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The New Farm and the New Farmer

Managing today’s capital-intensive farm

Photo courtesy of Rocky Mountain Equipment.

How ya gonna keep ’em down on the farm?

Finally! After generations of the clichéd stereotype, there’s an answer: business savvy, tech smarts and lots of money.

The traditional life of farmers – with long and exhausting days, endless chores, the up-and-down whims of the market and the economy, and dealing with the good and bad of weather – has not only changed, it has been compounded and complicated.

The 2017 Calgary farmer’s life encompasses constantly changing technology, skyrocketing land costs, sophisticated equipment and environmental regulations while still dealing with the unpredictability of weather, long days, endless chores and the whims of the market.

Regardless, Canada continues to be one of the largest and most respected agricultural producers and exporters in the world. Although the proportion of the Canadian population and GDP related to farming fell dramatically during the 20th century, it remains a solid component of the Canadian economy.

“The basics of farming are timeless,” says Graham Drake, president and CEO of Cervus Equipment, with 64 company-owned and managed locations in British Columbia, Alberta, Saskatchewan and Manitoba.

“It is about growing crops, raising livestock and being the food source to feed the world. Where farming has drastically changed over the years is the scale and amount of production.

“Business expertise and tech awareness are critical to how successful farmers can be in applying advancements to their particular farm. While this has always been important in farming, the amount of information available and how it can significantly improve a farm operation makes it even more critical.”

According to Lynn Jacobson, president of the Alberta Federation of Agriculture (Alberta’s largest producer-funded general farm organization comprised of farmers, ranchers and agricultural enterprises), today’s farmers face entirely new and different challenges to success.

“There’s the complexity of agriculture business. The business savvy to recognize opportunities to diversify, which crops to grow and knowing where the industry is heading and the vital role of technology. Farming 2017 means managing interest rates, the economy, agriculture policy and business risks.

“And there are significant costs, like the price of land, equipment, the price of agriculture products and more. Farms are getting larger. Particularly with the increasing price of farmland, more farmers will rent more of their land than own it.

“And the consolidation of operations also raises other problems. The larger the farms get, rural populations shrink. It is going to be very hard for many of the small towns or hamlets to stay viable communities.”

Farmers and most agriculture professionals agree technology is the industry’s most important change. It impacts every aspect of farming and transforms farming into a complex big business. “Without the technology advancement we would not have today’s precision agriculture,” Jacobson points out. “Thanks to technology, farmers now produce more product per acre, and can work a larger land base per person, than ever before.”

Drake has diverse farming expertise and knows first-hand the positive impact of technology. “It has made many farming operations easier and much more efficient. The more sophisticated farmers can plan their operations ahead of time and have data that can be easily applied during the seeding and other operations.

“The use of data is revolutionizing agriculture. Farmers can record and collect information on all of their farming activities, and use the information to more effectively plan, improve yields and reduce costs,” he says.

Jim Wood, the chief sales and operations officer of Rocky Mountain Equipment, also emphasizes the value of technology, not only as key components of farm equipment but for the many functions of contemporary farmers.

“Technology has added tremendous efficiencies to assist producers in making much more informed decisions to either increase their production, reduce input costs or both. Due mostly to new technology, farmers now have the ability to produce more product per acre and diversify their crops. Even as a basic math formula, they constantly maximize acreage to maximize product-per-acre yields.”

Today’s farms, particularly in the Calgary region, are not only complex operations but, by business necessity, they are big and getting bigger. And the spiking cost of farmland continues to be a contentious farm issue.

As tracked in the 2016 Farmland Values Report by Farm Credit Canada (FCC) – Canada’s leading agriculture lender – although Canadian farmland values increased by 7.9 per cent, just in 2016, and farmland values continue to strengthen, their rate of growth continues to slow overall.

Due primarily to overall healthy farm incomes, low Canadian interest rates and a low loonie, Calgary region farmland prices are at record highs – approximately $5,000 per acre of non-irrigated land.

There are also some unique generation challenges, like getting qualified (and interested) labour. The average age of the Alberta farmer is 55, often complicating what’s called the trans-generational transition.

The Calgary area’s Larry Woolliams is a hard-working, married father of two who loves his job and is enthusiastic about his calling: “Being one with Mother Nature, loving the smell of the soil and getting to be my own boss.”

Woolliams is a plugged-in and fifth-generation, contemporary farmer. He operates the 8,000-acre malt barley, peas and canola Woolliams Farms, just outside Airdrie. “In many ways, farming is a very, very big business. Land is expensive. And staying up with new technologies and new ways of farming is critical. There are constantly new and serious learning curves and it’s important to stay positive.

“There’s an app for everything, and you have to be open minded and not afraid to try new things. I’m a detail guy and I love the changes! Technology is a tremendous tool for farming. I can do a lot of the work on my phone and iPad. But technology still hasn’t come up with a way to predict or manage a hailstorm or some other weather surprises,” he grins and shrugs.

“A significant challenge in transitioning is not only the cost of operating farms and the capital required to own larger farms, but also the financial acumen to run larger operations,” Drake cautions. “Implementing new technology to improve a farm’s performance can be a challenge for more traditional operators.”

The success of contemporary farming not only requires acreage and business smarts but the state-of-the-art (and expensive) equipment it takes to get the work done.

“Being a dealer for the latest farm equipment just isn’t good enough,” Wood adds. “We are now optimization specialists, partners in technology and focused on reducing costs and increasing production by optimizing the farmer’s equipment.

“Whether it’s auto guidance, section control, variable rate applications, yield, monitoring and the overall productivity of the farm operation, equipment is crucial. It’s what we do! Just the auto steer/guidance feature is complex and costs about $15,000. And with a combine in the $600,000 range or a $500,000 sprayer, it’s vital that the farmer optimize the value and the investment.”

“Most high-demanded pieces of equipment are seasonal,” notes Jeff Bilow, precision AG manager with Cervus Equipment in Calgary. “In the spring, it’s seeding equipment. In summer it’s self-propelled nutrient and protection application equipment. And in the fall, the demand turns to harvest and combines. All of the equipment have fully-integrated technologies, allowing the producer to perform most of the equipment functions from inside the cab.”

Just like the Jurassic cliché about starving artists is ancient history, the struggling, parched and lonely farmer sitting on a chugging tractor is long gone.

Managing today’s farm operations is capital-intensive. With significant financing needs like land values, technology, sophisticated and pricey equipment, increasingly expensive chemicals, quotas and other factors, the investment required for a viable commercial farm operation, particularly in the Calgary region, is huge.