Monday, 11 December 2017

Does size really matter?


 I know by the title you may be questioning what this is all about. Sorry to disappoint some of you but this is about farming and not the other ongoing debate  :)




  I started thinking about my farm the other day and some of the challenges I'm facing right now and then realized that many of these could be specific to the fact that I'm a smaller farmer. I figured I'd write some of these issues down.
 The definition of a small farm can be very subjective and area specific and everyone will have their own idea as to what constitutes a small farm. 40 years ago a small farm could have been anything under 320 acres in Central Alberta. Then as equipment became larger in the last couple of decades anything under 1000 ac and currently I would dare say if you are under 3000 acres you would be considered one. Many challenges in farming occur across the board whether you are a small or large family farm. Things like rising input costs and fluctuating commodity pricing are common issues that we all face. In this write up I am not bashing large farms these are just some of the differences that I've noticed. Whether you feel you are a small or large operation is totally up to you and you may or may not relate to some of these issues. What I want to focus on are things that relate mainly to challenges in operations like mine


Equipment:

   A small farm is usually over equipped. You may ask how is this a problem? Often when I go to a dealership I'm looking at 5-10 yr old equipment and these may be 2nd or 3rd owners already. These come off of larger farms that are demanding bigger machinery all the time. This equipment also carries an increasing price tag so thus being over equipped increases my cost per acre. I can go older to lower the cost but this raises its own set of problems. Second or third hand equipment carries another risk not experienced by the previous owners, as this equipment ages repair costs escalate. So even though I may not have had to pay the large initial cost I own this piece of machinery during it's money pit stage!
  Another thing to consider is when I go to purchase a piece of machinery It's not a simple mathematical problem of HP/Ac or Ft/Ac. I'm a one man show quite often so I have to look at time requirements as part of the equation. Time spent on the air drill takes away from time on the sprayer and vice versa. So when I look at a piece of equipment I see how it buys me time and from the outside looking in this doesn't always seem the most efficient use of equipment.

Grain marketing:

  Grain companies in the past did seem to favor larger operations. 

-Getting to deliver at harvest
-Delivering tough grain off the combine
-Gaining better pricing opportunities

  But honestly I don't see the disparity as much anymore. Through good marketing and a little heads up contract timing you can deliver at harvest and even get the odd tougher load in. Large quantity sales still get a premium to the small sales that I make that don't hold the same clout. Let's face it if you have a farmer selling 100,000 bushels of wheat compared to 20,000 the larger amount demands more attention and this will never change and honestly is totally understandable.

Labor:

 During harvest I get help from some friends and family and I am very lucky. Some farms require help only during busy times and finding people to help out can be a huge issue. Being able to keep full time help on a large farm affords them the chance to get good skilled help and not have to be constantly training someone new. Many times the cash flow isn't there in a smaller operation to hire anyone even though help is needed, so the farmer has to work longer periods or some things may get neglected or re-prioritized as I like to say.


Technology uptake:

  Tech has always been a big part of farming but is becoming increasingly important. 90 yrs ago we were farming with horses and now they are coming out with seeders that drive themselves. The evolution in farming is staggering compared to many industries and with these advancement can come a large price tag. Many small farms have a hard time justifying trying to "keep up". Now I know you can farm without it but if you're a techy guy like me you also see the upside on your farm. These added costs can be a hindrance to your bottom line and take longer to recoup on a small farm but things like GPS, auto steer and mapping are all things that I've seen a nice return on investment. Besides it keeps farm life new and exciting and can keep you more engaged. 


Buying inputs:

  Now I know these are common expenses to all farms. We all need to buy seed, fertilizer and chemical but let's face it just like anything if you purchase larger amounts you normally get a better price. Our bargaining power is limited and we don't normally get the best deals. Small farm operators can't walk into their farm input store and say we only want to pay $400 a tonne for my fertilizer blend and not expect a giggle in return. Our base input costs are normally higher and I rarely push for lower prices and try to remain as loyal as I can to people who treat me well. Rising input costs are a huge reason for a poor bottom line on lots of farms and I guess we'll just have to blame it on  Dicamba! :)

Succession planning:

 Anytime you add someone into a business the profit per person goes down. Pretty straight forward statement but can be tough to absorb on a small farm with limited profit and when it comes to adding one of your children to the farm. Succession usually includes the child working off the farm and helping out where they can until it's time for the parent to retire. This was how it worked for me. I helped my dad on the farm and had a full time job until dad decided to slow down and I was able to purchase some land and make a go of it. I would have loved to work full time on the farm as soon as I got out of college and on a larger farm I would have been able to do this. Also when more than one child wants to farm tough choices have to made on a smaller farm but on a large acre farm usually all children are more than welcome to join in.

Trying to keep up with the neighbors:

  This has been the downfall of many a farm. Keeping up with the Jones's in the city can cost you a bit of money here and there but on a farm it can amount to thousands of dollars of unneeded expenses. New tractors cost over $500K and combines and air drills even more. It gets tough to farm within your means and not go out and get a loan for a new piece of equipment that you know would make your life easier but in the end could potentially break your farm. Just because your friend down the road buys a brand new tractor doesn't mean it will fit into your operation or your budget. Smaller farmers very seldom buy new and learn to repair and not replace quite early on.


Advantages:

 My dad came to Canada when he was 5 yrs old back in 1929. By the time he was 16 he knew that he wanted to be a farmer and he started out by working on a farm and eventually bought some land. He grew the farm to 1000 acres in his lifetime which was a huge feet.Without his hard work and sacrifices I wouldn't be farming today. He always knew he was a small farmer and embraced that and never felt the reason to push to get any bigger. This is one of the greatest lessons I think he taught me was that you need to allow time for life in between all the work and that bigger doesn't work for everyone.
  Even though there are challenges to being a small farm in today's day and age there are also some huge advantages. I have the opportunity to be my own agronomist, and yes this isn't always an advantage but it affords me the chance to learn about plants and crop development. It's challenged me to dig deeper into why I grow certain crops and allowed me to understand their limitations.
   I also know on my farm if I don't do it, it isn't getting done. I see every stage in all operations which gives me a whole farm picture. Many large farms have a manager who does this but at the end of the day they are at the mercy of others to agree on any major decisions. If I have a hunch on something happening in a field I can follow through on that without having to explain myself to others. Don't get me wrong having a sounding board is great but it can also be limiting if you sometimes like living on the edge and trying something that isn't proven. I get to try new crops in small plots and know that I will be completing all operations on them and get a real feel for how all aspects of them will work on my farm. From watching them develop to how each spray pass fits into time requirements on my farm.
  I rely greatly on close relationships with the people I deal with through the farm. My advantage isn't that I'm a bulk buyer or can afford a large equipment payment, it's in cultivating trust between myself and those I do business with. I have to be able to count on them to be fair and they need me to reciprocate that when I can. Whether it's the grain buyer who needs wheat when no one else will haul or the local crop input guy who knows I'll be up front with them and will always follow through on commitments and they respect that. These are the people I discuss my ideas with and confide in and many I would consider friends. Respect is hard to earn and is easily lost in any business. These good relationships become not only important to doing business but can often affect my bottom line.
  I don't want to come across that large acre farms are bad, they have too many advantages to list. This is only about the pros and cons that I see on my farm.
  I feel I have a long ways to go to manage every acre on my farm to it's full potential. I see opportunities every day to do better and am constantly learning from other farmers I meet. I have great friendships with 100 acre farmers all the way up to 25,000 acre farmers and many in between. They all care about what they do and are amazingly like minded when it comes to sustainability and helping each other out. This has really widened my perspective of farming in general. The great thing that I see right now in Agriculture is that yes size matters when it comes to some of the issues we face but when we all get together we are all just farmers working hard to do our best and we can always respect that in one another!






Farm Stress: Everyday is not a good day but there is good in every day

   I am not a professional. I'm just a farmer from central Alberta who writes about what is going on in his life. When harvest was delay...