Jim Pallister farms 60 times more ground than Trevor Schriemer, yet both are successful. And so is Christoph Weder, a mid-sized beef producer. It all begs the question, how big should you be? The answer, it turns out, is another question.
What’s your business model?
Statistics Canada can pinpoint exactly what’s going on with the size of Canada’s farms. The 2006 Census of Agriculture spells it out in black and white and in table after table. There are 229, 373 farms in the country, a decline of 7.1 per cent in just five years.
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There are also more larger farms, the census says. Farms with gross receipts of $250,000 or more increased by 13.8 per cent over 2001, while farms with less than $250,000 declined by 10.5 per cent.
The “average” farm size also increased, growing to 728 acres, with farms in Saskatchewan, long the leader in the farm-size arms race, hitting 1,450 acres.
As a farmer, though, the obvious question is, which way is the wind blowing? What do the statistics say about what’s the ideal farm size, and what’s the most profitable level of production?
Increasingly, says one of North America’s leading farm economists, the statistics don’t give you the answers you need, because the statistics don’t tell you about the business model that the farms are pursuing. And it turns out, with today’s new business models, almost any size farm can be profitable, as long as the farm size and the business model are successfully aligned.
Fred Kirschenmann is an American farmer and academic who has spent much of his career pondering the fate of the family farm, first from his 3,500-acre grain and oilseeds operation on the wind-swept plains of North Dakota, and now from his role as a distinguished fellow at the Leopold Center for Sustainable Agriculture at Iowa State University.
In an nutshell, Kirschenmann says, in today’s agriculture, the farmer’s management capability outstrips their acreage constraints. Hands down, the farmer is the most important variable.
Data analysis is a great tool for identifying macro trends in the industry like how many farms there are, where they are and what they produce. But it also tells us exactly nothing about the key determining factor in the success or failure of a farm operation — the skill, strategy, abilities, knowledge and intelligence of the people running those farms.
It’s the vision of these operators that determines the shape of the farms they run. Over the course of a career that might span 40 or more years, they slowly shape their operation into a business that reflects who they are, what they believe in and the risks and rewards of their strategy for wrestling a living from the market.
In an industry where every farmer is his or her own CEO, this means there are no two farms that are alike — though there are a few clearly identifiable trends that farmers have seen and are moving to capitalize on, always with a mind to how their efforts will be rewarded or punished in the marketplace.
To show how these ideas are playing out in the field, COUNTRY GUIDE talked with the three farmers you’ll meet in the following three stories. They represent both the current state of the industry and where it might be headed.
First, though, we leave you with an important reflection.
Kirschenmann says that Michael Pollan-style food advocates miss the point with their over-simplified analysis. Today’s farmers were given a job to do.
“The first thing we should say to any commodity producer is ‘thank you,’” Kirschenmann insists. “We asked them to do something, and they quite simply did a terrific job of it.”
Tomorrow, however, will be different, and one of our feature farmers is certain that he knows where to find the best crystal ball.
“I am a staunch advocate of our free market system and its ability to correctly allocate resources,” says Manitoba’s Jim Pallister. “Why does there have to be just one solution? That’s a collectivist mind-set. Why can’t there be any number of different solutions?” CG
