SUNHAVEN SHARES THE LEAD +PLUS

WESTERN EDITION
country-guide.ca
February 15, 2013 $3.50
SUNHAVEN
SHARES
THE LEAD
For Bryan Perkins and 150 pork
farmers, shared leadership
pays off despite rough market
+PLUS
FCC ACCUSED OF STOKING LAND
PRICES TOWARD COLLAPSE
IS NEXT GENERATION OF FARMERS
UP TO THE LEADERSHIP CHALLENGE?
Publications Mail Agreement Number 40069240
MASSIMO CAPRA TELLS HOW TO
SELL TO CANADA’S TOP CHEF
Take
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Nothing gets you ready to seed like the Brandt Contour Commander. Designed to be durable and
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up the soil in spring, or leveling and sealing, the Brandt Contour Commander has superior land following
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FEBRUARY 15, 2013
THE PRICE OF LAND
The numbers are astronomic. Even two years
ago none of us would have believed the price
that land is getting today. So what will it
be in the next two years? This month, our
writers bring you multiple perspectives,
but no easy answers.
10
17
28
ARE THEY UP TO IT?
No one disputes that the leadership challenge is
getting tougher for farmers. But is it too tough?
31
53
HOW DO YOU PREPARE FOR A
DEFLATIONARY MARKET?
56
TURBULENT TIMES
EVERY ISSUE
6
HOW TO EFFECTIVELY MANAGE
FOREIGN EXCHANGE RISK
These strategies can protect your grain and livestock
sales from volatile currency fluctuations.
42
‘INSURE’ YOU GET PAID
Accounts receivable insurance suddenly becomes
a hot topic for risk management on the farm.
44
TAKING ON THE GIANTS
Winnipeg’s Versatile says it’s ready to go head to
head with the Big Three tractor manufacturers.
FEBRUARY 15, 2013
MACHINERY GUIDE
Combines may be the most important machinery
on the farm, but they aren’t all created equal.
54
HANSON ACRES
Those countless trips to town are turning into an
education for our Prairie family.
58
GUIDE HEALTH
In sex ed class it sounded so simple. In real life,
though, getting pregnant can be complicated.
Leadership is helping Sunhaven Farms survive the
pork market. Their example may help you too.
38
GUIDE LIFE — CLEAR OUT THE CLUTTER
Take a few minutes for this checklist before your next
trip to buy office furniture and equipment.
Down pressure on commodities may call for a whole
new marketing philosophy, our Errol Anderson writes.
32
GUIDE HR — WHEN FEAR GETS IN THE WAY
Forty per cent of our worries are for events that never
happen. Thirty per cent already did. So why worry?
BANKING ON FARMERS
Critics say FCC is driving farmland prices to the point
where they will crash. The lender begs to differ.
TWENTY MINUTES OF PRAISE
You may not like performance reviews, but the proof
is growing that they help retain good employees.
WHO’S IN THE BACK ROOM?
Saskatchewan has launched a hush-hush
investigation into illegal farmland sales.
20
50
HOW HIGH CAN LAND GO?
Farmers, not investors, are driving the price of land,
and it looks like the market is far from topping out.
FARM FRESH FUN
At Synders Family Farm, success begins when you
toss out those old ideas of what makes a farm.
THE CHEF KNOWS
One of Canada’s best-known chefs, Massimo Capra
shares how farmers should market to him.
14
47
60
PETUNIA VALLEY
What are women doing in the coffee shop? Worse,
why is Dan sitting with them instead of the men?
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CONTENTS
BUSINESS
country-guide.ca 3
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EDITORIAL STAFF
Editor: Tom Button
12827 Klondyke Line, Ridgetown, ON N0P 2C0
(519) 674-1449
Fax (519) 674-5229
Email: [email protected]
Associate Editors:
Gord Gilmour
Cell (204) 294-9195
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Fax (204) 942-8463
Email: [email protected]
Maggie Van Camp
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Email: [email protected]
Production Editor:
Ralph Pearce
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Email: [email protected]
ADVERTISING SALES
Cory Bourdeaud’hui
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Lillie Ann Morris
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Tom Button is editor of Country Guide magazine
The right price for land
The truth is that the Canadian land
market is operating pretty much as it
should.
But that doesn’t mean surging land
prices won’t fundamentally transform our
agriculture. Of course they will.
The fact that many investors have
dropped out of the market this winter
because they believe prices are too high
and too risky — as Richard Kamchen
reports this month — confirms that the
market is doing its job.
Even if the last couple years have been
an extraordinary ride in agriculture, the
fundamental truth underlying the farm in
Canada is still that it’s a live-poor, die-rich
business model. Revenue is still converted
into the price of land.
When I was a kid in my part of
Ontario, the wisdom was that good land
should go for three times the value of the
corn crop that you could grow on it.
Well, it’s been a long, long time since
that had any meaning in the real world,
and similar rules of thumb suffered similar
fates all across the country.
Nor should we mourn them. The world
hasn’t gone haywire. Farming is, and
pretty much always has been, a business of
high capitalization and low margins. This
is the fundamental gamble that farmers
make, believing in their ability to farm well
enough to walk away a winner.
We aren’t naive enough to think there
aren’t any offshore investors quietly buying Canadian land, or that all of the nonfarming investors have dropped out of
4 country-guide.ca the market. Still, all the evidence is that
it is farmers who are driving the price of
farmland, and that this is a form of wealth
generation that recognizes the fundamental value of farming.
Some will say the surge is forcing
farmers to bear unrealistic risks. Perhaps
they will be proved right, but I have a
hard time believing it. I see no indication that interest rates are going to shoot
up overnight. Nor do I see evidence that
commodity prices will go into a longterm slump. Yes, they may slide, but the
fundamentals are too bullish for me to
turn pessimist.
Instead, farmers have reasonable
income prospects and reasonable expectations of low interest rates, and because
they generally have high net worth based
on land they already own, few farmers are
likely to be forces to sell the land they’re
buying now, which is what it would take
to make the market do a U-turn.
Of more concern is that farm families
will be reluctant to sell their land for at
least the next generation, especially when
they look at neighbours who sold out a
couple years ago and have missed the ride.
In other words, the rising tide of
tomorrow’s non-farming landlords are
today’s farmers and their children.
As so often happens in agriculture,
evolution is coming from within. Are you
becoming the enemy you worried about
yesterday? Let me know if we’re getting it
right. I’m at 519-674-1449, or tom.button@
fbcpublishing.com.
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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
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Country Guide is printed with linseed oil-based inks
PRINTED IN CANADA
Vol. 132 No. 3
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ISSN 0847-9178
The editors and journalists who write, contribute and provide opinions to
Country Guide and Farm Business Communications attempt to provide
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february 15, 2013
Manager
Strategist
Marketer
Accountant
Problem-Solver
Role Model
Farmer
Carmela Miller – FCC Customer
We understand
your business
01/13-19769-04
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Machinery
By Ralph Pearce, CG Production Editor
What’s the most important piece of farm machinery on your farm? They’re all
important, of course. If you can’t get the crop in the ground, after all, there’s no
point owning a combine. Increasingly, though, it’s in the combine that the farm’s production, marketing and business management intersect.
Industry stats show North American equipment sales fell a modest eight per cent
with the drought of 2012, following three years of what are described as “very high
sales figures” for combines. It’s a chance for manufacturers to start catching up on
back orders. For some Canadian farmers, it may be a great time to visit your dealer.
claas 700 series 
Claas is seeking to differentiate itself not only with its muscles,
but also with its brains. The company’s Lexion 700 Series combine is a mix of new technology and existing features that have
been finetuned. In the cab, you’ll find the CEBIS display, Claas’s
Electronic On-Board Information System, providing total machine
monitoring and control with harvest displays and control systems
including throughput monitoring, yield and moisture monitoring,
message window for alarms and information, and head positions.
More information means you’ll be better informed, the company
says, which will lead to better decisions.
www.claasofamerica.com
versatile rt490 
The company wants its name to say it all, and with its RT490
combine you can see how they’re trying to carry that Versatile
concept into the field, from its solid design to its rugged durability. At the heart of the RT490 is the innovative Rotating Concave
Rotary System, a 360-degree concave that wraps around a large
6 country-guide.ca rotor and counter-rotates. That contrast of rotation of the concave
in relation to the rotor translates into an unparalleled threshing
and separating area. The moving concave eliminates any dead
zone, and the grain is threshed three times in each rotation for
increased throughput and a cleaner grain sample.
www.versatile-ag.ca
FEBRUARY 15, 2013
massey ferguson 9600, 9700 and 9800 series 
new holland cr twin rotor combines 
Two words define Massey Ferguson’s goal with its 9600, 9700
and 9800 Series combines: speed and reliability. Choose from any
of these three models and get direct high-volume unloading capability, with what the company says is the world’s fastest unloading
rate at 4.5 bushels per second. The redesigned cab on all three
models comes with improved header visibility, plus brighter lighting and a C2000 virtual terminal that keeps you in touch with
what’s happening with your crop. There are fewer belts and fewer
augers, but more efficiency and better quality control on your harvested grain.
www.masseyferguson.us
Take one impressive lineup of New Holland combines and
introduce some added features, and you have five different models that can lead from the front. Choose from the CR6090 all the
way up to the CR9090, then add the Terrain Tracer lateral float
system, a feature that automatically raises the head to follow the
contours of any field harvesting any crop. In addition to the new
Tier 4A engines, New Holland is introducing the Advanced Stone
Protection (ASP) system, an industry first, that senses stones, then
stops the head and the feeder automatically. Best of all, it requires
a minimal amount of operator input.
www.newholland.com
challenger 500c series 
case ih 30 series 
The Challenger slogan is “Strength from Simplicity.” Like the
company, the slogan is direct, no-nonsense, and ready to go to
work. The Challenger 500C Series combines are designed to
answer farm demands for more power, improved performance
and better control over grain quality. Whether it’s the 540C or
the 560C, Challenger boasts a new processor that is a complete
threshing and separating system designed to increase capacity
while reducing power consumption. The new header design delivers as much as 55 per cent more horsepower, and there’s also a
multi-stage cleaning system that enhances grain quality.
www.challenger-ag.us
Heading into 2013, Case IH is continuing to hone its offerings with its 30 Series Axial Flow combines. Case has become
the leader in axial-flow design, and with six different models,
they want to solidify that reputation. The company’s engineering
goal is to build 30 Series combines that offer an incredible mix of
maximum control and intuitive operation blended with simplicity,
adaptability and capacity, all at impressive power levels, to a maximum of 560 horsepower — and all at your fingertips no matter the
crop and no matter the field conditions.
www.caseih.com
FEBRUARY 15, 2013
country-guide.ca 7
W
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Powered by Solumax® soluble granules, Express® dissolves completely into solution for more effective
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Express® brand herbicide. This is going to be hot.
Questions? Ask your retailer, call 1-800-667-3925 or visit express.dupont.ca
As with all crop protection products, read and follow label instructions carefully.
The DuPont Oval Logo, DuPont™, The miracles of science™, Express® and Solumax® are registered trademarks or trademarks of
E. I. du Pont de Nemours and Company. E. I. du Pont Canada Company is a licensee.
All other products are trademarks of their respective companies. Member of CropLife Canada.
© Copyright 2013 E. I. du Pont Canada Company. All rights reserved.
28312 Express 2013_DPS_CountryGuideWest.indd 1
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estern Canadian farmers continue to benefit from tools such
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EFFECTIVE NON-CROP USE OF GROUP 2 HERBICIDES
Pre-seed weed control is a practice that began in cereal crops, and is
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But in recent years, growers have seen an increase in the number of
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UNDERSTANDING RESISTANCE
Weeds become resistant when they’ve had too much of a good thing.
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MANAGING RESISTANCE
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Utilizing multiple modes of action
Herbicides are categorized into 17 different groups according to how
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business
business
The chef
By Steven Biggs,
CG Contributing Editor
knows
Our Steve Biggs asks elite Toronto chef Massimo Capra
how farmers should make a sales pitch to him. Says Capra:
“I talk to everybody who calls.”
C
elebrity chef, Massimo Capra, grins as he tells the waiter to bring him his
“regular.” Then he turns to me to explain that his “regular” is a double-double
— forget the fancy espresso or cappuccino. We’re not at Tim Horton’s… quite
the contrary; we’re sitting in Mistura, Capra’s elegant midtown Toronto restaurant with
linen tablecloths, sleek, charcoal-coloured walls, and trendy lighting. It’s an espresso
atmosphere if ever there was one, but Capra shrugs off the Timmy’s contradiction.
His double-double isn’t really a surprise, I soon find out, because Capra also
tells me he prefers good, plain white bread to fancy loaves full of whole and exotic
grains. Growing up in Italy, he explains, white bread was the norm — and he loves
it to this day.
It’s that down-to-earth appreciation of good things that makes Capra not only a
trend leader in the world of food, but a chef whose insights are gobbled up by an
increasing number of farmers.
But don’t make the mistake of thinking Capra is old school. For him, the allure
of his Italian roots and food traditions is matched just as powerfully by the emerging
food scene in Canada. “I go home and after two weeks I’m dying to come home (to
Canada) to go for Indian food and sushi,” he declares. Then, as he talks about the
amazing variety of food in Canada, he wonders aloud why anyone would want to live
anywhere else.
Or grow food anywhere else.
As we talk, it’s also clear that like any farmer, Capra seamlessly mixes business
with his thinking. Like any product, he says, food sells if it’s what people want.
When I ask him how he has survived as a trend leader for 10 years, once again
you could switch the restaurant and replace it with farm. The restaurant and
its menu are not fixed in time, he tells me. They evolve. “When you’re running a
restaurant, ultimately, the client dictates what they want.”
It’s beginning to sound familiar.
Talking food on many fronts
With a quick tour of YouTube, you
will find videos of Capra in his restaurant
Mistura, in his hometown in Italy, talking about buying his first steak, or doing a
cooking demonstration. In another video,
while drinking a glass of red wine and talking about the pleasures of food, he says, “I
absolutely have no problem with fast food.
As a matter of fact, one of my favourite
things is chicken nuggets. Beautifully fried
fresh chicken nuggets from McDonald’s… I
have no problem with that.”
Throw together a resonant voice, lots
of laughter, an expressive manner, a big,
big moustache and a gourmet chef who
dispenses with pomposity to drink double-doubles and eat chicken nuggets, and
you’ve got a food personality who can
connect.
Capra’s television resumé includes “Restaurant Makeover” on the Food Network,
“CityLine TV,” and “Gourmet Escapes.”
Right now, he’s stoked about his upcoming
show about ethnic food in Canada. I ask how
he likes the TV spotlight compared to the
kitchen, and he says he loves it because it gets
him out of the kitchen to meet other chefs.
He talks about food in print too. Capra
has a regular column in the Globe and
Mail, and, along with his book One-Pot
Italian Cooking, he co-authored the book
3 Chefs: The Kitchen Men.
Shopping for food
I ask Capra what goes through his
mind when he sources food.
Capra is a farm boy, an upbringing
he partially credits for his love of food.
“You know how much respect I have for
farmers,” he says, as he talks about his
late father’s passion for the land. “When I
was a kid we used to have schoolkids from
Milan,” he says, recalling the busloads of
Continued on page 12
FEBRUARY 15, 2013
country-guide.ca 11
business
Look to the past for
ideas, Capra says.
Then remember
we are living in
the present
Continued from page 11
city schoolkids coming to see the farm.
He still goes back to Italy to visit family
— and says he always picks up a handful
of soil to smell when he’s there. He inhales
deeply as he describes the smell of the soil.
He’s a big fan of seasonal and locally
produced foods, saying, “I think that
local and in-season is the key.” Giving
an example, he says, “You’ll not catch
me eating strawberries right now.” He
frowns at the thought of California strawberries in Canada in January. Ditto for
the imported tomatoes. “You can play
pinball with them,” he chuckles.
At the same time, he says, we live in a
climate where we simply can’t buy seasonal
and local fare all of the time. “I’m not militant about market-fresh cuisine,” he says,
noting that he thinks the local-seasonal card
is sometimes overplayed. “The reality is you
have to buy from here and there.” In short,
he likes seasonal and local, but won’t hesitate to round out a meal with other food.
“Organic is the cherry on top,” he adds.
I ask whether, in the restaurant business, he gets suppliers and farmers knocking at his door. “We normally have people
who call,” he explains, adding, “I always
talk to everybody who calls.”
He talks about the farm that produces
arugula and squash for the restaurant —
and then enthuses about tunnel-grown
strawberries he recently tried at a nearby
agricultural fair.
Capra uses the example of carrots to
explain how a chef thinks. Keeping kitchen
preparation time to a minimum is important, so he prefers prewashed carrots that
don’t need to be scrubbed for dirt. Uniformity matters, so carrots sorted for size
are important — because he can’t give one
patron two large carrots, and another four
small carrots. The other thing that’s important is package size. “The kind of volume
I do, I need 100 pounds of carrots,” he
says, as he explains how small bundles
from farmers’ markets simply wouldn’t be
practical for him.
12 country-guide.ca The business of food
I catch Capra by phone one day as he’s driving across town from a new restaurant
he’s opening. “I’m a very reluctant businessman — I like to be behind the stove,” he
says, explaining that at first, business was outside his comfort zone, which was near the
food. Yet here he is, in a car, driving from business to business, while being interviewed.
Capra’s favourite way to learn about business is by watching. For him, observing
people who are successful works better than reading about the theory of business. “It’s
the biggest ace up my sleeve,” he says.
As for innovation, he’s not convinced good business means reinventing the wheel every
time. “I did not invent anything — I just took what was there and built on it,” he says.
Look to the past for ideas, and then remember we are living in the present, he advises.
Ethnic food in Canada
Capra is invigorated by the amazing variety of food in Canada. Even when he arrived
here in the 1980s, Toronto’s Chinatown had vegetables he had never seen before. Capra is
working on a new television show about ethnic food in Canada. As he reflects on Canadian cuisine, he says, “I think Canadian cuisine is a mix of ethnic cuisines from around the
world.” He likes that mix because the Italy in which he grew up was not multicultural.
Tell me about ethnic food on the Canadian Prairies, I say.
“You want some good perogies man — I had some great perogies in Saskatoon,” he
exclaims, as he talks about some of the eastern European dishes found there. Then we
jump to what he thinks might go mainstream. He’s excited about the prospects for Indian
cuisine. “I think it will be taking over, just like Chinese restaurants have done,” he says.
The consumer’s ear
I ask Capra how he has earned the ear of consumers on food matters — and how, as a
chef, he has also forged a niche as a pop celebrity. After thinking for a moment, he says, “I
don’t pull any punches,” and then adds with a laugh, “Sometimes, it comes back to bite me
in the butt.”
When it comes to the ethics of eating meat, he doesn’t shy away. We are supposed to
eat everything in moderation. “We are omnivorous — that means we eat everything,”
he says. It’s an opinion that some vegetarians don’t like — but it’s his opinion.
He gives an example from farming, saying, “I’m not gonna slam mega-farms,
because mega-farms make farmers money,” continuing on to say that this is not always
the case with small farms.
“You cannot be militant about everything,” Capra says.
Business means risk
Capra talks about Italian food shopping habits, where people go out and shop daily
and then do a bulk buy once a week. There are lots of small, specialized shops. What’s
heartening for him is that he sees a new generation of Canadians who seem to be more
interested in food. “Things are getting better all around,” he says as he talks about the
interest in food and the growth of specialty food shops in Toronto.
“There was a generation that was my age and that was a bit detached,” he says.
But to him, food is anything but a banal experience. The way he sees it, awareness and
excitement about food are an opportunity for food producers.
The new restaurant that he’s opening is at the Pearson International Airport on the
outskirts of Toronto — a completely different milieu than his midtown location. “It’s a
big risk,” he says. If he’s worried, he doesn’t say so. “I can do it, and I will work it until
it’s successful,” he says.
I don’t ask if the new restaurant will serve double-double coffee — or white bread.
Of course it will. I’m guessing it will have lots of local and seasonal fare, but some
imported food too. There will be some traditional dishes, with a modern-day twist. And
patrons will leave with just a bit of Chef Capra’s bullishness about food in Canada.
“I jump in with both feet,” says Capra, adding, “I tell my cooks all the time, failure
is not bad — the biggest failure is when you think you know it all.”
“You’re only as good as your last plate of spaghetti,” laughs Capra. CG
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business
How high can land go?
Don’t blame investors for soaring land prices.
They’ve been scared off, but your neighbours
have their bankers primed and ready
By Richard Kamchen
hile Canadian farmland prices
surge higher and higher, the
experts insist the market is being
driven by farmers, and not, as
some fear, by foreign capital
swallowing up Canada’s farmland.
“What you’re seeing is people buying the land
around them. That’s mostly what’s happening,” says
David Sparling, ag professor at the Richard Ivey School
of Business at the University of Western Ontario.
“For the last couple of years, farmers have been
doing much better,” Sparling says. “Grain prices have
been higher and they’re just making a lot more money.”
Jared Carlberg agrees, and the University of Manitoba agribusiness and agricultural economics prof
adds an extra explanation.
Farmers will spend more to expand their land
holdings than investment companies are willing to
risk, Carlberg says.
“I think it really is driven by farmer purchases. The
farmland investment companies are out there, they
have a lot of money, but they don’t spend it foolishly,”
says Carlberg. “I think they’re less likely to overpay for
farmland than producers themselves might be.”
Carlberg says the market’s energy can be broken
down into two sources: commodity prices mean farmers have cash, and the constant need to achieve higher
economies of scale means they’ve got incentive to buy.
With high commodity prices — and with farmers
thinking prices are going to stay well above historic
averages — farmers can pay more for land and still
expect to continue making money on it.
Plus, there’s an additional factor. New technologies,
especially on the machinery side, mean farmers can
cover more acres in the same limited number of days,
so they can safely increase the size of their operations.
It’s hard to keep on top of just how fast land values are increasing, but Farm Credit Canada’s 2012
Farmland Values Report pegged the average increase
14 country-guide.ca in the value of Canada’s at 8.6 per cent for just the
first half of 2012.
That in turn was built on average increases of 6.9
and 7.4 per cent in the previous two reporting periods.
Based in Ottawa, Bonnefield Financial calls itself
the country’s only Canada-wide farmland investment
manager and property management firm, providing
lease financing to growth-oriented farmers and also
providing opportunities for institutions and individuals to invest in farmland.
“You can pretty much predict where farmland prices
are going to go once you know where farm incomes are
going,” says Bonnefield president Tom Eisenhauer.
Like Carlberg and Sparling, Eisenhauer believes
that the main explanation for soaring land prices lies
in farm revenue and improving farm productivity.
It’s been true for at least the past 30 years, Eisenhauer says.
“It’s become a bit of a new story lately because
we’ve seen some bigger increases in the last few
years,” Eisenhauer says, “but those increases are
certainly not out of line with general farm revenue.”
Eisenhauer says it has become popular to believe
outside investors are scooping up farmland, but the
evidence doesn’t bear it out.
“There’s roughly, by our estimation, about $300
billion worth of farmland in Canada, and from what
we can tell, if you were to go back even over the last
10 years and add up all the third-party investor capital
that’s been invested in farmland, maybe, maybe, you
get to a few hundred million dollars,” Eisenhauer says.
Adds Eisenhauer: “To suggest a few hundred million dollars of transactions over a 10-year period is
driving the price of $300 billion worth of farmland
is just lunacy.”
Eisenhauer says that roughly $15 billion of farmland changes hands each year in Canada, and that
Continued on page 16
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business
Continued from page 14
very little of that — perhaps a fraction of one per
cent — would represent third-party investors.
That makes it cut and dried, Eisenhauer continues.
“There’s no question. Farmers set the prices of farmland.”
In fact, it’s not uncommon for farmland to get sold
to a neighbour without ever even getting listed on the
open market. That’s certainly true in Manitoba, where
neighbours typically get first dibs and take advantage
of the opportunity, Carlberg says. Farm Credit Canada
last fall reported Manitoba farmland values rose an
average of 10.3 per cent in the first half of 2012, the
province’s highest increase since FCC began reporting
farmland values in 1984.
Ontario is experiencing a similar situation and
demand has far exceeded supply, sending values
soaring in the process. FCC reported Ontario farmland increased a staggering 16.3 per cent in the first
half of 2012, the highest increase in Canada, and
Ontario’s largest gain since 1996.
It’s part of an ongoing trend.
Ontario’s Municipal Property Assessment Corporation reports the province’s farm property values
rose by an average of 34 per cent between January
1, 2008 and January 1, 2012. MPAC, which handles
property assessments and appeals for the provincial
government, adds that when eliminating farm homes
and the one acre of land on which they sit — both
of which are assessed as residential property — the
average farmland value increase during the same
four-year period is actually 46 per cent.
Sparling says farmers are in a position where it pays
to jump on any nearby land. The farther away land
is from their other production, the more expense they
add trying to service it. So if a piece of land comes up
next door, and that same land may not come back on
the market for 10 or 20 years, it adds to farmers’ willingness to pay a premium for that property.
“If you’ve got a farm of 500 acres and it’s all
paid off, then you buy the (500 acres) next door, and
you’ve got 1,000 acres to pay for 500. People are
leveraging their existing properties and grain capacity to buy more,” Sparling says.
Eisenhauer agrees, saying that even by paying a
“crazy” price, the overall average cost of land versus
revenue for the operation could still be ridiculously low.
No bubble in sight
As high as prices are now, don’t be surprised if
they keep going higher. In fact, these experts say you
should count on it.
“Long term, the value of farmland in Canada is
likely going to increase,” says Sparling, who adds that
relative to many parts of the world, Canadian farmland
prices are not out of line or even particularly expensive.
Besides, the global ag outlook remains bullish.
With a rising world population and changing consumption patterns in developing markets, demand
for food is going to increase.
“You’ve got a scenario that farming’s going to
16 country-guide.ca look good over the next 20 years at least,” Sparling
says, pointing out that what seems expensive now
may not in 10 years.
Land prices in most areas probably seem high
now, but then again, they seemed high two years ago.
The same is true in the West, and it’s impossible
to pinpoint the limit of prices.
“When farmland was $300 an acre, people
couldn’t believe it would ever get to $600. And when
it was $600, people couldn’t believe it would ever
get to $1,000. And when it was $1,000, $2,000
was unimaginable. And if it’s $2,000, $4,000 seems
unimaginable,” says Carlberg. “The upper limit on it
really is what people are willing to pay. It’s as simple
as that.”
No one is pointing a gun at farmers and forcing
them to pay something they aren’t willing to spend.
Farmers have an intuitive sense of what’s too much,
says Carlberg: “The farmer understands his or her
operation, cost structure, has an idea of what’s going
to happen with commodity prices, and makes the
land purchase decision accordingly.”
As well, although prices might seem exorbitant,
history tells a different story. According to Eisenhauer, the percentage of the revenue that comes
from each acre that a farmer would have to spend
on a mortgage is actually much less today than it
was back in 1982, even though farmland is much,
much higher in value.
“It’s more affordable because you’re getting much
higher yields, you’re getting much better prices, and
interest rates are lower,” Eisenhauer explains. “It’s
just a much better time to be a farmer today than it
was, and that’s being reflected in the land.”
Risks
None of the above means it’s a simple no-brainer,
however. Clearly, say our experts, there are risks.
When farmers are highly leveraged, they are susceptible to changes in interest rates and commodity prices.
And, of course, the weather can also wipe out a crop.
There is also the risk that no one can definitively
predict the future, whether that’s yield or price or
financial conditions.
“If interest rates go up and commodity prices go
down, that farmer is done,” warns Carlberg.
Some farmers in the early 1980s experienced 17
per cent interest rates compounded monthly, combined with ground temperatures over 100°. “It will
happen again,” Carlberg says. “It’s inevitable. Those
are things farmers are guessing on with respect to the
future. I think lenders need to be judicious in lending
money out for very highly priced land.”
But both Carlberg and Sparling believe the global
economy is too fragile for interest rates to rise anytime soon, or at least substantially enough to put people who hold a lot of debt — like farmers with newly
purchased, high-priced land — in short-term trouble.
“And if interest rates don’t go up, then you can
carry an awful lot of debt at three, four, five per cent
interest rates,” Sparling says. CG
FEBRUARY 15, 2013
business
Who’s in the back room?
It’s a favourite sport in Saskatchewan for farmers to accuse “foreigners”
of sneaking around the province’s land ownership rules, often with the
collusion of locals. It turns out, however, the farmers are sometimes right
askatchewan is hiring an investigator to dig into rumours that
foreign investors are adding
fuel to the province’s skyrocketing land values, despite rules
that ban non-residents from buying any
more than 10 acres.
The only thing more secret than the
rumoured under-the-table deals that the
investigator is supposed to pry into, however, is apparently the investigation itself.
If the province’s rules are working,
farmers would be the only ones who are
bidding up prices. By blocking non-farmers, that’s supposed to mean the province’s farmland is as cheap as it can be.
Saskatchewan’s Agriculture Minister
Lyle Stewart has announced his government has appointed a special investigator to examine who is buying what and
where the money is coming from.
“There is speculation out there in
farming country that some of the land
is being bought by foreign interests, and
under Saskatchewan law, that’s illegal.”
Stewart told Country Guide
The minister is tight lipped about specifics, however, not even going so far as to
name the investigator or explain exactly
how he or she will tackle their assignment.
“We’re really not making that public
in order to preserve the integrity of the
investigations that may follow, or the
methods that the investigator may use to
conduct the investigations,” Stewart said.
Saskatchewan’s Farm Land Security
Board (FLSB) currently reviews suspicious activity, and the new investigator is
to enhance those efforts with his or her
“special skills,” Stewart said. But what
those skills are exactly, he won’t say.
“In the past, a number of sales have
been discovered that were not legal by the
existing staff of the Farm Land Security
Board, and divestitures of those properties have been ordered and carried out,”
Stewart said. “So this could lead to more
of that, fines and so on, or jail terms.”
Although Saskatchewan doesn’t maintain specific statistics about individuals
or entities purchasing farmland, Stewart
FEBRUARY 15, 2013
By Richard Kamchen
emphatically rejected any notion that the
province doesn’t keep track of the number of non-residents who buy land.
“Nothing could be much further from
the truth than that. Every sale has been
looked at in the past and there are records
(at) the Farm Land Security Board, and
certainly we keep track,” Stewart said.
FLSB is notified any time there is a
change in land title and the board’s staff
reviews those reports, says its general
manager, Mark Folk.
Stewart, however, allowed that the
FLSB may have limitations in tracking
where the money is coming from: “It’s
a difficult thing to do and maybe that’s
part of the reason we brought this particular investigator on board.”
But the investigator isn’t considering broad consultations with farmers,
although Stewart noted the FLSB has
“always been open to tips and complaints about the sales of farmland.”
In fact, it’s those tips that seem to have
sparked this investigation in the first place.
Stewart acknowledged farmers have voiced
their objections about money coming from
places like China, India and South Korea
and driving up farmland values.
“There’s a lot of chatter and occasional complaints that are associated
with specific sales, but there’s a lot more
coffee row chatter than there are specifics,” Stewart said. “It’s a difficult situation at best to follow up on the basis of
the investments.
“Farm Land Security Board staff have
been following up on any sales that seem
suspicious to them or sales to which complaints or tips from the public have been
associated,” Stewart said. “This investigator will just add a little more punch.”
The provincial government is clearly
taking the issue seriously. Shortly before
the minister announced the hiring of a new
investigator in December, Folk wrote the
Law Society of Saskatchewan to remind
lawyers of provincial rules about foreign
ownership. It was an action that followed
an FLSB meeting with the minister.
“It was also sent to real estate agents
and auction markets to verify that these
are the rules and if anybody has questions on who can own what, here they
are,” says Folk.
Other side of the fence
Tom Eisenhauer chuckles at the idea
that it’s money from China or other foreign countries that’s sending the prices of
Saskatchewan farmland to new heights.
The president of the farmland investment
company Bonnefield says the facts and figures simply don’t bear this out.
Eisenhauer says that for just about
every province, there’s a strong link
between farm revenue and farmland
prices — except for Saskatchewan. And
he says that has a lot to do with the province’s rules blocking foreign investment.
Under the Saskatchewan Farm Security Act, only Canadian citizens and permanent residents, as well as 100 per cent
Canadian entities that are not publicly
traded can own more than 10 acres.
The rules used to be even tighter.
Between 1974 and 2002, non-Saskatchewan residents couldn’t buy land at all.
Saskatchewan has been playing catchup since then, and according to Farm
Credit Canada’s most recent findings, its
farmland values rose an average of 9.1
per cent in the first half of 2012. That
followed gains of 10.1 and 11.6 per cent
in the two previous reporting periods.
Eisenhauer’s findings, however, reveal
that the legacy of restrictive ownership
still affects values there. Despite experiencing the greatest rate of revenue
growth of any province, Saskatchewan
farmland appreciated the least of any
Prairie province between 2006 and 2010.
Still, Eisenhauer applauds Saskatchewan’s appointment of a special investigator to level the playing field. “If you’re
going to have these, what I think, are
stupid rules, then at least enforce them
equitably... If there is some stuff that’s
not legitimate, let’s root it out.” CG
country-guide.ca 17
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business
Banking on farmers
Critics say government-backed FCC is blowing up a land
bubble. But farmers love this lender like no other
ankers have always been viewed by farmers with a healthy dose of skepticism.
After all, what could someone sitting
behind a desk all day know about the
day-to-day operations of a farm?
Besides, why is it the banks always seems to want
to give you money when you don’t really need it, but
also can’t seem to wait to rip the rug out from under
your feet at the first sign of trouble?
In fact, the banker-farmer tension is one of the
most familiar tales in agriculture. From the dust
bowl of the 1930s to the penny auctions of the
1980s, stories, songs and barrels of printer’s ink have
been used to tell this tale over and over again.
That’s what makes the tale of Farm Credit Canada
even more extraordinary. Just try to say something
even vaguely critical of FCC in front of a Canadian
farmer, and there’s a fairly high likelihood that the
previously unthinkable will happen — a farmer will
begin to defend the reputation of a banker.
Sean Gorrill, 45, runs a dairy in the heart of
Saskatchewan’s breadbasket, near the community of
Bulyea, north of Regina. His story reflects the diverse
environment that FCC faces, even within agriculture.
Every farmer may need money, but their needs are
unique as the farm itself, and it seems to be FCC’s
ability to handle both the diversity and the commonalities of farming that lies underneath farmers’
positive assessments.
Gorrill milks 190 head and has worked with FCC
three times in recent years, once for a significant
expansion, once to adopt robotic milking technology
and most recently to finance a divorce settlement.
His grandparents milked cows back in the 1950s,
and his parents revived the dairy portion of the operation in the early 1970s when they returned to the farm.
From a farmer perspective, Gorrill cites FCC’s
relative expertise in the industry.
“They’ve got a lot of staff with agriculture backgrounds,” Gorrill says. “You don’t have to explain stuff
to them. I would say that’s the No. 1 thing.”
20 country-guide.ca While he has enjoyed working with FCC and
says the local representative has been excellent,
Gorrill disputes any suggestion FCC is a soft touch
that’s too quick to make a loan.
“They’ve been great to deal with and have stood
by us the whole way, but I wouldn’t say they’re too
loose with making loans,” Gorrill says. “You have to
have your numbers and your projections -- and they
have to be realistic. I’d say the more homework you
show you’ve done, the easier they are to deal with.”
Gorrill also says other lenders tend to come
and go as their interest in agriculture waxes and
wanes. When times are good they’re interested in
agriculture lending but when times are tough they
can disappear and make tough demands, as many
operations in the area remember from the farm crisis years of the 1980s.
“FCC seems to be in it for the long term,” Gorrill says. “Even though money is available now from
banks, I think people learned a lesson in the 1980s.”
At least one U.S.-based think-tank, however,
says it should probably be taken as a warning sign
when a lender’s clients sing its praises.
Alex Pollock, a research fellow at the American
Enterprise Institute, recently penned a dire warning
over land prices and the role of the U.S. Farm Credit
Administration. In that report, entitled “A Bubble
to Remember — and Anticipate?” Pollock revisited
the 1970s land boom and subsequent bust of the
1980s. He drew striking parallels between then and
now and noted that during the last time through this
cycle, the government-backed lending system may
have contributed to increasing asset values beyond
what the underlying fundamentals would have supported in the absence of government intervention.
“To me it’s what happens when you push credit
into a sector using a government-sponsored entity,”
Pollock told Country Guide during a recent telephone discussion. “The value of that credit gets
fairly quickly converted into the price of capital
investments like land.”
FEBRUARY 15, 2013
Photo credit: Carey Shaw
By Gord Gilmour, CG Associate Editor
business
Farmie Mae?
To see the danger, Pollock urges farmers to take
a close look at housing markets in both the U.S. and
Canada. There, he says, one can see the clear outline
of government intervention into a lending market.
While the goal of affordable housing might have
been an admirable one at the outset, organizations
like Fannie Mae and Freddy Mac in the U.S. and
the Canadian Mortgage and Housing Corporation
(CMHC) in Canada ultimately wound up fuelling a
speculative bubble in residential real estate.
With homebuyers able to access cheap and readily
available credit because of these publicly backed institutions, the institutions took on more and more risk. In
the case of the CMHC, its portfolio now sits at nearly
$600 billion, and that could spell trouble, Pollock says.
“So far at least you’ve avoided a housing disaster like we had in the U.S.,” Pollock says. “But
there are growing signs, I think, that you could be
in for a rough ride too.”
The problem with these types of governmentbacked entities is simply one of incentives, Pollock
says, and they share a number of key traits that can
translate into trouble.
Their funding is either implicitly or explicitly
government backed, which means the people supplying the money pay less attention to the bottom line
because of the government guarantee. This can make
money too readily available.
FEBRUARY 15, 2013
They also tend to have relatively weak oversight
that’s riddled with conflicts of interest — in the case
of residential lending for example, such institutions
tend to have boards of directors that are packed
with real estate insiders.
“If they have a vested interest in keeping credit
flowing to the sector, it’s difficult to see how they can
provide appropriate oversight,” Pollock says.
As a final point Pollock notes that excessive
pride in the executive suites can also play a crucially important, but frequently overlooked role in
brewing up this cocktail.
“Eventually these organizations always seem to
get taken over by someone with ambition, someone
who really wants to make his or her mark,” Pollock
says. “They’re not content with a niche role, with
being a lender of last resort, so they begin to expand
the role of the organization.”
Mandate creep
That can mean anything from getting into completely new roles to radically altering the rules under
which it fulfilled its old mandate. Pollock again cites
the CMHC as an example of an organization that’s
undergone such a transformation.
When the CMHC was first founded just after the
Second World War, it was intended to make credit
available to returning veterans to buy homes. It operContinued on page 22
country-guide.ca 21
BUSINESS
Continued from page 21
ated under relatively stringent lending
requirements that demanded hefty down
payments and strict amortization periods.
Today, however, it underwrites virtually
every residential mortgage in the country.
In recent years it also significantly
lowered its lending standards. After
decades of using a tried-and-true formula of 10 per cent minimum down
payments and maximum amortization
periods of 25 years, it began to reduce
the first and increase the second. At the
peak of this trend in 2006, you could
sign a zero down mortgage that amortized over a 40-year period.
It’s a strategy that encourages buyers
to go out and buy more house than they
could otherwise afford, and crucially,
it depends on constantly rising house
prices to remain financially viable — for
borrower and lender alike.
“We saw how that worked out in
the U.S. — housing can and will go
down for a period of time, and we’re
only just now, five years later, at the
very early stages of recovering from
that,” Pollock says.
Pollock says he spends a lot of time
talking about housing while trying to illustrate his point on farm lending because it’s
a recent example that’s still fresh in mind,
unlike the 1970s and ’80s bust-and-boom
cycle. However, he also says many of the
underlying issues apply and the numbers
are beginning to strongly suggest the same
thing is happening.
During the last land-values cycle, U.S.
farmland prices first boomed and then
fell 27 per cent from peak to trough,
something which he notes in his report
caused “disastrous effects for farmers,
lenders and the Farm Credit System.”
He notes that in the U.S. at least, they’re
now on their 17th straight year of
growth in real farmland prices and that
average prices are now higher than the
peak of the previous cycle. He also takes
little comfort in the prevailing wisdom
that other underlying fundamentals like
elevate
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22 country-guide.ca
19449-01 DAS_CHE Elevate 15X6.5.indd 1
FEBRUARY 15, 2013
BUSINESS
population growth and income growth
in emerging economies underpin this
trend. He points out similar arguments
were heard last time around, and they
essentially amount to the infamous claim
that “this time is different” which in
investment terms is always a great time
to head for the exits.
“It’s not impossible to imagine that
farmland prices could fall again,” Pollock says.
While Pollock freely admits he is less
familiar with the Canadian farm lending situation, he also notes that the two
economies are so interlinked it would be
difficult to see a major shakeout in farm
prices in the U.S. that didn’t eventually
bleed across the border. He also stresses
that the particulars of individual organizations may vary, but that all such
institutions share the same key potential
weaknesses, and even if FCC is functioning well today, it’s always a good
idea to maintain vigilance.
DIFFERENT HERE?
One Canadian economist who has
spent some time looking at Farm Credit
Canada says he simply doesn’t share
Pollock’s alarm.
Derek Brewin, an agriculture economics professor at the University of
Manitoba, worked at FCC prior to
returning to school for an advanced
degree in the 1990s, and his master’s
thesis was on FCC lending risk.
During a conversation with C OUN TRY G UIDE , Brewin quickly began to
deconstruct Pollock’s points regarding
government-backed lenders and highlight where they didn’t apply to FCC.
One key difference is FCC’s relative
importance to agriculture lending in
Canada. According to their most recent
annual report, FCC makes up just 29
per cent of Canadian farm lending.
That’s significant for one single organization, but it has remained relatively
stable for the past number of years. In
Continued on page 24
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country-guide.ca 23
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BUSINESS
Continued from page 23
1980 for example, FCC held 30 per
cent of farm debt in Saskatchewan,
Brewin says.
By comparison chartered banks currently have about a 36 per cent combined
market share, making them the largest
agriculture lenders in the country, albeit as
a group. Their market share has also been
more volatile, Brewin points out. In 2003
the chartered banks had a 25 per cent
market share, which climbed by 2007 to
40 per cent, only to drop back down.
Brewin also takes issue with the characterization of FCC as pushing unneeded
credit into the sector, noting that they
24 country-guide.ca
don’t subsidize their interest rates, and as
a federal Crown corporation they actually return revenue to the federal government — a 20 per cent return on equity
according to the last annual report.
“This suggests that they are actually levying a small tax on farmers who
use their services, though another way
of looking at it might be that they’re
simply generating a fair return on lending with government-backed rates,”
Brewin says. “The only things that
would make money ‘far more available’
than it otherwise would be are subsidized interest rates, which I think is
minor, or riskier lending practices as we
saw down south in the housing sector.”
In fact if you want a clear snapshot of where FCC is in terms of its
risk management practices, the single
most important number to key in on
is a ratio known as loan-to-security,
Brewin says.
Taking the U.S. housing example,
those values actually crept above 100
per cent — meaning lenders were not
just no longer requiring down payments, they were actually giving
people cash money back the day they
signed their loans, according to media
reports at the time.
“If FCC were loaning at or close to
100 per cent of their security, I would
probably share this concern,” Brewin
FEBRUARY 15, 2013
BUSINESS
says. “I’m not sure what their current
rules are regarding their loan-to-security, but loans at 100 per cent loanto-security were very rare when I was
working there.”
MINDING THE STORE
So, where is FFC’s loan-to-security
number actually sitting? A heck of a lot
lower than 100 per cent, says Michael
Hoffort, FCC’s senior vice-president
of portfolio and credit risk. Hoffort
says over the past year the average loan
that FCC has put on the books has had
a loan-to-security margin of just over
63 per cent. In other words, it’s like a
down payment of 37 per cent.
Hoffort also notes this number has
remained relatively stable over the past
several years, and that the loan-to-security ratio for FCC’s overall loan portfolio
is actually significantly lower than that,
since farmers retire part of the value of
the loans over time.
As a baseline FCC will lend for land,
for example, at a loan-to-security that
doesn’t exceed 75 per cent, and Hoffort
notes that a significant number of the
farmers who it lends to actually prefer to
put more than that down, further lowering FCC’s credit risk.
Remi Lemoine, FCC’s chief operating officer, also says he’s comfortable
that Hoffort and the risk management
shop are performing adequate oversight. During a conversation with
C OUNTRY G UIDE he pointed out that
there are significant checks and balances built into the system which the
average loan applicant might not see
when they’re dealing with front-line
staff at the institution’s lending offices
across the country.
“I hate to disappoint anyone,” Lemoine says, “but it’s pretty bank-y here
behind the scenes. We do say no. We
actually say no quite a lot.”
They also spend a lot of time with
customers making sure they’ve considContinued on page 26
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country-guide.ca 25
business
Continued from page 25
ered all of the potential ramifications
and have ‘stress tested’ their borrowing
decisions.
“One key difference between now and
the 1980s is the quality of financial advice
farmers have access to,” Lemoine says.
“It’s easier now than it’s ever been to run
scenarios that look at issues like whether
a loan is still viable if interest rates rise,
prices fall or some combination of both.
We strongly encourage our clients to work
with their accountants or farm management advisers to do these exercises.”
Both Hoffort and Lemoine also point
out that there was a significant amount
of oversight from outside the organization every year, with officials from both
the Agriculture and Treasury departments
expecting thorough annual reviews and
ongoing medium-term business plans.
“These are not just rubber stamp
reviews,” Hoffort says. “They are significant and detailed and the federal
officials ask a lot of questions about
our operations.”
Both also noted that the board of
directors, which is appointed by the
federal agriculture minister, isn’t just
stacked with agriculture industry insiders either. It has some farmers and agriculture insiders, balanced with an equal
slate of financial professionals.
“I think both groups bring very valuable skills and perspectives,” Lemoine
says. “The agriculture people bring
their understanding of the business, the
financial professionals their considerable knowledge and skills.”
Lemoine also notes in recent years
there’s been a clear trend in the business world towards ensuring the independence of boards of directors and
the active provision of oversight, rather
than simply responding to the information they’re spoon fed by management,
and FCC is no exception, with a group
charged with independent monitoring
for the board members.
“At FCC those folks go where they
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February 15, 2013
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want, talk to who they want to and
attend whatever meetings they choose
to, and report back directly to the
board,” Lemoine says.
“I think this is something that was
ongoing at the time of the 2008 financial crisis, but got a real kick in the seat
of the pants as a result of it.”
So what of the question of land
values, which caused AEI’s Pollock to
pen his report? Here Lemoine actually
sounds a note of caution that begins to
sound similar. Does it really amount to
a bout of irrational exuberance based on
short-term trends?
“This is actually an area — land values — where we have a lot of interest in
what’s happening as a lender,” Lemoine
says. “I also think this is an area where
I might share some of those concerns
and it’s why we spend time talking with
our customers about stress testing a
farm operation.”
It’s a focus both he and Hoffort say
goes back to the dark days of the 1980s
when FCC was itself dealing with the
after-effects of the 1970s boom and
subsequent bust.
“We were basically broke, and absolutely nobody wants to go back to those
days,” Lemoine said. “There is a good
corporate memory of that experience
and a real desire not to repeat it.”
In many ways the sort of criticism from
the outside like Pollock’s report can actually be helpful for an organization like FCC
Lemoine says, serving to shake up their
thinking and interject fresh points of view.
“I think one of the basic challenges
for our organization — or any large
organization really — is to not become
too ‘positional’ and thinking that only
we have all the answers,” Lemoine says.
“In fact sometimes this criticism from
without contains messages that we need
to hear.” In an era of cheap and relatively available money, FCC has been
holding its own in market share. In no
small part that’s because of a loyal base
of farm clients who have made the organization their lender of choice. CG
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country-guide.ca 27
12/21/12 12:12 PM
BUSINESS
Are they up to it?
Even the experts agree that your farm is a great place
to learn leadership. The question is, will it produce
young farmers prepared for the leadership challenges to
keep your farm in business tomorrow?
By Amy Petherick
28 country-guide.ca
“There is never a time when leadership training
is not valid for a business, even if you’ve got yourself
and just one employee or a spouse,” says Sparling,
“but as farms become larger and more complex, you
really need it because you actually have to get a somewhat diverse group to work toward the same goals.”
Beyond the farm gate, there are other reasons for
farmers to be thinking about leadership, adds Sparling.
The co-operatives, buying groups, marketing boards
and industry associations which represent farmers
must operate in a collaborative style, which is unlike
the average farmer’s daily decision-making processes.
As in other areas of agriculture, these groups
are often getting larger and more complex, and the
dollar sums that they’re handling include a lot more
zeroes than they used to. This requires everyone
involved to at least understand a little bit about leadership, to ensure they’re electing individuals with the
skills to wield their power effectively.
“Even if they aren’t going to take on leadership
roles, they need to be thinking about who are the best
people to send to tackle future issues,” says Sparling.
Besides, Sparling adds, it’s important for farmers to
be conscious of how leadership works because often
they are unknowing leaders themselves. “Farmers often
take on different roles outside their farm that have an
influence on their local community and beyond.”
What leadership means
Maybe one of the reasons why farmers don’t
think of themselves as leaders is because the definition of a leader isn’t always clear. Academics offer
myriad definitions of what leadership is, and even
more theories about how it works.
William DeMarco has been both a scholar and
professor of leadership theory throughout his career.
His definition of leadership is simple; “Leaders give
purpose to a group or a collective effort and inspire
willing effort.”
It’s a useful expression because it breaks the act of
leadership into two distinct parts. First comes giving
the group a reason to act. Second is convincing each
individual to participate of their own free will.
Neither task is especially easy, but each offers significant advantages to the leader who masters them.
FEBRUARY 15, 2013
PHOTO CREDIT: PAUL MAYNE, WESTERN NEWS
aybe there are two things that
farmers can be forgiven for sometimes getting wrong about leadership. First is that no one is really
a born leader. You might have
won the genetic sweepstakes and arrived on the
scene with the right instincts and talents, but somewhere along the way your ability to lead needs to be
nurtured and mentored… even if you don’t realize at
the time that this is what is going on.
Second, and even more important, is that many
farmers may think the farm is the last place to learn
how to be a good leader because you spend so much
time on your own.
Who needs to be a leader when sometimes it feels
like the only person you can be boss of is the person
you see in the mirror?
But that means you’re selling the whole concept of
business leadership short, and it can also mean you’re
ignoring a new generation of business insights, which
say that those times when you’re working alone on
the farm can be practically the best times ever for
honing your business leadership abilities.
That’s a good thing, because virtually everyone
agrees that the leadership demands on farmers are
getting more and more intense. Farms are getting
larger and more complex, many are multi-generational, often with multiple siblings, and many are
incorporated and have multiple employees.
And the complexities are only going to grow.
But is the next generation of Canadian farmers
learning the leadership skills it will need?
The place to start is by learning more about leadership, the experts say, and to break leadership into
its essential parts. Along the way, maybe the older
generation can reflect on whether they should be polishing their leadership skills too.
David Sparling is a professor at the Richard Ivey
School of Business in London, Ont., who spends his
time investigating the nuts and bolts of economic
pressures and opportunities for farmers (See How
High, page 14). But Sparling also thinks everyone,
no matter what business sector they’re in, needs to
always be honing their leadership skills. But the need
may be extra imperative in agriculture.
BUSINESS
“Understand your own
style, how you approach
decisions, how you
communicate those
decisions, and how
you get people to buy
into them.”
— David Sparling
“Giving a purpose, a nobility, to the group brings
value to the group if it’s done right because people
will collaborate, they will put in the extra effort, and
they won’t waste energy on infighting or tearing each
other down,” DeMarco says.
Farmers actually start with a foot on the first
rung here, DeMarco says, because you don’t need to
be too creative to think about the farm in the context
of doing something absolutely worthwhile.
“There are very few jobs I can think of that are
absolutely necessary for the human condition,” says
DeMarco. “Farmers and people in agribusiness do
something truly noble.”
That in itself makes it easier to convince others to
join you, says DeMarco, because in almost all cases,
human beings relate very well to something virtuous,
rather than something they deem mundane.
Sometimes we think that in business, the purpose of
the group is to make money and our inspiration is the
paycheque that we get to take home at the end of the
day. This is a common misconception, says DeMarco.
A growing bank account is a result of inspired
leadership, but an employee who is just putting in their
hours doesn’t go out after dark to harvest one more
load even if it’s not going to rain in the morning.
FEBRUARY 15, 2013
In business, leadership is getting everyone to surrender to the idea that we’re all in this together,
and that even when the boss isn’t around, everyone
“gets” how important the work they are doing is, so
they’ll go that extra distance for the job.
Yes, some people are just hard workers, no matter
who they’re working for. But one person’s hard worker
is another’s workaholic. Individual values are very much
a part of group dynamics and, therefore, leadership.
“Every time you add additional human beings
into the mix, their value system comes in conflict
with the value system of the core,” says DeMarco.
“We need to have a clear sense of our value system,
but within that, we need to understand our needs.”
DeMarco’s definition of values includes a person’s
needs, their attitudes, and their beliefs. He tells me
you can think of the value system as a teeter-totter,
with needs on one end, beliefs on the other, and attitudes are the fulcrum in between.
If there’s a disproportionate non-compliance with
the needs, he says, that will force the teeter-totter down
to the point where nothing else is possible, no matter
what a person believes. In other words, as the old ChiContinued on page 30
country-guide.ca 29
business
Continued from page 29
nese proverb goes, he who has much bread has many
problems, but he who has no bread has only one.
In short, leaders who work equally hard at meeting the needs and upholding the beliefs of the group
have a greater capacity to influence their teams.
The behaviours of a leader
Among the blessings of farm life are moments of
solitude which often lead to reflection, which both
DeMarco and Sparling say is critical for leaders. Not
only do leaders need to dedicate time to envisioning
the future of a group, but they need to remain intimately aware of their own values and convictions,
which can flux with changes.
“Our real values live in our behaviour,” says
DeMarco, “so if you want to see what you truly
value, look at your behaviour. Everything else is just
ideas and words. ”
Everyone likely knows someone, assigned to a
leadership position, who said the right words or had
the right ideas but their behaviour didn’t motivate
the group to follow them towards a vision.
“If you don’t have followers you’re actually not a
leader,” says Sparling. “People don’t really think very
much about that, but it’s true.” That seems to be one
of the tricky things about leadership. You can think
you’re a leader when you’re not, or be a leader and
A lesson on leadership and management
from Kim McConnell
There’s a common belief that management and leadership are just two
words for the same thing. Kim McConnell begs to disagree.
Managers organize tasks, McConnell says. Leaders organize emotions,
ambition and drive.
In other words, an effective manager can be the furthest thing from an
instrument of inspiration. A leader, on the other hand, may have powers of
persuasion and all the strength of vision in the world and still not be able to
get the job delivered on time.
McConnell, a Canadian Agriculture Hall of Fame Inductee in 2012 tells
the story about the time Mary Kay was asked to speak at Harvard. Mary Kay
herself arrived in attire befitting a cosmetic saleswoman and she brought one
of her chief executives with her, who slumped off in his dated suit to a dark
corner of the stage.
Kay delivered a glowing address, detailing her vision of the company with
great fervour, and delighting the sombre crowd of Harvard scholars as she
whisked brightly around. When she’d finished, one student asked her a very
detailed question about a specific company transaction that had occurred.
Kay simply said, “That’s a good question,” and stepped aside so the
dowdy executive could take centre stage and impress the whole crowd by
methodically outlining every action taken in the case, as well as the reasoning behind each decision.
McConnell says the story perfectly demonstrates that not only are the
roles of leaders and managers not the same, but also that a company can be
extremely well served by isolating the two roles. Management produces order
and consistency. Leadership creates change and movement. Your business,
McConnell says, needs a combination of both to excel.
30 country-guide.ca not know it. “There are various styles of leadership,”
says Sparling, “and it’s important to understand
your own style; how you approach decisions, how
you communicate those decisions, and how you get
people to buy into them.”
Sparling says a common tool used to help people
rank their leadership ability is through a 360-degree
analysis, which involves getting feedback from the
people all around the leader is order to identify their
strengths and their areas for improvement.
Self-assessment can be effective too. Asking simple
questions like, “Do people listen to me?” “Do people
tend to react well when I suggest directions?” and
“Why do I think they follow me?” can help many
leaders down useful paths of self-discovery. “The
problem with a lot of this self-assessment is that our
perceptions of why people do things relative to us are
just that; they’re our perceptions and they’re not necessarily accurate,” Sparling points out. This is when
you see executive coaches come in to help.
Heather Petherick is an executive coach based
in Lethbridge, Alta. who started her career in agriculture. She says that coaching as a profession is
relatively new but it’s gaining traction among professionals including accountants and lawyers.
Whether or not farmers think of themselves as
professionals, Petherick says it’s still an isolating
journey, which can really benefit from coaching. “It’s
inaccurate to think that you’re either a born leader
or you’re not,” says Petherick. “The best leaders are
intrinsically driven by their values and their passion
to create or change something.”
Petherick (aunt of the author’s farming husband)
says most people who come to see her have already
identified something about the way they’re running
their business they need to change, and are looking
for help on how to make that change.
“Business is so complex today and we’re identifying how unrealistic it is to know it all or do it
all ourselves,” says Petherick. Yet business leaders
feel under pressure to never admit any vulnerabilities, either to a competitor, a supplier or to staff.
Coaches give the leader that chance to let their
guard down and to talk frankly, says Petherick.
They’re from outside of the business and can offer a
safe place to air frustrations, toss ideas around, and
be heard without being judged.
“Coaching comes from the perspective that the
client is talented, resourceful and creative… ultimately, that they have the smarts to get through this
challenge,” says Petherick, “and the coach’s role is to
support them by brainstorming, evaluating options,
and untangling them.”
Petherick says that the most effective leaders have
someone beyond a spouse investing in and supporting them already. For some leaders, it’s an individual
they can usually count on to disagree with their
ideas. While that doesn’t necessarily suit everyone,
all three experts agree that becoming a leader must
include a willingness to adapt and grow as an individual through such means. CG
FEBRUARY 15, 2013
TOOLMAN
How do you prepare for a
deflationary market?
By Errol Anderson
he word “deflation” doesn’t enter our
vocabulary very often during a lifetime.
But that doesn’t mean it is unheard of.
Japan has been battling a deflationary
economy for years, starting back in
the 1990s. In fact, Japanese interest rates for a time
actually turned negative.
But deflation in North America? Come on, get real…
Deflation occurs when all general price levels
begin to decline for a prolonged period. Assets are
simply worth less. In a farm context, even land
prices and cash rent values might be impacted.
This type of economic event has long tentacles,
but it often begins in the energy world, with the
market for crude oil.
Crude oil is a lead indicator of commodity price
health. A buoyant crude market is a sign of robust
global economies (or disruptions in oil supply.) And
crude oil is also a key price indicator for ethanol,
which can impact U.S. corn prices as well.
West Texas Intermediate (WTI) crude prices
approaching $100 per barrel EW are a good sign. WTI
prices slumping toward $80 per barrel or lower are not.
Through this winter there has been a brewing
battle between those who believe hyperinflation
will inflate product values because of our global
economic woes, and those who believe that commodity prices including input costs are in store for a
prolonged setback.
Let’s imagine for a moment that there may be a
truly deflationary economy on our market doorstep.
How can a grower set price targets in this potential
new economic environment?
If this economic scenario unfolds, it would change
some market planning ideas of old. Deflation suggests
storing product may not be an effective strategy. The
longer you store, the lower the price. It also means
market rallies may have shorter lifespans. From a
farm market perspective, this makes it exceedingly
important to have realistic price targets in place with
your cash buyers and commodity brokers.
But deflation is not just a one-way street. Deflation would affect not only raw commodity values,
but input prices may be affected and pulled back as
well. This thought will no doubt spark debate. Many
say there is no way growers will get a break in input
costs. But that is the shocking aspect of a rare deflationary market event. Even inputs might be impacted.
Another good news aspect of this economic
reversal is that interest rates should stay depressed
for a long time. Although interest rates are destined
Febuary 15, 2013
to remain low, debt must be monitored closely. If
inflation won’t allow expansion, then controlling
debt starts to take on a whole new meaning. Again,
this is up to much debate. But a deflationary market
means inflationary pressures are in check. And rising
interest rates are a government tonic for inflationary
pressures, not deflationary ones.
Here’s some more good news should deflation
rear its head. Fuel prices may stay down for the
long haul. That’s unheard of, you say? What about
the $130-per-barrel oil talked about just months
ago? No doubt the Edmonton crude spot market
has been hard hit so far in 2013. Canada is experiencing a more difficult time accessing premium
U.S. markets, creating a supply bulge here at home.
This slowdown in demand for key staple commodities is characteristic of a deflating economy.
But the world population is growing and everyone
has to eat. How can prices possibly go down? This is
a common comment, but price discovery is a balance
between supply and demand, and when prices compete for market share, demand is ultimately the steering wheel of markets. The law of product substitution
kicks in. That’s why bull markets in commodities
tend to have a shortened shelf life. In times of global
price shortages, world markets become innovative
and resourceful. Rising prices eventually price themselves out of the global marketplace.
A key in a deflationary marketplace is to keep
close tabs on your cost of production. A deflating price environment may also threaten to break
below production costs from time to time. This will
mean a sharp pencil on the input cost of the equation is necessary. As any coach would state, a solid
defense may be your best offense. This pertains to
marketing as well.
Global economies and governments have a
daunting struggle ahead of them. Global debt loads
are forcing a showdown that will impact global
markets and ultimately impact our own.
No one really has a clear vision of what lies
ahead. You may not agree that there is a possibility
of deflation, but this article is meant to generate
some discussion and thought. Ask yourself just
what will happen if commodity markets take a
twist toward deflation. Are you prepared? CG
Errol Anderson is a Calgary-based commodity broker and author of the daily ProMarket Wire report.
He can be reached at (403) 275-5555, email:
[email protected].
country-guide.ca 31
business
Turbulent
times
Strong leadership and an
innovative business structure
have helped the members of
Alberta’s Sunhaven Farms
survive in the pork sector.
Could the same approach
help you too?
hanks to their ingeniously complex business model, the farmer members of Sunhaven Farms in Alberta are maintaining
their independence while also taking
advantage of the scales of economy and
the access to knowledge and services normally only
available to a large corporation.
If it sounds like a pipe dream, it isn’t. But then, if
it sounds easy, it isn’t that either.
Undeniably, it takes special leadership skills and
an iron will to keep a steady beam on a ship with so
many oarsmen, especially considering the volatility of
the swine industry and its ongoing story of bail-outs
and bankruptcies.
32 country-guide.ca Photo credit: Dirk Brouwer Photography
By Maggie Van Camp, CG Associate Editor
FEBRUARY 15, 2013
business
Says Sunhaven’s Bryan Perkins,
“By working together,
we can accomplish more.”
The core belief, however, is as pure and
simple as it can be, and so is the group’s
commitment to it. “By working together
we can accomplish more,” says Bryan Perkins, president of Sunhaven Farms and
Sunhaven Farms Milling.
Sunhaven is also aware of the evolutionary pressure on agriculture, perhaps
best summed up by Bob Milligan, senior
consultant with Dairy Strategies in Wisconsin and professor emeritus at Cornell
University. Today’s farmers need to motivate and share decision-making with more
people, Milligan argues, and in order to
do so they must transition from their past
roles as operations managers into a new
future as chief executives.
Such leadership skills can be learned,
Milligan says. In fact, he says they must
be learned: “In addition to hard work
and excellent management, farm business
success today is increasingly requiring
great leadership.”
Not only is there volatility in farm
commodities, but economic variability
threatens to rock the boat as well, Milligan adds, so our farms increasingly need
leaders who are dedicated to a strong
vision. Like Sunhaven, such leaders must
not only think operationally but strategically as well, and they must make planning for the future a priority each day.
“Business leaders portray this better
future by articulating the mission or vision
for the business,” says Milligan. “Every
farm manager and agribusiness professional
must recognize the earth-shattering changes
occurring in our industry and world.”
Sunhaven Farms was started in the
FEBRUARY 15, 2013
mid-’90s with 30 investors, mostly local
grain farmers including Perkins who
wanted to add value to their production. At the time, massive changes were
sweeping through the hog business. Processor- and investor-owned hog barns
were emerging, processors were moving
to the Prairies, and segregated production units were gaining popularity.
In this mix, Sunhaven was born as
a community of shareholders investing
in sow barns and a feed mill that would
then contract to and supply feeder barns
that were independently owned and operated by farm families.
One hundred and
fifty shareholders
Today, Sunhaven Farms has about
150 shareholders and four partnerships.
Including the Perkins Farms unit, the
company has about 11,000 sows and
contracts out nearly a quarter-million
market hogs per year to affiliated farms.
Bryan’s son, Ian, leads Perkins Farms,
a farrow-to-finish hog operation with
1,900 sows and feed mill, plus 10,000
acres of grain.
To the contract feeder barns, Sunhaven
provides the pigs from their own sow units
and Perkins Farms. Sunhaven also provides
veterinary services and cost-only feed made
through their own mill at Irma, Alta. As
well, the company co-ordinates marketing.
Feeder barn owners are then paid a
fee per pig for the job of finishing and, if
there are any, they get the first share of
the profits.
Although the structure itself is a complicated flow chart, the benefits are simple
and powerful. Each farm can take advantage of production scales of economy and
have at-cost feed. Then the group, by sharing similar management, feed and marketing goals, is able to market larger volumes
of fairly uniform market hogs. As well,
members also help each other keep on top
of production information and hire topquality veterinary services and consultants.
Around wooden tables in local halls,
Perkins chairs meetings with feeder
barn owners and sow barn operators
three times a year. They share information, listen to speakers and talk about
the general business of the farms. They
aren’t trying to extract more margins out
of each other and instead are trying to
work together and learn from each other
in order to heighten their efficiency.
Through it all, the message is that
their success is linked.
Multiple owners
Historically, farming has been a bastion
of sole proprietorship and individualism,
Perkins says, yet farmers have also been
leaders in a range of co-operative efforts,
including everything from local elevators to
community telephone and power projects.
This approach to working together
demands a willingness to delegate some
decision-making to the group. But Perkins
makes what he believes is a critical point.
Says Perkins: “Most larger enterprises,
outside of farming, have multiple owners.”
Continued on page 36
country-guide.ca 33
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business
Continued from page 33
Unlike many large corporations, Sunhaven Farms has a competitive advantage. It is made up of family farms, with
vested down-to-earth people. There are
no fancy offices or boardrooms here.
Everyone wants to help each other and
yet the members are still driven individuals in their own right, trying to make a
better future for their children.
Bryan’s daughter Shannon leads the
Sunhaven accounting and administration
team and with her husband Arthur owns
and operates a nearby grain farm.
“It helps that each of the finishing barn
owners has skin in the game,” says Perkins. “And we try to run a strong balance
sheet and replenish on good years.”
It also helps to have shareholders who
understand the agricultural industry and
recognize what’s gone on — the diminished number of herds after prolonged poor
prices and substantially high grain costs.
Originally, this business structure was
conceived by Perkins as a way to capture
the success he had working with family
and friends on their grain farms. He still
shares equipment and works with his
children, his brother Mark, his brotherin-law Matt, and neighbour, Ken Wasmuth. Also, many years ago Ken and
Bryan owned and operated a local crop
input company together.
Each individual owns their own land,
decides what to grow and how to market, and separately buys inputs. However, they share one of the largest fixed
costs, equipment. At harvest they operate
by the principle that the grade-sensitive
crops come first, followed by the highervalue ones, and they leave the feed grain
until last. Since they work together with
larger equipment, they can harvest faster
and more efficiently, a big advantage
especially for the smaller, newer farms.
“It’s not one big farm but we share
equipment, help each other with labour
and consult with each other on inputs
and marketing,” says Perkins.
Rally the troops
Larger operations need a leader who
can rally people, says Milligan. Traditionally farmers have led more by example, but in larger businesses the leader
cannot work alongside every employee.
However, leaders can show they’re
willing to do the work and that they
have great respect and trust in those
they lead.
36 country-guide.ca “It’s the farm leader’s responsibility
to evoke the passion of all owners, family members, and employees to work as a
dedicated team to fulfil the mission and
vision,” says Milligan.
Having the ability to draw good people to the operation and and to engage
everyone in a shared vision has been
essential to the success of all the organizations Perkins has helped lead. He was
vice-president for UGG (later became
part of Viterra) and chairman of Fletchers Fine Foods (now Olymel). He has also
coached teams and volunteered for many
non-profit organizations.
Fundamentally, he believes in the
power of enjoying what you’re doing,
since that energy will spread to others
within the organization. “If you’re not
having fun, it’s not going to work out
very well,” he says.
Connect
Motivating others requires communication and that can be a challenge
in larger operations separated by long
stretches of the Prairies. Sunhaven Farms
has 80 employees and, as with many
livestock operations, strict biosecurity
regimes mean it’s difficult to have person-to-person contact. Even so, Perkins
prefers a more personal communication
method than email. “To me, phones are
better because you can get a tone of voice,
and face to face if possible is even better.”
In early June, Sunhaven Farms’ owners have an annual meeting and every
spring, the general partners, management
and employees meet, eat and have some
fun together at a big seminar. “Leaders
need to be connected,” says Perkins.
Over the years, having strong public
speaking skills has helped Perkins conduct meetings, and communicate effectively as director and executive at large
business boards and local functions. He
first got a taste of this skill as a teenager
as a junior toastmaster in high school.
Milligan says leaders like Perkins
tend to network with other leaders to
learn and observe, and Perkins points to
his own role representing agriculture in
the Rotary Club of Wainright.
“Where do the leaders in your local
community — the mayor, the superintendent of schools, the presidents of
local businesses — meet, network and
learn? Perhaps you should join,” says
Milligan. “In addition to learning and
growth, you would be a positive representative of agriculture.”
Self-SWOT
Over the years, Perkins has observed
that people have different qualities
which can almost always contribute to
leadership, but these inclinations vary
a lot. “Strong leaders make use of others’ strengths,” he says. “If allowed and
encouraged to show, one or more leadership traits will emerge.”
The strong leaders Milligan has met
fundamentally understand each person
is a unique, wonderful human being, and
they make the most of it.
Moreover, Milligan says leaders like
Perkins are self-aware and recognize and
understand their own uniqueness, tendencies, strengths and weaknesses. They
get help on those things at which they’re
weak. “I’m probably not the best detail
person so I need to surround myself with
people who are good at it,” says Perkins.
His integrated-yet-independent business
model plays into this ability. “Over the years
I’ve learned that everyone has their own
strengths and weaknesses, and working
together helps balance that out,” he says.
“Then all you need is a leader who helps
build on the strengths of people and makes
sure the weaknesses are covered by others.”
Before making a final decision in meetings, Perkins goes around the table asking
each individual if they’ve got anything to
add. Some of the individuals who were
reluctant or too shy to speak up may have
the best insight. Also, you get a higher
degree of buy-in. It’s a way to acknowledge that there are different views but in
the end someone’s got to make the decision, says Perkins. At least then the group
can move together as a team.
Youth
By engaging everyone, a deeper pool
of knowledge and a wider set of skills
are leveraged. Plus, in common with
many strong leaders in business, Perkins
believes in engaging younger people. They
provide energy and bring in new knowledge and skills to the organization, and
they also stretch leadership skills. “We
have quite a range of ages on our operations and I think that’s healthy,” Perkins
says. “You can balance out the energy,
excitement and new knowledge with the
accumulated wisdom and experience.”
Leaders recognize that the workforce
is changing, adds Milligan. “The genXer and millennial generations are much
less willing to work at a job that does
not have meaning.”
FEBRUARY 15, 2013
business
Milligan also points to another
characteristic of the millennials. They
have little respect for authority. For that
age group, it matters how feedback is
framed and the relationship with the
supervisor leader is also crucial. Since 1969, when Perkins started
grain and hog farming, changes in technology have impacted the industry the
most, he feels. “Then all you needed
was energy, ambition and physical work
but today you’re likely to need management skills, computer know-how.”
Learn from mistakes
In Perkins’ view, the biggest mistake he almost made was trying to
buy a block of land in the 1980s.
Luckily he ended up backing off,
since interest rates soared shortly
after and the people who ended up
buying it struggled.
Over the years there have been
many challenges and Perkins says that
they taught him the importance of risk
management and alternative marketing strategies. In 2002, there was no
crop in his area but they had crop
insurance. When pork demand took a
dive with the swine flu scare and one
lender backed out, they were prepared
B:8.635”
to quickly move to
another creditor.
When they lost a T:8.125”
barn to fire, it was
covered by an insurance
S:7” policy.
In 2009, when Perkins had a heart
attack and his father passed away later
that year, the business model of working together became a sort of personal
hedge. He had the support of family,
community and long-term friends built
into the business, and that proved to
be an amazingly strong risk-management tool.
Making mistakes is essential to
developing skills, says Perkins. It also
teaches how important it is to manage risk, while at the same time revealing that sometimes you just have to be
aggressive and go after what you want.
It’s that balance, he says, that can be
the hardest part of farming. CG
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MANAGEMENT
How to effectively manage
foreign exchange risk
The second in a two-part series on managing foreign exchange risk
By Mark Kelly and James Percival, Western Union Business Solutions
n our first article, Protecting Crop Profits from Foreign Exchange Risk, we stressed the need for
today’s Canadian farm operations to understand the impact that foreign exchange (FX) risk has on
their bottom line, regardless of whether they export directly or not. We also discussed the first elements of a successful FX hedging policy: starting with calculating the value-at-risk to FX fluctuations and from there determining a budgeted rate that not only makes sense from an operational
standpoint but is also realistic relative to the current market environment. As well, we touched on the
important concept of separating your FX hedging program from your commodity hedging program to
maximize the benefit derived from each.
Now the next step in the process is choosing the right hedging tools and having a strategic implementation plan to effectively manage this risk. In other words, now that you have worked out the value-atrisk in your operation and determined a budgeted exchange rate that makes sense, how do you go about
protecting that rate and ultimately your farm’s bottom line?
Choosing the right hedging tools
FX hedges are designed to efficiently and precisely target currency risk without increasing other
exposures. Therefore they are often the most costeffective and useful tools available. These typically take the form of a financial contract with a
financial institution or dedicated foreign exchange
services provider, and contain provisions for the
settlement of funds in the future according to an
agreed-upon formula. The two main types of tools
available to hedge foreign exchange are as follows:
1. Forward (or swap) based: A forward contract
lets you buy or sell one currency for another for
settlement at a desired point in the future. Unlike
a spot rate contract, which is the purchase or
sale of one currency against another transacted
immediately, a forward contract reduces the
risk of fluctuating exchange rates by locking in
an exchange rate today for a transaction that
will take place in the future. By protecting your
future cash flows against negative currency fluctuations, it can reduce some of the risk associated with doing business in a market where the
primary price discovery is in U.S. dollars.
With a forward contract, the locked-in forward
rate you receive will either be at a discount or a
38 country-guide.ca premium relative to the spot market rate. The reason for this has nothing to do with market expectations of future rates but rather the difference in
market interest rates between countries. The currency of a country with lower interest rates than
Canada will therefore trade at a discount, whereas
currencies of countries with higher rates will trade
at a premium.
There are two main types of forward contracts
available to meet the FX risk management needs of
agribusiness:
• Open Forward Contracts: With an open forward contract you lock in an exchange rate now for delivery of any portion at any time until the contract
is depleted (referred to as a drawdown), or its
expiry date arrives. An open forward contract is
therefore suited to a producer who wishes to lock
in a particular exchange rate for their production
that will be sold at indeterminable intervals (i.e.
when they decide commodity prices are favourable) throughout a period of time.
• C losed Forward Contracts: With a closed forward
contract you lock in an exchange rate now for
delivery of the currency on a specific date in the
future. This contract is best suited for when a
producer knows that they will be receiving or
delivering product on a particular date (i.e. there
is a contractual agreement to deliver).
FEBRUARY 15, 2013
MANAGEMENT
As well, forward contracts can be classified as either
deliverable or non-deliverable. A deliverable forward contract requires that settlement of the contract be done with
physical dollars, meaning that there is an actual exchange
of funds (i.e. if you sell a US$100,000 deliverable forward,
settlement occurs when you deliver the U.S. dollars to the
financial institution you entered into the contract with). A
deliverable forward contract is therefore best suited to the
producer who directly exports their production to another
country and receives foreign currency as payment for those
goods. A non-deliverable forward contract on the other
hand allows the producer to settle the forward contract by
either paying the out-of-the-money or receiving the in-themoney position at the contract’s expiry:
Example: If you sell a US$100,000 non-deliverable forward at a rate
of 1.0000 USD/CAD, settlement occurs by either paying the outof-the-money portion of the contract if the rate on expiry is above
1.0000 USD/CAD or receiving the in-the-money portion of the contract if the rate on expiry is below 1.0000 USD/CAD.
A non-deliverable forward contract is best suited to the
producer who sells and/or hedges their production in domestic
currency, whether through a Canadian merchant or exchange,
where the commodity being hedged has primary price discovery in U.S. dollars (i.e. soybeans, corn, wheat, hogs).
Forward contracts are cost-efficient and flexible tools, allowing producers to easily and effectively reduce their exposure to
FX market movements. However, the downside to fixing an
exchange rate is that it also limits your ability to gain when the
markets shift in your favour. For those producers wanting to
hedge their exposure while still allowing for potential upside
participation, option-based products are a great alternative.
A strong FX risk management
strategy can help to provide
pricing and profit stability to
an agribusinesses environment
that is fraught with uncertainty
— helping you to survive and
thrive on a global scale
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2. OPTION BASED: One of the most flexible ways to mitigate
the foreign exchange risk in your operation is to make use
of currency options. Currency options allow you to effectively manage risk and, at the same time, take advantage
of positive changes in market exchange rates. The benefit
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Continued on page 40
FEBRUARY 15, 2013
country-guide.ca 39
AAFC_001E_Country Guide National REV.indd 1
13-01-28 4:42 PM
management
Continued from page 39
pate in favourable moves, and can be structured
at a zero cost. They may be used alone or in
combination with other hedging tools, such as
forward contracts, to offer a powerful risk management strategy.
Option-based currency hedging products can
be categorized into two main classes: Vanilla and
Structured:
• Vanilla Options: Vanilla options allow you to maintain a position that is fully hedged while also
giving you the ability to take advantage of any
favourable market movement. As ‘the Buyer’ of
a vanilla option, you have the right, but not the
obligation, to exchange currency at a predetermined rate on a predetermined date. However,
vanilla options do require you to pay a premium,
similar to an insurance premium, in order to
protect you at that predetermined rate. The size
of the premium payable varies depending on a
number of factors such as: how far your protection rate is from the market rate, how much time
is left before the option expires, interest rates,
and market volatility among other factors. The
protection rate is that rate which you use to
measure the strength of a hedging strategy, and
it is the rate you will receive if the spot market is
Managing foreign
exchange risk effectively
often requires highly
specific knowledge of
the market and the
tools available
trading at a less advantageous rate than you have
received as your protection rate.
The advantage of using a vanilla option is that
if the spot rate is more favourable than your protection rate at expiry, then you are free to deal at
the more favourable spot rate. Alternatively, should
the spot price at expiry be less favourable than
your protection price, you are fully protected and
can deal at your protection rate.
With a vanilla option, the cost is always limited
to the cost of the insurance premium that is paid to
buy the option. Depending on your FX service provider, it may also be possible to defer the upfront
premium and pay it upon expiry of the option. As
far as the drawbacks to consider, the premiums
associated with vanilla options can be quite expen40 country-guide.ca sive under certain market conditions and are also
non-refundable.
• Structured Options: Like vanilla options, structured
options allow you to maintain a position that
is fully hedged while also giving you the ability
to participate in favourable market movements.
However, unlike a vanilla option, a structured
option is usually built at zero premium cost to
the holder, avoiding the hefty upfront premiums
associated with vanilla options. In exchange for
not having to pay a premium, the holder of a
structured option typically agrees to cap their
upside to a favourable market move.
Structured options are created through the
concurrent sale and purchase of two or more call
options and/or put options. In any structure you
may be both ‘the Buyer’ of an option and ‘the
Seller’ of an option. As ‘the Seller’ of an option
you create an obligation as opposed to a right to
buy or sell currency at a predetermined rate and
date. Combining both the sale and purchase of
two or more options therefore gives the holder
of a structured option both the right to exchange
currency at a predetermined rate and date (full
protection) as well as the obligation to exchange
currency if certain conditions attached to one or
more of the options within the structure are met
(limited upside).
Many producers prefer structured options over
traditional forwards and vanilla options as this
gives them the protection of a forward contract
combined with the elements of the upside potential
associated with vanilla options, without having to
pay a premium.
Strategic implementation plan
A strategic implementation plan involves bringing all the pieces we’ve discussed so far together into
an executable action plan. After an assessment of
your operation’s FX risk has been done, the valueat-risk identified, a budgeted rate determined, and
the appropriate hedging tool(s) selected, successfully
executing on your FX risk management strategy is
crucial to its overall effectiveness.
Day-to-day market movement can present many
opportunities for producers to enter positions at
favourable levels, but large negative moves can
wipe away profit just as easily. As a result, many
of the most experienced corporate risk managers
trade tactically by employing pairs of standing
market orders to capture opportunities while protecting themselves in the event that markets shift
against them.
Market orders can be placed to automatically
trigger a trade when the exchange rate hits a prespecified level. When the trigger is placed on the
favourable side of the market, the order is called a
“take profit”; when it is placed on the less favourable side, it is called a “stop loss.” Pairing both
FEBRUARY 15, 2013
MANAGEMENT
types of orders in a disciplined manner can help to optimize trade execution levels within the context of your
budgeted rate, while ensuring that the
bottom line is protected against large
negative moves.
A variant of this tactic is called a
“trailing stop loss.” A trailing stop loss
order sets a protection level at a specified percentage away from the prevailing
spot price, and moves with favourable
movement in the currency. This creates
a “worst-case rate” for hedging and
accounting purposes while allowing for
upside participation — particularly in
those circumstances when the market
moves sharply in one direction.
Looking at charts to visually quantify recent trading patterns can be
instrumental in understanding the risks
and opportunities available, and can be
particularly helpful when determining
where to place market orders. Speaking to trading specialists may be highly
worthwhile, both in determining where
market consensus is heading and in
understanding where this consensus is
vulnerable to adjustment. When adjustments occur, currency volatility follows,
and volatility creates opportunity.
is corporate foreign exchange specialist, agriculture for Western Union
Business Solutions, a world leader in
helping farms of all sizes manage foreign exchange and cross-border payments in 140 currencies and 200
countries. Mark specializes in currency
risk management solutions for agricultural clients, and James designs holistic agricultural foreign exchange risk
management strategies. Contact them
at 877-475-2226 or: mark.kelly@
business.westernunion.com , james.
[email protected].
HYPR
HYPRO
®
Make The Connection
SUMMARY
Ultimately, a strong FX risk management strategy can help to provide
pricing and profit stability to an agribusinesses environment that is fraught
with uncertainty — helping you to survive and thrive on a global scale.
Of course, the ideas presented for
consideration in this article are merely a
starting point. Many agribusinesses simply do not have the internal resources
available to build, implement and monitor an FX risk management program.
These resources are not always easily
developed or maintained, particularly
over the long term. Managing foreign
exchange risk effectively often requires
highly specific knowledge of the market
and the tools available.
A dedicated foreign exchange specialist can add significant value to this
process by providing the information,
the tools, and the expertise required to
help you make the right decisions. CG
Based in Winnipeg, Mark G.J. Kelly
is sr. business development executive, agriculture, and James Percival
FEBRUARY 15, 2013
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country-guide.ca 41
MANAGEMENT
‘Insure’ you get paid
Whoever thought it could be interesting to talk about
accounts receivable insurance? Well, the day has come.
Today, there may be multiple benefits to buying your own
insurance to make sure you get paid for your grains or
livestock, no matter where on the globe you sell them.
By Gerald Pilger
armers are quick to insure the tractors,
barns and other assets they need to produce
the commodities they sell. Most farmers
insure those commodities too, buying crop
insurance, for instance, and also insuring
their breeding herd. Yet most willingly deliver their
production before payment is made, typically with
little due diligence into the ability of the buyer to pay.
Should farm managers insure against the risk of
the buyer not paying for commodities they receive?
The answer to this question depends on three factors: the risk of non-payment, the capacity of the farm
operation to endure non-payment, and the availability
and cost of insurance to protect against non-payment.
Most farmers believe the risk of not receiving
payment for the grain or cattle they sell is very small.
After all, there are relatively few cases of farmers not
being paid for sales. Yes, we hear of small grain companies occasionally going broke, and the hog industry
in particular has had a number of large operations
declare bankruptcy and not pay for hogs and feed.
But given the size of agriculture in Canada, such
Market Power Assurance
Last summer, Pangaea Global Risk Management
of Vancouver partnered with Atradius Credit Insurance
and Export Development Canada to develop a new
group accounts receivable insurance program specifically designed to protect sales of farm commodities and
livestock. They are offering this insurance to farmers
through Farmers of North America (FNA).
Kevin Sullivan, president at Pangaea Global spent two
years working to structure an accounts receivable insurance
policy specifically for western Canadian farmers. Sullivan
says utilization rates for this type of insurance by farmers
were previously non-existent because few individual farmers have the $5 million to $10 million in annual sales to fit
the profile for the policies sold by private insurers. Nor did
the farmers have the margin, so the two to three per cent of
gross sales charged as a premium was too costly.
42 country-guide.ca
shortfalls are far from the norm and affect a relatively small number of producers.
Couple this with the belief by the majority of
farmers that the Canadian Grain Commission (CGC)
already offers no-cost payment protection to grain
growers through the licensing and bonding of grain
buyers, then insurance against non-payment seems
like a redundant, needless expense.
The rules in Eastern Canada are somewhat different.
For instance, grain farmers in Ontario are protected by
that province’s Grain Financial Protection Program.
However, the net effect in terms of farm risk is similar.
Buying insurance
Exporters, manufacturers, and even retail business have relied on accounts receivable insurance
for years to protect their operations against buyers
failing to pay.
David Newstead, assistant regional vice-president,
Canada, of Euler Hermes, a global issuer of credit
insurance products, describes accounts receivable
insurance as affordable security for any business,
Sullivan’s solution was to create an aggregated program which insured sales on a transactional basis.
According to Sullivan, this approach to account receivable insurance had never been done before in the
world. With a big group policy the risk of each single
transaction can then be spread across all buyers and
sellers, thereby reducing the premiums on each sale.
Sullivan says the MPA premium for sales to large Canadian or American buyers is less than half a per cent.
“This one simple program is open to all Canadian
farmers, including livestock producers, hatcheries, and
grain growers,” Sullivan says. “Every farmer has access
to the program.”
Sullivan also says that MPA offers three benefits to growers. First is risk mitigation. The plan empowers the producer
by guaranteeing payment and by increasing the creditworthy
buyer pool the farmer is comfortable dealing with.
FEBRUARY 15, 2013
MANAGEMENT
including farms, against unpaid invoices.
“You get paid even if your customer
defaults,” Newstead says.
Most of Euler Hermes business is geared
to companies which are export oriented
because of the increased risks of dealing
with a buyer in another country. “Most sellers don’t have any inkling of the solvency of
a foreign buyer,” Newstead says. Instead,
underwriters of accounts receivable insurance do the business intelligence needed to
evaluate the risk of a buyer defaulting on
payment in the next 12 to 18 months. “We
get that information and then continue to
monitor the buyer on behalf of the seller,”
Newstead says. “If a buyer defaults, a standard accounts receivable insurance policy
will pay the seller an indemnity of 80 per
cent of the sale value.”
Newstead describes the application
process for accounts receivable insurance
as fairly simple. Typically, a company
will insure all of a business’s annual sales
on one policy. The insurer reviews the
past sales history of the company, losses
the company has experienced in the past,
and the buyers and countries where the
company is selling. In as little as a week
or two the underwriter will respond to
an application for insurance with a personalized policy for the selling company.
Euler Hermes will also tailor-make a
policy that covers only sales to one particular buyer that a business sells to, as well
as offering policies which cover a single
sales transaction. Each policy is written on
a case-by-case basis. In a few cases, insurance cannot be offered simply because the
risks cannot be evaluated, or because of
Second, Sullivan says MPA provides
cost savings to buyers. Previously, letters
of credit were commonly used to guarantee payment, and this was a real cost in
terms of working capital for the buyer. MPA
insurance costs are not only lower, but
they free up working capital so buyers may
be willing to bid more or change the terms
of the sale.
Third, the insurance policy can be
viewed as a capital asset, unlike a credit
sale, and farmers are able to borrow
against the policy, thereby increasing their
working capital.
Farmers who want to insure a sale
through MPA must first join the program
by visiting mpa.fna.ca or by calling FNA
FEBRUARY 15, 2013
the political climate as with some trade to
buyers in Iran, Cuba, or Venezuela.
Newstead adds that Euler Hermes
offers accounts receivable insurance for
domestic transactions as well and he
invites business owners to contact him
if they are interested in partnering with
a company that specializes in credit
management. He points out the value
of this insurance really depends on the
client’s appetite for risk, but he believes
any company with over $1 million in
sales annually would find this insurance
affordable and it will take the worry of
not being paid for sales off your plate.
Export Development Canada
Farmers who are looking at exporting
crops and livestock also have the option
of purchasing accounts receivable insurance from Export Development Canada. This federal government agency is
mandated to increase Canadian exports
through a number of actions including
assisting in finding export opportunities, developing exporting and business
plans, creating credit profiles on buyers,
and providing financing and bonding. It
also offers insurance solutions, including accounts receivable insurance. Rather
than an individualized policy, there are set
rates based on the country and customer,
payment terms, goods being sold, and
coverage sought.
But like private accounts receivable
insurance, EDC insurance will cover
most of your loss if the buyer goes
bankrupt, defaults, or refuses payment
for a number of reasons.
at 1-877-363-3276. Once registered, it is
simply a matter of visiting the MPA website
and completing the transaction form before
making a sale which you want to insure.
If the sale is to a North American buyer,
insurance can usually be arranged within
48 hours. It can take a week for insurance
to European buyers and up to two weeks
for other international sales. There is an
annual $100 application fee for each buyer
you insure sales to, as well as a premium
payable on each transaction.
“MPA provides Canadian growers with
the opportunity to sell their production on
open account terms all over the world,”
Sullivan says. More details can be found at
www.mpa.fna.ca .
Other benefits
Ross Purdy, senior manager of
agriculture and agribusiness at BMO,
believes there can be additional financial
benefits to carrying accounts receivable
insurance. For instance, an insured sale
of a commodity allows for a higher valuation of that commodity in the farm’s
financial statements. Accounts receivable
insurance reduces the financial risk for
the bank or lender as well, and a better
financial position could increase the borrowing capacity of the farm.
Purdy also points out accounts
receivable insurance could enable a
farm to sell production on extended
payment terms which may result in better prices or more market opportunities.
Accounts receivable insurance could
also protect farmers who defer receipts
of sales into the next tax year.
Purdy cautions farmers to carefully
evaluate the company offering insurance. “Look at their track record,
especially if you are seeking to insure
international sales.”
Meanwhile, growers in Canada may
not have all the protection they think they
have. For instance, the CGC currently
licenses nearly 150 grain buyers in North
America, but the list of companies that
are not required to be licensed or that are
exempted from CGC licensing is much
longer. This list includes elevators that only
ship producer cars, seed dealers, distilleries, feed mills, feedlots and many others.
Even the list of licensed grain companies is constantly changing, and the
absolute minimum due diligence for
growers is to check the list of licensed
buyers prior to making a sale to ensure
that company is licensed. That list can
be found at http://www.grainscanada.
gc.ca/licensee-licence/licensed-agreeeseng.htm. (In Ontario, farmers can check
the licensing status of a grain buyer at
www.agricorp.com/en-ca/Programs/GFPP/
Pages/CheckLicence.aspx.)
The grain industry is changing and so
are the regulatory bodies which protect
growers. There are a host of new buyers
and new marketing opportunities, and
at the same time, protection systems that
were in place in the past are being dissolved. Together this adds up to more
risk of non-payment for grain deliveries.
That means insurance that can protect against non-payment is something
you may now want to consider. CG
country-guide.ca 43
management
Taking on the giants
With Winnipeg-based Versatile taking aim at the
full-line manufacturers, the battle is set to begin
By Scott Garvey, CG Machinery Editor
t’s enough to set us thinking about the old
1960s TV show “Land of the Giants.” In
today’s farm machinery market, the Big Three
corporations with their full-line brands are the
giants, and to say the least, they dominate the
business on a global scale.
Market leader John Deere set a new record for
equipment sales in its fiscal 2012, hitting US$33.5 billion. By the time AGCO, the smallest of the three,
releases its financial report, expected net sales should
easily surpass the US$8.8 billion it racked up in 2011.
Anyone who wants to battle it out for market
share with companies of that scale is facing a daunting task, but that’s exactly the situation Winnipegbased Versatile finds itself in.
Yet Versatile isn’t shying away from a fight. In
fact, the company has been aggressively working to
carve out a bigger piece of the market pie for itself.
Even so, with 2012 revenues of just C$361.2 million, Versatile has a lot of ground to cover before the
leading equipment manufacturers’ group gets defined
as the Big Four.
Nevertheless, the optimism is building at Versatile’s corporate headquarters. “It’s an exciting place
to work,” said one of the company’s newest product
marketing managers during a media event a year
ago, and in the intervening year, the excitement has
continued to grow.
On a visit to the company’s Winnipeg facility in early
January this year, the excitement was palpable.
Marty Cook took over
as director of sales
at Versatile in
mid-December. Photo credit: Versatile
New tractors move
down the Versatile
assembly line at
the company’s
Winnipeg, Man.,
plant.
Photo credit:
Scott Garvey
44 country-guide.ca FEBRUARY 15, 2013
management
I was there to meet Marty Cook, Versatile’s
brand new director of sales for North America, and
in the process, I had a chance to wander through
the corporate offices with Adam Reid, the company’s director of marketing.
Amid the construction workers renovating and
expanding office space was an entirely new section
now stuffed with a significantly enlarged workforce
of engineers.
Over the past four years, the company has been
following through on a promise made by Dmitry
Lyubimov, president of Buhler Industries (which
is the corporate entity behind Versatile and Farm
King brands) to move the company to full-line
manufacturer status. So far, many of the gains on
that front have come through the acquisition of
other companies, such as Ezee-On and Feterl.
But that office full of engineers is now also
contributing to the effort too. They’re designing
new machines in house, such as the ML Series air
drill introduced last summer (which won an AE50
engineering award). And Reid promises there is
more to come, with new product announcements
scheduled to take place over the next few months.
“I think there is going to be a real buzz generated
by some of those products,” Reid says.
It’s into this environment that Cook has landed,
FEBRUARY 15, 2013
and he’s expected to deliver a strategy that will
turn those engineering achievements — and products from new acquisitions, if there are any more
— into increased sales.
Cook has found himself in exactly that position
before. He worked for a variety of agricultural and
high-tech companies before coming to Versatile,
cutting his teeth at firms like Ramboc, Novariant
AutoFarm and Topcon. What really links all those
companies together is their focus on digital technology,
which may offer a clue as to what senior management
at Versatile sees as a key element for the future.
“The technology is just as important as the iron
is today,” says Cook. “I think horsepower is still a
piece of the puzzle. But you need to put some focus
on (technology). I think the bell curve is turning up
for technology on a tractor.”
However, Versatile is a company with a reputation primarily for simple and reliable equipment.
“We’re known for simplicity, reliability and ease of
service,” acknowledges Reid. “But as we’ve gone
down the road of having more precision-farming
options available, and now that we have sprayers
and air drills, it (technology) is not something we
can put in the back seat anymore. I think what
Continued on page 46
country-guide.ca 45
MANAGEMENT
FITS MY
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46 country-guide.ca
Marty brings to the table is a voice that has a lot of technology experience.”
Would more emphasis on digital technology move the
brand away from its traditional customer base? “Where we
walk the line a little bit is we still have that traditional customer,” says Reid. “As we lay out our plans for the long term,
technology is clearly going to play a role in that. Our integration strategy is how do we make that technology as simple
and user friendly as we can so it doesn’t alienate that traditional Versatile buyer?”
So the trick is to keep the company’s core values of simplicity and reliability as it moves to meet the demands of an
increasingly digital world. “The philosophy is going to be the
same,” promises Reid. “But the products are going to be a lot
more varied. Our big challenge going forward, as always, is
just making sure we’re mixing the right technology with our
products, so we’re still appealing to our historic base of customers but attracting new buyers to the brand.”
An ideal short-term sales target for the company might be
to first grow into market niches that need only a moderate
technology level. “In some major row crop markets they don’t
necessarily want fancy technology, so the telematics technology is easy to adapt to those tractors,” says Cook. “That’s
where we’d be a great fit.”
As well, some of those row crop markets, particularly in
the southern U.S., represent virgin territory for the brand. As
the company’s product line continues to expand, that region
could become the source of valuable new sales. “There are
tons of opportunities,” says Cook. “Especially in the south.
Our potential (there) is through the roof.”
Integrating new technologies around its simple-and-reliable
mantra means it wouldn’t be necessary to rebrand the company. Cook believes Versatile can still embrace technology
from that perspective, and he will try to make that happen.
“Coming from a technology background, I’m always looking
for ways to increase that aspect of the business,” he says.
The simple-and-reliable brand, which was prized mainly by
family farmers in the past, may also become something even the
very large corporate farms come to value in the future. “I think
that can be even more important,” suggests Cook. “The larger
you scale the farm, the more important those things become.”
Machines that are simple to maintain and operate become
even more valuable as finding qualified farm workers gets
increasingly difficult. “Those professional farm hands that were
around in the past just aren’t available anymore,” says Reid.
Whether or not it’s due to that reputation for simplicity, Versatile’s marketers have noticed increased interest in the brand’s
equipment at recent machinery shows around the country.
“Our presence at Regina (Canada’s Farm Progress Show)
last year was one of the best trade shows we’ve ever done,”
says Reid. “We were run off our feet. To stand there and see
a lineup of people for three days was really exciting. It was
good to see a lot of people come into the booth and say, ‘I
don’t have a Versatile tractor, but it’s good to see you guys
back again.’
“Of course the next step is to get that guy to say, ‘Hey, I’m
going to buy this tractor,’” Reid adds with smile.
The job of making that happen with increasing frequency
now rests with Cook. CG
FEBRUARY 15, 2013
BUSINESS
Farm fresh fun
At Snyders Family Farm, success begins
by throwing out all those traditional ideas of
what a farm is supposed to be
By Jeanine Moyer
y any definition, Snyders Family
Farm isn’t your traditional farm.
You might say, in fact, that it’s
a completely upside-down sort
of farm, because for the Snyders,
their main crop in a very real way is the people who they attract to their place every fall,
not the crops or animals that they produce in
their fields and barns.
Even the Snyders have a very hybridized view of what they are trying to do. “We
don’t sell pumpkins, we sell memories,” says
Meghan Snyder who, along with her husband
John, owns and operates the 120-acre farm
located in Bright, Ont., 20 minutes west of
Kitchener-Waterloo.
Or… it might be that the Snyders actually
have a very sophisticated view, and one that
puts them closer to the mainstream of agriculture than you would initially think.
The Snyders’ agri-tainment destination has
become a popular fall attraction featuring a
10-acre pumpkin patch, fall flower and decor
retail location, 16 daytime family fun attractions and a nighttime Fear Farm — an elaborate haunted hayride and barn.
Continued on page 48
FEBRUARY 15, 2013
country-guide.ca 47
Continued from page 47
process designed to make their farm even more successful the following year.
And however you define it, the farm is a success.
On one evening alone this past October, the Snyders
hosted 1,700 guests on their farm operation.
Success means you have to…
Thirteen days of production
Some farmers would consider the Snyders lucky
since they have almost an entire year to plan their
production season. But Meghan says they need that
year, because everything depends on those six weekends when they are open — a total of 13 days.
“It takes a whole year to produce,” Meghan says.
Nor do they take any breaks. As soon as the fall
harvest season and Halloween festivities are over, the
Snyders are right back at the drawing board, measuring and evaluating every aspect of the operation in a
“We don’t invest in things like irrigation equipment on our farm,
we invest in bubble machines
and sugar for our cotton candy.”
— Meghan Snyder
48 country-guide.ca John may not have realized he was a trailblazer
when he jointly purchased the farm in 2002. Land
prices seemed astronomic, although they were far
from today’s highs, but the question for new farmers
was already the same as today.
How could he make enough income to farm full
time on 120 acres?
In this case, the answer came from the previous
farm owners who had already started a small retail
location and pumpkin patch on the farm. John added
to the existing on-farm business in 2004 when he
launched Fear Farm, the nighttime haunted attraction.
Together, John and Meghan have grown the business over the years, maximizing their earning potential through seasonal agri-tainment attractions.
The success and popularity of the on-farm destination is a combination of good ideas, good marketing, and a lot of hard work. “And you have to like
people,” says Meghan, pointing out that she and her
husband host thousands of people at their home as
their guests each year. She also says those guests have
high expectations, saying “people expect an experience and they demand you do it well.”
It’s the details like making sure Google Maps can
FEBRUARY 15, 2013
Photo credit: David Charlesworth
b u s i n e ss
business
locate their farm, and posting signs directing visitors to the baby change station that
keep the Snyders awake at night, because
it can often be the smallest details that
affect a guest’s experience on the farm.
The Snyders consider their farm
operation an attraction, rather than a
retail location. Their emphasis on creating memories and experiences helps them
focus and meet consumer’s expectations.
“We don’t invest in things like irrigation equipment on our farm, we invest in
bubble machines and sugar for our cotton candy,” says Meghan.
It’s a different way of thinking. For
instance, when they bought their bubble
machine, they couldn’t calculate how
many more bushels of one crop or another
it would help them grow. Instead, they had
to ask how much impact it would have on
their customers, and how much more business would be created by that extra investment in fun. “We’re gonna try to blow
your mind today,” Meghan says, slipping
into the marketing jargon. “And this is just
the beginning.”
Farming the public
On-farm agri-tainment is gaining popularity especially with the current marketing trend that sees more companies
inject more farmers in consumer advertisements. But, just because consumers
like to see farmers in mainstream marketing doesn’t automatically mean they will
come to your farm.
“You can build it, but they won’t
come unless you make it an attraction,”
says Meghan. It’s not enough to just
grow a patch of pumpkins and invite
consumers to come pick them — you
have to invest money in marketing and
advertising, develop distinctive ideas and
ultimately, create a unique experience
that can’t be found anywhere else.
The best advice the Snyders can offer
to other farmers considering the agri-tainment business is to make an important
decision — are you going to farm crops or
people? In Meghan’s opinion, you can’t do
both, because you need to commit 100 per
cent of your focus on one or the other.
In fact, this is the main strategic idea
driving their farm, and it can be summed
up in just three words. Focus is essential.
That’s why income shouldn’t be the
only motivation in developing farm
attractions, Meghan says, because a key
learning for the Snyders has been that
while they have built their operation to a
financially secure point so they can both
FEBRUARY 15, 2013
work full time on the farm, it takes more
than money to keep them going.
“It’s the feedback that gets us
through the year,” Meghan says when
she describes the elated feeling she gets
overhearing a child say that a visit to
their farm is better than Christmas, or
the chuckle she and John share knowing
their haunted Fear Farm attraction has
made adults wet their pants.
John and Meghan also make sure they
pass on positive comments to their more
than 70 seasonal staff members as a form
of motivation. Staffing is a priority for
the Snyders and a lot of effort goes into
recruiting and hiring, because “good people will keep you inspired,” says Meghan.
A new group of employees is trained
yearly before the farm opens to the public
with an emphasis on treating visitors as
guests, not customers. Last year, John and
Meghan also developed a theme for their
staff, challenging them to turn farm guests
into farm fans.
The Snyders success wasn’t built overnight, “and it isn’t always smooth,” admits
Meghan. The couple has dealt with chal-
lenges of developing new attractions and
ideas, zoning complications and dealing
with day-to-day encounters with the public.
Industry support for their operation
is limited since it is so unique and isn’t
always recognized as a traditional farm.
The Snyders are members of the Ontario
Farm Fresh Marketing Association, however, and often get together with owners of other Ontario agri-tainment and
retail locations to share ideas. John and
Meghan were also finalists in Ontario’s
2012 Outstanding Young Farmers’ finalists, nominated by Ontario Farm Fresh.
Such a short season — 13 days —
means the Snyders must get everything
right the first time. They’ve had 10 years
to ensure everything runs smoothly, but
are constantly adding new ideas, attractions and features to their farm to put a
smile on every visitor’s face.
Their enthusiasm, attention to detail
and love of the fall season continue to
bring thousands of guests to their unique
farm operation, and every year John and
Meghan are proud to count their harvest
in laughter, smiles and memories. CG
When comparing
MBA programs,
remember what field
you’re in.
The University of Guelph
delivers a world class
On-Line MBA,
with the benefit of
an Agribusiness
perspective.
Find out
more today.
Call 1-888-622-2474
Or visit www.mba.uoguelph.ca
country-guide.ca 49
management
Twenty minutes of praise
Performance reviews may seem foreign to most farmers,
but there’s growing evidence that they do work
By Maggie Van Camp, CG Associate Editor
ven though it was 7 p.m., the thermometer was still pushing a very humid
100 F when I rushed out the door
one day last summer on my way to a
human resources conference at Guelph.
As I headed to the car, however, I could hear my
81-year-old father-in-law hammering away, repairing an old barn floor to get it ready for a load of
straw. He’s never received an ounce of praise for
his labour, nor has he given it. Yet he’s the most
driven person I know.
That example of stubborn independence and selfmotivation formed a kind of counterpoint to the
whole theme of the conference — motivating employees and family through feedback and communication.
The message was that tomorrow’s farmers are
being forced to transition themselves into people
managers instead of task-doers, and not surprisingly,
we often do it poorly.
Still, the message was clear, and hard to argue
against. Yes, we can get better at motivating our people so we get more out of them, and yes we can get
better at preventing and at solving interrelationship
problems, but it takes time, openness, and patience,
not to mention a healthy dose of belief.
But it doesn’t have to be impossible to get started,
says Gregorio Billikopf, agriculture human resources
specialist at the University of California, especially if
you focus on an acheivable objective like adopting
performance reviews. Billikopf says one key ingredient of people
management is topping performance reviews and
negotiations with a big dollop of praise. In fact, he
recommends an ego-boosting 20 minutes of it.
Yes, you read that right. I can almost visualize my
father-in-law chuckling as he reads this. However,
Billikopf’s approach has been amazingly successful
on the large employee-dependent farms he consults,
and he is convinced that sincere praise effectively puts
employees at ease during performance appraisals. Although people vary in their desire for improvement, Billikopf says generally they want to know
how well they’re performing. Plus, once they’re
relaxed and feeling good about themselves, they’re
50 country-guide.ca also more likely to be grateful for constructive information on how to improve shortcomings and maybe
for an offer to help.
“It’s got to be at least 20 minutes’ worth,” says
Billikopf. “Most people are just waiting for the
hatchet in performance reviews, and it takes this long
for them to relax.”
Billikopf’s systematic approach to performance
appraisals turns traditional roles upside down. With
his negotiated performance appraisal, the employee
is in charge and the supervisor or manager acts more
as a coach than a judge. The focus is on helping
individuals assume responsibility for improvement,
rather than on assigning blame and discipline. “This is about getting people to talk to each
other, not about the supervisor judging,” says Billikopf. “More people are motivated by praise than
by disciplinary process.”
The process starts two weeks ahead of the
appraisals when managers/supervisors make a list
of all things the employee does well, including two
examples of why this makes a difference to the overall operation. At the same time they meet with the
group of employees to explain what’s going to happen and assign three written lists that the employees
are to prepare ahead. These include a list of ways
the employees perform well, secondly how they have
shown recent improvements and thirdly how they
need to improve. Additionally, employees are to think of ways the
farm and supervisor can help them thrive and be more
successful, and the employees are also responsible for
coming up with ways to measure improvement.
Essentially, in other words, the managers transfer
a substantial amount of responsibility for improvement to those being evaluated, which reduces
defensiveness and puts employees in control of
their own review.
Two weeks later, the manager meets with each
employee individually and starts by asking them to
share their first list — ways they perform well. Even
if the manager thinks it’s a negative and not a positive, at least this may help reveal the subordinate’s
perspective, or be an opening for discussion as it
FEBRUARY 15, 2013
management
Farmers are being forced
to transition themselves
into people managers
instead of task-doers,
and not surprisingly,
we often do it poorly
might fall into the needs improvement
category. Too much of a good thing is
still too much. “The goal is to have them join in the
praise of themselves,” says Billikopf.
“This is a celebration.” Once done, managers read from their
own list and add why it’s important
to the farm, and also restate the ones
already mentioned. Details and specific
examples will make it easier to accept
this feedback as honest. “Learning how to give powerful, earnest compliments is an investment that will
pay off with dividends,” Billikopf says.
FEBRUARY 15, 2013
Now that they are relaxed and feeling
pretty good about themselves, employees are asked to share some things to
improve and things they’re still improving. The subordinate reads out loud
areas of possible improvement and the
person doing the appraisal listens and
crosses off these ones on their own list,
and records the ones they missed. Both
the person doing the review and the
employee should have written some suggestions, but it’s up to the employee to
lead this discussion.
This works well, Billikopf says,
because it’s human nature to prefer to
point out our own shortcomings rather
than have someone else do it. The manager doesn’t need to repeat what the
subordinate says, just keep track of it
and offer support to help improve. Also
ask for ways to measure improvements,
exploring questions like: How will we
know in a year if that goal was met?
In Billikopf’s experience, leaders who
sincerely look for positive behaviour
have fewer problems giving constructive
feedback or suggestions.
Finally the manager states any weaknesses not already discussed, using what
Billikopf calls the smallest hammer. If the
employees don’t get it right away, give
more details and add a few examples, if
necessary. That’s why it’s important for
the manager to think about these things
ahead of time.
If things start getting tense, Billikopf
suggests the manager mention something
from the first list. Also, asking the employee for alternative solutions is good since it leads into
the final list of what the supervisor can
do to help. Which brings us back to the
purpose of the review — not to assign
blame but to look for solutions.
Billikopf also suggests a brief followup meeting a month or two later to
discuss what has or has not worked so
far. This is a way to point out specific
obstacles preventing people from reaching their full potential. His clients have found by having this
appraisal process, they’ve been able to
avoid conflicts or deal with disagreements before these balloon into conflicts.
“It gets people talking and it helps people look at the past and make agreements for the future,” says Billikopf.
If you have middle management
doing these appraisals, Billikopf suggests
starting with their own performance
appraisals so they learn how to do it by
sitting on the other side of the table. Sometimes facilitators sit in on these
meetings to help everyone learn how to
present their own thoughts and focus on
positive change instead of defending positions. Sometimes Billikopf teaches both
parties how to do this through role play.
Getting people to praise others and
accept compliments can be surprisingly
difficult. After all, for so many of us,
it’s way outside our humble but proud
nature. CG
country-guide.ca 51
w e at h e r
NEAR NORMAL
**
**
ld y
C o ow a k s
Sn bre
t
ou
BRITISH COLUMBIA
F
rai requ
n / en
sn t
ow
NEAR-NORMAL TEMPERATURES
AND PRECIPITATION
M
sp ild
M el
ar ls
ch
l
onaw
i
s
o
ca
Oc n / sn
rai
S tor
my
at tim
es
ld
Co owy
Sn
**
MILDER THAN NORMAL
M
NE ILDE
AR R T
-T
HA
PR O ABO N NO
EC
IPIT VE-N RMAL
ATI OR
ON MA
L
COOLER THAN NORMAL
look for some heavier snow or rain. Colder,
often snowy north.
Mar. 17-23: Pleasant on a few days this
week with thawing temperatures but a
couple of colder, blustery days bring snow
or rain to the south. Intermittent snow and
cold north.
February 24 to March 23, 2013
Feb. 24-Mar. 2: Seasonal to cool although
a few highs could hit double digits in
southern areas. Fair aside from occasional
rain on the coast changing to intermittent
snow elsewhere.
Mar. 3-9: Temperatures vary but trend
toward normal values. Blustery at times.
Pleasant overall but a couple of cooler outbreaks bring rain west and heavier snow
east/north.
Mar. 10-16: Fair but disturbances bring
two or three unsettled days with rain on
the coast and a snow/rain mixture elsewhere. Chance heavy precipitation. Seasonal to cool temperatures.
Mar. 17-23: Temperatures moderate and
climb to double digits in the south and
above zero north. Fair but occasional
heavier rain west with snow or rain east
and north. Windy at times.
ALBERTA
Feb. 24-Mar. 2: Seasonal but mild spells
bring thawing on a couple days in the
south. Bright skies but with scattered
heavier snow, chance rain on two or three
days this week. Windy at times.
Mar. 3-9: Seasonal temperatures overall
with a couple of milder days and thawing
in the south. Generally fair but snow or
rain falls on a couple of occasions, chance
heavy in places.
Mar. 10-16: Expect changeable weather
this week as fair, pleasant days interchange with windy days and periodic snow
or rain. Blustery winds from the mountains
create variable temperatures.
Mar. 17-23: Seasonal to occasionally
milder with extensive thawing in southern
areas. On a couple of windy, cooler days
52 country-guide.ca SASKATCHEWAN
Feb. 24-Mar. 2: Sunny on a few days with
changeable temperatures and minor thawing south. On a couple of occasions expect
heavier snow, chance rain. Blustery at
times with drifting.
Mar. 3-9: Bright, mild days interchange
with unsettled, windy and cool outbreaks
this week bringing occasional snow, mixed
with rain south. Chance heavy precipitation in a few areas.
Mar. 10-16: Thawing takes place on several days this week in spite of a couple of
cooler, windy outbreaks and sub-zero lows.
Sunshine dominates apart from scattered
heavier snow or rain.
Mar. 17-23: Seasonal to occasionally cool
although thawing occurs on a few days.
Look for sunny skies to alternate with periodic snow or rain, possibly heavy in a few
regions. Windy.
MANITOBA
Feb. 24-Mar. 2: Blustery at times with
drifting snow and changeable temperatures. Minor melting south and sunny
aside from snow, chance rain on a couple
days. Cold, snowy north.
Mar. 3-9: Bright skies and some melting
alternates with a few unsettled, windy
and cool days. Occasional snow, possibly
mixed with rain south. Chance heavy precipitation in places.
Mar. 10-16: Sunny but snow, some rain,
falls on two or three days, risk heavy in
some regions. Temperatures on the cool
side but thawing takes place on a couple
milder, windy days.
February 24 to March 23, 2013
NATIONAL HIGHLIGHTS
Lengthening days and milder southerly winds
will begin the job of loosening winter’s grip on
the country in this period. This will be most
evident over the eastern half of Canada where
milder-than-usual temperatures are anticipated. Several weather systems will follow the
milder air from the Great Lakes eastward to
the Atlantic provinces. This will increase the
likelihood of heavier-than-normal snow and
rain in many of these areas. Meanwhile, from
British Columbia eastward to the Prairies and
into northern Ontario and northern Quebec a
changeable weather pattern is expected. This
is likely to result in variable weather conditions
with temperatures and precipitation averaging close to normal values. In a few areas of
Canada where snowfall amounts were greater
than normal, rapid warming may cause local
flooding in March.
Editor’s note:
Where’s my weather page?
Look in every second issue for your month-long
Country Guide weather forecast during the winter
months when we’re publishing every two weeks.
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.
February 15, 2013
hr
When fear gets in the way
“I am an old man and have known a great many troubles,
but most of them never happened.” — Mark Twain
By Pierrette Desrosiers, psychologist and coach
ear is a normal human reaction. We
would not have survived as a species
without it. Most of the time in daily life,
however, we harbour several fears that
are often disproportionate, irrational,
exaggerated or even unconscious. They become an
obstacle to personal and professional development,
proper business operation, teamwork and effectiveness in general. If not controlled, they often produce conflicts or prevent us from resolving them. When I coach farmers, communication problems often originate in their fears:
• “It irritates me when he goes along behind me to
‘redo’ my work or what I’ve said and talks to
me in a disrespectful way.”
• “I would like to retire and rest a little. I’m tired.
I would like to work fewer hours, but my son
calls me the moment I’m not on the farm.”
• “I have the impression that I do more than my
brother does, that he gets the best jobs and that
I’m treated as if I were an employee.”
Have you told yourself any of that?
Very often, agricultural producers tell me that
they have shared very little about what they want
or don’t want, their fears, needs and limitations.
Why? Because they are afraid of:
• Being judged
• Being challenged or openly
criticized/publicly ridiculed
• Being dominated
• Being betrayed
• Being misunderstood
• Being used and manipulated
• Revealing a weakness or being
seen as incompetent
• Feeling bad
• Other people’s reactions
• Not being loved anymore
• Not being respected anymore
• Creating a conflict
And you? What fears hinder you in your work
and daily life?
What is the effect of those fears on your work
relations, on your teamwork, on the smooth functioning of a future meeting, and on your ability to
give and ask for all the information necessary to
make the best possible decisions?
How do those fears impact on your effectiveness, and on your profitability?
FEBRUARY 15, 2013
When you feel uncomfortable or unable to correctly formulate what you are thinking, ask yourself:
• What am I afraid of?
• What is the basis of my fear? (For example: I’m
afraid I won’t be respected anymore because I
mention that I’m tired.)
• If that were to really happen,
would it be all that bad?
• Could I live with the consequences?
• Over the short, medium and long term,
what are the consequences of not talking?
• Are the consequences of not talking more
harmful than talking?
Allowing anxiety to paralyze you is a problem
because although avoiding the underlying issue works
well in the short term, it only makes things worse overall. When you feel anxious and avoid the situation,
your anxiety level decreases. However, your problem
is not actually solved. Your frustration and dissatisfaction are still there, and will probably worsen with time.
This means that avoiding our fears is a winning strategy in the short term but a losing one in the long term.
Being afraid and letting your fears win will limit
what you can get in life, what you can become as a
person, and the goals you can achieve in both your
personal and your professional life. Mark Twain has
said, “Courage is not the absence of fear. It is acting
in spite of it.”
It’s important to act and follow through with
your plans despite your fears and your desire to
avoid pain and disappointment. The fears will go
away as you act. Remember:
• Forty per cent of our worries are
about events that never happen;
• Thirty per cent of our worries are about
events that have already happened;
• Twenty-two per cent of our worries are
about harmless events;
• Four per cent of our worries are about
events we can do nothing about;
• Four per cent of our worries are about real events
over which we have some power. CG
Pierrette Desrosiers is a work psychologist, professional speaker, coach and author who specializes in
the agricultural industry. She comes from a family
of farmers and she and her husband have farmed
for more than 25 years. (www.pierrettedesrosiers.
com) Email: [email protected].
country-guide.ca 53
ACRES
By Leeann Minogue
Those trees on the Sampson place
Little did Elaine know when she moved to the farm from town
that getting back to town would be such a big part of the job
eff and his father Dale had been gone less
than half an hour when their wives heard
them stomp the snow off their boots on the
step and come back into the house. The men
were taking their coveralls off in the porch
when Jeff’s boy Conner came toddling up, wide
eyed. He stopped, looked at his dad and spoke in a
slow, loud voice. “Car! Road! Snowbank!”
“That’s right, Con-man,” Jeff said, picking up
the boy and hugging him hard. “You and your mom
had a pretty good adventure out there, didn’t you?”
The men came in and joined Jeff’s wife Elaine
and Dale’s wife Donna at the kitchen table where
they were drinking hot chocolate. Conner raced off
to play with the old set of Lego Donna had hauled
up from the basement.
“Whew,” Jeff said. “You were right. That SUV’s
totalled. There’s no point dragging it back to the
yard. We’ll call a tow truck and get it hauled to the
insurance adjuster in town.”
Earlier that afternoon, Jeff had taken a break
from clearing snow around the Hansons’ yard when
Brian Miller drove in. Jeff had been confused to see
his wife and son climbing out of the passenger side
of Brian’s truck.
54 country-guide.ca
“I picked these two up on the road two miles
north,” Brian told him. “Your wife slid off into
the ditch.”
“Are you OK?” Jeff said, taking Conner out of
Elaine’s arms.
“Car! Road! Snowbank!” Conner said.
“We’re OK,” Elaine said. “Shaken up. It happened so fast. I got a bit too far over to the edge and
the next thing I knew, I lost control. I was terrified,
but I didn’t want to shout, and scare Conner.”
“I’m just glad you’re OK,” Jeff said.
“We’re OK. But I wrecked the SUV. I heard a lot
of crunching.”
“Oh geez,” Jeff said to Brian, “I’m always saying
she drives too fast on the gravel.”
“Nah, this could’ve happened to anyone” Brian
said. “It was up by the old Sampson place, where
the snow’s all built up. Somebody oughta go in there
and cut down those trees.”
“Yeah,” Jeff said.
“And that layer of ice doesn’t help.”
“Thanks for picking her up, Brian.”
After Brian left, Jeff took Elaine and Conner into
his parents’ house. “Dad,” he called in from the porch.
“Could you give me a hand?”
FEBRUARY 15, 2013
acres
“I don’t think I’ve pulled a car out of the ditch since your sister left home,” said Dale. “I’m out of practice.”
As soon as Dale and Donna came
in from the living room, Conner ran to
his grandparents, yelling “Car! Road!
Snowbank!”
“What happened?” Donna and Dale
both asked.
Elaine explained again and Jeff said,
“I’m going to take the front-end loader
tractor up and see if I can’t pull the SUV
out of the ditch and drive it home.”
“I don’t think you’ll be able to drive
it,” Elaine said.
“Might as well take a look,” Jeff said,
grabbing some spare coveralls out of his
parents’ porch closet.
“I don’t think I’ve pulled a car out
of the ditch since your sister left home,”
Dale said to Jeff as he pulled on his own
coveralls. “I’m out of practice.”
The men left, and Donna turned on
the kettle to make some hot chocolate.
Elaine started to cry.
“Don’t do that,” Donna told her
daughter-in-law. “You’re OK. Conner’s
OK. We have insurance.”
“I could’ve killed Conner.”
“Don’t even think that,” Donna said.
But Elaine cried harder. Donna brought
Kleenex and hot chocolate with extra
marshmallows, and finally Elaine sniffed
and pulled herself together enough to
talk again.
“I didn’t know there was going to
be so much driving when I moved out
here,” Elaine said. “I mean, I knew
where the farm was. And I knew how far
it would be to town. But I didn’t know
what it would really be like.”
“I know,” Donna said. “You’ve been
on the road a lot lately.”
“Twenty-seven miles! Twenty-seven
miles each way to get to the playschool
board meeting today. And yesterday to
meet with the accountant. And twice
the day before to take Conner to see the
health nurse and to have dinner with
friends. That’s over 200 miles! And I
don’t even feel like I’ve been anywhere!”
Donna had been doing this sort of
math in her head for the past 30 years.
“I know,” she said.
“And I can’t even look at the price
of gas on the sign at the Co-op. It just
makes me sick. And the environment?”
FEBRUARY 15, 2013
Donna nodded. “If we thought too
much about those things, we’d either
have to leave the farm, or be hermits out
here. We have to live our lives.”
“That’s part of the problem! There
were two days last week when I couldn’t
even get to town.”
“This has been a rough winter for
driving,” Donna said.
“I had to stop listening to the CBC,”
Elaine said, still sobbing. “Every morning that woman goes on and on about
how bad the roads are. It was making
me scared to leave the farm.”
This made Donna laugh. “They do
sometimes get carried away on days
when it’s not that bad.”
Then they heard the men coming
back in, and Elaine went to the bathroom to blow her nose.
Not much later, Dale’s father, Ed,
came in.
“Is everybody all right?” he hollered
from the porch, before the door was
all the way open. “I saw the car in the
ditch!”
“They’re fine Dad,” Dale shouted
back.
Ed pulled his boots off and came to
join the family.
“Quite a bit of snow built up by that
old Sampson place,” Ed said. “I figured
somebody would hit the ditch before
the end of the season. You think the
SUV’s totalled?”
“Yeah,” Jeff said. “There’s no way
it could be worth fixing. She hit a big
rock at the bottom of the ditch.”
“Lloyd Richardson’ll be glad to hear
it,” Ed said. “Since Trina left home, I
don’t know how he’s been keeping that
autobody shop in business.”
“She had a lot of accidents?” Elaine
asked.
“My sister had at least one accident
a month that winter she turned 17,”
Jeff said, shaking his head. “Remember
that time she slid into that steep ditch
south of town and hit that fence post? I
still can’t believe she made it out of that
one.”
“I remember that winter,” Dale said.
“So does the Ford dealer. Insurance
bought us two new cars.”
“Wow,” Elaine said. “This is my first
accident.”
“Really?” Jeff said.
“Well, sure,” Elaine said. “But I
guess I didn’t drive that much, before
I moved out here. These days, it sometimes seems like all I do is drive.”
“You’ll get used to it,” Ed said.
“Maybe you’ll learn to like it. Gives
you a good chance to look around and
see what all the neighbours are up to.”
When Ed laughed at his own comment Conner heard him and came running in to tell his grandpa the news.
“Car! Road! Snowbank!”
“I’m going to have to start taking
you down to Wong’s Café to hear the
guys on coffee row,” Ed told Conner.
“Your story’s got a lot of plot, but
you’re going to have to learn to make
up some extra details.” CG
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.
country-guide.ca 55
10623A_MON_GEN_stewardship_legal_countryguideresize.indd
8/9/12 10:29
1 AM
LIFE
Clear out
the clutter
… so you can focus on what’s really important
By Helen Lammers-Helps
t was economist John Maynard Keynes who
predicted in 1930 that we’d have a 15-hour
work week within 100 years. It’s hard to
know if he meant to include farmers in that
vision, but we can be confident he never
anticipated the pressures and the time commitment
involved in running a modern operation.
In fact, farmers today can sometimes feel more
overwhelmed than their parents and grandparents
ever did, partly because so much less of farming is in
the muscles and so much more of it than ever before
is in the head.
That’s why Country Guide asked two experts
to weigh in on how you can create an efficient and
organized office, and also on how to use that office
to better manage your time. Not only will you feel
less stressed, but you’ll be more efficient and you’ll
achieve your goals faster as you focus on the things
that really matter.
As always, a bit of planning is the most important
ingredient when it comes to setting up an efficient office,
although it’s a step that’s too easy to ignore. Instead,
laments Colette Robicheau, a professional organizer in
Halifax, N.S., an office can just grow organically, getting more and more disorganized every time you need to
find space for a new piece of equipment.
Or like too many others, you may start with a
trip to the office supply store to look at desks with56 country-guide.ca out thinking through what you really need, agrees
Sue Rasmussen, a decluttering expert in Coon Rapids, Minnesota.
It sounds basic but both Robicheau and Rasmussen
recommend starting with a look at the tasks you perform on a day-to-day basis. Keep track of what you do
in the office, and when you do it, says Rasmussen. “Be
specific. Write down ‘answered email,’ ‘made a call to a
supplier,’ ‘wrote a funding proposal.’”
It doesn’t have to be anything fancy, Rasmussen
continues. “Just jot it down in a notebook.” Also,
make note of what equipment you needed to perform each task. Then, by grouping tasks with the
equipment needed, you can create zones of activity,
says Rasmussen, and you can make sure each zone
has the equipment at hand so you can perform the
task as efficiently as possible.
It isn’t rocket science, but it’s a useful and even an
eye-opening exercise, and even if you’ve been running your business for a while, it’s a good idea to try
it, says Robicheau. The nature of your work may be
changing, she explains. For example, perhaps you
are spending more time at your computer and rarely
use your fax machine anymore.
For most people, the three key pieces of furniture
will be a good desk, a good chair and a filing cabinet, says Rasmussen. Robicheau stresses the importance of choosing furniture based on function. She
FEBRUARY 15, 2013
LIFE
warns that if you don’t pay attention to
the ergonomics of your office you could
be setting yourself up for a lifetime of
health issues from repetitive stress injuries
or a back injury.
The chair is the most important, says
Rasmussen. “Make sure it is completely
adjustable. You should be able to sit with
feet flat on the floor and your arms at a
90-degree angle to the keyboard.”
When it comes to desks, Robicheau
says many people choose a desk that’s
too small. “An L-shaped desk is best
because it gives you extra workspace.”
One of the biggest sources of stress for
people today is the deluge of emails and
paper. “People are flooded with information and when they get behind they feel like
they will never catch up,” says Rasmussen.
Robicheau recommends dividing
the information you keep into one of
three categories and filing it accordingly.
There’s the “Action” category, which is
information that you need to have at
a click or within easy rolling distance.
There’s “Reference” material which can
go on a desktop or in a filing cabinet.
And there’s “Archive” information which
can be kept farther away, or even in a
closet, the basement or the attic.
With so much information coming in,
Rasmussen says the key is to learn to make
decisions about what to do with incoming
mail and email as quickly as possible. She
urges people to “Shred and delete. Shred
and delete. Shred and delete.”
Rasmussen uses a gardening analogy
for managing email. In gardening, weeding and thinning are important if you
want your favourite plants to grow well.
Weeding means getting rid of the things
that are not what you want. Thinning
means getting rid of some of the good
stuff, simply because there is too much of
it and because you need to create room
for the very best to flourish.
“Let go of the guilt and let go of the
‘shoulds,’” Rasmussen says.
If you have papers or emails and you
can’t decide whether to keep them or not,
Rasmussen suggests taking a deep breath
and deleting or tossing them.
And she recommends thinking
twice before printing emails or articles.
“Research has shown about 75 per cent
of papers that get filed never get used
again,” she says. If the information is
readily available online, there’s no point
FEBRUARY 15, 2013
in printing it since the online version will
be the most up to date. Clutter stifles our
energy, whether it’s print or electronic,
Rasmussen adds, so clean out both paper
and email folders at least once a year.
For paper, Rasmussen suggests having one inbox where everything goes,
including bills, invitations, newsletters,
etc. Once a day, or once every two or
three days, go through the papers and
deal with everything in there. Events and
task items get added to your planner so
there is no need to save these emails or
papers. “Use your planner to empty your
inbox,” she advises. This also avoids the
clutter of multiple sticky notes stuck on
phones, computers, walls, etc.
When it comes to electronic files,
Robicheau says there is no excuse for
losing files. There are external software
programs such as MozyPro, Carbonite
and Box.net that you can use to back up
your hard drive in case of an emergency.
You can also keep important files on a
USB memory stick or CD.
To allow several people access to electronic files, there are many cloud sharing
options available including Google Drive,
DropBox and Microsoft SkyDrive.
Remember, though, that your goal is
to share files that are worth sharing, not
sharing a million things that no one will
ever need or look at.
Computers let us store more information than ever before, but we’re kidding
ourselves if we think that this automatically means we can be better managers.
Instead, we still need to give ourselves an
opportunity to think about the big things,
and to think about them one at a time.
In other words, stop as much clutter
as possible before it starts getting in your
way. Don’t let information into your system unless it will actually help you.
“Learn to say no as often as possible,” Rasmussen advises. “That way you
can focus on the things that are really
important.” CG
Manage email too
It’s easy to get 25, 50, 100 or even
more emails every day, and it’s just as
easy to take a huge hit in both your
office efficiency and your overall productivity by taking time to read and
process them all. Sue Rasmussen and
Colette Robicheau suggest these tips
for taming your inbox.
• S et up rules so different types of
emails automatically go into specified
folders.
• U nsubscribe from lists you don’t
want to be on (there’s usually a link
at the bottom of the email for unsubscribing.) Ask friends and family not
to forward jokes to you.
• Only check email once in the morning and once in the afternoon.
• U se good subject titles. Change
the subject title when a thread has
changed directions.
• If it only takes a few minutes, deal
with the email right away.
• If you have multiple email addresses,
check to see if each one gives you
true value or if it is complicating your
life. Alternatively, forward all emails
to one location by rule, so you only
have one in-box to check.
• When clearing out a backlog, start with
the most recent emails first. If necessary, clear out a small section at a time
(try setting the timer for 10 minutes)
instead of tackling everything at once
and getting overwhelmed.
• S et up a reminder notification in
case you don’t hear back from someone you’ve emailed.
• Get proficient at using “search and
find” commands to locate emails.
• Sometimes picking up the phone is
faster than sending an email. Know
when to use email and when to call.
RESOURCES
Both Rasmussen and Robicheau have websites with lots of useful information to help
you clear up the clutter and become more efficient.
Sue Rasmussen’s website: http://www.unclutter-organize-transform.com/organize-files.html
Collette Robicheau’s website: http://www.organizeanything.com/
If you want to hire a professional organizer to help you, check out the Professional
Organizers of Canada at www.organizersincanada.ca.
country-guide.ca 57
h e a lt h
Getting pregnant —
Sometimes it’s not easy
By Marie Berry
ne in seven couples will have problems conceiving, and if you’re among
them, it can be frustrating. The basics
seem simple enough. An egg or ovum
joins with sperm to form a fetus, but
sometimes it just doesn’t happen, as shown by Canada’s fertility rate of about 35, representing 35 live
births in a year per 1,000 women aged 15 to 44.
There can be various reasons for a couple’s infertility, but in about a quarter of the cases no explanation can be found.
Older age, especially for women, can reduce fertility, and unfortunately nothing can stop you from
growing older. A family history of difficult pregnancies or low fertility rates may also point to a problem
that is hereditary.
If you have been trying to conceive for
about a year without success, getting
checked out is the first step. Causes
can be found in three-quarters of cases
If you have been trying to conceive for about
a year without success, getting checked out is the
first step. Low sperm counts, inactive sperm, fallopian tube problems, or ovulation irregularities may
be the cause and sometimes these can be corrected.
Being overweight or underweight reduces fertility. Eating healthy, being active, and maintaining
an appropriate body weight will also increase your
overall health. Environmental contaminants such
as air pollution, solvents, lead, herbicides, and
pesticides can also be linked to changes in fertility.
These are best avoided and if you need to handle
them, remember to use the appropriate protection.
Chronic obstructive pulmonary disease or COPD
is an inability to breathe due to obstruction of
airways. The condition can begin when you
are younger, but disabling symptoms are more
frequent over 50 years of age. Not being able
to breathe is uncomfortable, unsettling, and
unhealthy. Next month, we’ll look at COPD and
what you can do at any age to avoid the shortness of breath.
58 country-guide.ca Another environmental risk is heat, especially
because of its effects on sperm, so be cautious with
hot tubs, for example, and with tight underwear.
Disease conditions have the ability to reduce
fertility too. Obviously, conditions such as endometriosis that involve the reproductive organs
can impact fertility. Any type of cancer has the
potential to affect fertility, as can cancer therapy.
Sexually transmitted infections can lead to pelvic
inflammatory disease and possible infertility as
well, and imbalances, not only of sex hormones
but of others like thyroid hormone, cause changes
in fertility.
It is important to identify and treat any medical
conditions that can alter fertility.
Sometimes drugs can be the culprit in reduced
fertility. Chronic use of non-steroidal anti-inflammatory drugs such as ibuprofen and ASA is linked
to lower fertility. Antipsychotic drugs used to treat
mental health conditions cause a decline in fertility.
As well, excessive consumption of caffeine has been
shown to affect fertility, as have illegal substances
such as cocaine and marijuana.
Besides avoiding the various causes of infertility, there are some steps you can take to increase
your chances of pregnancy. Eat healthy. Following Canada’s Food Guide is a great place to start,
remembering to include folic acid in your diet to
prevent neural tube damage. The recommendation
is 400 micrograms of folic acid for the first three
months; green leafy vegetables, brown rice, and
fortified cereals are good sources.
If you smoke, you are more likely to miscarry
and have a baby with a low birth weight. Researchers also think that smoking lowers fertility. Quitting is certainly a healthy choice! There also seems
to be no safe amount of alcohol during pregnancy.
Fetal alcohol spectrum disorder can occur regardless of how little you drink, and it is unclear as to
what other factors may be involved as causes.
Trying to get pregnant can be stressful, and
stress may also affect fertility. Relax, get sufficient
sleep, and use stress busters like time management, breathing exercises, breaks from work, and
even taking a walk. Increasing your chances is
your aim, and many of the strategies can improve
your overall health as well, which certainly is a
win-win situation.
Marie Berry is a lawyer/pharmacist interested in
health care and education.
FEBRUARY 15, 2013
“Please join us for a celebration of
our 50th wedding anniversary.” We
enjoy these events, especially when children and grandchildren express appreciation for the honoured couple.
As I listen to the speeches, I recall my
early years as a minister. I presided at many
marriages. It was pleasant work, even
when the bride’s mother became obsessive
about arrangements. I wonder how those couples, so filled with
hope and love on their wedding day, have fared over the years?
In traditional wedding ceremonies the couple promises to
stay together “for better or for worse.” Vina was the housekeeper at the theological college I attended. Her job was to
clean the corridors and classrooms. She constantly complained
about her husband, who drank excessively and could not hold
a steady job. In my youthful idealism I moralized, “Well, Vina,
you married him for better or for worse.” She retorted, “Yea,
but he don’t get no better.” Many of us “don’t get no better”
but our spouses put up with us.
Why do some marriages last while others fail? The bride in
the first wedding I performed turned out to be a polygamist.
She told me she was single, but she was legally married to three
other men. She stayed with the groom for a few hours then
ran off with the best man. I worried that I would be in trouble
with my bishop and the law, but an understanding supervisor
encouraged me to continue performing marriages.
Other marriages last “until death do us part.” A retired farmer
from southern Saskatchewan told me how he left the family farm
to join the army during the Second World War. He was sent to
England where he noticed a young woman “throwing heavy sacks
of groceries onto a lorry.” “I said to myself, ‘she would make a
good farmer’s wife.’” He turned to the beaming grey-haired lady
beside him. “I persuaded her to come to Canada and she has been
a wonderful companion for more than 60 years.”
Some couples are not as fortunate as this veteran and his
war bride. Kathleen Norris, the author of Dakota, wrote: “My
grandfather practised medicine for 55 years in an isolated town
in northwestern South Dakota. Whenever he would bring in a
partner, usually younger physicians, my grandmother always
used to say that it was the wives who would determine whether
or not they would stay. Rural life asks a great deal of women,
and its rewards are not always evident to outsiders.”
Norris says the documentary “The Farmer’s Wife,” filmed in
the 1990s but still relevant, “tells the truth about what it takes to
make a marriage. When the going gets rough, Darrel and Juanita
Buschkoetter (subjects of the film) are smart enough to realize
they need help, and turn to their priest and, briefly, a marriage
counsellor. One of the most moving revelations to unfold in the
film is the way in which Darrel and Juanita come to recognize
that ultimately, the marriage is up to them. They are the only
two people who can make it work. And like the farm, their
marriage is worth fighting for, even if it means change, even if
it means discarding the old idol of “the way we’ve always done
it,” or “the way our parents did it.” The Buschkoetters struggled
with enormous farm debt. They almost lost the farm and their
marriage. Norris says, “I was struck by Juanita’s profound
observation that as bad as their financial crisis had been, it was
of little significance compared to the crisis in their marriage.”
Suggested Scripture: Ruth 1:16-17, Matthew 19:4-6
Rod Andrews is a retired Anglican bishop. He lives in Saskatoon.
FEBRUARY 15, 2013
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country-guide.ca 59
Va l l e y
Women
take over
the diner
ILLUSTRATION: RICK KURKOWSKI
Dan Needles is the author of
“Wingfield Farm” stage plays.
His column is a regular feature in
Country Guide
ow that a Korean couple runs the Kingbird
Cafe, the traditional
hot beef sandwich has
been replaced by Wok
Wednesday. We’re still reeling from the
shock, because green vegetables haven’t
appeared on the menu in the diner since
the Depression. (There were the Pale Peas
of Petunia, which are related to green
peas by marriage, but it’s not that close.)
The menu change and the smoking
ban have brought new faces to the diner,
notably women. The Kingbird had been
a man’s preserve since Mac MacKenzie’s
mother, Flossie, added a lunch counter to
the filling station in 1937. The first week
she started serving soup and sandwiches
to the community, the place filled up with
the retired, the infirm, the verbally incontinent and the bewildered. Legend has it
we’re still using the same deck of cards
Flossie handed out when someone complained about the service.
Women have never been excluded
from the diner. They just preferred not to
advertise that they had nothing to do and
all day to do it.
“I’m going to drive a stake in the
floor beside you guys and see if you’ve
moved when I come back,” said Roseanne Pargeter, stamping her boots on the
mat. She joined the long table along the
window where her sister board members
of the High Heels Co-op were attending
their weekly power lunch. A couple of
years ago, a dozen women including my
wife, pooled their savings and bought the
abandoned Bijou cinema and the High
Heels Strip Club next door to it (this
60 country-guide.ca was a port city for many years, after all).
They have since converted the ground
floor into a sprawling indoor marketplace for local food and the upstairs into
artists’ studios. What was once a symbol
of rural decay is now jammed with people day and night.
It started out as the Hundred Mile Market, but people still called it the High Heels,
a habit that has proven hard to break after
three generations. Eventually the women
bowed to public pressure and put the old
neon sign back up on the building, with the
hemline lengthened and the martini glass
removed. Across the street at the Kingbird,
their lunch table is now longer than ours
and the conversation much louder. But
then, who can get excited or need to raise
his voice when talking about seeding depth
or pre-emergent herbicide?
“Can we borrow him for a minute?”
asked Roseanne, pointing at me. “We’re
having trouble sourcing free-range
chicken.” Roseanne’s husband Bert raised
an eyebrow.
“You want to sit with the girls now?”
he asked.
“They’re buying my chickens, which
is more than you guys do. I’ll be back in
a minute.
A minute turned into a half-hour.
Chickens gave way to lamb chops, which
led to a discussion of pork chops and
hamburger, stuff that I produce in small
quantities and usually give away. Roseanne’s sister-in-law Heidi has found a
bunch of part-time livestock enthusiasts
like myself and she’s arranging a steady
supply of local meat.
It all sounded great but I pointed out
that the regulations don’t allow you to
sell chickens out of a retail outlet without quota. Heidi shrugged and said,
“You don’t raise chickens. You just have
ducks, don’t you? There’s no restriction on
ducks.” I think Heidi must have taken her
business training in a Soviet labour camp
because she is very creative. When I finally
turned back to my table, it was empty.
I just heard a CBC radio documentary “The New Revolutionaries” that
quoted economists, social scientists and
politicians about the way women are
changing a chaotic world. They concluded that if we are going to move
forward on age-old issues like poverty,
conflict and how to feed ourselves, it is
women who are going to break the logjams and make us think differently.
Sitting in the Kingbird listening to
Roseanne, Heidi, my wife and several
others talk about business, food, art and
families — often in the same sentence —
I got the unmistakable impression that
the experts were on to something. It’s
the same feeling I get listening to my kids
— that warm, wistful and scary sensation you get when you know your job is
being handed over to someone with more
energy and optimism than you have.
It’s the realization that you are in the
process of being replaced.
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