January 2009 Archives

Grainews columnist Andrew Allentuck asks this question in the early pages of his new book, “When Can I Retire?” His answer, “The advantage of being insecure is that you can do something about it before it happens. Reading this book is a part of that process. Congratulations for taking a first step.” 

The decision to retire is a big gamble, Andrew writes, because you stop earning income and then have to depend on your savings and government pensions. It’s hard to get a good job after age 55 after you’ve bowed out of the workforce. Retired farmers have the benefit of earning income of retained land, and working with neighbours or farming children a few months a year at seeding and harvest to make some extra money. What’s more, some farmers never retire. They don’t have to if they don’t want to. But at the same time, this book has lots of tips and advice that is suitable for everyone, at whatever age.

Andrew shows his regard for farmers, which perhaps has rubbed off from this work on the Farm Financial Planner series in Grainews. “Farmers who are forced to sell for lack of children to take over the business or who have to sell to be closer to medical care undergo a wrenching change of life," he writes. "When a small business has been a way of life for many decades or even the better part of a century, selling is only the first step in the reorganization of a way of life. An economic gain on the sale of the business may be offset by new costs incurred in adapting to living in the city or to finding ways to fill the hours that the business required.”

Andrew is perhaps best know for this column “Financial Facelift” in the Globe and Mail. To see more about “When Can I Retire?” click here. 

Speaking of Andrew’s Farm Financial Planner…

We’d like to hear from farmers with troublesome financial questions. That way, we can revive the series after a few months off. We will protect your privacy. We insist on examining real situations, but we DO NOT use real names or even identify your hometown. You do not have to pay to participate in this article. If you have a financial question, email it to me. Grainews will contact you if we want to follow up. 

We introduced Grainews readers to Brenda Campbell in the November issue. The 22-year-old from a cow-calf farm near Sundre, Alta., is in Denmark for a six-month working visit on a dairy. We asked her to send regular reports to tell us what she's doing, how farming in Europe is different from farming in Alberta, and what farming tips she learns that she'd like to try back home.

Here is her second instalment, written January 15:

Hello again from Denmark. I have just passed the two-month mark in my adventure, and have many interesting facts to share! Can you imagine paying 180 per cent tax on a vehicle purchase? This is a fact in Demark. This is only one of the interesting facts I have learned about driving and transporting livestock in this country I temporarily call home. I learned many of them while we were hauling our team of horses to a trail ride. Here are a few more:

—You need to pass an extra driving exam in order to legally drive a vehicle towing a trailer with a combined weight of 3,500 kg. 

—Trailers are not permitted to be driven over 70 km/h on most roads, but can go 80 km/h on major highways.

Now the interesting part is when a person is hauling livestock. As far as I understand, there is a five-day course that teaches all aspects of hauling livestock: rules and regulations, care, handling, etc. This course is animal specific and is required for anyone hauling animals as part of a business. This course is optional for farmers, but without the certificate, you:

—cannot drive over 65 km from home with your animals

—cannot haul anyone else’s animals, even for a favour (this could be considered for business)

—can only drive animals owned for personal pleasure and not related to your enterprise. For example, on our farm here, we can haul our team of horses but not any cows because these would be considered part of our business. To follow all rules, we would need to hire someone to haul a heifer we purchased from a neighbour because my host father does not have the required course on livestock transport.

So with all of these rules in place, all slaughter cows and baby calves are picked up by a truck with a lift, as shown in the top photo. I have included two other photos to show how animals are hauled. The middle photo is our horse trailer. The bottom photo is how a neighbour hauls his team of horses.

Peter Gredig and I worked together at Country Guide magazine for many years. He farms near St. Thomas, Ont., and I always appreciated his quick analysis of circumstances and his common sense. He provides a good dose of both in a recent posting on Farms.com, his current employer. I think his first point about fertilizer is well put. His points about soybeans and corn also provide some useful insight, even if you don't grow those crops.

Here is Peter's report, called "Farming is easy in January":

I just attended a two-day conference with 1,500 other farmers — all of us looking to kick-start preparation and planning for the 2009 crop year. Experts from the U.S. and Canada delivered seminars on everything from weed control to fertility to wind power and the great ethanol debate. Talk about energizing. It’s like opening day of the baseball season — anything and everything is possible, and we’re all contenders. Everyone I chatted with seemed poised to make significant changes for 2009. For some it’s new equipment, for others it’s a shift in tillage or management. Apathy is not an issue, that’s for sure. 

Meetings and events through the winter help us get focused on the coming season. If you’re going to relevant, progressive events, it’s easy to become motivated to implement some big changes in the program for next year. But I have to confess that come mid-May, I have more than once had the thought that I’d been overly ambitious with my plans back in January. 

Here are a number of themes that were dominant at the conference I attended:

1) Fertility

Everyone is worried about fertilizer costs, almost to the point that it’s distracting us away from other issues that are just as important. The best advice I heard was to simply determine your budget for fertilizer for each crop on a per acre basis and do your best to get as much of the right nutrients as you can for the money you’ve allotted. If you haven’t done soil tests, put that task at the top of the list.

2) Soybeans trump corn

It’s partly due to high input costs for corn and the recent strength in soybean prices due to weather worries in South America, but farmers are suggesting they will favor soybeans over corn on swing acres. Over the years I’ve learned that predictions for planting intentions give markets and pundits something to talk about during the winter, but at the end of the day, the swings are rarely as dramatic as predicted. What I do find interesting is the renewed interest in non-GM, identity preserved food grade soybean contracts. The premiums look pretty attractive right now, but this is an example of something that looks easy in January. There is a reason why there is a premium here. As a smaller acreage producer, IP soybeans have been a good option for me, but most years I earn that premium. Weed control is more inconsistent than RR programs partly because the older herbicides used are reliant on timely rainfall for activation. Some IP varieties don’t yield as well as top RR varieties and it’s hard to make up for lost yield with per bushel premiums. Cleaning combines, planters, storage bins, trucks, etc. takes time and effort. There is also more paperwork involved. 

3) Jury is still out on applying fungicides to corn

A lot of corn acres were sprayed with a fungicide in 2008. Researchers say their plots showed widely variable responses to fungicides. It appears that some hybrids are very responsive to fungicides and show dramatic yield increases while other hybrids show little or no response. We have a lot to learn here. The experts suggested that you should definitely spray fungicide on corn that has suffered hail damage, or if you plan on leaving the corn in the field for an extended period in the fall. The fungicides can protect hail damaged cobs and stalks from disease proliferation, and it appears that corn treated with a fungicide offers better stalk strength and standability. Beyond this, the researchers suggested it was very difficult to provide advice as to whether a fungicide application was warranted. If you decide to spray, be sure to leave a check strip so you can assess the cost/benefit of the treatment.

4) Commodity markets will remain volatile

The market experts at this conference suggested that we can expect volatile markets to continue through 2009. Wildcards include the health of the global economy over the coming months, availability of credit for potential buyers, weather, and whether the U.S. ethanol sector can survive this period of uncertainty. There is potential for big jumps and big drops. All the experts advised paying very close attention to the markets at July 1!

Alf Erichsen from Botha, Alta., sent an email with a "philosophical thought" for me. I'm going to share his email with you as a reminder that truly new ideas are rare, and that sometimes it takes a long time for good ideas to sink in. Thanks Alf.

Here is Alf's email:

Most of us become so focussed on our own narrow world we lose track of time and space. For example, in the past 25 years in Canadian Prairie agriculture we've evolved air seeding. In the past decade we've tackled seed and fertilizer placement, ie. side banding and mid-row fertilizer placement. I'm including a quote  from "another world." See if you can guess. I've put in brackets our local word usage.

"In the best drills (seeding tools), a very important improvement has been made within the last few years, which consists in the use of separate coulters (openers) for manure (fertilizer) and seed. The manure is now deposited according to the mode preferred by the cultivator (farmer), not only from two to three inches deeper in the ground than the seed, but from ten to twelve inches in advance of it, so as to give the soil time to cover the manure, before the next coulters deposit the seed. On the old plan of depositing the seed and the fertilizer together down one pipe, an evil was liable to arise; when it was used with some of the more powerful artificial manures, the seed and the manure were too close together, and the manure was not dropped with certainty in its best position, under the seed."

The author is J.Allen Ransome, from England, and this is from his book titled  "The Implements of Agriculture." The book was published 166 years ago in 1843.

“I am continually shocked by how little most industrial farmers think about the taste or nutrition of their crops and livestock, how little they know or care about what might seem a fundamental aspect of their work. Clearly, they have become as divorced from their groceries as consumers.”

This is an excerpt from the introduction to Margaret Webb’s book, “Apples to Oysters: A food lover’s tour of Canadian Farms.” She visited 11 farms, chosen for their special attention to detail on production practices and on taste. Parts of this book will make you mad, especially if you’re a “conventional” farmer. But in general, I liked the book, and if you read it, you might find it inspiring.

In the chapter about a fish farm in Newfoundland, Webb paints a positive picture of fish farming, the practice, and farmed fish, the food. She also admits that she prefers the taste of farmed salmon and farmed cod over the wild versions. This is “something foodies consider a travesty,” she writes. “Yet, when I admit this to my food friends, they usually agree.”

She writes about pork production in Manitoba, focusing the chapter on Ian Smith from Argyle, whose practices were certified as “humane” by the Winnipeg Humane Society. Smith sells his pork direct to consumers, and because he doesn’t have a lot of marketing training, growth of his business is slow. Webb quotes Erin Crampton, who runs a food market in Winnipeg, which sells Smith’s pork: “Ian’s a super honest, upfront guy, but he’s a typical farmer, a producer first. Agriculture departments should be helping guys like these with marketing.”  

In her Saskatchewan chapter, Webb describes Cecil Werner, a flax grower and processor from Regina. Werner figured out a way to roast flax that makes it easier to chew and digest. “It also gives the oilseed and rich nutty tang,” Webb writes. At one point, Werner says the government is doing little to help farmers diversify. In that same paragraph, Webb writes that “Cecil believes the Canadian Wheat Board has stymied innovation by forcing farmers to sell directly into the wheat pool, rather than, say, keeping their own grain and processing it into pasta, as one group of farmers attempted.”

I could go on, but I’ll close with one last excerpt about Alberta beef. This is a perfect example of how our quality parameters have little to do with taste, which is probably the most important characteristic of food. Webb writes about going into a “very upscale” restaurant in Calgary that serves AAAA beef. She is less than impressed. “Clearly the industry, by creating a fetish around beef grades, has distracted us from looking at how that beef is raised. For, predictably, this top-of-the-class strip loin arrives on my plate perfectly grilled rare, as ordered, but like most beef these days, wet and flavourless. Tender, yes, but tasteless.” For that, she paid $45.