The idea sounds right for the times. If you can’t expand at home, either because land is so expensive or because there just isn’t any for sale, look further afield. Maybe two hours away, maybe four, maybe even in a different province and so far away you basically have to set up a whole new farm.
Could you make it work?
Well, that depends. At least that’s what we’re hearing from farmers like Michael Carter and Brandon Kloot as they tackle the challenges head on.
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Game changers
Michael Carter’s family has farmed for four generations near Provost, 15 minutes on the Alberta side of the Saskatchewan border. Then, in 2011, with more family members coming onboard and with land values already making it hard to expand their grain operation at home, the family decided to branch out and purchase some more reasonably priced land southeast of Regina, six hours to the southeast.
“At that time, myself, my brother, my dad and our families all needed to draw income from the farm we were on and it simply wasn’t big enough to do that,” Carter says. “That’s what prompted us to start looking outside of our traditional trade area.”
That was the first big jump for the family, but not the last. Still in expansion mode, they continued to purchase a little more land in the Regina area until that too started to get prohibitively pricey, after which they purchased a farm near Nipawin, three hours north of Regina.
“We just wanted to own more land and the productive capacity of the land (at Nipawin) relative to what we paid for it was way better than the value proposition in the Regina plains at that time,” Carter says. “Our thought was that even if we couldn’t physically farm it, we could rent it out. But we were able to find the right group of people up there and we have been able to actively farm it ourselves.”
Still family owned
Today the farm operation has grown from 1,800 acres to just under 70,000 acres and has satellite operations around Regina, Nipawin, Balcarres (one hour northeast of Regina), Stockholm (south of Yorkton) and Ogema (an hour southwest of Regina). Although scattered, the operation has remained 100 per cent family-owned, except it now takes 23 full-time employees and about the same number of seasonal crew to run it.
They have recruited a manager for each satellite location and one of their key mantras is that each site has to be pretty much self-sufficient from day one.
“It has to meet the economy of scale to be efficient right off the hop because we don’t want to be dragging equipment 400 km down the highway,” Carter says. “They all wrap up into one big operation but we try to have it where one location isn’t constantly subsidizing another one.”
Being spread out into different geographic areas has also helped to mitigate some of the weather risk for the farm overall, Carter says. “The chances of having a drought or a hail storm at all the locations is significantly smaller.”
Adopting new business systems
Managing multiple, far-flung locations means the family has had to make some changes both to their mindset and to their business practices, starting with establishing the farm as a professional corporate body and employing technology to streamline the management functions that Michael and his brother still handle.
“It took a lot of effort to streamline the data flow and the paper flow,” Carter says. “We have one head office and we funnel all of the relevant data and information into that office. We are using multiple programs and apps, and each serves a purpose but they all roll up into one central governance model.”
From his location at the Regina farm, Michael, who has an undergraduate degree in science and an MBA from the University of Calgary, is responsible for the financial and marketing end of things. His younger brother, Kevin, takes care of the production and operational side from his location at the home farm at Provost. Their dad, Dennis, and mom, Cheryl, are semi-retired but continue to help out as needed.
They use a couple of advisory firms for specific advice but have always been willing to learn from other businesses that operate across multiple locations, whether they are involved in agriculture or not.
One strategy they have adopted as a result is to have detailed job descriptions for everyone, from the person sweeping the shop floor to the equipment operators and management and administrative staff.
“Then subsets of those job descriptions are the actual standard operating procedures that we have developed that basically say, if you’re operating a combine anywhere on this farm, whether that’s at Nipawin or Ogema, this is how you do it, this is our expectations, this is who you call if things go wrong,” Carter says.
Bringing people in
The Carters have had to expand their management team beyond family members to include two office administrators, a regional manager, logistics manager and in-house agronomist (this last is a bit of a misnomer as he is in a truck travelling from location to location most of the time).
“We are fortunate to have some good people around us,” Carter says. “The regional manager is a liaison between myself and the other location managers and he can make decisions on my behalf to ensure they have everything they need to move the operation forward on a daily basis. He has been a wonderful addition to our team.”
With a fleet of 15 trucks on the road almost every day, the logistics manager eats, sleeps and breathes the needs of the farm as a whole.
“He’s been with us for six years and he has taken a ton off my plate,” Carter says. “I can focus on the marketing and once I have a grain contract, I hand it off to him and he executes it.”
Many smaller farm operations don’t have the means to hire people to handle all these functions, but Carter says that as they have grown they have hit different thresholds of efficiency that have allowed them to do that, and it’s had both positive and negative effects on the business, the brothers and their families.
Not all costs are financial
“As the farm has gotten bigger the last couple of years, I feel like we’ve gone backwards a bit because our overhead is higher,” Carter says. “That’s a function that’s a little bit of a detriment of being spread out. You can have the best governance model in place ever, but it’s going to be inherently more work when you have multiple locations.”
As it grows, the farm takes more of Michael and Kevin’s time and they both worry that it is coming at the expense of the time they can spend with their families. Carter (who is 38) and his wife, Kristen (who works off-farm as a nurse practitioner), have four young children. Kevin (35) and his wife, Megan, have three.
“Although they’re not on the farm on a day-to-day basis, my brother and I couldn’t do what we do if we didn’t have their support,” Carter says.
That’s why the ultimate goal is to replace themselves in the operation, and Carter admits if a CFO walked through the door, he would be tempted to hire that person on the spot, although it’s not always easy to recruit the professionals they need and they know they might have to think more creatively to achieve their goals.
“Things have changed and so have the expectations of these kind of professional people,” he says. “The thing about technology is that it’s allowed us to digitize and there’s no reason why, with the processes we have in place, a bookkeeper couldn’t live in Calgary or wherever. As long as our location managers are following the proper procedures, all that information is in the cloud, the bookkeeper can access that and do their job from anywhere in the world.”
Not for the faint of heart
Carter admits they would not have been able to grow the fa rm to where it is today if they had stayed in one location.
“We couldn’t have bought land all in the same area because it got to a point where it just didn’t make sense,” he says. “You can grow, but that growth becomes finite at some point because when you’re buying land that’s gotten so expensive, it doesn’t cash-flow anymore, you are rolling current cash flows at the expense of what you hope is future growth and what you hope is upside in the future of that asset. Basically, you are betting that farmland is going to continue to appreciate in value. While that’s maybe the case, I think the percentage gains that we’ve seen in the last decade are going to slow down now.”
It’s one more way long-distance farming isn’t for the faint of heart and certainly not for anyone who has a hard time delegating tasks.
“If you’re the type of person that isn’t good with letting go of things it’s not likely for you,” Carter sums up. “The Nipawin location is seven hours away from me… I have to trust the people there and be okay with the fact that they’re going to do things differently than what I would.”
Jumping on an opportunity
For 21 years, the Kloots had been running their two broiler/breeder farms in Chilliwack, B.C. Then, three years ago, the opportunity came up to purchase another farm near Lethbridge, Alta.
That’s 1,000 km — and a good 11 hours on the road — away from home.
“We weren’t actively looking for an opportunity, but we had put out feelers,” says son Brandon. “Someone approached us and said they were looking at selling their operation and would we be interested.”
“After having some conversations and seeing the place,” the 39-year-old says, “we saw a good return on investment and moved forward on it.”
There are five siblings in the family who help out periodically, but Brandon, his brother Jorden and his dad, Jim, are the ones responsible for the day-to-day management, and they made a crucial decison early on. Having someone in place to manage the Lethbridge farm on a daily basis would be essential.
“We have a business partner, Riley Liefting, who manages the farm and all the day-to-day operations: walking barns, picking eggs, flock health and so forth,” Kloot says. “We were fortunate that he was willing to move from Chilliwack and begin his life out there with his new wife. He’s been a great part of our success out there.”
The farm now has about 65,000 units of quota in British Columbia and around 16,000 in Lethbridge.
Importantly, the new farm was well established, so the transition was smooth and relatively easy in terms of the production, Kloot says. It was more the management model that required some streamlining.
“You bring your game factor with everything, whether it’s equipment that you’re comfortable with, or certain management skills or programs to be able to manage similar to what we do here,” Kloot says. “There are different ways that people do things, so we had to adjust some of our tactics to compensate for that.”
Being accepted
Another consideration with long-distance farming is community acceptance. The Kloots know that whenever a farmer purchases land in another area or province a long way from the home base, there can be some resentment from farmers in that area who see them as outsiders gobbling up their land as an investment and not having any commitment to the community.
That’s where being able to work with the previous owner and having someone live onsite has been invaluable.
“I don’t think we got any hard pushback from people in the sense of ‘you guys are just outsiders’ but people always want to know what your dynamic is. You moved into town, so what is your angle? Are you here for a short term, or for the long term?” Kloot says.
“We definitely had to work at reassuring people that we’re here like everybody else, we’re here to do business, and during that time we want to be valued members of this community… Riley is 23 and works hard at building relationships, and people have embraced him as someone who is willing to ask questions and learn.”
Although the Kloots hadn’t expected to end up long-distance farming, it’s something they would definitely consider doing again if the right opportunity arises, especially as the cost of production continues to increase with rising fuel and feed transportation costs, especially in the Fraser Valley of B.C.
“There is always opportunity to look for areas of savings,” Kloot says. “When you are getting paid through a quota, it’s the cost of production that makes the difference, and we are seeing, even in Alberta, as farms are getting bigger, there are certain people that are aggressive in the quota market, so we are seeing the prices of quota trending upwards. Some farms need to get bigger… with a certain size there are efficiencies.”
Thinking about lifestyle
Of course, it’s not just farmers who get pinched when there’s a rapid increase in the cost of living. It’s the same for others no matter what industry they work in.
For all of them, Kloot knows, the decision to look elsewhere is complex.
“Whether you’re pursuing farming or not, you’re pursuing a certain lifestyle,” he says. “Sometimes opportunity arises and you don’t expect it, but if you’re open to it, you need to think about the different scenarios and what that looks like for the future of the farm, or the family or both.
– This article was originally published in the January 2024 issue of Country Guide.
