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Large, commercial… and organic

Agri-Fusion says its choice to go organic is a business no-brainer, with a collaborative new management design to make sure it pays

Agri-Fusion’s four owners of Quebec largest organic farm never looked back at their choice to go organic. Whether it’s wheat, corn, soybeans, beans or peas, organic crops earn them twice as much per acre as conventional crops, and they cost much less to produce.

It’s a point I heard again from 67-year-old Gilles Audette, one of those four founders. Audette is a passionate man, and he showed it when we met in the cafeteria of the company’s grain centre, where he was moving into his office in the company’s brand new 14,000-sq. ft. headquarters, completed on budget at a cost of $3 million.

Located at St-Polycarpe, about one hour from Montreal, Agri-Fusion has 5,500 acres under cultivation.

Audette is still burning the organic flame, although the farm converted to organic in 2004 for a reason that may surprise many purists. It was all driven by the arithmetic that started with a challenge they gave themselves: How could they boost their profitability.

The four owners got out their pocket calculators and started running the scenarios.

Nor was this the first time. Agri-Fusion was born in 2000 because its members came together looking for a more affordable way to get access to a topnotch fleet of machinery.

When the four farmers looked at the new, high productivity machinery being developed by the major manufacturers, they all had the same thought, Audette says. “Quebec’s farm size does not justify the price and the size.”

At first, Agri-Fusion was limited to a machinery ring, but then the partners asked, “How can we boost our profitability even more?”

But by forming a partnership, they were able, for instance, to run a new tractor 1,200 hours a year at a cost of $17 per hour, rather than the 250 hours at $75 per hour that Audette would have faced if he had tried to acquire it on his own.

To make it work, however, Agri-Fusion began running like a single big farm. All is shared, with the exception of the land, which stays in the hands of each of the four owners.

Income and expenses are shared each year according to land ownership.

Then, four years after the launch of Agri-Fusion, when the group was looking for a more dependable way to boost their net cropping returns, and when the organic discussion came up, their numbers showed that the economic gain from organic crops was hands-down superior to conventional crops.

Even if the organic crops yielded only half of conventional crops, the price given for organic grain would see them break even.

There was still some skepticism. Could the numbers on paper actually be reproduced in the field?

“We had now to convert these budgets from Excel tables to the fields,” Audette recalls. But from that first year in organic production, the results always beat expectations.

So, what are their yields like? Audette replies, “We don’t think in terms of tonnes per hectare but in dollars per hectare,” which has become a sort of motto for the company.

For instance, organic corn yields are 80 per cent of conventional corn. But that begs the question: Which is more profitable, to harvest 12 tonnes per hectare of conventional corn at $200 per tonne, or to harvest 9.1 tonnes of organic corn at $525?

“We get double income in organic… $4,800 per hectare versus $2,400 in conventional,” Audette says.

The spread of income is even larger for soybeans where there is little or no difference in yields between organic and conventional, says Audette. But organic soybeans are priced at $1,100 per tonne compared to $450 for conventional, which means a gross of $3,410 per hectare for organice versus $1,395 for conventional.

Moreover, says this producer, organic crops are less costly to produce. “We save near $1.5 million in seeds, fertilizers and pesticides,” he says.

“But is there no down side to organic?” I ask.

It turns out that there is, and it can be a serious one.

“In organic production,” Audette says, “there is no room for error.”

A gradual step

It takes three years to transition a field from conventional production to certified organic, and there must be a good paper trail along the way. Ecocert is the organization which certified Agri-Fusion’s organic practices.

Agri-Fusion owners embraced organic production gradually, slowly increasing the number of hectares under cultivation year after year. This transition has allowed for the learning of new practices as well as spreading the risks.

In order to put the odds in their favour, the group did extensive land drainage and surface levelling. (In 2015 alone, they invested $650,000 to install 350 km of farm drains in nine different locations, on land which is mostly clay.)

From 130 hectares certified organic in 2006, Agri-Fusion fields were all organic in 2016, 10 years later.

Once the land is in good condition, Audette says they had to learn how to win what he considers the No. 1 threat in organic… weeds! “The Americans have forgotten the use of mechanical weeding. They rely only on GMO and Roundup. We look to the Europeans to get the proper machinery,” says Audette.

That helps explain why Agri-Fusion’s machinery inventory has climbed $5 to $6 million, including a 12-metre Lemken seeder which allows narrow seeding, a favoured technique to overcome weeds.

Another star in the machinery shed is the Einböck cultivator tined weeder guided by GPS. Equipped with cameras, it films the corn plants at stages from two to six leaves and allows the removal of weeds with an incredible precision. This versatile cultivator can be used in any crops which are seeded at 30 inches, including corn and beans. “Beans love to be weeded,” says Audette. It’s part of the reason, he believes, why organic bean at 10 t/ha are outyielding conventional beans at 8.5 tonnes.

During our interview, Audette makes sure I know that it took three years and an investment of $250,000 to convince the French multinational and king of frozen vegetables, Bonduelle, to get involved in organic production, its first such contract in North America.

“The company was afraid that the yields would not be there. We proved the contrary,” says Audette. Baby foods made of organic vegetable puree are a huge hit on the market. And Agri-Fusion intends to grow 450 ha of vegetables for Bonduelle this year.

Crop rotation, nitrogen, soil compaction and tilling

Agri-Fusion grows eight crops in a four-year corn, soybean, vegetables and cereal rotation. But the farm has stopped wheat production even though yields reached four t/ha with a 13.5 per cent protein content following a bean crop the previous year. “We have two strikes against us. First, we have a humid climate which favours the development of fusarium. And second, it is difficult to supply the crop with sufficient nitrogen to obtain more than 12.5 per cent protein content,” Audette explains. However, he has replaced those acres with spelt, which is sold at a very good price to a mill in Utah before getting to California, the organic magnet that defines food tastes in North America.

To avoid the introduction of lethal fungus such as sclerotinia, Audette mentions that they will never seed more than 40 per cent of the farm land in legume plants such as soys, beans or peas.

With their in-house team of agronomists, Agri-Fusion’s focus is on soil vigour and compaction.

Audette also finds that apart from the weeding, organic production faces two other big challenges. The first one being to ensure a proper nitrogen supply to the crops.

Agri-Fusion uses poultry manure and cover crops, but for the last two years they have also spread fresh chopped alfalfa and clover to fertilize the fields. “The quality of this silage must be as good as the one you would serve to a cow which produces 50 kg of milk per day,” Audette says.

The other crucial challenge is to avoid soil compaction from the high number of machinery passes. For example, in order to properly weed corn or other crops, you can count on an average of seven trips, and then, there is the mandatory tilling operation in organic production, which is done two out of three years. “This is not the best agricultural practice, but in organic production we do not have another alternative for the moment,” says Jofroi Desperrier, a young agronomist who has been hired by Agri-Fusion.

The future belongs to the young

Audette sees a bright future for Agri-Fusion. “We do not depend on seed and agrochemical companies. We harvest and select our own seed, and there is an increasing demand for our products,” he says. The only bad news was the death of one of the four founders killed in a motorcycle accident in 2006.

By keeping the ownership of their land, each musketeer or his descendant is guaranteed an income that no other investment in a stock exchange can offer.

“The land is the most precious asset that a man can possess,” Audette says.

To keep thriving, Agri-Fusion, has hired five young talented directors such as Desperrier as well as experts in machinery, agronomoy and human resources. The company now has 25 full-time employees.

“These young lads will bring our enterprise to another level,” says Audette. The company finished fourth place in the bronze medal category in the 2015 contest of the Ordre national du mérite agricole du Québec.

The next step, says Audette, is to hire a general manager. But Audette isn’t retiring, so the manager’s office, he tells me, will be next to his own.

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