Melanie Sommers tears around the corner of her family s free-stall barn, jumps out of the tractor cab and pokes a hand out of her coveralls for a handshake. She s been cutting some fourth cut hay and is rushing to get it done before the fall rain sets in. The pressure is on, but she is not about to back down.
Along with her parents Louise and Peter, Sommers manages a 510-cow herd, raising their own replacements. It’s an impressive operation. The cows are milked three times a day in a double-12 parlour and the Sommers also grow corn, soybeans and hay on 1,650 acres of the high-yielding sandy loam flats west of Montreal, near Lancaster, Ont.
Read Also
Adapting, innovating and thriving in Saskatchewan agriculture
Cyle and Erika Stewart have embraced their ability to pivot and take a new approach to ranching on more than…
As Sommers and I tour the twice-expanded 600-foot long barn, she notices an injured cow and stops to ask one of the nine full-time staff to look after her. As we continue, it soon seems the mountains of corn silage in the just-filled bunker silos behind the barn are small compared to the amount of work required to run a dairy and cropping operation this size.
The calf barn is the farm s original tie-stall barn, renovated into low-cost, well-ventilated group pens. When Peter started farming 35 years ago, his family milked 40 cows in this barn and had 270 acres. His transition into farming full-time was early and abrupt. He was only 20 years old when his father, a post-war Dutch immigrant, died suddenly.
Now that it is time for Peter himself to think about succession planning, however, the generational transfer is happening by choice, and with much more preparation.
At 55, Peter is still as passionate about farming as his daughter. We re always talking about business, says Melanie, comparing herself to her two sisters who have successful careers off farm. Maybe our relationship is too much about business.
In fact, Melanie herself earned a degree from McGill before committing to the farm. That was three years ago, and since then she s been incrementally learning and getting comfortable with each new responsibility. First comes the transition of management power and eventually financial control or share ownership.
Currently, Melanie manages the animals and the people who look after them, stressing animal health. Since Melanie started farming full time three years ago, she s been tracking and managing the herd based on health numbers including milk fever, mastitis, and dead-on-arrivals and is encouraged by the improvements. A couple of key changes have made a difference. For example, she started feeding acidified milk to the calves and switched their semen supply to a company with genetic merit scores based more on health traits, not type classification.
It s further proof that while on many farms a 26-year old is definitely still considered an apprentice, on the Sommers farm, Melanie makes major decisions. Partly, that is because Peter is willing to trust her judgment, but it s also because Melanie has proven that she has what it takes.
Peter manages all the crop production and does the bookkeeping with a close eye on statistics such as whole- farm ROI, and he is confident the farm is financially healthy enough to transfer.
Taking over a successful business allows you to have some equity to work with, to continue to expand and grow the business, says Peter.
New directions
For this family, the first step in mapping out a succession plan began with a share buyout. In 2004, Peter s partner and brother died. The farm corporation recently bought his shares from his widow. Now the Sommers are dealing with that debt load.
For the next few years they re focused on paying down this debt so the corporation can transfer to Melanie in a stronger debt-to-equity position, enabling future growth. The Sommers have a goal of being able to grow four to six per cent per year. In the past Peter has averaged 10 to 12 per cent growth but that s with lower asset values, some inflation and higher ROI.
Melanie s vision for the farm is more complicated than her father s low-cost per unit, expansion-based business model. Her mission statement includes words like sustainable, profitable, progressive, and consumer-driven.
Although someday she d like to expand the facilities and potentially increase milk production, the lack of quota on the market means they can only increase about five to 10 cows per year.
So instead the Sommers have taken a different path to increase profitability. Two years ago they started producing a niche product, omega-3 milk at a premium of seven to eight cents per litre. The marketing is all done by the processor and under the quota system. They ve found the net returns can get pretty skimpy since the purchased feed costs five cents more per litre of production. Moreover, there s been a significant suppression of their fat test and an increase in feet-and rumen-health problems.
However, this niche strategy is also about managing the threat of the potential loss of supply management. Their already significant land base is also a strong fallback position. For now only about a third, some 500 acres, goes to off-farm crop sales. The cropping is our diversity in the agricultural industry, like our safety net, says Melanie.
Their most potent hedge against this loss of supply management risk is to enhance their farm s ability to produce milk with low overhead and low operating costs per litre, says Peter. With or without supply management, the low-cost always survives, he says. We need to position ourselves so we re the ones left in the industry.
Employees
The two generations agree that their business relies on good employees, both for current day-to-day operations and in order to expand in the future. Farms are no different than any other industry, says Peter. To keep growing, you need to keep more people. Only farmers who can successfully work with people will be able to keep growing.
Along with paying the area s going full-time rate, the Sommers say the little things make a difference. The staff each get a birthday and Christmas cards with monetary gifts. During the year they also receive some beef and milk.
Melanie has focused on formalizing their human resource management by creating employee handbooks, job descriptions and taking over the hiring procedures. Most of their employees have been very accepting and capable of adapting many of the changes she s implemented, such as new milking procedures, treatment protocols and work/ holiday schedules. She s also fluent in both French and English.
I didn t grow up working with people, Melanie did, says Peter. That s the hardest thing to learn, how to treat people.
Even with these efforts, some employees have had difficulty transitioning decision-making power to the new young, female boss. As they see her ability to perform and her knowledge, and as they learn that she treats them with respect, they re listening to her more. Yearly employee evaluations have helped too, and Melanie has also found that communicating daily instructions on white boards helps to ensure nothing gets missed.
She s also trying to build respect with knowledge. Any chance she gets, Melanie reads farming articles, attends seminars and uses the Internet to continually look for answers. She has spent three days in Wisconsin on a large-herd management course for middle and upper management put on by Professional Dairy Producers of Wisconsin ( http://www.pdpw.org). This winter Melanie has been accepted into the George Morris Centre s C-TEAM program.
Beyond the information she garnered at university, Melanie says she learned how to learn, how crucial it is to analyse situations, ask the question why and use conceptual thinking. Moreover, she learned who she was at her core and what she wanted.
While going to university, she worked in a real estate office in downtown Montreal and discovered how much she disliked the environment the high-traffic commute, being confined inside and the limitations of working for a company.
I always enjoyed the farm, the way of life, working outside, and finding new ways of doing things and applying new ideas, says Melanie. It s a lifestyle, not only a career. And it s something you need to be passionate about for the next 40 years, not just this week. CG
