There’s been a lot of chatter about the new farmers coming back to the sector. Across the country, enrolment numbers have ballooned at ag colleges. Even the 2016 Census of Agriculture showed a real, albeit small, increase.
Saskatchewan is no exception. In 2016, the number of farm operators under the age of 35 hit 9.7 per cent, a gain of 0.9 percentage points from 2011. And while overall there were fewer farms compared to 2011, the rate of decline has slowed substantially.
But do the census numbers accurately reflect what is happening on our farms? We wanted to find out, so we spoke to people on the ground and in the field to ask them: Is it real?
Last one out, turn off the lights.
It was a one-liner familiar to anyone living in rural Saskatchewan through the ’90s and early 2000s, a cynical reference to all the youth leaving for greener pastures in Alberta.
But it’s not a joke people make these days, and their increased optimism carries over to agriculture too.
“The whole feeling in ag now is one of pride versus one of embarrassment, which I kind of felt before that,” says Darren Howden, Farm Credit Canada’s vice-president of operations for southern Saskatchewan and Manitoba.
Howden grew up on a farm and graduated from the University of Saskatchewan in 1989. In 1991, he started working in lending with Farm Credit Canada (FCC), although at that time the job was more about settling debts, he says.
Since then, he’s done everything from leading IT projects in FCC’s core banking system to working on learning events, all from Regina.
These days, Howden sees piles of young people coming back to the farm, compared to 20 years ago. And the numbers bear that out. In 2014-15, FCC lent $2.4 billion to farmers under 40, nationwide. In 2016-17, that number hit $3.2 billion.
The renewed interest and optimism is also spinning into the rest of the industry. Howden says many commerce graduates want to work for FCC, too. “That wouldn’t have been the case in the early ’90s.”
As a high school student and farm kid in the 1990s, Scott Owens saw the tough times. But Owens decided at the age of 14 or 15 that he wanted to farm. The idea of being his own boss appealed to the teenager, and he started tailoring his high school and college education to a farming career.
In 2001, after finishing a vocational ag program, Owens came back to the family farm near Maidstone, in northwestern Saskatchewan. At that time, farmers were suffering from poor prices and several years of drought. The only good thing, Owens says, was that land was available to buy or rent at very reasonable rates.
But Owens’ parents were financially astute. Plus they knew that he wanted to take over the farm, so they made decisions with that in mind.
“I had a love for farming. I had a desire to do it. And the opportunity was there to take over a functional, well-run farm with a good land base.”
These days Owens grows crops and runs about 50 steers, and he is also a director with the Agricultural Producers’ Association of Saskatchewan (APAS).
Ian Boxall is a fourth-generation farmer in the Tisdale area, in Saskatchewan’s northeast. He’s also a vice-president of APAS. But Boxall’s route into farming was less direct than Owens’.
In 1998, Boxall started farming full time. Drought made things tough. Since Boxall was the youngest sibling, and the last to start farming, he sought off-farm work. He farmed and worked for a few years, but in 2004 worked full time in Alberta’s logging industry. Then, in 2010, Boxall returned to farm full time.
Boxall thinks the pessimistic mood in Saskatchewan agriculture hung on until 2004 or 2005. But it’s gone now.
What’s behind this more positive outlook and the bump in young-farmer numbers in Saskatchewan these days? A lot of it is due to better grain prices.
“If you’re able to generate enough income to live on, with a little bit extra, it’s a lot easier to bring in somebody. It’s a lot easier to expand,” says Howden. “If you’re barely making it, it’s hard to expand and it’s hard to bring somebody else in.”
Another factor is that areas suffering from a 20-year dry stretch started getting moisture, says Owens.
“You can put more cattle on pasture on the same amount of land with twice as much rain as you used to get. We’re getting substantially higher yields strictly from the extra moisture,” he says.
Boxall also sees the innovation in agriculture as attractive to young people. The emphasis on innovation these days keeps people interested, he adds.
Saskatchewan also has an advantage over its neighbours. In fact it’s a big advantage, because it goes right to the heart of farming. It’s the price of land.
Between 2011 and 2016, the average price per acre jumped 76 per cent for farmland and buildings in Saskatchewan, according to the Census of Agriculture. But at an average of $1,210 per acre, Saskatchewan still sits far below the national average of $2,696 per acre.
Boxall says that land prices seem high to Saskatchewan residents. But talking to Manitoba farmers at the Keystone Agriculture Producers annual general meeting provided perspective. Saskatchewan’s most expensive farmland was still much less than acres in Manitoba.
“But in saying that we also have the highest freight rates,” says Boxall. Plus most of the province can’t grow highly profitable crops such as corn, he adds.
Another factor may be that in the last few years, agriculture has looked a lot better than some of the alternatives. For example, Owens points out that in his area the oilfield was a profitable alternative to farming. But oil prices dropped, and there’s less money to make in the oil field these days. That makes farming look more appealing, he says.
That may apply to the rest of the ag industry, too. Farmers always need fertilizer and chemical, Owens points out.
“It’s a business that’s fairly steady. It’s always there. It’s not like farmers have huge fluctuations in their staff like the mining industry or the oil industry does,” Owens says.
In fact, primary agriculture made up 9.7 per cent of Saskatchewan’s gross domestic product in 2013, according to Statistics Canada. Throw in ag input suppliers, food and beverage companies, and retail and wholesale companies, and that number rises to 13.5 per cent.
And finally, while people used to talk about supporting young farmers, today there are organizations with programs to help.
For example, FCC’s young farmer summit, Ignite, aims to up the network and business acumen of aggies under 40. FCC also has loans for producers under 40. With those loans, FCC will give farmers a bit of a break on interest rates and look at lower down payments, says Howden. Young farmers can purchase up to $1 million worth of ag-related assets.
Is it enough?
Owens, Boxall, and Howden all see young people as bringing new ideas and energy to the industry. They are comfortable with new technology. They look for niche marketing opportunities. And when they need to solve a problem, they tap their social media networks, which are international.
Boxall says there is more interest in farming in the next generation, compared to several years ago. But are there enough young farmers in Saskatchewan?
Boxall reflects. “I don’t know if we have enough new entrants,” he simply says.
Boxall’s wish list for young farmers includes:
• Lower interest rates for young farmers. Or refunds of the interest from early loans for farmers to reinvest in the operation.
• Tax incentives for retiring farmers to sell to new entrant farmers. For example, expanding the capital gains exemption so people can sell to new entrants who aren’t related. That might make retiring farmers willing to take a little less money for the land if they could make it up on the tax side.
• More security and risk management tools. Boxall says APAS doesn’t yet have a plan fleshed out, but has been discussing the issue.
As for Owens, he’s not sure about the magic number of young farmers needed to sustain the industry either. He doesn’t think Saskatchewan will ever see the numbers it did in the 1930s, or even the 1970s and ’80s. In 2016, there were just over 34,500 farms and 45,350 farmers, in the province.
“I think it would be beneficial for the province to stop the decline,” says Owens. “If we could plateau the total number of farmers, there would be a major demographic shift from the 55-plus to the 35-and-under age group, which would be really positive, I think.”
But Owens is encouraged by the number of young women farming these days, and thinks they may have helped bump the young farmer numbers. The last Ag Census reported that a quarter of farm operators in Saskatchewan were women.
In fact, he says, women have always farmed, and are now gaining the recognition they should have had all along.
“I think the fact that the stigma is fading encourages young women to start farming.”
Farming as business
“There are a lot of farmers who survived some pretty tough times back then, which I think demonstrates some business savvy,” says Owens. But those farmers may not have been recognized for their business instincts.
Boxall sees changes in how farming is perceived by the public and the ag sector. People used to refer to themselves as “just a farm,” he says.
“I think that mentality has changed. We’re business owners. We run multi-million dollar businesses,” Boxall says. Some of that change is due to the work of farm organizations, he adds. And that change in perception may be helping pique interest among young people, Boxall adds.
Howden thinks FCC’s Ag More than Ever campaign also gave producers permission to talk more positively. Before that campaign, producers were doing well, but couldn’t talk about the fact that they were making money, he says.
Some of those changes go beyond perception. Owens thinks farmers have become more sophisticated in how they manage the farm business. For example, some farms take on more of a corporate structure and philosophy. And Owens suspects that when farmers apply to borrow money, their presentations to bankers are likely more sophisticated these days.
Howden says producers are now in more control of the factors they can control. They know their numbers. They check the markets with their cell phones. Many can break down costs and net revenue to dollars per acre.
“Very few guys talked about that stuff 20 years ago,” Howden says.
Howden has also noticed a shift in how farmers view land. Many people are less emotionally attached to land than they once were, he says. It’s more common these days to see a farmer let go of a couple of quarters in order to pick up land closer to the farming operation’s base, for example.
One other factor driving that business focus is the relative ease of accessing information today, says Howden. There are more learning events for farmers, for both production and management.
Boxall also thinks today’s farmers focus more on tracking costs and marketing to the levels needed to be profitable. A lot of that emphasis on tracking expenses and grain marketing is driven by higher costs, he says. Boxall also thinks the increased business focus makes farming more inviting to young people, as it gives them more control over their business.
Taking adversity in stride
The reality is that farming is hard, says Howden, and when young farmers have to struggle a bit and make some tough calls early on, it makes them better managers.
Part of the Prairie farmer culture is an ability to handle adversity. Because farmers deal with hardship frequently, says Howden, they tend to think: “Okay, this is today’s challenge, how are we going to solve this one?”
Owens agrees with the concept of a culture geared towards tackling adversity. A love for farming is also part of that culture, he says.
“I’ve always said that if you’re in farming strictly for the money, you’re probably in the wrong business.” While there are profitable periods, says Owens, there are also times when you’re hanging on, and that’s it.
“For me, I love farming enough that I’m willing to take those 10, 15 year stretches of adversity just because I like doing it so much,” says Owens. Without that passion and drive, “when the adversity lasts into that fifth or sixth or seventh year, I think you’re going to kind of wither away and pursue something else.”
Boxall sees the way the ag sector responds to issues as another example of that. Every general farm organization has a plan for dealing with issues over the year. But when the federal government unexpectedly proposed tax changes in 2017 that could have affected many family farms, farm organizations acted quickly.
Boxall says that during meetings last October, high-level tax officials told him that the federal government received about 22,500 submissions on 2017’s proposed tax changes. A more typical number for a government white paper is 2,500 submissions, Boxall says. Producers’ ability to form a united front on that type of issue “has a huge impact.”
In Howden’s 26-year career, young farmers have always faced huge challenges, such as capital requirements. How does a young farmer get started? It’s never easy, Howden says, and typically young farmers get some support from family or others.
It’s like asking how a university graduate can take over a multi-million-dollar business.
“It’s not that different for farming. It’s just another big, capital-intensive business,” says Howden. “So you start at it slowly.”