscape found its roots expand without having of investment in Saskatchewan farmland may in the Saskatchewan to come up with a be just the diversified mix Farm Security Amendment Act, 2002, which down payment or worry the province needs to keep crop and livestock lifted restrictions on how about whether your production on track. “I much Saskatchewan land Canadian citizens balance sheet can take don’t accept the proposition that the family farm and residents could own. on more debt. is dead, but at the same Canadian companies in time I don’t necessarily the business of farming were likewise no longer restricted in the accept that the family farm is the only amount of land they could own. Owner- way to go,” he says. “When you look at ship constraints were also loosened some- the diverse asset base that exists, it affords the ability to do a number of things. what on non-Canadians.

“The agricultural model is changing,” There are pools of capital out there, and says Ken Ziegler, a Saskatchewan-based people who want to invest in land.”

Saskatchewan in particular is blessed lawyer with Robertson Stromberg Pedersen LLP. In the past, he explains, farm- with a large farmland base. “Here in this ers felt land would reward them and they province we’re sitting on virtually one out

©iStockphoto.com/Mike Bentley

Remember 1973? Grain and oilseed values skyrocketed and land values followed. Now it’s happening again.

ers may wish to retain ownership of land but not work it themselves . . . making renting it out an attractive option. In other cases, investors or nonfarmers may have acquired farmland but are renting it out so that someone else works and maintains it while they still get a return.”

In cases like the latter, Ziegler says, professional farm managers are being employed under arrangements that create new opportunities for young people who come out of school wanting to stay in farming, but lacking the capital to buy their own land.

Farquhar says ADC talks to a lot of urban-based investors who want to “go back to where they grew up” and own land. The company facilitates the land purchase through its limited partnerships and generates income from land rental

and long-term capital appreciation.

“At the end of the day, we see ourselves providing a vehicle for urban capital to play a role in agriculture,” Farquhar says.

“That’s positive.” The idea, he adds, is not to displace Saskatchewan farms, but to make them more productive by bringing investor capital into the field. FF farmforum.cA

of every two acres of agricultural land in Canada,” says Ziegler. And while Statistics Canada’s 2006 Census of Canadian Agriculture, released last May, indicates clearly that the number of farms in this country is continuing to drop - declining 7.1 percent since 2001 - it also shows land ownership undergoing a shift.

“Farmers are responding to an increasingly competitive environment by changing tenure arrangements,” according to the StatsCan report. From 2001 to 2006, owned land dropped 2.1 percent, while area leased or rented from others increased by 9.9 percent. “While land ownership remains attractive,” the report continues, “land rental has been increasing for the past several censuses and is a less capital-intensive means of expanding an operation.

“Some retiring or downsizing farm-

for more information visit us online online articles Land values take off www.farmforum.ca/sasklandvalues Here’s a new way to oil the wheels of retirement www.farmforum.ca/exitstrategy additional resources B.C. Land Titles Act amended www.farmforum.ca/bclandtitles Agriculture Development Corporation (ADC) www.farmforum.ca/adc Changes to the Saskatchewan Farm Security Amendment Act, 2002 www.farmforum.ca/saskamendmentact

Land values take off Increasing global demand for food commodities along with an emerging biofuels industry is creating international interest in Canadian farmland as an investment.

In a world where the value of many paper and physical assets can fluctuate wildly, farmland has traditionally been seen as a safe refuge that’s neither high-risk nor high-gain. Today, however, investors are upgrading their expectations of capital gain from agricultural land.

Farm Credit Canada reports the average value of Saskatchewan farmland was up by three percent in the first half of 2007; triple the rate of the past five years. Alberta and British Columbia also saw marked increases. Canada-wide overall, farmland values had the highest growth rate since 2002, increasing by 3.6 percent in the first half of 2007, up from a 2.5 percent increase in the last half of 2006.

“People used to snicker when it was suggested they might want to look into land as a portion of their portfolio,” says Ken Ziegler, a lawyer with the Saskatchewan firm Robertson Stromberg Pedersen LLP. Now, with commodity prices high, an investment in agricultural land is looking better all the time.

“We’re getting a lot of interest from external markets,” he adds. “There are profiles that are starting to develop and people who are well up in the value-added chain who are looking to control their chain.” He cites the example of a linen business in China buying land in Saskatchewan to grow flax then arranging to have the land handled by a professional farm manager. The flax grown on Saskatchewan soil is shipped, semi-processed, back to the factory in China.

Closer to home, Saskatchewan-based Agriculture Development Corporation (ADC) says its land investment opportunities are generating lots of interest among non-farm investors who want to add a diversified agricultural land asset to their portfolios. “When we started, nobody was talking about agriculture,” says ADC vicepresident Brad Farquhar. “Usually, the best time to invest in something is when nobody is talking about it.”

ADC offers the opportunity to invest in land, he explains, without having to worry about leasing or renting out that land and dealing with tenant issues. He compares it, in real estate terms, to owning a rental home versus owning real estate investment trust (REIT) units.

Another advantage to having land in an investment portfolio, Farquhar says, is that returns are stable.

As well, he adds, “If farmland values in Saskatchewan come back to parity with Manitoba, the way they used to be, it will generate a 100 percent to 150 percent rate of return for our investors.”

Ziegler believes the jury’s still out on whether interest in this type of investment takes off. “Time will tell on rates of return, growth, management and exit strategies. I think there are a lot more positives in this than negatives.” FF

Farm Forum.cA | 15

production

A vigorous crop improves herbicide performance by starving weeds of the sunlight they need for growth.

Stop resistant weeds before they spread

Herbicides are a blessing in the fight against weeds. But excessive reliance on these tools of modern crop production comes at a price by holly Spicer Every year prairie fields become battlegrounds between crops and weeds.

Kochia, cleavers, green foxtail, wild oats and many other weeds are yield robbers.

They compete with your crops for moisture, light and nutrients. Herbicides are highly effective weapons against these invaders. Over time, however, herbicide resistant (HR) weed populations have emerged. These weeds continue to thrive after treatment with herbicides designed to control them, leaving farmers facing super-weeds with fewer chemical control options.

“It is impossible to prevent HR unless you stop using herbicides,” says Linda 16 | Farm Forum | Winter 2008

Hall, a research scientist with Alberta Agriculture Food and Rural Initiatives.

“It (HR) is part of the natural selection process. All weed populations include individual plants with the genetic ability to withstand a particular herbicide. “We select for those one-in-a-million plants when we repeatedly use the same herbicide or herbicides in the same herbicide group.”

As this selection pressure increases, there is a shift in the weed population from susceptible lines to resistant lines because resistant weeds thrive and set seed, while susceptible weeds die.

“There will always be selection pressures to various herbicide groups, but we

can certainly do things to alter the path in terms of how quickly we develop HR,” says Hugh Beckie, a research scientist with Agriculture and Agri-Food Canada.

“Selection pressure can be slowed by using integrated crop management (ICM) strategies that include a range of nonchemical (cultural) and chemical weed control tools along with — most importantly — crop rotations.”

“Crop rotation is the cornerstone of your defense against the build-up of HR weeds,” Beckie explains. “Many outbreaks of HR across the prairies are linked to a lack of crop diversity.” Seeding the same crop each spring with rela-

ways

10

to avoid herbicide resistance

tive varieties,” suggests Beckie.

Weed populations can also be substantially suppressed when crops are harvested as silage, or crop rotations are extended to include forage. A survey on over 100 Manitoba fields found lower Canada thistle, wild oat and wild mustard populations in fields that previously had alfalfa, allowing producers to reduce herbicide use. In HR management, though, the most significant benefit of crop rotation is that it stops frequent or repeated use of the same herbicide or herbicide group, reducing selection pressure.

“We can slow chemical selection pressure by limiting the number of herbicide applications on a field during the growing season and by rotating herbicide groups applied either in sequence or in the herbicide mix,” says Beckie. Since only 12 herbicide groups are commonly used on the prairies, it is important to practice

conscientious herbicide rotations and be aware of the groups being used.

“There is no magic bullet for HR prevention, but by doing a lot of little things all of the time we can slow its progression,” says Beckie. FF farmforum.cA

tively constant spraying and harvesting dates provides a niche for weeds adapted to those conditions. Then the resistant weeds proliferate.

Hall agrees. “Weeds like consistency so the more we can do to shake things up the better it is for weed control and HR prevention,” she says. “Planting different crops with different seeding dates — peas and followed by a fall-seeded crop like winter wheat, for example — disrupts weed life cycles, making it more difficult for weeds to grow and set seed.” This leads to fewer weeds, less seed returned to the soil seed bank, and reduced selection pressure on the weed population.

Vigorous crop growth is another useful tool. Weeds do best when crop competition is weak. “Use ICM that involves good agronomic practices such as increased seeding rates, precision fertilizer placement, weed-free seed and competi-

for more information visit us online online articles A short course on herbicide resistance www.farmforum.ca/HRexplained Information on Infinity www.farmforum.ca/infinity additional resources The Prairie Weed Survey Report www.farmforum.ca/weedsurvey Are your fields at risk for herbicide resistance? www.farmforum.ca/HRrisk Crop rotation information for AB producers www.farmforum.ca/Altacroprotation Crop rotation information for SK producers www.farmforum.ca/Saskcroprotation Weed resistance management www.farmforum.ca/mixitup

Integrated crop management (ICM) incorporates both cultural and chemical weed control without relying on any one method. It’s the best way to prevent herbicide resistance (HR) not only in the current crop year but in years to come. Here are some ICM strategies to try on your farm: 1. Follow crop rotations that include a diversity of crop types, seeding dates, and harvest dates.

2. Use certified seed because it’s relatively weed-free and produces seedlings that compete more vigorously with weeds.

3. Scout fields to identify weeds and determine the most appropriate control methods. Weed populations increase exponentially so it is important to scout often.

Accurate field observations help detect any decline in herbicide efficacy.

4. Seed at the high end of the recommended rate range, as this also improves overall weed control.

5. Rotate herbicides to avoid using the same herbicide group too often. If possible use tank mixes where both active ingredients work in completely different ways to kill the same weed.

6. Clean your equipment. This prevents weed seed transfer from one field to another.

photo courtesy bayer cropscience

7. Apply herbicides at the recommended rate and at correct growth stage of both crop and weeds. Properly calibrate your equipment and pay attention to environmental conditions (wind speed, for example) at application time to ensure maximum herbicide efficacy.

8. Use a range of cultural control methods.

Rotate crops and herbicides to control resistant broadleaved weeds such as kochia.

9. Choose crop varieties carefully. A variety’s merit depends on disease and pest resistance, agronomic traits, and crop quality. Crop performance trial information can help you choose the best varieties for your farm.

10. Apply fertilizer strategically at the proper rates and times to enhance crop competitiveness. FF

Farm Forum.ca | 17

technology

Bring the world to your farM

By Kate Rowland

M

ore than ever, farmers are using the Internet as a daily business tool. From live agricultural presentations and daily market price checks to on-line banking and e-mail, high-speed Internet provides access to the world, in real time, with the click of a mouse.

According to Statistics Canada’s 2006 Census of Agriculture, 46 percent of surveyed farmers reported using a computer for farm business, compared with 39 percent in the previous (2001) census.

“It’s plain that Canadian farms, like businesses around the world, are using the Internet more,” the census report states.

About 75 percent of those who reported using computers tapped into the Internet in 2006, compared to 70 percent in 2001.

Increased ability to access high-speed Internet through satellite or wireless broadband in rural areas has opened up more than just telephone lines previously choked by slow, dial-up connections. While bookkeeping was reported in 2001 as the most common computer application, it has taken second place to Internet use in the latest census figures. Part of this change, the census report says, may be attributed to farmers partly replacing trips to the bank with mouse clicks. About 48 percent of farms using a computer now do so for banking, representing 22 percent of all farms.

Bert and Debbie Bos, who own Bos Sod Farms in Abbotsford, B.C., have used the Internet to host a company website for a decade. “For us, it’s a good marketing tool. We might have a customer in Idaho who never actually sees our farm,” says Bert.

“A website gives people a good idea who they’re dealing with.”

In the Bos’ case, it also makes it possible for them to cover a large territory virtually, instead of trying to put a salesperson — who can only be in one place at a time — on the road. “We try to keep it simple and informative, with objective information about our product,” he says.

But a website is only one component of the business and Bert says, the telephone is still an important tool in dealing with customers’ individual needs. “Ultmately, the sod has to go in the truck. The computer doesn’t ship it there,” he says. “With a live 18 | Farm Forum | Winter 2008

product, I think you can only take it so far.”

Surfing the Internet is no longer just the realm of bored teenagers. Tax information, forms and guides can be downloaded with ease, then tax returns filed online. If you have a question for your accountant, you can e-mail him and attach the documentation you’re questioning rather than making a trip into town. The state of the soybean crop in South America? The latest amendments to the U.S. Farm Bill? It’s all there. Even on a slow dial-up connection, web-based conference presentations are available for free on subjects as diverse as the future of agritourism in Canada, agricultural commodity prices, best management practices, and trends in food and biofuel production, to name a few.

Until recently, most rural areas had to rely on dial-up Internet via phone lines to satisfy their searching needs. Slow and cumbersome, dial-up has now become nearly obsolete in many areas as provinces like Alberta and Saskatchewan strive, through provincial government initiatives such as Alberta SuperNet and Saskatchewan’s CommunityNet, to deploy high-speed Internet service in rural communities.

“It’s a combination of things that are coming together at the right time. The broadband need itself is becoming a fundamental component of how people communicate and do business,” says Bill MacDonald, vice-president of products and service for Barrett Xplornet, the national reseller for Telesat Canada’s Ka-band service, and Canada’s largest wireless broadband service provider.

In areas where wireless Internet service is still not available — it requires line-of-sight from a user’s home or office to an access point on a tower up to 15 or 20 miles away — Ka-band satellite Internet access is filling the rural void. “Up until a couple of years ago, satellite technology was expensive. There are now viable broadband solutions available anywhere,” MacDonald says. “Our target is rural. Rural areas have been an unserved market for quite a while.”

High-speed Internet gives farmers access to real-time market reports, weather forecasts, and up-to-the-minute information on production issues such as insect outbreaks. As well, today’s farmers are using the Internet to buy and sell grain and livestock, gaining via the worldwide web immediate access to markets.

High-speed is also essential for filing your e-manifests, if you are shipping product into the United States, says Bert, who sells sod to three Canadian provinces and four U.S. states. “You also have to have high-speed to be able to check some of your shipments at the border,” he says.

Finally, the Internet is also an open library of industryrelated marketing infor more information formation, if you know visit us online where to look. Increasonline articles ingly, government orHigh-speed hits the farm belt ganizations such as www.farmforum.ca/highspeedinternet Agriculture and AgriCheck hardware for high-speed compatibility www.farmforum.ca/hardware Food Canada, as well additional resources as provincial ag deAgriwebinar web-based conference site partments, provide www.farmforum.ca/agriwebinar their fact sheets on the eBay link to farm equipment Internet. FF www.farmforum.ca/buyfarmequipment farmforum.cA

©iStockphoto.com/Kiyoshi Takahase Segundo

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bayercropscience.ca or 1 888-283-6847 Always read and follow label directions. Thumper® is a registered trademark of Bayer. Bayer CropScience is a member of CropLife Canada.

business

Get creative to beat the farm labour crunch O

By Kate Rowland

ne of the most pressing concerns for farm managers today is the shortage of willing and available workers, particularly for operations that do not need employees year round.

According to the Canadian Agricultural Human Resource Council (CAHRC), which was created in 2006 and is led by industry with funding from the federal government, competition within the industry for workers is a key challenge for farmers.

Part of the problem with attracting and retaining employees, says CAHRC executive director Danielle Vinette, has to do with the negative perception of agriculture. “There’s more to agriculture than hard work and low pay, which is unfortunately the tag we have. We have to raise the bar.”

CAHRC research and focus group findings bear this out. In a survey of agricultural employers, one of the top three human resource concerns identified was an increasing difficulty in recruiting la-

bourers. At least the employers were not in a state of denial: more than half those surveyed acknowledged low wages, hard work, and a poor image associated with the agricultural sector as obstacles to hiring skilled labour. Some of the employees surveyed also cited long work hours, low wages and lack of advancement or training opportunities as reasons to explore other careers.

But image isn’t the only problem. An aging workforce, a lack of training and professional development culture in the industry, and restrictive government policies with respect to Employment Insurance (EI) and the hiring of foreign seasonal workers, were also cited as issues of concern.

Doug Connery, chair of the Canadian Horticultural Council’s Human Resources Committee and partner with family members in Connery Riverdale Farm in Portage la Prairie, Manitoba, believes the diminishing supply of local short-term workers is largely due to a lack of life photos courtesy case ih

Today’s big acreages and tight labour markets demand creative thinking if you’re to find and retain qualified farm employees

20 | Farm Forum | Winter 2008

skills among potential employees.

This leads to a nomadic, non-connective existence that’s not conducive to remaining in one job for any length of time, he adds, whether from failure to get along with other employees, or psychological issues.

“I think 25 percent of the Canadian workforce is (in) a revolving door. A lot of it comes down to life skills. Federal and provincial governments have not addressed this issue at all.”

As a result, adds Connery, we see a growing proportion of the workforce using the current system to their own benefit, working only long enough to qualify for EI, or collecting social assistance rather than staying on the job.

To help ag-sector employers in their short-term hiring, Connery says legislation regulating EI and social assistance payments needs to change. “We have a lot of people within our social (welfare) system. How do we use the carrot to get people to start working?” The current welfare system, with its rigid monetary clawbacks, is a disincentive for those who might otherwise take casual work.

Education, while important to the industry, doesn’t assist in worker retention either, adds Connery. “Throwing money at training doesn’t solve the problem.

Education only helps in productivity, in keeping production capacity to the forefront. First, we need to solve a lot of our life skills problems. Then, we have to make sure training available is still relevant. And third, we need to bring in enough people to address the shortage.”

The good news is the wide range of options available to attract and retain employees. Your success will depend in part, says Vinette, on your ability to provide attractive employee incentives.

“Agriculture is so diversified,” she says. “You can’t compare a Cargill to a family-owned business.” For smaller operations, Vinette suggests benefits that are not necessarily monetary. Examples include transportation ­— from farm trucks to bicycles — for workers to get into town; on-site housing; and other perks such as job-specific training. “These are

farmforum.cA

for more information visit us online online articles Caribbean program solves seasonal worker shortage www.farmforum.ca/foreignworkerprogram The want ads go electronic www.farmforum.ca/labourpools additional resources Canadian Agricultural Human Resource Council www.farmforum.ca/cahrc Statistics Canada 2006 Census of Agriculture highlights www.farmforum.ca/statscan2006census Peak of the Market information and recipes www.farmforum.ca/peakofmarket

©iStockphoto.com/jason walton

definitely the kinds of incentives a smaller operation needs to look at,” she says. “Be creative.”

Connery runs his horticultural operation 12 months of the year, from spring asparagus through to winter storage crops. He has a warehouse and packing operation where he readies both his own and other farmers’ produce for market.

“Best practices” for keeping employees year-round, he explains, demand a mix of management strategies.

“I don’t think there’s any magic in it,” he says. “Usually the farms that can operate more months of the year have better retention of employees.” For seasonal vegetable growers wishing to expand their operations in order to hold onto employees, he suggests a mix of crops, or working in cooperation with other farmers, whether that be in sharing equipment or in packing. “That cooperation can continue on to sharing in land, or sharing in marketing,” he says, citing the example of Peak of the Market, a Winnipeg-based marketing cooperative. “With Peak of the Market, he explains, everything is done cooperatively from the farm gate on.”

With 50 Manitoba grower-members, Peak of the Market markets and ships vegetables throughout Canada and the United States, as well as to Asia, Europe, Latin America and the Caribbean.

Another option is to consider foreign seasonal workers. Connery Riverdale Farm has participated in the Seasonal Agricultural Workers Program (SAWP) for 40 years, and Connery has been a team member of the Mexican Foreign Worker negotiating team for nearly two decades.

“We try to hire Canadians, but they don’t always want to stay for the whole year.

We use SAWP where we can’t have absenteeism no matter what; where we need people out in the field seven days a week.

That’s the way you put the employee puzzle together.” FF

Seasonal Agricultural Workers Program Caribbean program solves seasonal worker shortage For decades the federal government’s Seasonal Agricultural Workers Program (SAWP) has been providing Canadian employers with additional seasonal workers from the Commonwealth Caribbean countries and Mexico, a region where unemployment rates are high and poverty widespread.

Developed by Human Resources and Social Development Canada (HRSDC) and Citizenship and Immigration Canada, the SAWP allows the organized entry of foreign workers to fill agricultural labourer occupations in Canada on a seasonal basis. The program is designed to meet the needs of specific agricultural commodity sectors, such as horticulture. Each participating province has designated commodity sectors being addressed by the program.

“I’ve been on the SAWP for 40 years,” says Doug Connery, current chair of the Canadian Horticultural Council’s Human Resources Committee and the council’s labour chair for 18 years. Connery, who is a partner with other family members in Connery Riverdale Farm in Portage la Prairie, Manitoba, has been a member of the Mexican Foreign Worker negotiating team for nearly two decades.

Currently, Connery says, about 22,000 workers are brought into Canada under SAWP to assist with seasonal work such as planting and harvesting crops during peak periods between February and December. Canadian employers who wish to apply to the program must first demonstrate to HRSDC that they have made serious efforts to hire Canadian agricultural workers and unemployed Canadians through HRSDC and provincial employment programs, at least eight weeks before the jobs begin.

Program guidelines require employers to offer SAWP workers the same wages paid to Canadian agricultural workers doing the same work. In addition, employers must pay for the foreign workers’ airfare to and from Canada (a portion of this cost can be recovered through payroll deductions, according to HRSDC); provide free seasonal housing to approved foreign workers; and pay the immigration visa cost recovery fee for each foreign worker hired (this fee can also be recovered through payroll deductions).

Employers must also ensure their foreign workers are covered by workers’ compensation and private or provincial health insurance during their stay in Canada. Finally, all these terms of employment must be detailed in a signed employer-employee contract outlining wages, duties, and conditions related to the transportation, accommodation, health and occupational safety of each foreign worker.

With Canadian agriculture facing a worsening labour shortage, programs like the SAWP can fill social and business needs, both in Canada and in participating countries such as Trinidad and Tobago with its high unemployment rate. And as employment needs rise across the board in other business sectors, Connery says the knowledge gained by the SAWP might be put to broader use. “I think we should be doing a whole lot more seasonal employment (programs). Tourism and construction are two examples,” he says.

Now a mature program, SAWP has its share of success stories. Connery has a prime example on his own farm: “My Mexican foreman (a longtime seasonal employee) immigrated about seven years ago with his family,” he says. “What better ambassadorship could we have for Canada?” FF Farm Forum.ca | 21

fa r m l i f e

In search of excellence W inners of the Outstanding Young Farmers’ (OYF) competition are a testament to the perseverance, ingenuity and commitment to community inherent in many of our young Canadian farmers.

For Warren and Carla Kaeding, regional and national champions in the 1999 competition, the win was acknowledgment of a job well done. It was also the start of a long relationship with a dynamic group of people who, through the years, have offered their support and shared their triumphs and disappointments w i t h one another while

keeping in mind their common goal of achieving excellence in farming.

When asked how much of their success they can attribute to being involved in the OYF program, Warren said, “That’s really difficult to measure but I would have to say a good part of it.” He adds that the biggest benefit of the group is the confidence it gives them to make decisions that need to be made in their business, especially in hard times. “This group is probably that guiding light that gets you through periods of crisis.”

About 15 years earlier, when Warren was at university, the Kaeding family made a decision to get out of the

PHOTOS COURTESY THE KAEDING FAMILY

The Kaeding family L to R: Michael, Carla, Matthew and Warren.

22 | Farm Forum | Winter 2008

By sherry butt

purebred Hereford cattle business they operated on their Churchbridge, Saskatchewan farm and venture into their current pedigree seed business, Wagon Wheel Seed Corp.

“My father was here alone and purebred cattle are a lot of work. If I was going to go off and explore other ventures for a while, he wasn’t going to do it by himself.”

Changes in the cattle business also influenced the Kaedings’ decision to make the move.

“We had been solely with Hereford cattle and at that time the exotic invasion had

their continued involvement in the OYF program helped them through the downs.

“You’re with a group of like-minded people who give you the confidence to make decisions.” The organization gives them the opportunity to network with people who are forward thinkers and have first-hand experience with similar challenges, from natural disasters to labour shortages.

This support network came in very handy when the Kaedings had three successive weather setbacks culminating in a 2004 hail disaster. “That was our peak year when we were producing the most, and we got hail to the extent that we had never had hail before,” said Warren. “We were cropping 50 quarters and we had hail claims on 47 of them.”

After a flood the first year, drought the next and then the devastating hailstorm coupled with a very early fall frost, the Kaedings had some major decisions to make.

Warren bowed out of some of the boards and organizations he was serving on to concentrate on crisis management.

Carla went back to work; they laid off employees for the winter; delayed capital purchases; and came up with a new business strategy.

They began focusing more on the wholesale side of the seed business. They also moved into forage seed to capitalize on the growing trend by farmers in their

area to turn marginal grain land over to hay and pasture for livestock. The strategy worked.

“We’ve now reached a plateau. We’re at the point where we have to decide whether to expand again or rethink the scope and magnitude of our operation,” said Warren.

The Kaedings’ two sons, Michael, 18 and Matthew, 15, have made that decision a little easier: Neither wants to carry on the family business.

Their next step, says Warren, is to think about an exit strategy. “Our employees are a very important part of our business and we need to discuss the future with them.”

But amidst all the planning and daily operating decisions demanded by their business, the Kaedings still manage to find time to nurture and encourage a new crop of OYF candidates. Tapping into their years of experience will be invaluable to future winners joining the path to excellence. FF farmforum.cA

come in,” said Warren. “We either had to change to a new beef breed or change to a new business completely.”

The decision to go with a new business paid off. At the time of their OYF win, the Kaedings had expanded from a 1,200-acre to a 6,500-acre pedigree seed operation growing wheat, oats, barley, flax, canola and peas. They also grew commercial pumpkins, willow herb and evening primrose on a commercial scale, exported specialty peas worldwide and were just getting into turfgrass seed production.

They attribute their win to an ability to successfully manage a period of rapid growth in the mid 90s, a solid business plan, an entrepreneurial spirit, and involvement in their industry and community.

During the eight years since the win, the Kaedings have experienced their share of ups and downs.

But

for more information visit us online online articles Where best meets best www.farmforum.ca/OYFprogram Winners work outside the box www.farmforum.ca/OYFwinners additional resources Outstanding young farmer website www.farmforum.ca/OYFCanada

The Kaeding’s pedigree seed business, Wagon Wheel Seed Corp., is a great example for Canada’s Outstanding Young Farmers.

Farm Forum.ca | 23

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