Country guide east by Farm Business Communications

Here comes the neighbour's mega-farm14 | Pulses wow Toronto’s glitterati 10

eastern EDITION / COUNTRY-GUIDE.CA / March 1, 2016

COVER FEATURE PROFILE

Bulletproof

farm THE

Melvin Penner’s eight-point plan keeps H&M Farms growing  18

CROPS GUIDE

Getting back to Toledo with Ontario soft red 42 New laser technology heats up soil testing 44

PLUS: The 5% Solution, drives productivity for Kristjan Hiebert 24

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6 MACHINERY

Electric power 700-volt systems may be the kick-start the industry needs

CROPS GUIDE

ulsing in P Downtown Toronto Bean and lentil growers charm Ontario’s food industry with glitter and celebrities

Recipe and a Dream A In Saskatchewan alone, value add is on its way to $6 billion in sales. How much are you getting?

itfalls on the road P to Value Adding Experts and veterans share how success can be achieved in value adding, and where the dangers lurk

nowledge — K The next ‘commodity’ Sure, you can download from the ’net as fast as anyone. But how efficient are you at actually using that information?

Selling Our Consumers Farmers are trying to educate consumers; food companies are trying to bamboozle them

Settling Up German machinery maker Rauch is a lesson in how to compete in an uncompetitive country

42 Getting back into Toledo

44 Soil testing by laser beam

46 Pest Patrol 48 Weather

Guide Life

66 8 Etiquette rules for the farm Smooth manners are becoming crucial for farm success 68 Health 69 Hanson Acres 70 Reflections

country guide / Vol. 135 Issue no. 4 / March 1, 2016

Business

39 Cereal breeding

is back in Eastern Canada

Inside

Columnists

8 Legal 63 AME-Management 64 HR

18 Bulletproof the farm Melvin Penner’s eight-point strategy protects Manitoba’s H&M Farms from strategic risks that you can’t buy insurance against. Plus, it opens the door to growth

Features 14 Sizing up the farm Yes, we’re entering an era of super-size farms. But no, says Lane Stockbrugger, they won’t be from Bay Street

24 The 5% Solution A sharp pencil and a commitment to HR add up to growth for Kristjan Hiebert

Our commitment to your privacy At Farm Business Communications we have a firm commitment to protecting your privacy and security as our customer. Farm Business Communications will only collect personal information if it is required for the proper functioning of our business. As part of our commitment to enhance customer service, we may share this personal information with other strategic business partners. For more information regarding our Customer Information Privacy Policy, write to: Information Protection Officer, Farm Business Communications, 1666 Dublin Avenue, Winnipeg, MB R3H 0H1. Occasionally we make our list of subscribers available to other reputable firms whose products and services might be of interest to you. If you would prefer not to receive such offers, please contact us at the address in the preceding paragraph, or call 1-800-665-1362.

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EDITOR’S NOTE

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Strategic thinking

about farm media Canadian agriculture is incredibly well served by farm media. Only a couple of countries can rival us. But that has to be a foundation to build on, not an excuse to say the job is done As you turn the pages of this Country Guide, you’ll notice some changes. The pages look different, the type seems somehow different, the “feel” of the stories is different. You might even think this is what the changes are all about, i.e. a skin-deep bit of cosmetic surgery rather than real innovation.

Farmers are a more sophisticated audience than virtually anyone else knows.”

I would understand. There was even a time when, with a wink, I used to say that a farm journalist is someone who goes to a meeting where some expert is talking about why farmers absolutely must get more innovative, and then pulls out a pen and paper to write it all down. But no more. It is a foundational belief at Country Guide that farmers are a more sophisticated audience than virtually anyone else knows. (I hope you agree, and that you sense it every time you open your new Guide. If you don’t, please give me a blast.) You might think that of all the changes I’ve seen in my career, the biggest change was from pen to touch screen, or the growth of web-based outlets, or the shrinking and virtual disappearance of ag coverage in the CBC and most other major Canadian media. All have been significant in their own way, but my vote for the biggest change has been in our attitude toward our readers. There was a time when the role of farm writers was to somehow be protective of them. Now, it’s to say something that might be interesting and helpful to them. That’s what led us some eight years

ago to adopt to our “Strategic. Business. Thinking.” tag line. If, when you put down the issue, you think to yourself, “There’s one or two things in there that I’m going to have to think about some more,” that’s what success looks like to me. That will still drive what we do, but now we’re ready for the next step. I compare these redesigned pages to a redesigned cab in a new combine. Appearance is crucial in the same way that operator comfort is crucial. None of us should downplay it. But the real drive behind this redesign is to put you in greater control. Science proves it. Different readers read in different ways, and our pages will be designed to accommodate this, with more ways to get to the heart of what is being said and discussed. We’re just beginning the process, and I admit that the design team and I feel the way you do when you get a new vehicle and you open the owner’s manual. We have barely begun to appreciate all the new capabilities that are here. Country Guide will always be a book about ideas, and how to execute on them. So the test will be, in coming months, are you getting to those ideas faster? Are you understanding them better? And, as always, are we getting it right? Let me know at tom. button@fbcpublishing.com. Tom Button Country Guide, Editor

EDITORIAL STAFF Editor: Tom Button 12827 Klondyke Line, Ridgetown, ON N0P 2C0 (519) 674-1449 Fax (519) 674-5229 tom.button@fbcpublishing.com Associate Editor: Maggie Van Camp mvancamp@fbcpublishing.com (905) 986-5342 Fax (905) 986-9991 Associate Editor: Gord Gilmour (204) 453-7624 Cell (204) 294-9195 Fax (204) 942-8463 gord.gilmour@fbcpublishing.com Production Editor: Ralph Pearce ralph.pearce@fbcpublishing.com (226) 448-4351 Design & Layout: Jenelle Jensen

ADVERTISING SALES Sales Director: Cory Bourdeaud’hui cory@fbcpublishing.com (204) 954-1414 Fax (204) 944-5562 Lillie Ann Morris lamorris@xplornet.com (905) 838-2826 Kevin Yaworsky kyaworsky@farmmedia.com (250) 869-5326 Advertising Services Co-ordinator: Arlene Bomback (204) 944-5765 Fax (204) 944-5562 ads@fbcpublishing.com Glacier Farm Media President: Bob Willcox bwillcox@farmmedia.com Publisher: Lynda Tityk lynda.tityk@fbcpublishing.com Associate Publisher : John Morriss john.morriss@fbcpublishing.com Editorial Director: Laura Rance laura@fbcpublishing.com Production Director: Shawna Gibson shawna@fbcpublishing.com Circulation Manager: Heather Anderson heather@fbcpublishing.com Contents of this publication are copyrighted and may be reproduced only with the permission of the editor. Country Guide, incorporating the Nor’West Farmer and Farm & Home, is published by Farm Business Communications. Head office: Winnipeg, Manitoba. Printed by Transcontinental LGMC. Country Guide is published 13 times per year by Farm Business Communications. Subscription rates in Canada — Farmer $43 for one year, $64 for 2 years, $91 for 3 years. (Prices include GST) U.S. subscription rate — $35 (U.S. funds). Subscription rate outside Canada and U.S. — $50 per year. Single copies: $3.50.

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Call toll-free 1-800-665-1362 subscription@fbcpublishing.com U.S. subscribers call 1-204-944-5766 Country Guide is printed with linseed oil-based inks. PRINTED IN CANADA Vol. 135 No. 4

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Am I getting it right? Please let me know:

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MARCH 1, 2016 / COUNTRY-GUIDE.CA

ISSN 1915-8491

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

Agriculture is our way of life too Meet Jen With a lifetime of experience in ag, Jen helps Canadian producers build their dreams. Like everyone on your FCC team, Jen knows your industry and sheâ€™ll get to know you. Jen Masur

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2016-01-28 1:38 PM

Machinery

Electric

POWER

These 700-volt systems may be the kickstart the industry needs By Scott Garvey / CG Machinery Editor

or a group of young boys standing around the Fendt display at the Agritechnica machinery expo in Hanover, Germany, earlier this winter, the prototype model Former 12555X electric hay rake on show was a little like a video game. By sliding a finger across a screen, they could use the touch pad computer on the edge of the exhibit to individually change the rotation speed of each of the rake’s rotating wheels, which is exactly the kind of easy variability and efficient machine operation that has many people believing electric implement control is the way of the future. “You have an indirect efficiency gain leveraged from the controllability,” agrees Morton Bilde, research engineering manager for harvesting equipment at Fendt. There’s no doubt electricity is playing a much bigger role in agricultural implement design these days. Several air drill and planter brands, for instance, have already switched to electric meter drives. But so far, we still aren’t seeing a wholesale move from hydraulic to electric overall implement control, which was the dream of previous Agritechnicas. “The enthusiasm about electrification has plateaued,” acknowledges Bilde. “We’re now more realistic about it.” That includes recognizing that there are many farm jobs where hydraulics will make the most sense for many years to come. “Hydraulic will remain dominant for quite a while,” Bilde says. “Two years ago there was a lot of hype about electrification. Everyone wanted to electrify everything. I think what we have learned over the past two or three years is we need to be really selecting which (electrical) applications make sense and which applications do not.” At the 2013 Agritechnica, it was Fendt

March 1, 2016 / COUNTRY-GUIDE.CA

that introduced the most significant contribution to electric implement control with the debut of its X Concept tractor based on the evolving industry standard of 700 volts DC, designed specifically to handle high implement electrical power requirements. “You can argue the rake is an attempt at justifying the tractor, right?” says Bilde rhetorically. “Because, who wants the tractor if you don’t have an electrical implement?” Even if the move toward electrification in ag equipment has seriously slowed,

Left: The Former 12555X concept rake from Fendt uses electricity instead of hydraulics as a main drive system.

Photos: Scott Garvey

Below: Morton Bilde is research engineering manager for harvesting equipment at Fendt.

At the 2013 Agritechnica, Fendt introduced the X Concept tractor, which is capable of delivering 700-volt DC power to implements. But it is not yet market ready.

no one thinks it has stopped entirely. At a press conference during Agritechnica 2015, AGCO executives talked about the electric rake soon becoming a market-ready product. But no one offered a definite timeline, and the X Concept tractor is still a few years away from commercial production. “At some point I think it (electric drives) will be normal,” Bilde says. “The more electrical implements that we get out there, I think it will be as natural plugging in for electrical power as plugging in hydraulic hoses.” In the meantime, however, there are still challenges ahead for the widespread development of electric implement control, and those challenges may include a re-examination of overall implement designs. “There are probably a couple of obstacles,” says Bilde. “Cost of components is one of them. Electrical components are still expensive. It’s not easy to leverage on the high volume of electrical motors (built) in the industry, because our applications are so unique. We have completely different specs. So it’s the cost of components and just the availability of them.” “For example, the volume in the automotive industry compared to agriculture is

so different that it’s hard to justify a unique motor for each different application. That’s why we need to leverage the economies of scale going forward. We need to start building more (common) platforms — product families in a sense.” The 12555X rake isn’t based on the kind of new product platform Bilde is talking about. Instead it is a conventional model converted to electric drive. “Now that we’re starting to have rakes and hay tools within our own portfolio, it made a lot of sense to electrify one of our own implements to get started,” he explains. “The tractor supplies 700-volts DC power. On the implement we then convert that in a controlled manner down to 400 volts AC. We’re working on a 700-volt DC standard across the industry. And from that, you can convert it to whatever makes the most sense for an application. AC has the advantage of being easy to control. So controlling speed and power, that’s why it makes a lot of sense.” Bilde thinks that once the electrification concept gains momentum and engineers start building “clean sheet” designs, there will be more significant efficiency gains that could begin to get farmers’ attention. CG COUNTRY-GUIDE.CA / March 1, 2016

Guide Legal

By Nadia Campion / Lenczner Slaght

Estate planning: Part 3 If you wonder about challenging a will — don’t wait too long

f you are a beneficiary under a will, there is one thing you should know. If you believe you have been treated unfairly, voice your concerns immediately and take action. While you might feel inclined to assist in the administration of the will and collect your share of the assets, don’t. Otherwise, you may be prevented from later challenging the will and objecting to the manner in which the estate is distributed. In a recent case, the court dismissed a beneficiary’s will challenge, in part because he actively participated in� the distribution of the assets of the estate in question and as a result appeared to have accepted the terms of the will he then challenged. The case involved the estate of Eleanor Leibel, who passed away in 2011. She left behind two sons, Blake and Cody, and a husband from whom she was separated for many years. In her last wills and testaments, of which there were two, she named her sister and husband as estate trustees. At the time of her death, Eleanor’s assets consisted primarily of a house and shares of various corporations. Following her death, Blake moved quickly to sell the house, which had been left to him under Eleanor’s wills. It sold for $5.5 million, some of which was used to pay down the estate’s tax liabilities by way of a loan to the estate. With the exception of certain shares which were left Like us, judges are solely to Blake, the residue of human and will not the estate was left to Blake and Cody in equal proportions. As divorce the law from the with the house, Blake acted situation placed before quickly in assisting the estate them. The facts matter trustees to liquidate the shares left to him by his mother. One year later, before distribution of the residue of the estate to him and his brother, Blake challenged his mother’s wills. He asked the Court to declare the wills invalid. He alleged that his mother expressed wishes to him and others that he would be the sole beneficiary of her estate and that leaving the residue to him and Cody was not what she wanted. Blake testified that his mother had been separated from her husband for more than 30 years and that Cody had been living with him (the separated husband) since age 12. He also testified that each parent was financially responsible for the son who was living with that parent. The estate trustees took the position that Blake’s will challenge was too late and that he was statute-barred pursuant to the Limitations Act (Ontario). That Act imposes a two-year limitation period on claims calculated from the date a claimant knew or reasonably ought to have known that a claim exists. The estate trustees 8

MARCH 1, 2016 / COUNTRY-GUIDE.CA

also argued that Blake could not legally challenge the wills given his participation in liquidating and distributing the assets of the estate from which he benefitted. The Court dismissed Blake’s will challenge in part because he commenced his will challenge more than two years after having received a copy of his mother’s wills from the estate trustees. It found that Blake had all of the information necessary to begin a will challenge at the time of his mother’s death. As stated by the Court, “[h]e chose, instead, to take many of his benefits under the Wills before he commenced his Application.” The Court also determined that Blake was “estopped” from challenging his mother’s wills. It found as a fact that Blake co-operated with the estate trustees to distribute the estate assets until all that was left was the residue to be divided between him and his bother, at which point he challenged the wills. The Court concluded that Blake should not be allowed to “resile from all of the actions he took during the two-year period following Eleanor’s death.” The outcome in this case was influenced, at least in part, by the facts. First, Blake did not attend his mother’s funeral. Second, he took an active role in assisting the estate trustee to quickly liquidate the assets of his mother’s estate to his sole benefit because he needed the money. Having taken the benefit of the assets to which he was entitled under the wills, he then complained that he did not receive enough money from the estate. He sought to exclude his brother from the estate. The Court was not sympathetic to Blake’s request. We must remember that, like us, judges are human and will not divorce the law from the situation placed before them. The facts matter. More often than not, the conduct of the parties will have an impact on the outcome of a case. Judges will consider and balance the equities. They want to do justice between the parties and deliver a fair result. So, if you are a disgruntled beneficiary, you should act in a timely manner and avoid leading others down the garden path, lest you be faced with a disgruntled judge. CG Nadia Campion is a business litigator at Lenczner Slaght in Toronto. Campion’s clients include small- to medium-size businesses, individuals and associations across a range of sectors in civil litigation such as commercial disputes as well as wills, trusts and estates litigation. She can be reached at ncampion@litigate.com or 416-865-2974.

The Canadian Association of Farm Advisors (CAFA) Inc. is a national, non-profit professional umbrella organization dedicated to assisting farm families and businesses by increasing the skills of farm advisors and consultants.

www.cafanet.com

the biggest farm challenge By Liz RoBeRtson, M.A., CAFA exeCutive DiReCtoR

circumstances. No SPEC. Communication break-down means that absolutely no progress in succession planning can be made and situations can hit all time lows. Broken family communication leads to destroyed families and often, financial ruin.

s a national organization and an exhibitor at farm shows across the country, CAFA has a unique opportunity to observe the diversity of crops grown in the different climatic and geographic regions of Canada. But in contrast to the agronomic diversity, there are many consistent challenges farmers say they face from coast to coast. In talking with them and their advisors, many say that farm succession transition is by far the largest challenge facing Canada’s farming sector. A farm transition plan used to look like this: farm goes to oldest son. Simple. No questions asked. Today, things are not so cut and dry. Most farms are worth millions, and children believe they deserve, and parents want to deliver for the most part, some kind of equality when transitioning the family wealth. SPEC Keeping a Sustainable farm in the family, keeping Peace in the family that is Engaged in the business and keeping a viable Cash flow for the retiring and incoming farming generations are primary objectives. Sustainable, Peace, Engaged and Cash flow – SPEC. (Acronym

pronounced SPEAK.) Without question, communication is the only way that SPEC is possible. There are a number of CAFA members who help farm families manage or improve communication. They are known as family coaches. Coaches are often called in when farm family communication is broken – parents and children cannot agree, when spouses cannot agree – oftentimes, resulting in zero communication and very unhappy

Farm succession conference On May 18, 2016 CAFA is hosting its Farm Succession Update: 3 Circle Model — InDepth conference at the Ajax (Ontario) Convention Centre. It will be a day of high-level information about three areas that farm businesses must deal with: family, management and ownership. All are distinct yet need to be looked at because of their interconnectivity to make substantial advancements in moving the farm to the next generation. Farmers, owners and all farm advisors — not just CAFA members — are encouraged to attend in person or via live webinar. This is an informative day for those involved in farm advisory services or for those planning on transitioning their farm business. For more information, please contact Liz Robertson at 1-877-474-2871 or visit CAFA’s website at www.cafanet.com/confernces. It is important. We hope you will participate.

SavE thE datES! May 18, 2016: Farm Succession Update – 3-Circle Model In-Depth, Ajax, Ont. & via webinar June 2, 2016: Farm Management Update, Woodstock, Ont. & via webinar Fall 2016: Farm Tax Update

More information available at www.cafanet.com/Conferences

Toll free: 1-877-474-2871 Email: info@cafanet.com PO Box 270 • Seven Sisters Falls, MB • R0E 1Y0

business

Pulsing in downtown Toronto To get Canada’s food elites excited about their farm products, Pulse Canada turns to three high-octane city buzzes... celebrities, glamour and nightlife

By Steven Biggs / CG Contributing Editor

“We are way past thinking about pea soup,” says farmer Lee Moats.

Ammeter steps down and Michael Smith, the celebrity chef and cookbook author, takes the stage. Smith is standing in front of a larger-than-life picture of himself in a farm field, windblown hair, with a handful of young lentil plants. “Hanging out in Toronto and talking about pulses. Who knew?” he says with a smile. He pauses. People cheer. He asks the farmers in the room to raise their hands, and then tells the audience that the 13 farmers in the room are the real stars. A pulse enthusiast these days, Smith says he didn’t used to realize that pulses grew in Canada. He thought lentils were from somewhere like France. But now, the UN has designated 2016 the International Year of Pulses. Some food trends come and go, Smith says, but the UN is far from trendy. He doesn’t think increased awareness of pulses will be a short-lived trend. An image makeover Consumers shop for beans or peas or lentils. Many don’t shop for “pulses.” Many don’t even know that the word has any sort of plant or botanical meaning. “It’s new to the sort of population we’re trying to reach,” Smith tells the crowd. One Twitter post about the event reads, “Pulses — it’s a new word to some, but you are probably eating them already: beans, chickpeas, peas and lentils.” These aren’t new crops or new ingredients. It’s not even a new word. It’s an old word going to a new audience. It’s an image makeover. Say lentils and shoppers might picture hipsters poring over a vegetarian cookbook — or delicious Indianstyle daal. Say pulses and… it’s a blank slate.

MARCH 1, 2016 / COUNTRY-GUIDE.CA

PHOTOS: PULSE CANADA

he presentations begin. A woman takes the stage in the middle of the long, narrow, highceilinged room. Across from her, two slide shows project on the wall. On the left screen is a combine working in a large, flat field; on the right, gourmet food. The room hushes as Allison Ammeter, chair of the Alberta Pulse Growers Commission, speaks. “I grow pulses, which makes me a rock star, right?” she asks. The crowd applauds.

Hanging out in Toronto and talking about pulses,” chef Michael Smith calls out to the city's food glitterati. “Who knew?”

Pulse feast I’ve only just stepped into the long, narrow room when someone with a tray of fluted glasses offers a drink. Then a server stops with an appetizer tray to offer kidney bean croquettes with spicy aioli. A lot of pulse industry people in attendance wear name tags. And a few of them greet me. Jackie Tenuta, director of market development for Pulse Canada, says that the pulse industry is throwing this party to celebrate pulses, and they’ve invited chefs, bloggers, media, nutritionists, and people interested in food security and sustainability. “There are 111 events worldwide today,” she adds, explaining this is the kickoff to the International Year of Pulses. Brand PULSE Pulses have long been promoted as nutritious. Tonight they’re sustainable, affordable, environmentally friendly — and good tasting too.

A display explains what makes pulses an environmentally sensitive food choice. “Compared to other crops such as cereal and oilseeds, pulses have a smaller environmental footprint. Pulses need little to no nitrogen fertilizer, a major source of greenhouse gas emissions in agriculture. Pulses also use less water than other cash crops and they improve soil health,” reads the sign. I chat with farmer Lee Moats, a director with Saskatchewan Pulse Growers. He tells me why these days, red lentils make up most of his pulse acreage. He’s keen to point out that in addition to being part of a healthy diet, pulses are environmentally sustainable. We talk about promoting pulses. “Our effort is threefold,” says Moats, explaining that first they need to help consumers understand what the word “pulses” means. Second is helping consumers understand Continued on page 12

COUNTRY-GUIDE.CA / MARCH 1, 2016

business

Lentil Hunter

Chef Michael Smith’s work with pulses isn’t new. On the lentils.ca website, funded by Saskatchewan Pulse Growers, Smith stars in a web series titled Lentil Hunter. “Chef Michael Smith scoured the globe to find the best lentil recipes on the planet!” declares a headline on the website. In one episode, Smith visits a Canadian lentil farm. Saskatchewan producer Lee Moats explains that this site was developed before the current push for the word pulse. “It’s our consumer-facing side,” he says.

MARCH 1, 2016 / COUNTRY-GUIDE.CA

Continued from page 11

the benefits of including pulses in the diet. Lastly, he talks about helping consumers fit pulses into their interest in food and their tastes. “It’s hearts and minds and stomachs of people we’re after,” Moats says. By the time Ammeter has taken the stage and talks about the smaller environmental footprint of pulses, it’s already the third time I’ve heard that message this evening. Nor is it the last. Varied and versatile The gourmet food served tonight shows the versatility of pulses. Four cooking stations — chickpeas, beans, lentils, and dry peas — feature three different recipes each. Staff members dressed in chef apparel offer me split pea bacon quiche, and it is delicious. Braised beef short ribs with lentil mushroom stew are my favourite. And the Indian chickpea stuffed crepe with chicken curry salad is nice. There are lots of others. Most are very good. A food writer next to me bites into a lentil burger, frowns, and then puts it on a tray. “Burgers should be made with meat,” she

says, and then talks about how great lentils are in many dishes — but wonders why anyone would try to make a burger out of them. “We are way past thinking about pea soup,” says Moats, adding, “There are so many fantastic ways of consuming pulses that are good for you… but they’re good!” The Pulse Market, a display near the exit, reminds attendees of the variety of pulses. It’s very attractive: red lentils against yellow; great northern beans and black beans; chickpeas and yellow peas; and many more. The small cloth sacks and scoops are there so that attendees can take samples to cook at home. Spreading the (new) word The party tonight is all about spreading the word: Pulse. Staff work the crowd, taking pictures of attendees holding signs for the Pulse Pledge. This pledge is to eat pulses once a week for 10 weeks. I hold up the sign as someone shoots my picture: it goes out on Twitter and I’m given a sticker saying that I took the Pulse Pledge. (The website, pulsepledge.com, reminds consumers that eating pulses is a good way to decrease your carbon footprint.) This event isn’t the only one in Canada

this year. There will be other activities to raise awareness of pulses. Tenuta says that events to help food processors use pulses are scheduled for later this year. As I get ready to leave, I see people taking selfies with Chef Michael. Later, on Ammeter’s Twitter feed, I see a picture of her, Chef Michael, and Canadian food writer Anita Stewart. I walk up Bay Street, behind people carrying small cloth bags filled with pulses. I hear the word more than I have in a long while. My father tells me about a new word he heard on the radio: pulses. My neighbour, Jim, emails to say that he saw a news segment about pulses (and emailed me because I’m in the background); and soon after that, my friend Bob in Vancouver emails to say he saw a segment on Pulse Feast on CBC’s “The National.” A word. A feast. A blank palette. CG

Pulse Tacos

The year 2016 has been declared the International Year of Pulses by the United Nations to celebrate one of the world’s most important foods: the edible seeds of the legume family. Beans, peas, chickpeas, and lentils are packed with fibre, protein, nutrients, and flavour. Their nutritional intensity, inexpensive accessibility, and ease of cooking have made them indispensible staples to cooks all over the globe. Wherever we live we all do our best to make healthy choices at home but it’s a lot easier when those choices are delicious. These meatless tacos are stuffed with so much sunny southwestern flavour that no one will notice anything missing. What a great way for your family to join families around the world in a global celebration of flavour and nutrition! Makes 12 tacos. Serves 4 to 6.

For the pulse filling • 2 tablespoons (30 ml) of canola oil • 2 onions, thinly sliced • 6 garlic cloves, thinly sliced • 1 heaping tablespoon (18 ml) of chili powder • 1 teaspoon (5 ml) of ground cumin • 1 cup (250 ml) of green lentils • A 19-ounce (540-ml) can of your favourite beans or chickpeas, rinsed and drained • 2 cups (500 ml) of water • 1/2 teaspoon (2 ml) of salt • 1/2 teaspoon (2 ml) of your favourite hot sauce

For the taco toppings • A head of Bibb or iceberg lettuce • 12 hard taco shells • A few handfuls of grated cheddar or taco-blend cheese • Your favourite salsa • A large bunch of fresh cilantro • 2 limes, cut into wedges

Make the lentil bean filling. Splash the canola oil into a large skillet or sauté pan over medium-high heat. Toss in the onions, garlic, chili powder, and cumin. Sauté until the vegetables soften and the spice flavours brighten, 3 or 4 minutes. Stir in the lentils, beans, water, and salt. Bring the works to a slow, steady simmer. Cover tightly and continue slowly cooking until the lentils are tender, 35 minutes or so. Stir in the hot sauce. Assemble the tacos. Fit a full leaf of lettuce into a hard taco shell. This will hold the fillings in when the hard shell inevitably breaks. Fill each taco with a heaping spoonful of the lentil bean filling. Pack with cheese, salsa, and cilantro. Serve with the lime wedges and share! © Chef Michael Smith 2015

COUNTRY-GUIDE.CA / MARCH 1, 2016

FEAture

Sizing up the farm

Lane Stockbrugger is betting that the age of the family farm has got a long ways to go yet

t was in the wide-open spaces of Saskatchewan where the trend was perhaps most apparent a few short years ago. A one-two combination had suddenly brought a lot of new attention to farming and farmland. First, crop prices spiked, creating attractive margins for the first time in a generation. Then, predictably, farmland followed suit, as prices on some of the most undervalued farmland on the continent began a string of double-digit increases. Some of that excitement rose from predictable sources — farmers themselves bought land and grew their operations. More came from farmers and aggies with agricultural roots but with a new interest in the region. But much of the heat came from even further away. Recent immigrants backed by money from home saw opportunity in farmland, and so did Bay Street hedge funds. Would this be the end of the family farm? In the end, even the free market Sask Party government of Brad Wall felt it had to step in, recently announcing new regulations to prevent non-farmers from buying Saskatchewan farmland, with the NDP only saying it didn’t go far enough.

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Farm business analyst and farm management speaker Lane Stockbrugger says it’s not surprising this happened. Agriculture typically starves for capital for years on end, punctuated by brief, intense periods of interest when non-farmers suddenly see what look like unbeatable numbers. “They see good margins in production and rising land values,” Stockbrugger says, “and they think they can’t lose.” Of course, those with more experience in the sector could tell them it’s not only possible to lose, over time, it’s likely. Agriculture is and always will be a cyclical business, and managing through the downs is at least as important as enjoying the ups. It would seem the latest raft of newcomers are getting a taste of this too. Crop prices have retrenched, demand has slipped, and margins have tightened to a point where many growers once again find themselves scratching for black ink when they pencil out their crop budgets. Quietly, meanwhile, those newly minted corporate farms have one by one dropped by the wayside.

Photography: Richard Jenkins • Reflections by Richard

By Gord Gilmour / CG Associate Editor

Sure, a few remain in the business of owning farmland and then leasing it back to farmers, but very few remain in primary crop production. It begs the question — can a large-scale non-family corporate farm ever truly work? Or will the family farm, in its many modern incarnations, always be the basic unit of production, albeit in ever-larger multi-generational operations that encompass more and more land, and more and more family members? The question of commitment Agriculture economist Alfons Weersink at the University of Guelph suspects we’re going to see an evolution, over time, of the existing family-based businesses, rather than a revolution driven from outside. Weersink believes the commitment that farm family operations bring to the challenges they face is very hard to replicate in a business model where employees run the farm and don’t share the risk and rewards in the same way. In his view, it’s why existing farms have grown and taken on new management structures like incorporation and ownership stakes in multiple farms, but it’s still rare to see a newcomer enter the business and make a go of it. “There are all kinds of business structures out there,” Weersink says. “However, if you really look at these operations, behind the structures, they’re still mostly family businesses.” In large part, Weersink says, the issue with non-traditional farms might be that too much attention is paid to capturing economies of scale, without truly understanding how that function works. The research on the topic is quite clear — economies of scale do work in farming, but only to a point. Eventually, if the farm gets too big, a tipping point is reached where there are simply too many details to manage effectively and productivity begins to suffer — call it an economic death by a thousand cuts. Yes, over time, the maximum sustainable size is going up as equipment grows larger, agronomic systems are refined and other advances occur. Successful farms are definitely getting larger — but only so large, and only so fast. “If you’re small, and you get larger, your cost of production falls,” Weersink says. “But if you’re large and get too large, your cost of production can actually rise.” But didn’t WalMart face that same challenge?

Or perhaps the old theories could get disrupted by new technology, Stockbrugger says. Advances are happening so fast, it’s tough to tell where it will all end, but it could wind up with “smart” machines being able to make many of the decisions that farmers with very large operations don’t have the time to make for themselves. “Five or 10 years ago, if we talked about an autonomous, largely solar-powered robot that would scout our field for weeds, and perhaps even kill those weeds, nobody would have believed us,” Stockbrugger says. “I don’t think many would now doubt that something like that is conceivable in the future.” It opens the door to the intriguing possibility that farming will undergo a transformative technology revolution in the coming years that’s every bit as profound as the one that’s been radically altering other sectors of the economy, often to the point they’re unrecognizable. Growing a mega-farm Stockbrugger has a sneaking suspicion that if we do see the rise of mega-farms, it will be exactly that — the growth of them from today’s group of operations, rather than from some whiz-kids dropping in from the outside to show those yokels how it’s done. “I don’t want to say that you can only come into farming by blood, because that’s not so — there are examples of successful farms that have been established by people with no prior history in the business — but not having that background does make it more difficult,” Stockbrugger says. He and his brother and business partner, Lance, might be a good example of this. They’re from a farm family; the first Stockbrugger farmed the home place in 1909. Continued on page 16

Yes, farms will get bigger, and the trend will still be toward multigeneration units. But at their core, Stockbrugger argues, they will still be family farms.

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FEAture family farm, and knowing that the first member of your family farmed it in 1909,” Stockbrugger says. “That’s certainly not unique to us — I think most farmers feel exactly the same way. It’s why they’re able to have this level of commitment to a business that’s extremely challenging many times.” In fact, Stockbrugger says as a group they’re so committed they can get themselves into trouble from caring too much — to the point of eroding their equity in an effort to keep a farm from going down, rather than, for example, making a difficult but more dispassionate decision to cut losses early and move on.

It’s a tough decision,” says Stockbrugger. “Do you want to be on the bleeding edge?” Continued from page 15

Both grew up on the farm, but the untimely death of their father in a road accident in the early 1980s saw the family leave the business. Later when older brother Lance was in university and Lane was still just in Grade 11, the pair began farming a single quarter section. Over the years, while working full time, they grew an operation that now encompasses 4,000 acres and supports both brothers, though Lane says both continue to dabble in consulting and public speaking, after his recent resignation from his longterm post at Farm Credit Canada. He admits the road from there to here was at times a bumpy one, but says the pair stuck with it in no small part because they had both financial skin in the game and family pride at stake. “There’s just this tremendous feeling of pride and accomplishment that comes with operating the 16

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Battle tested In fact, there can be upsides to a period of tougher times, though Stockbrugger, like other farmers, acknowledges that it sure won’t feel like it at the time. It’s out of some of the toughest times that agriculture has found its greatest achievements. When margins are lean, growers begin to focus on cost containment, then turn their eyes to innovative new strategies that might give them a leg up. Necessity drives invention. Probably the classic example of this is zero till, and how it swept over the Prairies a generation ago. It was first bandied about in the 1970s, and bleeding-edge innovators were pursuing the technique with an eye to soil conservation — but over time it became apparent the system was at least as big an economic winner. It eliminated multiple field operations, reduced machinery wear and tear and in many ways paved the way for a growth spurt in farm size. It’s likely another such wave could be just around the corner — but it’s not exactly clear what it will be. Perhaps technology-based precision agriculture will make farming truly high tech? Or will a more economically and environmentally efficient system enhance margins by reducing costs? Or will biotech innovations create new markets? Or is there an idea that hasn’t even been thought yet? Weeding through all the options

can be daunting, and wrong choices can lead you on wild goose chases. “It’s a tough decision,” Stockbrugger says. “Do you want to be bleeding edge? Leading edge? An early adopter? All have risks, including the risk of doing nothing and waiting too long.” In order to make sense of the chaos, he says Stockbrugger farms will be keeping a close eye on some key issues in the coming seasons: • C ost containment will be at the top of the list, making sure that the operation is spending its money wisely and targeting expenses to where they’ll do the most good, i.e. building efficiency and ultimately profitability. • B uilding and maintaining an equity “war chest” will also be a top priority, both to help the operation weather any downturns, but also to position it to be able to take advantage of any opportunities. It’s no secret that some of the farmers who expanded during the last downturn, using the opportunity to hunt for land and equipment bargains, ultimately fared better than others who built in better times. • The final goal will be to build better business relationships. That might sound a bit mom and apple pie, but Stockbrugger says there’s a sound business case for paying attention to the human side of the equation. “When you get the text everyone gets, ‘Canola at $10.50 a bushel, limited space,’ it’s too late,” he says. “You want to get the pre-call.” By building these relationships, you strengthen your market position and can garner some of the intangible but important benefits, like that break on grading, for example. Guelph’s Weersink says he’ll be encouraging growers to remember that there’s no one size fits all. Some small farms are very profitable, and some large farms too. Still, here are limits, and he encourages expansion-oriented farmers to figure out where the productivity sweet spot for size is for their type of farm, and to grow with that as a goal. Says Weersink: “It should help them identify opportunities.” CG

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Extreme weather, volatile markets, government regulations, financial strains… The bullets are flying and they’re aimed straight at your farm. Here’s how Melvin Penner at H&M Farms is fighting back

Bulletproof farm THE

now pelts the metal siding so hard it rattles, but inside the farm shop, it’s warm with work and energy. Lined up in various stages of maintenance are a truck, tractor and corn planter, while in the corner, pouring over their field maps, the three owners of H&M Farms near Altona, Man., discuss the upcoming season. Today, like every day, Melvin Penner, Kyle Friesen and Kris Penner can sense the balance that is at the heart of this operation. Young optimism must work hand-in-glove with seasoned wisdom, technology with pragmatism, and business planning with the lessons learned from past battles. Melvin Penner himself has been farming since 1975. At the time the farm was 560 acres. Today H&M Farms Ltd. grows canola, wheat, fall rye, oats, corn, soybeans, sunflowers and edible beans on about 22,500 acres. In 2003 Penner added a hog barn to diversify income, and now the farm includes an early wean multiplier 2,750sow operation, and it finishes some gilts and barrows. It means there’s a lot at stake with every decision. For Penner, more importantly, it also means there’s a lot at stake for a lot of people, as in the family and staff who make the farm successful, and who benefit from it. Melvin’s son-in-law Kyle and nephew Kris are owner/ operators, and the farm employs 10-year round workers and hires about 15 seasonal workers. “It’s not all about expansion or money,” says Penner. “It’s about the person beside you.” Penner also knows it takes preparation, communication and planning to dodge or at least deflect the bullets coming at today’s farms from so many directions. And, if you take a hit, to keep on going. 18

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C G A s s o c i at e E d i t o r

Expert farm business analysts agree, like Purdue ag economist Michael Boehlje, who sees a crucial distinction in the kinds of risks that today’s farms face. Production, operational and financial risks can be managed with insurance and effective marketing, Boehlje writes in his paper Managing in Turbulent Times: Positioning to Capture the Upside, Buffer the Downside. “But,” says Boehlje, “that is generally not the case with strategic risks.” Yet Boehlje also argues that strategic risks and uncertainties can provide significant opportunities for profits and growth, so transferring them to others would result in lost opportunities. Instead, managing these risks needs a different approach. It takes successful positioning to build the resiliency and absorptive capacity to handle the potential downside or negative consequences of an uncertainty, and it also takes agility to detect and capture the potential upside or positive consequences of an uncertainty. In other words, learn how to take the bullet so it doesn’t kill you. Then sell the lead. For Penner, many of the risks are just everyday facts. “Weather and market volatility are part of the game,” he says. “If you can’t be prepared for that, you shouldn’t be playing.” But in today’s world, it takes a higher level of management, he says, so here’s how the management team at H&M Farms built armour plating with the goal to not only survive, but thrive.

Continued on page 20

Photography: Steve Hiebert • Personal Reflections

By M ag g i e Va n C a m p

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feature factors have an impact on cost of production such as efficient capital and labour utilization, marketing, and scale. These top farm managers know every detail of their production costs, and they are constantly striving for better, more effective ways of doing things, keeping good records and combining their farm’s information with other sources to make decisions.

Continued from page 19

1. Full capital utilization Even when the income side of the balance sheet looks weak, using assets and leveraging your position can drive growth. Penner remembers when the light bulb first came on. A neighbour had the same sugar beet harvester that he had, pulled by a similar tractor, all for a harvest that lasts only about one week a year. Then the two farms got together, sold one harvester and worked the other 24 hours a day, doubling their capital efficiency. It was an indication this was a strategy to build on, he now says, especially if you’re willing to work with others. Penner learned to think like this for everything in their business, from pickups to people. For instance, custom spraying creates a positive cash flow for their sprayer. They simply use this sprayer on their own farm and when done, do the custom run. When times are slow in custom spraying, they put the extra human resources to work somewhere else on the farm. They manage and match labour, carefully keeping the farm always current on their workload. It does take a kind of alertness from management. Penner and the H&M team look and plan for efficiencies every day, in all parts of the business. “Think about every move,” Penner says. “Don’t just do it.” To this point, they’ve always been expanding so they buy what equipment they need, but will need to address equipment turnover more carefully as the business matures. They’ve also been renting whatever they can find, and buying whenever they have an opportunity. Over the years, Penner has generally run at about 35 to 40 per cent rent to owned land. “Rentto-own ratio is kind of a fluid target,” Penner says. “If I could own all our land and it would cash flow it would be perfect. Normally rent is more cost-effective than owning, if you are only looking at cash flow.” 2. Low-cost production Although the kinds of challenges that farming faces in the future may evolve, Penner is convinced one thing won’t change: if you are the best in class, you will come out on top. Low-cost production matched with efforts to achieve the highest returns will always be a winning strategy. However, beyond direct expenses, many management 20

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If you can build trust, you can build relationships,” Penner says. It’s not what you say that's important, he adds. It's what the other person hears

3. Contribution margins Penner’s marketing strategy is to manage his margins, not to chase the absolute top price. This involves pricing on the spread between their cost of production and the market, not speculative pricing, and it has kept them in business in tough times even though he sometimes misses out on the big wins. Penner summarizes it like this: “We didn’t make as much on hogs in 2014 as some farms, but in 2015 we still made money.” It starts with a detailed understanding of their costs per bushel and per kilogram, and then comparing them against current cash market prices, futures market prices adjusted for local basis, or cash forward contract prices to lock in positive margins when opportunities to do so are available. That may seem difficult for many farms, but positive margins are what can pay or “contribute to” fixed operating costs. Marketing is also integrated with input purchases and with cash flows; however, selling needs to be done with logistics in mind. In a hog context, Penner explains, it works like this: “Know your cost to produce the pigs, sell the pig, buy the inputs and target locking in margin.” To market crops, Penner uses a basic incremental selling strategy. He direct contracts about 10 per cent of their acres. Depending on price and delivery, Penner then usually pre-sells about 25 per cent of projected harvest even before the team firmly decides exactly what crops and acres to grow. Another 25 per cent is sold when the crop goes in the ground, and then another quarter when they’re getting sure they’ve got a crop. Some are in paper trades and some are deferred delivery contracts. The 25 per cent balance he speculates on. 4. Diversification In 2003 when Penner bought a neighbouring hog barn, he looked at it as a way to grow and also as a way to diversify for risk manContinued on page 22

feature crops, including winter wheat, fall rye, oats, corn, soybeans, sunflowers, and pinto, black and kidney beans. Although the production risk and expertise is higher for growing some of these specialty crops, they cover it off with crop insurance. Not only do these crops deliver a premium, they create marketing opportunities and spread out workload and delivery for the farm.

Penner has little tolerance for guesswork and estimates. He looks for real numbers so the management team can integrate all aspects of the operation.

In my opinion, farming will continue to be a commodity game,” Penner says. “The low-cost producer will win. This will hold true for specialty crops and livestock as well… it’s just a matter of time.” Continued from page 20

agement strategy. The timing was right for the business to expand and the opportunity came up. The strategy has levelled out cash flow for the whole farm. However, there has also been a lesson learned over the years. Each enterprise must be self-sustaining, Penner says. “One part of the business cannot carry the other.” What Penner didn’t know was how challenging the hog business would become. Between 2006 and 2011, the number of hog farms fell by 35.9 per cent and the herd decreased 15.7 per cent, according to the 2011 Census of Agriculture. Influenza A (H1N1), incorrectly called “swine flu,” also damaged consumer confidence and closed some countries’ borders. Penner quickly developed an appreciation for the differences between the grain and livestock businesses. “It certainly made life a lot busier,” he admits. 22

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He learned the differences in how lending institutions treat the two sectors, and that there are a lot more options for financing in the U.S. “Banks will play a lot longer on black dirt than they will on a hog barn,” says Penner. “When the price of hogs is in the tank, the bankers don’t really want to own them.” The farm survived the tumultuous hog market by tightly managing margins, building relationships, finding new opportunities and sometimes just rolling with the punches. Today, R12 Pork Ltd. is an early wean multiplier 2,750-sow herd for Danbred North America. The R12 barn has the ability to farrow 130 sows per week with a goal of shipping 1,400 weaned piglets per week, at about 20 days of age. The gilts are sold to commercial sow herds in the U.S., and barrows are sold locally. Another diversification path has been to actively seek specialty crop opportunities. Currently H&M Farms grows an amazing array of

5. Build Trust “If you can build trust, you can build relationships,” says Penner. But that requires communication and what he calls “a 100-year view” of building for the future and not letting your thinking get bogged down with small problems. Communicating w ith your creditors is extremely important. Every year H&M Farms sits down in the boardroom with the account managers of their two lenders to explain their game plan. They do an annual review together, so everyone knows the whole picture. “It’s not what you’re saying that is important, but what the creditor understands,” says Penner. As Penner approaches retirement, his son-in-law Kyle and nephew Kris Penner are taking over. Communication has become even more critical. Melvin mentors them and some staff, yet he’s happy to step back from making the day-today management decisions. The key to succession is having a vision of what you want it to look like before you go to the lawyers, says Penner. To do that took years, not days, of talking and accepting that the process is fluid and things will change as you go along. 6. Adopt technology “If there’s a fit for a new technology, we try it,” says Penner. The younger generation at H&M Farms is driving the uptake of new computer-based technology. Already the farm has loads of gadgets and tools, including GPS yield mapping, satellite imagery, auto steer, variable rate application and even drones. This year

they tried seeding 80 acres without a human touching the wheel. It worked perfectly. Penner believes the technological revolution on farms is just starting, so they better be part of it even if it doesn’t necessarily pay back yet. Penner says the drone they recently bought has been a good investment. One of their staff agronomists likes to use it, and with the size of their operation, it’s a tool for monitoring staging for weed control and fungicide applications. Also, when reviewing how seeding went, the drone images showed the operators the misses, an undisputable reminder how important it is to continually check their monitors. Penner points out another angle to the technology question: if they don’t invest in technology, they will miss out on good employees who expect and want to engage with new technology. In future, the technological skill of employees is going to be even more valuable for farmers, Penner believes. “Farming is going to need different people in the future,” he says. “In the past we needed a labour force that was mechanical and could operate machines — somebody who could change a 4020’s clutch was so valuable. In the future, maybe not so much.” The clutch-changing employees will still be valued, Penner says, but “we will also need technologically talented people.” 7. Prepare for the worst As much as you don’t like to think about it, Penner says farmers need to think about what could go wrong on your farm like accidents or spills and how they’d handle them. It’s why H&M Farms has a basic public relations strategy set up, just in case. Employees and management all know that if there’s a problem and the press wants to talk to someone on the farm, they’re not to say anything and direct the journalist to the president, Melvin, who will speak on the farm’s behalf. If the president isn’t available, they’re to direct them to Kyle.

It’s the things you can’t control or are not expecting that can derail a business, Penner says, so have a written agreement as a way to deal with death, disability, divorce and disagreements. Incorporation has also given them some more flexibility when transferring assets to the younger generation and with tax planning strategies. You also need to think about what could happen with employees. Recently, H&M Farms created procedures to prevent and deal with employee sexual harassment claims. The farm also carries insurance, including crop, life, health and accident and liability insurance. These policies are all part of a risk mitigation strategy. 8. Create a team of people Good employees can increase your farm’s ability to withstand problems, says Penner. “We treat our employees like part of the team.” The farm offers full-time employees a comprehensive benefits package, plus pension plan contributions after one year. They cross-train staff so if anyone is absent, someone else can step in and do the job. This also keeps people learning and engaged. They have written job descriptions, and an on-board training and mentoring process. Penner also finds it’s just as important to listen and give them the opportunity to contribute. “Annual reviews are a very good way to learn what is going on in their heads, but I try not to do a ‘performance’ review as they already normally know if they are doing what is expected,” he says. Penner has high expectations and everyone knows it. But that imposes a responsibility: the leadership team must communicate why the company is doing what it is doing. “We try to give our employees a clear direction as to where we are headed and their role in helping us get there,” Penner says. “They are also our ambassadors, and they need to understand that.” CG

Absorb and be agile Below are key recommendations from Purdue ag economist Michael Boehlje’s paper Managing in Turbulent Times: Positioning to Capture the Upside, Buffer the Downside (available via www.purdue.edu). Boehlje includes an assessment tool to test your farm’s ability to absorb bad news and to be agile. At the very least, it will get you thinking. The following 10 characteristics, Boelhje says, will equip your farm to accommodate and absorb unfortunate events. 1. Low fixed costs — These can help a farm weather a wide range of changes, such as price wars, higher raw material costs, and declining demand. 2. War chest of cash — Cash can be deployed against future contingencies that you cannot foresee. In Canada, AgrInvest can be an important tool. 3. Diversified cash flow — Diversification can help you withstand downturns in specific markets, and inventories can serve as a store of potential wealth that can be sold later. 4. Too big to fail — Large firms can survive by off-loading operations and reducing assets in crises. Size also increases the odds the government, customers, or suppliers will prop up an ailing business. 5. Tangible resources — Valuable resources like real estate serve as a store of potential value. 6. Intangible resources — Brand expertise and technology can insulate the farm against changes in the market in the short and medium term. 7. Customer lock-in — Prevent customers from easily jumping ship. Pump up service and look hard at pricing 8. Protected core market — Barriers to entry in a core market provide a safe stream of cash to weather storms. 9. Powerful patron — A powerful government, regulator, customer, or investor vested in the firm’s success can buffer it from changes. 10. Excess staff — The corporate equivalent of body fat, these employees serve as a store of value that can be shed in tough times. Railroad executives have been doing it for years.

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feature The

Solution On the Hebert farm, the momentum for growth is internal By Lisa Guenther / CG Field Editor

Looking for the five per cent Hebert earned a commerce degree at the University of Saskatchewan and worked winters as a chartered accountant with Meyers Norris Penny (MNP) before going back to the farm full-time in southeastern Sask atchewan. It was great training, he says. Not only did he have great mentors at MNP, but he also met with about 50 farmers a year, and he describes that on-the-job education as “farm management on steroids.” When Hebert was at Manitoba Ag Days with his farm crew Country Guide caught up with him shortly after his keynote presenta24

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Photography: Sandy Black

n Saskatoon in mid-January, Kristjan Hebert was at the podium of a banquet room, telling the crowd of farmers something that farmers have said all through the generations. Hebert and his family want to build a legacy farm. “And our definition of legacy is extremely simple,” Hebert continued. “We want to leave the land and the financial statements in a better state when we’re done than when we took it over. That’s it.” Yet creating a legacy farm has always been easier said than done, and today is no different. In fact, today’s challenges in some ways are different than ever before, and maybe tougher too. Even so, Hebert is hopeful that he’s found the approach that will get his family to their dream. It’s to value relationships, and to find a string of opportunities to make small improvements rather than looking for a chance to hit one out of the park. But what does that mean in actual practice?

tion. Hebert tends to book meetings at farm shows since they draw movers and shakers from across the Prairies. Meanwhile, his farm crew scouts the grounds for practical tools to help back home. This approach also fits a farm management philosophy that focuses on improving things five per cent at a time, rather than chasing unicorns. The Hebert farm team looks first for improvements in production, Hebert says. “We use an immense amount of inputs, but in the right spot at the right time and the right source.” On the Hebert farm, that means variable rate nitrogen and potash. They use sectional control on every farm implement so inputs aren’t over-applied. They grid soil test every four acres to make sure they apply the right rate of nutrients to every acre and maximize yield potential. But like everything else on the Hebert farm, the focus is on integrating the best ideas into a complete package that delivers capital efficiency. On the operations side, for instance, it means timing fills for the seed drill, to keep them under half an hour. It also means that a pit crew fills that drill, greases the conveyor, and fuels it while the operator takes a much-needed break. And it also means encouraging suggestions from the crew to make things run better. It’s called a learning mentality, Hebert says, and it applies to the entire organization. It also signals a cultural value that permeates the farm. It’s being relentless in the search for improvement. Hebert’s motto is that if it ain’t broke, you haven’t looked hard enough. You can always find someone who is doing something better than you are, he says. In fact, as a farmer, that’s actually a big part of your job. Hebert practices what he preaches. In January, he and his farm team were creating repair budgets for each implement, so they can allocate costs to each quarter, based on previous years. “So if we’re two or three thousand bucks over that, why are we over?” It could be as simple as returning a wobble box, he says. “It doesn’t sound like a big deal, but it’s 20 cents an acre, and every time you do that, it adds up to a dollar or two fast.” Hebert says they get pretty excited about finding small ways to improve things on the farm. “Our repairs and maintenance dropped $5 an acre this year,” he says. “I was ecstatic.”

Our repairs dropped $5 an acre this year… “I was ecstatic.” Kristjan Hebert, shown above with father Louis and team member Bryce Olsen

It’s about the people While Hebert’s accounting background might help explain why he’s a fan of incremental changes, operating margins, and the details of accrual accounting, he values relationships at least as much as numbers. Marketing is just one example. Hebert says they’re very comfortable with futures and options. But at the core of their marketing plan are their relationships with buyers. “That almost means more than price a lot of times,” he says. “That’s another way I’d say we maximize our top end.” Hebert says his wife, Theresa, his parents and his crew are what make the farm. He and Theresa are both very goal-oriented and were married young, so Hebert has benefited from their partnership since he was 20 years old. His parents, Louis and Karen, trusted him enough to hand over a large degree of control early on, he says, although they remain critical to the farms. Plus, the crew works like they’re family, Hebert says. In fact, he refers to them as family with a different last name, and Hebert Grain Ventures’ full-time employees include Bryce Olsen, Lori Dorma, and Travis Castle. Employees have come to the farm through referrals and Twitter. Lori Dorma, an accountant, was Hebert’s co-worker at continued on page 26

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continued from page 25

That course really opened my eyes to what a network and a team culture could bring to a business.”

March 1, 2016 / COUNTRY-GUIDE.CA

MNP. She divides her time between the grain farm and the Hebert’s risk management consulting company, which is associated with Global Ag Risk Solutions. Hebert’s recruitment strategy doesn’t focus on resumés. “It’s ‘Come have a coffee with me,’ and it’s a lot of gut feeling.” Of course, keeping good people is another matter. Employees are well paid, Hebert says, and they receive benefits and pension contributions. In that way, it’s not much different from working at MNP. The crew is also always looking for ways to improve the farm and their own performance. For example, employees fill out their own performance reviews regularly. Each crew member comes up with three personal strengths and three areas they’d like to improve in. They also provide the same critique of the farm as a whole. But perhaps the most important staff retention strategy is the workplace culture. It’s driven by two principles. The first is that when workers see someone doing a task that they’re better suited to, they should jump in. As a leader, part of Hebert’s job is to make sure everyone understands their roles, and that they know they’re as important as everyone else. “It doesn’t matter if you’re picking rocks, running a combine or talking to the banker. All those things have to get done at the same level of importance. It’s just whose skill set fits it better.” The second principle is that they are a team, Hebert says. That means if someone is shovelling grain at 5:45 p.m., everyone

jumps in to help to get the job done more quickly instead of leaving for the day. The approach is designed to let people know their roles, feel valued, and yet avoid the “it’s not my job” mentality that simmers in some workplaces. Hebert knows he can’t do it all. He hires an agronomist. He’s “awful” at mechanics, he says, but Louis, Bryce, and Travis have that covered. He says he also has trouble keeping focused on one thing for long. He’s like a boat motor, he says, and so Theresa, Lori, and Karen make sure things get done in his wake. Perhaps the proof is that when he’s asked how he figured out how to build such a positive workplace culture, he hesitates, and takes time to consult with some of his nearby crew members. He’s not sure where he picked up his human resource skills, he admits. His parents’ farm didn’t have many employees, and he says it’s hard to build that culture until you have a team. But he’s been working on it for a few years, ever since he took the Executive Program for Agricultural Producers at Texas A&M. “That course really opened my eyes to what a network and a team culture could bring to a business,” Hebert says. It turns out that this team culture, plus the focus on small improvements, has allowed Hebert Grain Ventures to do some pretty remarkable things, such as seeding 24 hours a day, seven days a week. But why go 24/7? Seeding is hectic for any farm, but few are as ambitious as the Hebert farm. They’ve been seeding round the clock, in shifts, since Hebert came back from that executive program in Texas a few years ago. Hebert says Danny Klinefelter, an economist at Texas A&M, “is the whole reason we run 24 hours.” But why do it? Hebert responds that seeding 24/7 allows the farm to use its machinery more efficiently. They can effectively seed more ground with less capital. It’s part of the reason they’ve grown the farm from 3,500 acres to somewhere between 11,000 and 12,000 seeded acres since 2004. The 24-hour shift is part of their culture now, Hebert says. The team, which includes “very dependable” seasonal help, expects it. “If we take a day to just kind of ease into it, it’s almost like a let-down.” But implementing round-the-clock seeding operations wasn’t painless. Hebert describes a typical day on the farm as “organized chaos,” but he says there are days

when they cross into gong show territory. “We crossed that line a lot more six years ago than we do now,” he says. Over the last six years, the farm team has gotten a lot better at figuring out roles, such as who is running the seed drills, who is running product and keeping the sprayer ahead, and who’s supplying fuel. More people can step into different roles now, Hebert says. And the crew works in shifts to prevent fatigue. They have standard operating procedures to keep people on the same page and avoid wrecks. For example, they want people to check the oil before starting any big motors on the farm. To keep everyone honest, they zip-tie keys to the oil dipsticks a couple of times a year. Louis likes to ziptie keys the most, so the crew did it back to him the other day, Hebert laughs. Despite the fast pace during seeding and harvest, they try to keep things enjoyable. Louis will have people laughing in the midst of the busy season, Hebert says. And they always shut down for half an

hour for supper, when Theresa and Karen run fresh lasagna and garlic toast to the field (in addition to running combines and handling other tasks). To make the cooks’ jobs easier, the farm bought an old motor home so they could keep slow cookers and other kitchen implements in one mobile place. Hebert loves seeding and harvest, and he plans to be around for that part of it forever. “But every other day of the year, I want a team built that can completely handle all situations without me.” That would free him up to handle the business side, which is where his strengths lie. The farm isn’t there yet, mainly because they’ve expanded aggressively over the years, but they’re getting better, he says. As we end the interview, I ask Hebert whether he ever wondered whether coming back to the farm full-time was the wrong decision. “No,” he answers after a brief pause to reflect. “I guess I wondered why I didn’t do it earlier.” CG

I t doesn’t matter if you’re picking rocks, running a combine or talking to the banker. All those things have to get done at the same level of importance.”

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business

What does it take to add value to Canadian crops? Good entrepreneurial skills and, as you’ll see, a little bit more

A recipe and

a dream By Anne Lazurko / CG Contributing Editor

alue-added agriculture on the prairies might conjure images of a large-scale industry whose size reflects the immensity of the wheat, lentil and canola fields that stretch as far as the eye can see. And you might think it’s mostly farmers formulating products that add value to what they grow. After all, it sounds so right as a strategy, creating a guaranteed market and price stability. Yet beyond a huge canola crushing industry, the truth is that value-added on the Saskatchewan prairie is more likely to start with a gamble by a local entrepreneur with a good idea or a favourite recipe. That doesn’t mean the sector is small by any stretch. In 2104, Saskatchewan exported $14 billion worth of agricultural and agri-food products to 153 countries, according to Statistics Canada. Agriculture was 6.5 percent of provincial GDP, and valueadded processors shipped $4.3 billion worth of goods. The 2012 Saskatchewan government Plan for Growth: Vision 2020 and Beyond, set a goal for value-added agriculture in the province to increase to $6 billion in 2020, meaning that if current trends continue, those targets might just be achievable.

I made a call,” says flax entrepreneur Kelli Skwark. “You take that chance, and who knows, you might get a positive response. One door opens, and then another…”

March 1, 2016 / COUNTRY-GUIDE.CA

Somebody clearly will be earning some serious dollars. To support its initiatives, the government established a Ministry of Agriculture Value Added Strategy to conduct market research, develop trade, and attract investment. The whole effort is so new it’s difficult to gauge its success, but today we have over 300 food processing companies employing 5,000 people, and the province’s food and beverage industry makes up 22 percent of total manufacturing and processing output. And the variety of products is impressive: flour products and bakery mixes; things done with peas, lentils and chickpeas; beef, chicken and pork products; jams, jellies and other preserves; organic cereals and meats; specialty foods, snacks and confections, and the list goes on. From Saskatchewan. Who knew? Scientists know. Fully one third of Canada’s biotech industry can be found in the province with over 700 scientists in 30 public and private research facilities. Facilities like the Saskatchewan Food Industry Development Centre (Food Centre), a non-profit organization that provides expertise and facilities for entrepreneurs to create products and add value to agriculture. So Who’s Involved? “Everything from mom and pop to multi-nationals,” says Food Centre communications manager, Carmen Ly. “Entrepreneurs come to us for product development, processing, packaging and labelling. Others want further large-scale processing, or require a federally certified facility for exporting.” With a pilot plant for incubation of an idea/product, to extrusion equipment aimed largely at pulse innovation, and a development kitchen to test recipes and formulations, services are provided at different stages depending on the product. A separate contract is signed for each. Staff includes food science, culinary and processing experts whose services can also be part of the contract. “It’s a federally certified facility that is used on a rental basis with project timelines of anywhere from two months to two years or more,” says Ly.

It Starts Small: Flax to Go Entrepreneur Kelli Skwark knows the drill. She went to the Food Centre with an idea and a dream and is effusive in her praise of the staff who helped bring her wellness bar, Flax to Go, to the market. After more than 20 years as a dietitian in Winnipeg counselling on the health benefits of flax (cholesterol-lowering omega-3 fatty acid alpha-linolenic acid (ALA), plant lignans and soluble fibre), she and her husband moved to Sask atoon. Instead of carrying on a private practice she decided to make the leap to product development. “I wanted to make something that uses a good amount of flax, is healthy and convenient, and most importantly tastes good,” she says. Her kitchen became her lab. Skwark spent a year working at different recipes because getting just the right amount of flax in the bar was tricky. She also wanted to incorporate oats and other healthy ingredients. Developed with the Food Centre, the resulting Flax to Go bar contains “nine ingredients you can pronounce, and that’s it,” she says. “It’s vegetarian and naturally gluten free.” The majority of Skwark’s ingredients come from Saskatchewan farms. The flax and gluten-free oats are milled in Regina, and the honey is from Manitoba via Tisdale, Sask. “I am sourcing as locally as possible,” she says. “My

suppliers provide quality, top-of-the-line product… When I tell people it is locally produced, their eyes light up. People care about that… In Saskatchewan there is so much in terms of food production, and so much potential globally in terms of addressing hunger and in sustainability.” For a transplant she has a lot of green Saskatchewan pride showing. And she gives credit to many other Saskatchewanians for her success thus far. Like Linda Braun, former executive director of the Saskatchewan Flax Growers Association, who took an early version of Skwark’s flax bar to showcase at an international flax conference, providing feedback Skwark used to make adjustments. From there it was perfected, processed, packaged and labelled at the Food Centre. That makes it sound like a lark, but as Skwark will tell you it’s a long process. Making a few bars is one thing, but scaling up to full production is quite another. At the Food Centre, Carmen Ly says that after a product is perfected at the pilot plant, it takes a day or two to scale up, tweaking the formulation to work at the larger scale, and ensuring packaging is appropriate for shelf life. Once things have been ironed out, the client is then able to gauge their maximum capacity and a pricing structure. Continued on page 30

Photography: David Stobbe • Stobbe Photography

The idea may come to you in a eureka moment, Skwark says. But the reality is that getting a product into the marketplace takes hard work, endurance, and a refusal to accept anything less than a great result.

COUNTRY-GUIDE.CA / March 1, 2016

Business

Local, minimally processed farm ingredients create instant consumer interest.

More Help Along the Way So that’s production. What about capital? Not everyone can simply go to the bank with a good idea. Like many other Saskatchewan entrepreneurs, Skwark turned for funding and business expertise to the Saskatchewan Agriculture Value Added Initiative (SAVI). It has been run by the province since 2009 under the federal Growing Forward programs. SAVI provides assistance for small- to mediumsize agri-businesses — defined as under 250 employees — with information services, business analysis and funding, as well as support for skills and training development. Developing a business plan was critical to Skwark. “It makes you focus and think through the steps and follow them,” she says. Flax to

Go has been on the market since September 2015 and is now in nine Saskatoon locations. Skwark plans to branch out from there using the plan she developed with SAVI, which includes a vision, competitive analysis and risk assessment, costs, distribution, management strategies, and marketing. “The most successful entrepreneurs are those with a strong business plans,” says Shawn Gibson, program manager with SAVI. “It’s the biggest advantage people can give themselves.” The program also provides money, up to 50 per cent of the costs for a value-added agricultural business in the province. “Anybody with a good idea and sound banking is eligible as long as they are using Saskatchewan products,” he says. “It’s part of the Saskatchewan Plan for Growth and helps to meet the targets of this program.”

I’ve never worked harder, physically, in my life,” Michaud says. “There were times when I thought, ‘Oh my Lord, what am I doing?’” 30

March 1, 2016 / COUNTRY-GUIDE.CA

Gibson admits SAVI is a highrisk program. The food industry is very competitive. And it’s not always easy to track success because private enterprise doesn’t always divulge their financials. “People like the program,” Gibson says. “They mostly accomplish what they’ve set out to do; 80 per cent of people who completed projects were still in business after the Growing Forward 1 program ended in 2012 (the program has continued under GF2). That is very good for a high-risk, food-based business.” And It Grows: Gravelbourg Gourmet Mustard Val Michaud took the plunge into that high risk arena, using SAVI funding and expertise to buy and expand her business, Gravelbourg Gourmet Mustard. The slogan for largely bilingual Gravelbourg, Sask., population of 1,100, is A Touch of Europe on the Prairies. Michaud took that phrase to heart, focusing her efforts on providing a variety of otherwise imported gourmet mustards to outlets across the prairies and into British Columbia. Just as Kelli Skwark has a passion for flax, Michaud sees mustard growing in the fields around her and takes great pride in processing it at home. “It’s so disheartening to see our raw product go to Europe,” she says. “I have a passion to keep it here.” She certainly does. Michaud bought the business in July of 2011

PhotoGraphy: Top: David Stobbe • Stobbe Photography, LeFT: Gravelbourg Gourmet Mustard

Continued from page 29

and by October had developed a 100-recipe cookbook nominated for a top cookbook award. Of the original four products, three were reformulated and she developed two new flavours as well as two dry formulations for rubs. On her own she expanded the business by 75 percent in four years, now producing 30 kgs of each flavour, which amounts to 75,000 jars of mustard. When demand grew, she hired a co-packer to help with supply. “I’ve never worked harder, physically, in my life,” she says. “There were times when I thought ‘Oh my Lord, what am I doing?’ But the passion remains. When I get comments like ‘it’s the best mustard I’ve tried,’ it makes up for the hardships.” There are more uses for mustard than you can imagine. Really. “Mustard is not just a hamburger, hotdog thing,” Michaud says. “You can use it in all kinds of ways — in rubs, sauces, dressings, appetizers. Even a mustard martini.” Now that does sound like Europe on the Prairies, doesn’t it? With numerous retail vendors and a cou-

ple of wholesale distributors throughout the West, Michaud says finding more distributors is key to expansion, because distribution is a huge job. And it’s all part of growth. Another part is finding and using all the resources at her disposal. Michaud has aligned herself with the Saskatchewan Mustard Development Commission. And besides using the services of first the Food Centre and then SAVI, she is a member of STEP, the Saskatchewan Trade and Export Partnership, an organization she says assisted her expansion to different provinces and one she hopes will help as she looks to exporting outside the country. Back in Saskatoon, Kelli Skwark says her work with the Flax to Go bar has been a team effort and she suggests that anyone venturing into value-added endeavours would be well advised to seek and accept help from anyone with something to offer. “I’m just a little part of the team,” she says. “I’m grateful. I made a call. You take that chance and who knows, you might get a positive response. One door opens,

and then another… It’s been a wonderful learning experience.” There is no manual for this, though Skwark says one would be very helpful. But she has managed to meet like-minded people who share ideas. “It can save you a lot of money and time if you’ve got a core group of people who help one another.” While Val Michaud’s challenges with her gourmet mustard are now more business related, one of Skwark’s biggest challenges is being patient. “You have to let the journey take its course and realize that everyone has to go through it,” she says. “Stick with it. Talk to people and realize that ‘my beginning is not the same as someone else’s middle’.” Beginning, middle or end, what these value-adding entrepreneurs hold in common is a desire to use the resources of the prairie fields that surround them, to add value, to be their own boss and to dream big. Part of the Saskatchewan Plan for Growth? Not entirely, but they just might be the ones making it happen. CG

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COUNTRY-GUIDE.CA / March 1, 2016

business

Pitfalls on the road to value adding So you’ve got a great idea. But can you actually grow a solid business around it?

t first glance, creating a value-added business may seem a lucrative way to increase profits and employ family members, but the road to success can be filled with potholes. Below, our experts and experienced value-adders list the dangers, and provide advice on how to avoid them.

eing star-struck by B your own product Gary Morton, a Nova Scotia ag business consultant with 25 years experience says the mistake he sees most often starts when producers are product driven, not market driven. “Too many are in love with the concept but haven’t validated the market,” he explains. “Don’t trust family and friends,” Morton continues. “The only opinion that counts is the person giving you money to buy it.” Morton says he’s seen people spend hundreds of thousands of dollars to develop a product that has no market. Getting funding isn’t necessarily validation of an idea, he adds.

ot knowing N your real costs John Jaques owns Sunshine Farms in Thamesville, Ont., which produces and sells 23 kinds of pickles. He says that when he is approached by someone wanting him to process a product using their grandmother’s recipe and get it to market, they rarely have an accurate picture of the costs. Jaques says that when he goes through a cost of production analysis with them, they are usually shocked. If they’ve been making pickles on their kitchen stove using 32

MARCH 1, 2016 / COUNTRY-GUIDE.CA

cucumbers from the garden, they likely haven’t accounted for the cost of insurance, electricity, labour, buying the cucumbers, storage or transportation. “The actual costs may work out to more than what they’ve been selling them for,” Jaques says. Jessica Kelly, the Ontario agriculture ministry’s program lead for direct farm marketing calls this “farmer math.” “Farmers laugh when I say this because they know it’s true,” Kelly says. “Too often they don’t put a cost on their labour or using their vehicle.” The cost of certification alone can add up to tens of thousands of dollars. Jaques is certified for organic, kosher, and the On-Farm Food Safety Program, and is working on Safe Quality Food (SQF) certification. Jaques says “people’s mouths fall open when I tell them the costs involved in obtaining these certifications.” Once you go beyond selling at the local farmers market, there are other fees that value-adders may not be aware of. Jaques says he regularly receives invoices for thousands of dollars from grocery stores charging him for in-store promotions, listing fees, and breakage. “If they drop a case in the warehouse, I get an invoice,” he says. He also pays a distributor and

By Helen Lammers-Helps

brokerage fees to ensure his product is actually on the store shelves. “If you’re going to take that next step, there are likely going to be a lot more costs than you anticipated,” he warns. A mentor can help you avoid some of these pitfalls, says Morton. Other farmers who have gone down this path can save you a lot of time and expensive mistakes, he says. Kelly agrees. In her experience, most value-added business owners are keen to work together and help each other out. “You can’t put a price on that kind of advice.” Jason Persall, owner of Persall Fine Foods in Waterford, Ont., says while farmers shouldn’t underestimate what they are capable of, they should focus, plan and not be afraid to ask for help.

I nsufficient research Kelly sees too many farmers who haven’t done enough research into what will be involved in producing and selling their product. What impact will zoning have on your value-added business? What are the insurance implications of having people come on your property? Will your value-added business trigger a property tax increase? Also be sure you do thorough research into your product, and into your customer too. Morton sees too many value-adders who don’t really understand who their customer is. It helps if you go through a process to put your thinking into actual words. “It’s important to understand what problem it solves,” Morton says. Develop a value prop-

osition, he recommends. This is a single sentence that explains why someone would want to buy your product. Such a statement will help keep you on track, Morton says, and it will be a touchstone for making critical marketing decisions, such as packaging and points of sale.

nderestimating U the complexity of value adding Value adding requires a different skill set than primary production. “Be prepared for a big learning curve,” says Janet Horner, a hog farmer who ran a full-service catering company for 30 years. Horner currently serves as executive director of the Golden Horseshoe Food and Farming Alliance for Greater Toronto, which has a goal of growing the second-largest food cluster in North America through a collaboration of municipalities, farmers, researchers and the food industry. Value adding often requires skills that farmers don’t already have, such as direct marketing, social media, customer service and human resource management, explains Horner. “Farmers are great ‘do-it-yourself ’ folks who can usually find a way to fix anything around the farm, but that may not apply to a value-added business. You may need to hire technical expertise in food science or technology.” Says Horner: “Many farmers are comfortable with a barn full of livestock but should never deal directly with people.”

Not scheduling downtime With two enterprises on the go, especially if one of them is dealing with the public or direct marketing, there can be a tendency to work seven days a week. But watch out. It can be a recipe for trouble, cautions Horner. She recommends scheduling at least one day a week when you can renew your energy.

ot having a N plan for how to get out Many value-added operations are located on-farm, but this can be a problem when you want to sell, says Horner. “If you try to sell the operation, you’ll be selling a business that includes primary production, the secondary business and your home.” Farmers may be wise to locate the valueadded operation away from your home farm, she says.

ot knowing N when to pull the plug Even if you do the market research and spend the necessary time and money to develop your product, your value-added business may not be successful, says Horner. “Know when to pull the plug before you drain your original enterprise. Have qualified advisers, and keep them informed of your business successes and failures.” CG

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business

Knowledge

The next ‘commodity’ By Amy Petherick / CG Contributing Editor

It doesn’t take a genius to haul megs and megs of farm-based info off the ’net. But actually using that information to build a better business? It turns out you can get good at that too

o you get Country Guide. Probably you also subscribe to other publications too, on top of the ones that your commodity associations send you. Maybe you get freebie updates from your machinery and chem companies as well, plus all the e-newsletters from marketing analysts, bankers and accountants, not to mention everything you get from the ’net or via social media or your customized phone apps. The surprise is, few farmers say they feel overwhelmed. Instead, they’re hungry for more. Russell Jeffrey of FarmShift Inc. recently surveyed the media consumption habits of farmers across the country and found that farmers largely plan to keep consuming more... of everything. “Today’s farmer is more educated and has more of an appetite for how to do things better than ever before,” Jeffrey says. It sounds like a great step forward, and it probably is. But knowing how to benefit from that clutter of information is also becoming a crucial skill. At the very least, the job has become so important to your farm that it’s worth investing a few minutes to think more clearly about how well you’re doing at it. 34

MARCH 1, 2016 / COUNTRY-GUIDE.CA

Just ask yourself this, for instance. Are you better at looking for information, or for ideas? Which should you be looking for? And when you find them, do you prioritize them according to their importance and usefulness, or do you tuck them all away in the same place, where there’s a good chance they’ll never again see the light of day? Let’s face it. We all need to get better at this, and the best place to start, our experts say, may be to get rid of a lot of the misconceptions that most of us are carrying around. The changing media world Farmers are changing the nature of the media that they consume. Sometimes, the changes are fairly straightforward, such as the way that much of what farmers used to get on radio and television has moved to blogs, specialty apps, e-newsletters, and of course YouTube. Other times it’s more complicated. The shift at Country Guide to dedicate more pages to business issues is an obvious example. Nor is today’s evolution showing any signs of stopping. Data speeds are still an issue in many rural areas, but technology is provid-

ing answers, so we’re seeing more electronic discussion groups, more online how-tos, and just generally more, more, more… It’s a challenge for ag suppliers too. What’s the best way to talk to farmers about your new tractor or your new herbicide? Do you have to be everywhere, all the time, in order to be sure you’re where you need to be when you need to be there? Can suppliers afford to be everywhere all the time? Those are the kinds of questions they ask Jeffrey, as well as wanting to talk to him about farmers’ interest in trade shows, or their desire for one-on-one consultations with company reps. But then, there’s also that other troubling question. Do farmers only want pieces of information, or are they also looking for ideas? And if you’re interested in ideas, can you absorb and evaluate them the same way you go about investigating the best timing for your fungicide application, or do you need a different process? Even with data, it turns out, Jeffrey says that information retention really isn’t anyone’s main objective. “Farmers are multi-tasking, thinking about where they can get help, what their best sources are, and what’s new or happening,” Jeffrey says. “It’s not so much that they’re going to retain it all, it’s much more about scanning what’s available than really studying and learning something.” Your two objectives So where does this leave farmers who are trying to improve both their management and their pro-

ductivity, and to do it in the most efficient way? Pascal Thériault, a faculty lecturer at McGill University’s MacDonald campus, is teaching his students what he believes will prove one of the most critical skills they’ll need as young farm managers. Thériault finds too many of the kids who have come to his classes in the last 10 years are so focused on specifics, they easily lose sight of their farm’s bigger picture. “I find they have a hard time trying to set long-term goals and a long-term vision,” Thériault says. It’s something he finds himself telling them again and again because, he says, repetition goes hand in hand with retention. Part of the reason why electronic tactics work, he says, is because the same bits of information often get repeated time and time again. It’s why scanning strategies, where for instance you simply glance at a social media message instead of really sitting down to memorize it, can eventually produce good results. Farmers who aren’t already absorbing information this way may feel overwhelmed with the amount of information they’re bombarded by. They’re the ones you may hear publicly lamenting how it’s all just too much. “They don’t have to read everything,” is Thériault’s secret for these individuals. Nor do you have to know everything, because so much information is retrievable on the Internet, or is accessible through your agronomist, mechanic, or other specialist. Still, the best managers also make time to step back from the technical part of their job and consider how their farm is running from other angles too, Thériault says. They also know that, beyond simple repetition, there are other strategies that actually work on the farm. Think of learning as a layering process, Thériault suggests. A farmer who attends a seminar on farm transfer and then follows that by reading an article about farm

transfer, or vice versa, will actually get more out of both, he says. Even better, they’ll emerge with a clearer sense of what the most important points are. In part, it’s because of repetition that we talked about, but it’s also because we have different learning pathways. Sometimes we need visuals. Other times we need an opportunity for discussion. ‘Mind management’ Jonathan Creaghan, a business management consultant, says it isn’t time management but really mind management that more farm managers could benefit from. Even

a single thought takes time, and if you don’t give the thought the time it needs, you end up being distracted and disconnected, which leaves you wasting even more time. Whenever possible, Creaghan says, if you hear your phone beep, force yourself to wait until you’re finished with whatever your mind is presently fixed on before you open that new text. It applies to bigger issues too. “From my experience working with business owners particularly, including farmers, they get distracted by day-to-day minutiae that Continued on page 38

Quest for proof

You’ve done the research but is it statistically significant? Outstanding farmers have always pushed the envelope trying new things, new ways. Today they measure it and call it R&D. Thanks to GPS-enabled crop production technologies including lightbar navigation, auto steering, variable-rate controllers, and yield monitors, on-farm research is more feasible than ever before. Precision agriculture technology has allowed for on-farm research on the fly without disrupting the commercial operation. It’s also usually not shared, except with the farm’s buyers and suppliers. However, true research isn’t only about recording history, it’s about predicting future responses. Variability in soil, weather, and other stresses makes it difficult to duplicate a test. You can never

be 100 per cent certain that the measured yield differences in a trial are solely due to the variable being evaluated, which is why statistical analysis comes into play. This analysis plus sound research design means the results are valid. In the U.S., on-farm research networks have popped up in several states and some are nationally run programs. For these networks, university or government scientists do the statistical analysis. It looks like a growth trend, says T. Scott Murrell, director of the International Plant Nutrition Institute in his paper, On-Farm Trials and Statistics. “In the future, freely available statistical tools may help transition farmers and agricultural industry professionals to conduct more sophisticated analyses such as multi-site, multiyear studies and, rate studies.” COUNTRY-GUIDE.CA / MARCH 1, 2016

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business Continued from page 35

SR&ED reminder Canada’s Scientific Research & Experimental Development program gives tax credits to businesses that invest in research. Administered by the Canada Revenue Agency, the SR&ED program provides more than $3 billion in tax incentives to over 20,000 claimants annually. You could be eligible for tax credit if you’re developing a new product or process, improving an existing product or process, or reducing the environmental impact of your farm. Generally, a Canadian-controlled private corporation (CCPC) can earn an investment tax credit (ITC) of 35 per cent up to the first $3 million of qualified expenditures for SR&ED carried out in Canada, and 20 per cent on any excess amount. Other Canadian corporations, proprietorships, partnerships, and trusts can earn an ITC of 20 per cent of qualified expenditures for SR&ED carried out in Canada.

The SR&ED program provides more than

$3 billion in tax incentives

to over 20,000 claimants annually

“Uptake for the SR&ED program has been in the billions of dollars,” says Mike McCreight, SR&ED partner for BDO. However, his company only processes 30 to 40 for agriculture, mostly larger farms. To make it worthwhile for BDO to do the paperwork, he says you need at least a $20,000 credit which means you’d spend $40,000 to $50,000 in expenditures directly attributed to the research. Although open to all sizes and types of businesses, the project must meet the criteria. The research and development process normally must include some or all of the following: projects or programs, new products, improving production methods or processes, improving a commodity, technology advancement, and productivity improvement.

MARCH 1, 2016 / COUNTRY-GUIDE.CA

isn’t relevant to their role and where they want to go,” Creaghan says. “So the first thing you need to be clear on is why you need the information and what you need it for.” In his book, Thinking Differently about… Getting More Done, Creaghan explains how our brains can operate at three distinct levels. The synopsis below will sort of explain his concepts, but is mainly meant to help you decide whether you want to learn more. That, after all, is the sort of efficient decision-making that this whole column is all about. The shallowest of Creaghan’s trio is what he calls the Thinking Mind, which tends to operate as a running commentary. The Thinking Mind personalizes information as it relates to your own values, so it doesn’t just notice that your brother is wearing a hat today but that it’s a hat you either like or don’t like. In other words, it’s a kind of thinking that mixes emotions with facts, which isn’t always a great mix when your goal is high-quality farm management. “The less time and energy you spend on emotional interpreting, the more likely you are to find the information that you need,” Creaghan says. “Emotion-free decision-making is the recognition of the outcome and the goal that you need from the information itself, so that you don’t get distracted.” Anyone who has ever lost themselves in a task knows what it’s like for their mind to be operating on a deeper level than what the Thinking Mind tolerates. This deeper level, which Creag han calls the Working Mind, is the mind of action and is responsible for directing behaviour, reasoned thought, and how best to use intelligence to serve the need of the moment. This is the mind at work when you get so focused on a job that you lose all track of time or don’t hear when someone is talking right next to you. Now instead of deciding just how ugly your brother’s hat is, your brain is free to notice he’s putting the keys to the farm truck on the counter, which is information that could be critical later that day when you need to go to town. “Observing without judgment

allows you to reconnect to your environment,” Creaghan explains. “As business owners, we need the truth, and the only way you can see the truth is by reconnecting to the information in a more non-judgmental way.” But learning to think free of emotion and stay focused on the present isn’t easy. Creaghan likes to compare it to doing martial arts for the mind. When mastered, however, clients report understanding their monthly income statement, production reports, or staff reviews much better. “There is no question that as you become more connected to your moment, the better your decision-making is and the higher your performance because the Thinking Mind shuts down.” The other advantage of shutting down the emotion-laden Thinking Mind is that it encourages more activity in the deepest part of the brain, the Aware Mind. This is where the most efficient kind of thought process happens. When it’s in control, you get what you probably call “gut feelings,” and not only do you lose all track of time, you lose all track of thought process. You hop to conclusions. We all do it, yet anyone familiar with these hunches also usually knows how difficult it can be to operate on them. Unless there’s a crisis situatio, the Thinking Mind keeps second guessing what the Aware Mind is telling us to do. It becomes a great feedback loop, and we do get very good at knowing when to trust our instincts, and when to think them through. But the same happens when we’re information seeking, because we may not pause long enough for the Thinking Mind to ask its questions. This in turn is especially important when we make a snap decision not to read something that we later wish we had. Again, we’ve all done it. The point is, just knowing about this kind of process can help us manage our way to better information outcomes. Becoming more in tune with instinctive decision-making can be the key to processing more information than ever, Creaghan says. So if you really want to absorb better information, work harder to stay focused on your immediate environment. CG

PG. 42 Our soft red wheat

gets back into Toledo PG. 44 New laser technology

heats up soil testing PG. 47 Better vetch

control in soys

CROPS GUIDE Cereal breeding is back

in Eastern Canada These two public sector positions will re-establish the importance of all cereals in the rotation ralph pearce / cg production editor

Mixed farmers value cereals for feed and bedding, and a large segment of row-crop growers depend on cereals for soil-healthy rotations. Both groups can expect to gain from the new research.

here is little point in arguing the importance of cereals in today’s rotations. The topic has been researched thoroughly; the results are documented and well known. Not only do corn and soybeans produce more bushels when there’s a cereal in the rotation, there’s also a beneficial long-term impact on overall soil health, plus the breaking of disease, weed and pest cycles. Even so, public sector cereal breeding has had a hard time holding its own in the past 10 to 15 years, not only because of tight government budgets, but also because Ottawa in particular has shifted more of its eastern spending to corn and soybeans. Nor has breeding in the private sector fared much better. Even with the growth of hard and soft red markets in Eastern Canada, only a few, comparatively small companies have invested in cereal breeding, while the big players have kept to the big crops, i.e. corn and soybeans. Now, however, there are encouraging developments, especially with the hiring of two public sector cereal specialists in the last two years. Dr. Ali Navabi is the newly minted GFO (Grain Farmers of Ontario) wheat chair at the University of Guelph, and Dr. Gavin Humphreys is the new breeder and researcher at Agriculture and Agri-Food Canada’s Eastern Cereal and Oilseed Research Centre (AAFC-ECORC) in Ottawa. Continued on page 40

COUNTRY-GUIDE.CA / MARCH 1, 2016

crops Guide Continued from page 39

Both are already active in trying to “restock the shelves” for eastern Canadian cereal growers. But both also say this is a long-term project. Meanwhile, there have been two additional developments that could benefit the eastern cereals sector, and especially Ontario. The first was the February 2015 implementation of the new Plant Breeders’ Rights legislation, known as PBR91. The other was the announcement that oats and barley will now come under the GFO. It’s expected the GFO’s coverage of oats and barley will give those two crops a stronger voice among the other commodities, and that its checkoffs will spawn more research. All of this is great news to Martin Harry, eastern marketing manager for SeCan. He notes that it was never as though public sector breeding in Eastern Canada was completely shelved, just that it wasn’t getting enough priority. Cereals haven’t seen private sector investment anywhere near that of corn and soybeans in the past 20 years. Added to that have been the difficulties in planting winter wheat in 2012, 2013 and 2014, together with low commodity prices and the long-standing issue of bin-run seed, which reduces overall returns for breeders. The hiring of two public sector researchers and breeders in Eastern Ontario will mean more opportunities for “homegrown” cereal varieties.

MARCH 1, 2016 / COUNTRY-GUIDE.CA

Despite his optimism, Harry emphasizes the need for patience. “It takes years,” Harry says. “The long-term benefit for Ontario growers is huge. We’ll have homegrown winter wheat from Dr. Lily Tamburic-Ilincic (University of Guelph’s Ridgetown Campus), but Ali (Navabi) is going to have five times or 10 times as large a program. We have a breeder again, and not just of wheat, but of cereals.” Ask Dr. Josh Cowan what he likes about these appointments, and he cites most of the same elements as Harry, including the long-term prospects and the revitalized programs for Navabi, who will focus on soft reds, and for Humphreys, who will focus on hard reds. But Cowan is equally impressed by the many connections both bring to their programs. “When you start to look at wheat breeding beyond just the traditional core breeding activities, you start seeing the need to bring people from specialized areas to accomplish things,” says Cowan, manager of research and innovation for the Grain Farmers of Ontario. “The biological stresses or environmental stresses that they’re breeding to overcome are very complicated, so these guys are starting to make the networks that will help to identify resolutions to them.” As Cowan states, breeding is a

numbers game. The more crosses get made, the better the chances of producing a commercial variety. But on top of that, Navabi and Humphreys are well known in the research community and have many useful ties and connections to researchers and breeders from around the world, which will also boost the odds of success. “We haven’t seen any lasting investment in the private sector side of wheat breeding in Ontario for a little while now,” says Cowan. “There’s no particular indication that it will increase over time, so we need to have that public base in order to do that core work. And not just the core breeding but understanding genetic interactions with agronomic factors and dealing with stresses, be they disease or environmental factors.” Generate greater diversity — at home It’s also important to understand the need for more “homegrown” breeding initiatives. For the past decade, Eastern Canada has largely been the recipient of wheat varieties from Western Canada and other regions when varieties produced there happen to show an adaptation to conditions in the East. According to Dr. Gavin Humphreys, that’s not the best way to do it.

Cereal breeding “Wheat in general doesn’t travel well,” Humphreys says. “Yes, you can bring western varieties east and you can grow them, and you can bring European varieties to Ontario or Quebec and you can grow them and you can produce seed. But if you really want something that’s well adapted, so it is higher yielding, and has the disease resistance or winter survival required, you need to breed them in the location they’re going to be grown.” That winter survivability component can be an issue, particularly with European materials. It’s the same bringing eastern varieties to the West, and Humphreys says there would be issues doing that with spring cereals, due to quality and competitive issues affecting production, as well as disease issues such as leaf and stripe rust. “Similarly in the East, you have fusarium which is much worse of a problem,” says Humphreys, who was happy to move back to Eastern Canada after 18 years in the West. “In the West, once you get past Regina, fusarium isn’t a problem, unless it’s a really wet year, and in Manitoba, they don’t produce as much wheat as Saskatchewan and Alberta.” “By reinvesting in cereal, and particularly wheat development in Eastern Canada with the hiring of Ali in Guelph and myself here at ECORC, that will ensure that we have activity in the sector and people who are motivated to see things happen and to see the crop not only develop but flourish,” says Humphreys. In addition to the hiring of Humphreys and Navabi, the funding also allows for technicians in various locations in Eastern Canada, including one at AAFC-Harrow and another in Charlottetown. The latter individual will oversee the varieties left following the retirement of Dr. Richard Martin. But the cupboard’s bare The greatest challenges facing Humphreys and Navabi may well be time and expectations. The cupboard is not only bare, it will take five to 10 years before either of their programs is likely to yield varieties for Eastern Canada. Humphreys has worked with Dr. Rob Graf, a winter wheat-breeding researcher at AAFC-Lethbridge in the past, and Graf sent him what he calls a “breeding program in a box.”

“It was all material that he thought might fit in the East, because he’d been asked to help a little with this program before my arrival,” says Humphreys. “And I planted it all out in Harrow or here in Ottawa, wherever it was appropriate, and that material is now working its way through the system. It’ll be a few years before it starts showing up.” In fact, it will be six to 10 years before materials from this program will be available to farmers, adds Humphreys. That said, he has a line that’s already in secondyear registration trials in both Ontario and in the Maritimes. It’s not the best variety, but it was third-highest yielding in the red wheat tests in 2014. So there is material in the pipeline that will be attractive, not just to the seed companies but ultimately to producers. It’s worth noting that the cereal industry is also unique in two other important ways. As more of a direct food crop, wheat, oats and barley do not face the easier road to development and registration that corn hybrids and soybean varieties enjoy. Downstream users — particularly millers — also play a big role in the registration process. A particular wheat variety might be a standout in the field, yielding 150 bu./ac. or being resistant to fusarium, but if millers find its blending capability or its elasticity in bread making to be substandard, that variety will never be registered. “And there are regulatory constraints that you just can’t get around,” adds Humphreys. “You have to have two years in Eastern Canada of registration trial testing and summarize the data, and make sure the registration committee approves it before you go forward. And you have to have enough seed before you go in for all of that regulatory testing. If you add all of those constraints together, you’re probably up to at least five years.” SeCan’s Harry doesn’t mince words. He points to Doug Young’s work on the benefits of cereals in the rotation in the 1990s and Dr. David Hooker’s subsequent work at the University of Guelph, Ridgetown Campus. But, he adds, “It took a lot of money to get a wheat chair at the university.” It was a difficult job to sell the university on the value of the wheat position, Harry says. “We have to look at the legacy 20 years down the road.” CG

he biological T stresses or environmental stresses that they’re breeding to overcome are very complicated.” Dr. Josh Cowan, Grain Farmers of Ontario

COUNTRY-GUIDE.CA / MARCH 1, 2016

crops Guide

Getting back into Toledo IP premiums for soft red and other wheats may open doors to make both reds and white more profitable By Ralph Pearce / CG Production Editor

In the chase for varieties best suited to Ontario conditions, the needs of farmers and the seed companies get balanced with those of the processors.

n Eastern Canada, if you hear the phrase “identity preserved” or “IP,” it’s almost always in connection with soybeans. And that’s only fair, given the importance of that market. But increasingly, “IP wheat” is also becoming part of the jargon. In 2015, the soft red winter wheat variety Branson seemed to be the hot commodity across much of southern Ontario. Dubbed an IP variety, it was viewed with great anticipation until fusarium head blight struck and many fields and loads were downgraded. Today, Branson from Dow Seeds and CM249 from C&M Seeds are aimed at re-establishing the flow of soft red Ontario wheat to the Mondelez Flour Mill in Toledo, Ohio. Ontario’s soft red sales to Toledo went off the rails in the mid-2000s when the province’s seed industry started chasing yield without keeping the needs of end-users — in this case, a cookie and cracker manufacturer — at the forefront. “When there was this push for higher-yielding wheat, it didn’t get looked at as far as the specific baking or quality traits that one significant buyer (Mondelez) wanted — it just

March 1, 2016 / COUNTRY-GUIDE.CA

went for yield,” says Larry Shapton, who recently retired as grain marketer with Hensall District Cooperative, in Hensall, Ont. “We lost these traits that Toledo wanted and, therefore, they significantly reduced us as a supplier and we lost a very significant market.” “We are not a preferred supplier from a quality point of view,” Shapton now says. “They will buy from us, at a lower price, and if there are quality issues in Ohio or Michigan.” Shapton says that in order to spread its risks, the Mondelez mill would prefer to have roughly a third of its wheat supply from each of Ohio, Michigan and Ontario, which is why there have been negotiations between the Toledo plant and several seed companies to ensure its baking needs can be met, and why CM249 and Branson are segregated here in Ontario. Some in Ontar io actually blamed Toledo for the whole mess. Representatives of the Mondelez operation didn’t take part in those registration meetings years ago, where the discussions on higheryielding varieties took place. And since other downstream users were there to ask for wheat varieties that

met their needs, the Mondelez criteria got bypassed. Whoever was to blame, though, it’s been a painful lesson. Lesson learned “It served as a wake-up call that all members need to be at the table when we are deciding which quality parameters and varieties meet the needs of the end-users,” says Ellen Sparry, general manager of C&M Seeds. Wheat is unlike corn and soybeans. If a variety doesn’t meet the needs of a miller or other downstream user — whether it’s for protein, say, or for blending capability — it might never get registered, even if it has great yields. “What Toledo is trying to do is get the overall genetics in Ontario back to a variety that they like or that has the baking qualities that they like,” says Shapton. “They will pay a small premium, which we’ll pass on to the producer.” That premium now stands at between $0.20 and $0.25 (roughly $7 per tonne), which helps cover the cost of certified seed, although no one is discounting the possibility that there may come a day

Crop Opportunities when that market resets and the premium disappears, making Branson and CM249 commodity wheat once again. Wheat is a difficult market, with different countries having very different preferences for key quality characteristics, including protein content. That makes a local market all the more attractive, especially if it’s a big market. So while there are plenty of millers in Ontario that can take the soft white winter, hard red winter, soft red winter and hard red spring wheats grown in this province, says Shapton, the difference is that the Mondelez mill is so large, it can demand the quality that it wants. “Last year (2015) when we produced a million tonnes of soft red, that was the potential market to sell to in Toledo,” Shapton says.

“That’s huge. Even a quarter of a million tonnes is big.” Accentuate the positive Meanwhile, Sparry puts a positive spin on the re-establishment of the Toledo market. “The way to look at it is that in Ontario, we over-produce soft red winter wheat and we over-produce it by a significant amount,” she says. “This opens another door to move that oversupply into a marketplace. The more doors we open, the better.” In the larger context, Sparry also likes the IP prospects for soft white winter and hard red winter wheats, just because so little of those two classes gets grown in the province. For example, during the summer of 2015 soft white winter wheat volumes in Ontario

were so low, it looked like the historic premiums of $20 to $30 per tonne (relative to soft red winter) might need to be doubled, and at least one seed company started putting out advice about the agronomics of growing white, and how to line up a processor or miller to receive it. An o t h er p o s i t ive t w i s t focuses on the weather, and the way millers like to draw some of their tonnage from Ontario just in case growing conditions stateside are negative. “We’re basically a weather control for Ohio,” explains Sparry. “We’re their backup. They can source wheat out of this area and they feel comfortable that we’re going to produce a lot of soft red. The problem comes when we’re not producing the right type of soft red for them.” CG

“ (Toledo) will pay a small premium, which we’ll pass on to the producer on both varieties.” Larry Shapton, former grain marketer

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crops Guide

Soil testing by laser beam A Quebec company has developed a soil-test system using laser technology that reports more accurate results in just three days By nicolas mesly

ké Nault regularly stops his ATV on a 25-acre freshly cut hayfield belonging to a producer from Howick, 30 kilometres south of Montreal. Probe in hand, the young technician methodically collects soil samples. Each stop is georeferenced as a green dot on a field map on his cellphone screen. It really is “space age” technology, because in 2020, a metal hand on the Curiosity robot, 560 million kilometres from Earth, will take a soil sample on the surface of Mars using the same science, called laserinduced plasma spectroscopy. But Nault is using an even more sophisticated version developed by Logiag, a company based in Chateauguay, Que. “We were inspired by the mining industry,” says Iké’s father Jacques Nault, an agrologist and Logiag’s vice-president. The mining industry had been using laser technology to detect the presence of copper in ore samples, but it did not indicate the quantity. That required excavation and further testing to determine whether a deposit is economic. Working with the National Research Council in Boucherville, Que., Logiag developed the laser technology so that it could precisely measure all the mineral contents as well as organic matter of a soil sample. “NRC researchers had embraced this incredible challenge to develop a laser capable of analyzing the soil matrix,” says Nault. He also credits the perseverance of Logiag’s research director Dr. Luc English, who used his knowledge of medical spectroscopy to develop the Logiag system. The development took five years and $2 million in investments from various sources including Business Development Canada and Investissements Québec. Named SOLID for the contraction of the words “soil” and “identification,” the system is now patent-protected in 148 countries. Once Iké Nault has collected his soil samples in small cups identified with a bar code, he scans them with his cellphone. He

MARCH 1, 2016 / COUNTRY-GUIDE.CA

Dairy producer Alain Rouleau (l) and Logiag vice-president Jacques Nault describe how each soil sample is georeferenced.

then brings his samples to Logiag’s laboratory in Boucherville where each cup is scanned with the SOLID laser beam, which heats the sample to a temperature between 20,000 C and 25,000 C. “This tremendeous heat creates a plasma where the electrons are freed from their orbit,” says Jacques Nault. “The energy released by these electrons allows us to identify different atoms in the sample.” Each sample is bombarded 3,000 times by the laser beam to make 100 analyses per second. All the elements from the periodic table, including nitrogen, phosphorus and potash, are identified and quantified. “We are the new field of atomic analysis,” says Nault. “There is no longer the need for chemical products, beakers and flasks, used up until now by conventional laboratories to do soil analysis.” According to Nault, the old method

Soil is collected and scanned with a laser that heats the sample to a temperature between

20,000 C

and 25,000 C. Each sample is bombarded 3,000 times by the laser beam to provide 100 analyses per second and identify its nutrient content.

precision ag allowed a margin of error of 25 per cent, while SOLID’s margin is only five per cent. In addition, Logiag clients can expect their results and recommendations within three days instead of two weeks or more with the conventional soil analysis system. The SOLID system is intended primarily for crop advisers and service providers. “Logiag is a kind of back office rather than a direct service offered to the producers,” Nault says. Dairy farmer Alain Rouleau, whose hayfield is being tested by Iké Nault, says he likes the Logiag system. “It all starts with the quality of my soils. That’s what creates the quality of my forages, which in turn keep my herd healthy,” Rouleau says. The speed of the analysis and recommendations is key for this dairy producer, who every year limes one-sixth of his 300 acres. Quebec’s rainy climate tends to acidify the soils. Rouleau says that by having his lime recommendations two or three days after harvesting hay, oats or wheat, instead

of waiting two or three weeks for the conventional soil analysis, he can better plan his field work, including crop rotations. “I manage my fields like my group of cows, or even cow by cow,” he says. Rouleau estimates that he spends $3,000 per year to lime 50 acres, so every penny counts. Logiag’s SOLID soil service analysis was officially launched on September 1, after being tested among 20 of the company’s 4,000 clients. Logiag is waiting for its official credentials from the provincial accreditation agency, as well as its accreditation to the international ISO1705 standard. “We should obtain these accreditations within the next six to 12 months,” Nault says. The system has already won a provincial innovation award, and attracted interest from outside Quebec. Logiag was also invited to participate in the Ag Innovation Showcase in St. Louis, Missouri, last September. “We met with the industry top players and we are following up the discussions to develop our market,” Nault says. CG

The georeference for each sample is recorded by cellphone.

Logiag’s SOLID soil service analysis was officially launched on September 1, after being tested among 20 of the company’s 4,000 clients

Each sample is placed in a box which is sent to the Logiag lab in Boucherville. The results are available in three days.

COUNTRY-GUIDE.CA / MARCH 1, 2016

Crops GUIDE #pesTpatrol

#PEST PATROL with Mike Cowbrough, OMAFRA Any updates on vetch control in soybean?

n a 2014 column, I expressed my optimism for a herbicide treatment to control vetch (Viccia cracca) before planting soybeans. I wrote, â€œ2,4-D Ester 700 applied seven days prior to soybean planting looks like a promising tool for the control of vetch in soybeans provided vetch has emerged at the time of application. More trial work will be needed to verify the consistency of these results.â€? After a completing a second season of evaluations in 2015, I have not swayed from that optimism, although it is tempered since the level of control in 2015 was not nearly as good as in 2014. Still, it was significantly better than all other treatments. Why the difference in control? Vetch appears to be a later-emerging species. Since the spring of 2014 was relatively wet, soybeans were not planted until the first week of June when there was a higher percentage of emerged vetch. In 2015, by contrast, the spring was relatively dry and soybeans were planted some three weeks earlier than in 2014, which meant less vetch was emerged at the time of pre-plant applications. Summary An average soybean yield loss of 35 per cent has been observed over two seasons due to vetch interference. 2,4-D Ester has been the most effective active ingredient on vetch, but its effectiveness has depended on the amount of vetch that is emerged at time of applications. CG

H ave a question you want answered? #PestPatrol on twitter.com @cowbrough or email Mike at mike.cowbrough@ontario.ca.

MARCH 1, 2016 / COUNTRY-GUIDE.CA

Average and range in control of vetch in no-till soybean over two trials and seasons with different pre-plant herbicide treatments

Pre-plant herbicide treatment

Average control

Range in control

Number of trials

Glyphosate (360 g/l) at 2 l/ac.

35%

18-51%

2,4-D Ester 700 at 320 ml/ac. + glyphosate (360 g/l) at 1 l/ac.

66%

57-75%

None

Vetch pressure with no pre-plant treatment in soybean.

Control of vetch following a pre-plant application of glyphosate.

Control of vetch following a pre-plant application of 2,4-D Ester 700 applied seven days before planting.

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Crops GUIDE weather

MILDER-THAN-NORMAL TEMPERATURES NEAR- TO BELOW-NORMAL PRECIPITATION

Variable Mild Rain / snow

al n o w si ca / sno c O in ra NEAR NORMAL

Ontario

MILDER THAN NORMAL

March 20 to April 30, 2016National

• Mar. 20-26: Generally sunny this week but on a couple of cooler, windy days expect rain changing to snow central and north. Seasonable to mild temperatures. Windy at times. • Mar. 27-Apr. 2: Changeable conditions as sunny, mild days alternate with cooler, blustery days and intermittent rain. Some frost south. Periodic snow, seasonable north. • Apr. 3-9: Variable as wet, windy days exchange with sunny and mild conditions. Highs often in the teens south with a few frost pockets. Fair with scattered heavier snow north. • Apr. 10-16: Expect two or three unsettled days with rain and gusty winds south, otherwise sunny with highs in the teens and a few 20s. Variable central and north with some rain or snow/frost. • A pr. 17-23: Pleasant temperatures and often sunny south apart from some rain on a couple of days. Frost risk. Changeable central and north with some rain or snow, chance heavy in places. • Apr. 24-30: Breezy and often mild with some highs in the 20s south. Sunny but expect showers on two or three days. Variable north with periodic rain, chance of snow/frost pockets.

Quebec

• Mar. 20-26: Temperatures fluctuate from mild to cool with frost. Occasionally blustery. On a couple of cooler days expect rain in the south, changing to snow central and north. • Mar. 27- Apr. 2: Pleasant, sunny and mild apart from rain and brisk winds on two to three occasions. Frost patches south, more widespread central and north. Periodic rain mixed with snow north. • Apr. 3-9: Fluctuating temperatures averaging near to a bit above normal. Often sunny but look for scattered rain in the south. Frost risk. Intermittent heavier snow and frost northern areas.

Scatt rain / ered snow

TO L E- MA ES V O OR R AB R-N ATU N R A NE MPEAND ATIO T E T IPI EC R P

S to at t rmy ime s

Sn Co sp ow ld el y ls

MARCH 1, 2016 / COUNTRY-GUIDE.CA

• Apr. 10-16: Unsettled on a few days this week as sunny, mild days alternate with rain in the south and snow mixed with rain in the north. Chance heavy precipitation in places. Frost risk mostly central and north. • Apr. 17-23: Fair skies and milder air combine to bring pleasant weather on most days. Scattered showers south and a slight risk of frost. Variable central and north with some heavier rain or snow. • Apr. 24-30: Blustery winds send some highs into the 20s south and well above zero north. Sunny with scattered shower activity. Changeable north with some rain, patchy snow and frost.

Atlantic provinces

• Mar. 20-26: Temperatures follow the thaw/freeze cycle. Frequently windy. Fair but expect two or three days of rain or snow, possibly heavy along windward coasts and far north. • Mar. 27-Apr. 2: Somewhat milder air moves in ahead of disturbances followed by colder, windy weather with occasional heavier rain or snow. Frosty nights mostly at inland localities. • Apr. 3-9: Highs climb to double digits in the west as fair skies alternate with rain and some snow. Cool east with occasional rain or snow and often frosty at night. Gusty winds at times. • Apr. 10-16: Unsettled conditions this week as weather systems race by with frequent rain or snow and high winds. Chance of heavy precipitation in places. Variable temperatures. • Apr. 17-23: Sunshine boosts highs into double digits in the west. A couple of frosty nights inland. Scattered shower activity. In eastern areas expect occsional rain or snow and blustery winds. • Apr. 24-30: Frequently sunny but showers occur on two or three occasions west and rain or wet snow east. A few highs in the 20s west but occasionally single digit in Newfoundland and coastal areas.

highlights March 20 to April 30, 2016 Spring is expected to begin early across most of Canada this year due mainly to a waning El Niño and a milder-than-usual weather pattern. Changeable weather and rapidly warming temperatures normally characterize the weather during the spring months. Drier-than-usual conditions are likely to accompany the milder spring weather in most areas. The only exception may be in parts of southern Ontario, eastern Quebec and Atlantic Canada where disturbances will bring a few cool, wet periods from time to time. 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.

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.

A special supplement brought to you by Canadian Forage and Grassland Association

Forage & Grassland Guide is produced in partnership by the Canadian Forage & Grassland Association (CFGA) and Farm Business Communications and distributed through Country Guide, Canadian Cattlemen and Le Bulletin des agriculteurs. It focuses on forage and grassland issues of importance to crop and livestock producers across Canada.

Making hay of environmental goods and services Researchers wrestle with turning an abstract concept into concrete profits for producers By jeff melchior

f you were to ask most cattle producers about the goods and services their grasslands provide, it might seem like an obvious question. Most would say that quality forage promotes the health of their cattle, provides high-quality protein and boosts their bottom line. Others might talk about how their grazing practices promote biodiversity and overall environmental health. Both are fundamentally correct in their definitions of the environmental goods and services (EG&S) provided by grasslands. But those answers are only the beginning of what is currently a somewhat vague and academic concept. If EG&S such as carbon storage and biodiversity have the potential for a dollar value, should producers be paid for owning and managing those services? And if so, how do you assign that value and develop a system of trade to support it? It’s the job of researchers such as Edward Bork to help answer such questions. Bork, a researcher with

2016

Forage & Grassland Guide

In many grasslands, including those of Western Canada, moderate grazing actually boosts overall plant diversity.

the University of Alberta’s Agricultural, Food and Nutritional Science department, says understanding these services is more crucial than ever in an era of escalating stresses such as grassland conversion and climate change. “What we’re starting to recognize as a society is that these perennial systems, particularly our native grasslands, provide benefits to society that go far beyond forage and livestock commodities. Those benefits affect all of us,” he says. “We want to develop solid baselines for the biophysical contributions from grasslands, whether it’s carbon storage or pollinator diversity. If you don’t have that baseline information, then it’s impossible to attach a dollar value to it. Once the important task of quantifying the size of those benefits is done the next step is to find the right policy mechanisms to promote, conserve or even increase them from these systems.”

Grazing a fit for EG&S

One thing that makes EG&S so hard to define is that they cover pretty much everything in the agro-ecosystem. These “goods” include habitat, water and millions of species including animals, plants and even soil organisms that haven’t yet been fully identified. “The services include the provision of wildlife habitat for both consumptive — those we hunt — and nonconsumptive species. They include rainfall infiltration, flood mitigation and water purification since a lot of our rangelands are also major watersheds. It also includes carbon storage, which is obviously an important good and service because if carbon is stored in the ground it’s not in the atmosphere contributing to rising CO2 levels,” says Bork. The good news is that good rangeland management already promotes these values. Continued on page 50 COUNTRY-GUIDE.CA / MARCH 1, 2016

A special supplement brought to you by Canadian Forage and Grassland Association

Continued from page 49 “If you look at these rangelands they evolved with grazing and often plenty of it,” says Bork. “It is well known that in many grasslands, including those of Western Canada, moderate grazing actually boosts overall plant diversity.” Overall, producers have done a good job of maintaining grasslands, using conservative stocking rates and giving the land time to regenerate, says Bork. “What we don’t necessarily understand is how the other environmental goods and services, the ones we know are out there but may be not be as well understood, how do they respond? Although research will continue to reveal how producers can hone their practices, Bork does not foresee any findings that could negatively affect grazing as a viable, socially acceptable facilitator of EG&S. If anything, the results of a study Bork led with support from the Alberta Livestock and Meat Agency (ALMA) suggests the biggest threat to these goods and services, aside from urban development, may be market-driven incentives to switch land use to forms of agriculture that provide fewer EG&S. “Just by flipping native grasslands into cropland you’re eliminating upwards of 40 to 50 per cent of the carbon stores. But what incentive is there for a farmer to retain grasslands for carbon storage? There isn’t one. So until there’s a market mechanism to reward producers for that they’re not going to change their management to accommodate the service.”

Potential for pollinators

One of the keys to discovering the value of EG&S is finding the species that deliver them. The collapse of bee populations throughout the world has brought new focus on the role of pollinators in crop production. A U of A study seeks to take the discussion beyond honeybees towards the countless other unknown, unnamed pollinators. “If we can start understanding 50

MARCH 1, 2016 / COUNTRY-GUIDE.CA

which species of bee are really doing this pollination work, then we can start to figure out their contributions to canola and other flowering crops and their contributions to the production of flowering plants within rangelands,” says Cameron Carlyle, a fellow rangeland researcher with the U of A. “From there we want to figure out what systems of cattle management might benefit these pollinators and reap the benefits in terms of forage.” Carlyle’s team has identified 140 bee species in Alberta so far. “We found there’s a great deal of variability in their numbers and abundance across the province. Depending on where you are there are differences in abundance of species between rangelands and canola fields. We have 15,000 bees to identify one at a time so it’s a bit of a slog.” Another issue is parasites on commercial honeybees. “We’ve been finding the same or similar parasites on native bees but we don’t know if they’ve always been there or whether this is a new thing,” Carlyle says. Even if species can be identified it is difficult to know how to conserve or manage them. “With a lot of species we don’t even know if they nest in the ground, if they nest in trees or stems or if they prefer one species of flower over another. There are so many species.”

Carbon storage questions

A major question around EG&S is how much carbon the soil can hold under drought conditions, which are expected to intensify with climate change. The U of A is embarking on a three-year study looking at carbon storage and the resilience of forage production under extreme drought. “With climate change we are expecting the amount of rainfall in the Prairies to actually go up,” says Carlyle. “However, accompanying those wet years will be increases in temperature and increases in year-toyear variability in precipitation that will likely lead to extreme drought

“ Just by flipping native grasslands into cropland you’re eliminating upwards of 40 to 50 per cent of the carbon stores. But what incentive is there for a farmer to retain grasslands for carbon storage? There isn’t one.” — Edward Bork, University of Alberta years that are really going to limit our agro-ecosystems.” Using large structures to simulate a number of rainfall conditions and clipping to mimic grazing, Carlyle and his team will attempt to discover which management practices work best. “The basic question is whether these different defoliation regimes modify the plant community in a way that makes it more resilient to grazing and allows it to still put plenty of carbon into the ground,” says Carlyle.

Patience is key

In Alberta, the government and the scientific community have only recently taken their first steps towards discovering the price of various EG&S. However, this process will likely prove difficult. How, for example, does one put a dollar value on a concept as vague as biodiversity? “One of our upcoming projects, which we’ve nicknamed the beef and biodiversity project, and again funded by ALMA, is a good example of that,” says Bork. “One of our goals with that study is to find out how ecosystem biodiversity, either in whole or in part, can be incorporated into the routine livestock management practices of ranchers. The challenge is that different species have different values to society. If it’s an invasive species do you count that as a negative if it is displacing native species or as a positive if in the end it is increasing forage production and carbon storage? There are all sorts of complexities.” n Forage & Grassland Guide

2016

Spring is closer than you think Do you have a plan for seeding pastures and annual forages?

CANADIAN FORAGE & GRASSLAND ASSOCIATION

www.canadianfga.ca

The Canadian Forage and Grasslands Association is online with a newly refreshed website and online resource. Connect with CFGA on Twitter @CFGA_ACPF and on Facebook!

For many of us, winter provides the cold needed to encourage a bit more time in the office. If you’ve decided to reseed a pasture stand, or to seed perennials into your crop rotation, the winter months pre- or post-calving are an ideal time to do a little preemptive planning.

Next, you’ll want to re-visit soil samples taken in the fall, or (better yet), take some right before spring seeding. Good fertility is crucial to developing seedlings, and the best way to know is by taking a representative soil sample and getting it tested.

First, you’ll need to decide on the intent behind seeding. Are you hoping for a silage crop in the first year? Will you be grazing or harvesting the established forage?

When it comes time to plant (early spring, ideally), know what’s listed on the forage mixture label, and understand that the percentages listed are not good indicators of the plant populations you’ll get, as they are typically listed by weight, as opposed to number of seeds.

Once you’ve answered those questions, it’s time to think about forage species. If you’re seeding a grazing pasture, consider using at least two legumes and two to three grasses, depending on the variability of soil conditions. The mixture should include a variety of species able to colonize all areas of the pasture, provide good growth, and good animal nutrition. When selecting species, consider their ability to handle pasture pressures like pH, salinity, texture and moisture, as well as their winter hardiness and lifespan. If you’re planting a companion crop, think about using a less competitive annual, to allow the proper establishment of your perennial species. Also think about reducing the seeding rate and harvesting it a little on the early side.

Once you’ve got your crop into a good seedbed, with few weeds, the proper inoculant and ample (but not too ample) fertilizer, it’s time to give it some space. Crop scout regularly, but don’t plan on turning animals out until the second year, if possible. If it isn’t possible to wait, ensure a good root system for the grasses, and avoid disturbing legumes when they are preparing for winter. If you end up needing more resources to prepare for planting, you’ll no doubt find an incredible number online, including, likely, information from your provincial government’s agriculture ministry. For further information and advice, consider phoning your local agronomist, forage specialist or provincial forage association.

A special supplement brought to you by Canadian Forage and Grassland Association

Galega — a new forage import from Eastern Europe Tests at the Thunder Bay Agricultural Research Station suggest it could be a high-yielding option for Eastern Canada By Ralph Pearce • Country Guide production editor

MARCH 1, 2016 / COUNTRY-GUIDE.CA

rate we had been using was up to 20 kg/ha, so I wanted to try seeding at 25, 35 and 45 kg per hectare.” He found that 25 kg/ha (22.3 lbs./ac.) was optimum for forage production with galega, compared to 13 kg/ha (11.6 lbs./ac.), which is the standard he’s tested with alfalfa.

Feed value

Galega boasts comparable feed values to alfalfa, and would make a good substitute or a blend with the standard forage. In test plots, Sahota has found some surprising attributes that put galega ahead of alfalfa. Although it’s reported to do well in deep, loamy and well-drained soils, Sahota sees little reason why it wouldn’t do well in any soil types. The soils at TBARS are slightly acidic to neutral, and its performance was comparable to alfalfa, and was better in some aspects. Sahota has found that galega is more winter hardy, more persistent and tends to grow faster during the early spring compared to alfalfa. That quicker growth can also help smother dandelions, although its ability to compete with other weeds is limited at early establishment. As the crop reaches the canopy stage, it does a better job of competing with weeds, and even in older stands it does well, something that alfalfa can’t do as it ages. Another advantage with galega is its dense canopy growth and a stem that’s softer than that of alfalfa, maintaining a higher feed quality after the

Photo courtesy of Dr. Tarlok Singh Sahota

f lower commodity prices have proved anything, it’s that the search in Eastern Canada for cropping options and alternative management practices is not limited to just corn, wheat and soybeans. Canola growers in Ontario’s Near North and northwestern Quebec are testing fababeans and growers throughout the east are experimenting with cover crops and cover crop blends in an effort to enhance their rotations. In northwestern Ontario, there’s a relatively new forage that’s been tested at the Thunder Bay Agricultural Research Station (TBARS). Galega, also known as Oriental goat’s rue, is a perennial forage legume that Dr. Tarlok Singh Sahota has been testing for at least six years. Originally imported from Scandinavia, it’s been traced to a native species from the Caucasus region between Europe and Asia. Its availability here in Canada is limited: Galega is the only variety in cultivation, and Sahota has been securing his supply from a seed dealer in Finland. Sahota first learned of galega in the mid-2000s. At first galega was tested simultaneously by Johan Rowsell and Sahota at the New Liskeard and Thunder Bay research stations. At that time, galega was yielding about 90 per cent of alfalfa, but it was also determined that the seeding rate may have been too low. “I thought that we needed to give it another try, because we didn’t know what the optimum seeding rate was,” says Sahota. “And the seeding

Galega (on the top next to an alfalfa stand) has shown promise as a forage crop, with some feed values running higher than alfalfa. In addition to its comparable feed values, galega provides quality nectar that’s attractive to honeybees.

first bloom. Sahota has found that at Thunder Bay, it’s also ready for cutting about a week before alfalfa. In bloom, its violet-blue flower provides quality nectar to attract honeybees — another attribute that’s shared with relative newcomers like sainfoin and phacelia. As a legume, galega can fix its own nitrogen, could produce reasonable amounts of biogas (when mixed with grasses and manure) and may even have a use as a bioremediation agent in soils that have been polluted by oil spills. Continued on page 54 Forage & Grassland Guide

2016

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A special supplement brought to you by Canadian Forage and Grassland Association

Continued from page 52

Potential for Eastern Canada

kidney-shaped, yellow-green seeds, each about 2.5 to 4.0 mm long and 1.7 to 2.0 mm wide. It can be planted as early as possible in the spring but if it’s being grown for seed, it should be planted at a rate of four to 10 kg per hectare. “We applied 44 kg of N, 20 kg of P2O5, 70 kg of K2O and 24 kg of S per hectare every year, on both alfalfa and galega,” explains Sahota. “The dry matter yield gain by galega during three harvest years (with a total of six cuts from 2012 to 2014) as compared to alfalfa seeded at 13 kg per hec tare was 2,630 kg per hectare, which is about 880 kg per hectare per year higher than alfalfa.” (See Table 1.) During that three-year period, the protein content in the first cut of galega averaged 26.1 per cent, up to 4.1 percentage points higher than alfalfa (figures cited in Table 1 are from 2013 only). In the second cut, there was no difference in the threeyear results. Dry matter yield spread was 55 per cent in the first cut and 45 per cent in the second cut, with both values close to those for alfalfa. Cuts were made when a few of the blossoms were visible.

Up to four cuts

As a feed source, it’s also rich in carotenes, minerals and vitamins, including vitamin C, and it’s low in toxic alkaloids. It can be grown as hay or silage and in the northwest portion of Ontario, can be cut twice during the growing season. “It can probably be cut three or four times in eastern or southern Ontario and Quebec,” says Sahota. “It also has better retention of leaves after harvesting and drying for hay, compared to alfalfa.” In planting the crop, direct seeding is best, with good seed-to-soil contact. In his test plots, Sahota has found galega grows best on its own, although he has little doubt it could be grown as a companion to less-competitive grasses such as timothy or the fescues. Growing galega at Thunder Bay, he’s also found that if left to seed, galega blooms can set pods, making it possible for Sahota to grow out his own seed. Pods are generally about four centimetres (1.5 inches) in length and contain five to eight

Asked if galega could be adapted in more southerly regions, Sahota doesn’t believe it would be an issue. If it grows well in Thunder Bay — and flourishes in Scandinavian climates and conditions — there’s little reason to believe it wouldn’t fare just as well, if not better, in southern Ontario or western Quebec. He does make note of the warmer temperatures and higher humidity values during the summer months. “I haven’t seen any disease or pest problems (that can’t crop up in alfalfa) with galega at Thunder Bay,” says Sahota. He emphasizes that he isn’t trying to supplant alfalfa as the forage choice for dairy producers — that was never his purpose. However Sahota is interested in adding diversity and “something new” to what’s possible for forage producers, no matter the region. And galega is just another option that he’s been testing. n For more information, contact Sahota at 807-475-1373 or tarloksahota@tbaytel.net. The TBARS website is info@tbars.net.

Comparative performance of annual and perennial forage legumes 2013 Quality parameters on dry matter basis CRUDE PROTEIN

SOLUBLE PROTEIN

ADF-CP

UIP

ADF

NDF

TDN

NEL

% of CP

Mcal/kg

Alfalfa @ 13 kg/ha

21.1

1.50

Galega @ 25 kg/ha

25.5

3.30

ug/g

1st Cut CROPS/SEED RATES

CROPS/SEED RATES*

NEM

NEG

1.25

1.33

0.61

1.33

1.42

0.70

ug/g

RFV

Alfalfa @ 13 kg/ha

0.36

2.57

0.26

1.47

12.05

487

0.09

105

Galega @ 25 kg/ha

0.35

2.69

0.23

1.01

13.29

441

0.01

122

CRUDE PROTEIN

SOLUBLE PROTEIN

ADF-CP

UIP

ADF

NDF

TDN

NEL

NEM

NEG

% of CP

Mcal/kg

Alfalfa @ 13 kg/ha

21.8

2.92

1.20

1.27

0.55

Galega @ 25 kg/ha

21.4

2.24

1.28

1.36

0.64 RFV

2nd Cut CROPS/SEED RATES*

ug/g

Alfalfa @ 13 kg/ha

0.46

3.93

0.38

1.65

0.49

672

0.15

Galega @ 25 kg/ha

0.37

2.55

0.23

1.24

0.60

941

0.02

106

CROPS/SEED RATES*

UIP = Bypass Protein, ADF = Acid Detergent Fibre, NDF = Neutral Detergent Fibre, TDN = Total Digestible Nutrients NE = Net Energy, L = Lactation, M = Maintenance, G = Gain and RFV = Relative Feed Value

MARCH 1, 2016 / COUNTRY-GUIDE.CA

F o rage & G ra s s land G uide

2016

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A special supplement brought to you by Canadian Forage and Grassland Association

Forage breeding faces funding challenges Government has cut back, private companies are not keen on crops that don’t need to be reseeded every year, and you can’t check off sales to farmers’ own livestock By ron friesen

orages are Canada’s biggest crop but you wouldn’t know it because of the few resources that go into breeding them. You’d think that, given its size, forage would be a giant in the world of plant breeding. Unfortunately, it’s more of a midget. Canada has only four major publicly funded programs for breeding tame forages, along with two smaller programs for native grasses. Research funding has been static for the last 10 years except for some from the Beef Cattle Research Council. It’s estimated that only about one-third as much forage research is being done nationally as in the 1980s. Research today concentrates on major species such as alfalfa, clover and grasses because there aren’t enough breeders to cover all the others. “Considering the importance of the crop, that is a small breeding effort, especially when you consider the number of species to be worked on,” says Bruce Coulman, a University of Saskatchewan forage breeder who works on dryland grasses such as brome and wheatgrass.

Similar in the U.S.

In the U.S., the pattern is similar, despite more private companies involved in forage research. Mike Peterson, the global traits lead for Forage Genetics International in Janesville, Wisconsin, says variety evaluation is “way less” than it was 10 or 15 years ago. He recalls that an alfalfa-breeding group meeting in the U.S. used to draw 300 people. Now only about 60 attend. “It’s crazy. It’s just eroding,” Peterson says. “We have almost as many acres of alfalfa and we’re just not doing the research that we used to.” Peterson stresses the work that is 56

MARCH 1, 2016 / COUNTRY-GUIDE.CA

being done is cutting edge and high quality. It’s just that the talent pool is so thin. “The quality of the work has never been higher. There’s just not enough of it.” Another problem is a lack of uptake for the research that is being done. “The work that our breeders are doing is certainly very valuable. But we also don’t have a huge uptake from industry to use a lot of these new varieties,” says Cedric MacLeod, executive director of the Canadian Forage & Grassland Association.

“It’s just eroding. We have almost as many acres of alfalfa and we’re just not doing the research that we used to.” — Mike Peterson, Forage Genetics International “There is some reluctance by growers to adopt the newest technology. It’s hard for the public purse and private industry to justify the expense that goes along with breeding new varieties because the return on investment is a difficult case to make.”

No checkoff revenue

The nature of forages can make it difficult for breeders to target traits to select for. Because most forage is fed by farmers to their own cattle, their production tends to fly below the radar. Even basic data is sometimes lacking. Yields and value often have to be estimated because they are not actually documented, as they are for grains and oilseeds. “The variability in itself makes it

hard for us to get a handle on what really needs to be done,” MacLeod says. “And it makes it difficult for the breeders to pinpoint what it is they should be breeding for.” Surya Acharya, an AAFC forage breeder at Lethbridge, Alberta, thinks breeding programs in the past placed too much emphasis on yields and not enough on quality. Part of the reason may be that beef producers, who use the bulk of forages, do not require the same high-quality forage that dairy farmers do. Acharya believes higher quality would give forages a market advantage for exporters

Enhanced management

Most in the industry agree forage producers need to take management to a higher level, given the escalating cost of farmland. Peterson does some work near Kitchener, Ontario where land can cost up to $20,000 an acre, making it hard for forages to compete with corn and soybeans. “You really need to pretty much pull an annual grain crop off that land to make it pay. Or you need 10 tons of alfalfa per year.” But Acharya believes there are ways for forages to be competitive through enhanced management. One way would be to stop growing forages as a monoculture in grazing situations. Acharya is currently working on sainfoin, a forage legume which can be grown in a mixed stand with alfalfa. Not only does this mixture reduce bloat, it produces greater yields with a higher quality. “We should be working in a more innovative way to produce more from a unit area without only concentrating on genetic yield increases,” Acharya says. n Forage & Grassland Guide

2016

soil matters………..www.ifao.com

Mark Koabels, Winner of the IFAO “Soil Your Undies” contest

#SoilYourUndies

OMAFRA’s Anne Verhallen with Soil Your Undies demo team by Mel Luymes, Director, Innovative Farmers Association of Ontario

“If you were on Twitter last fall, you may have heard about IFAO’s competition for a free conference registration. It turns out farmers will go to great lengths to attend this conference; they will even soil their underwear! Ok, before I offend your imagination any further, let me explain. This is a humourous modification of the cotton test, which has long been a way for farmers to understand biological activity in their soils. Strips of cotton are buried across various fields and later washed and weighed to measure the decomposition. Cotton is a food source for fungi and bacteria in the soil; and the extent to which it is consumed indicates soil microbial activity, which can also indicate organic matter. In June last year, OMAFRA’s Anne Verhallen and Claire Coombs were inspired at a Midwest Cover Crop Council meeting, bought a pack of 100% cotton briefs and buried them in Ridgetown’s longterm tillage trials. With two pairs left, one went into IFAO Director Blake Vince’s corn field, which has been no-till for decades and built with diverse cover crop mixes. The other pair went in his neighbour’s corn field, just a few steps away. The team uncovered the underwear two months later and the results were stunning. Blake’s soil life had consumed almost all but the elastic bands; whereas, the pair in the neighbouring field looked like it could have been washed and worn. The Ridgetown results were much the same: the less tillage and the more diverse crop rotation, the less of the underwear that was left.

When the ‘soiled underwear’ was showcased at IFAO’s summer meeting, farmers were challenged to bury a fresh pair in the first week of September and send a photo two months later. Farmers from across the province took their shovels to the fields and in early November, the photos started to roll in. We even received a photo from France and a few from Iowa and Illinois.

Results varied due to moisture levels, as biological activity often fluctuates throughout the season. For famers that missed out last year, try soiling some underwear this spring. But don’t bury them too deeply because much of the microbial activity happens in the top six inches of the soil. And honorable mention goes to Michael Jones, who did two replications across five of his dad’s fields for a Grade 7 science project, with results ranging from 2% to 47% decomposition. And another honourable mention goes to Mike Sieve (@clayallover) for making the joke even funnier. But the winner of the IFAO competition was Mark Koabels who planted a few pairs of underwear in his clay soils near Port Colbourne. His winning entry came out of a long-time pasture. Though Mark has attended the National No Till conference, this was his first year at the Innovative Farmers conference. The 2016 conference was Feb 23-24 in London and, as usual, there was an incredible lineup of innovative speakers.

Business

Selling our consumers

While farmers strive to educate consumers, marketers bend the rules By Gerald Pilger

It takes an average of 13 years to get a GMO seed approved by the government for safety…” Denise Morrison, CEO, Campbell Soup

March 1, 2016 / COUNTRY-GUIDE.CA

ernment for safety,” Morrison added. “Ingredients derived from these crops are in many of our products. We also believe that GMOs and other technologies will play a crucial role in feeding the world.” Unlike other kinds of food labels, GMO labelling is not done for nutritional or health purposes. It is primarily a marketing statement, focused on consumer perception. In that way, Campbell isn’t actually breaking new ground. Labelling is increasingly used by food companies to differentiate their products. A&W launched their “Better Beef ” campaign in 2013 which promised consumers that all its burgers are made from beef that “doesn’t contain added steroids, hormones, preservatives or additives and is supplied from ranchers who are committed to ethical and sustainable practices.” In the 2014 annual report for the A&W Revenue Royalties Income Fund, John R. McLernon the fund’s chairman states: “Looking forward, the trustees are confident that A&W Food Services’ strategic initiatives will continue to attract new customer visits, grow same store sales and consequently grow royalty income in the fund. The most significant of these initiatives is the differentiation of A&W with “better ingredients,” including beef with no added hormones or steroids, eggs from hens fed a vegetarian diet without animal byproducts, and chicken raised without the use of antibiotics.” Most recently A&W has added an organic coffee guarantee to the menu. It is strategic marketing such as this that has enabled A&W to grow their

sales for 23 straight years. Clearly, Campbell Soups wants in on that kind of windfall. Growth of organics Building on consumers’ unease about conventional and “factory farming” practices, such marketing of organic, pesticide-free, non-GMO, and “natural” has made organics the fastest growing segment of the food industry. According to the 2014 Organic Market Overview produced by the USDA Economic Research Service, organic products are now sold in over 20,000 natural food stores and nearly three-quarters of conventional grocery stores, with double-digit growth in consumer demand for organic food. The USDA ERS Overview notes: “U.S. sales of organic products were an estimated $28.4 billion in 2012 — over four per cent of total food sales — and will reach an estimated $35 billion in 2014, according to the Nutrition Business Journal.” However, few consumers actually understand what the terms organic and natural mean. In 2012 the Canadian Food Inspection Agency commissioned EKOS Research Associates Inc. to survey Canadians to determine their understanding of food labelling. Included in the survey were questions about the terms “Organic” and “Natural.” The final IKOS report, Canadians’ Understanding and Acceptance of Composition and Production Claims states: “When asked, unprompted, to explain their understanding of the term “natural,” respondents provided

n Januar y 7, the N ew Y ork T imes covered the news that Campbell Soup would become the first major U.S. food company to come out in support of mandatory GMO labelling. It was the same day that Campbell’s CEO Denise Morrison sent a letter to her employees, saying the policy change came from the company’s focus on its customers, “so they can feel good about the choices they make, for themselves and their loved ones.” What the Times didn’t mention, however, was the second half of Morrison’s letter. “I want to stress that we’re in no way disputing the science behind GMOs or their safety,” she wrote. “The overwhelming weight of scientific evidence indicates that GMOs are safe and that foods derived from crops using genetically modified seeds are not nutritionally different from other foods.” “It takes an average of 13 years to get a GMO seed approved by the gov-

a number of interpretations, with the plurality (30 per cent) suggesting that a “natural” product is derived from natural ingredients. One in five (20 per cent) feel that natural products are not processed or modified in any way, and one in seven believe that “natural” implies no preservatives (16 per cent), no pesticides or herbicides (14 per cent), or no artificial flavours or colours (13 per cent).” “These respondents were also asked, unprompted, to list their reasons for purchasing natural foods. The most common reasons identified for purchasing these products are: they contain no artificial flavours or colours (69 per cent), they contain no food additives or preservatives (69 per cent), or they contain exclusively natural ingredients (62 per cent).” Canadians perception of “organic” was even more interesting. The report states: “Respondents were asked, unprompted, to give their interpretation of the term “organic.” In contrast to the word “natural,” respondents are largely in agreement in their interpretation of the word “organic.” Six in 10 (62 per cent), believe that an organic product is one that contains no pesticides or herbicides.” These respondents were similarly asked, unprompted, why they purchase organic foods. A clear majority (72 per cent) cited the absence of pesticides and herbicides, and almost the same number pointed to the fact that organic food is free of additives and preservatives, and it includes only natural ingredients. But organic foods are not pesticide free. Nearly three-quarters of those surveyed are buying organic because they believe organic means pesticide free. In fact, in 2014 CBC News investigated pesticide residues on organic fruits and vegetables and, based on CFIA tests obtained through the Freedom of Information Act, 45.8 per cent tested positive for trace levels of pesticides. Organic producers are also allowed to use a number of nonsynthetic and naturally occurring pesticides. Natural pesticides are not necessarily any less toxic than manufactured pesticides, however. A complete list of pesticides and food

additives that organic producers can use can be found on the Government of Canada website at: www.tpsgcpwgsc.gc.ca/ongc-cgsb/programmeprogram/normes-standards/internet/ bio-org/lsp-psl-eng.html#anna.

On the American Council on Science and Health website, the council’s Dr. Josh Bloom writes, “The distinction between natural and synthetic pesticides is both artificial and manipulative. As I have said dozens of times, it makes no difference where a chemical comes from — only the properties of the chemical itself.” Besides a misunderstanding about how organics are produced, consumer perception that organics are nutritionally better and safer is not supported by studies. In a January 2015 web posting, the Dietitians of

Canada stated: “There is not enough scientific evidence to say that organic food is more nutritious than nonorganic food or that there are any health benefits to eating organic foods. Some foods grown organically may have more nutrients, and some may have the same, or even less, than those grown on non-organic farms.” Likely the most comprehensive review of organics was done at Stanford University. Researchers analyzed 237 studies of organic versus conventionally produced foods and reported their findings in September 4, 2012 issue of Annals of Internal Medicine. The Stanford study found little nutritional or health benefit from eating organic foods. Studies of this kind make us ask: Is Campbell’s Morrison respecting her consumers, or misleading them? CG

Print your label Can you really market your food as organic, natural, non-GMO, pesticide free, free range, grass-fed, hormone-free, steroid-free, cage-free, antibiotic-free, or locally produced, just because you say it is? In Canada, it turns out, all such labelling terms are voluntary. There is, for instance, no requirement to tell consumers if a product is organic or genetically engineered. But there are standards… sometimes. According to a Canadian Food Inspection Agency spokesperson, if you are shipping organic products across provincial borders, or if you are using the Canada Organic label on your products, they must be certified, and “these products can only be certified when they meet the requirements of the Canadian Organic Standards.” The Canadian Organic Standards can be found by searching at www.tpsgc-pwgsc.gc.ca. Standards for genetically engineered claims should also be met before a product is labelled as GMO-free. Those criteria can be found at: www.inspection.gc.ca. When asked about labelling a product as natural, CFIA responded: “Claims such as “natural” on food labels or advertisements should not convey the impression that “nature” has made some foods nutritionally superior to others. Also, foods or ingredients

of foods that have undergone processing that has significantly altered their original physical, chemical or biological state should not be described as “natural.” For more, search for “natural food labelling” at www.inspection.gc.ca According to CFIA, the primary requirement for the use of any voluntary labelling claim is that “the claim must be accurate, truthful and not misleading. Labels must meet the Food and Drugs Act, the Consumer Packaging and Labelling Act and all applicable regulatory requirements.” “The verification of voluntary claims used on food labels such as method-of-production claims (pesticide-free, free range, cage-free, no antibiotics, hormone-free and grass-fed) are part of the CFIA’s regular inspection activities. These claims are subject to the Food and Drugs Act and the Consumer Packaging and Labelling Act, which prohibit statements and claims that are false, misleading, deceptive, or that create an erroneous impression regarding the product. This includes the method of manufacture.”

COUNTRY-GUIDE.CA / March 1, 2016

Business

Settling up Moving onto a former Canadian military base in Germany is only one in a series of smart decisions by this machinery shortliner By Scott Garvey / CG Machinery Editor

t was to be our second stop that day on a week-long media tour that was winding its way through Germany. We were visiting a long list of German machinery manufacturers, and it was dark when we pulled up to fertilizer spreader manufacturer Rauch’s assembly plant adjacent to the Baden airport. It was clear the company now occupied some old aircraft hangers, but it was a glimpse of the former Royal Canadian Airforce roundel painted on the side of a Cold War-era concrete hangar that grabbed my attention. As it turns out, Rauch’s newly built assembly plant and its R&D centre now occupy part of what was once Canadian Forces Base BadenSoellingen, which closed in 1993. With the end of the Cold War, our military pulled out of Europe, vacating a lot of prime real estate in a country where space is at a premium. It was the perfect opportunity for Rauch. “Here we were able to get seven hectares of land without taking the slightest bit away from farmers,” explained Jens Hille, marketing manager at Rauch, speaking in German. “The farmers are our clients, and we have a very close relationship with them. The last thing you want to do is make your clients angry by taking away their land.” “The factory was built in 2009, in only nine months. We’d already designed a new plant on paper and were looking for the right plot of land. Most companies do it the other way around, they buy the land and then try to somehow build a factory.” 60

March 1, 2016 / COUNTRY-GUIDE.CA

TOP: Fertilizer spreader manufacturer Rauch invited an international group of journalists to tour its production facility in Germany. ABOVE: Jens Hille is Rauch’s marketing manager.

Focusing only on fertilizer spreading and metering technology, Rauch, a fourth-generation, family-owned business, has captured a dominant share of the market in Europe. Now it’s working on developing a more global presence. “Every second spreader sold in Germany is a Rauch,” said Hille. “We’re represented in 40 countries around the world. It’s our goal to be a global leader in spreading and metering equipment in both agriculture and municipal services. Last year our turnover was 76 million euros. That means 16,000 fertilizer spreaders, with 60 per cent of our production exported to 40 countries.” But cost-competitive manufacturing in Germany, a country with one of the most expensive labour costs in the world, and meeting the strict — and getting stricter — environmental laws and expectations of the region’s citizens, is no easy task, especially when there are manufacturers operating in parts of the world where the exact opposite business conditions exist. The only way the company thinks it can

remain a market leader is by staying on the cutting edge of the technology curve. “We’re working on achieving this through an innovation strategy,” Hille said. “We have very high research spending, approximately five million euros last year.” Outside the assembly plant a fleet of ag tractors, each from a different brand, was parked near the R&D shop. “We need to have these tractors to test our electronic control systems,” Hille said, pointing in their direction as we all walk past them on our way to the assembly building. “A couple of years ago a fertilizer spreader was a simple machine. Today we have electronics. You need maintenance; you need programming. So we need well-trained service technicians.” In fact, meeting all of Rauch’s workforce needs is a challenge. Inside the plant the diversity of the workforce is obvious, with more than a few women working on the assembly line.

Sound familiar? German machinery company Rauch must compete globally, but it faces higher wages, tighter labour supply, and tougher enviro-rules. Here’s how it is winning, and maybe how you can too

Continued on page 62

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