At Hebert Grain Ventures in Saskatchewan, they actually have a word for it. They call it the “harvest hangover.” It’s those three weeks after the last of the crop has come out of the field when, somehow, nothing much seems ever to get accomplished.
“Once the fall season hits, things go out the window,” says Evan Shout, chief financial officer for the 30,000-acre grain operation near Moosomin.
And they also know the after-effect. “By the time you’re done with the harvest hangover,” Shout says, “you’re already on a condensed time period to get everything done before year-end.
“If you’re not prepared going in, you’re behind the eight ball.”
Read Also
Why do farmers hate paying taxes?
It didn’t take long in my accounting career to learn that farmers don’t like paying income tax. No one does…
For producers like Shout, leaving the bulk of the farm business work for the winter isn’t an option. Business management is increasingly happening year-round — even during the busy months of summer when farmers traditionally have focused on production, not planning.
“There’s a lot of downtime in the winter,” Shout says. “If you have a plan in place, you can make the most of that time. And for us, the summertime is the best time to do that planning.”
“People get busy,” agrees MNP farm management consultant Mark Wobick. “They get into production and it’s easy to lose focus of the big picture. But just taking the time to look beyond production is critical.”
It doesn’t have to be a massive commitment. There can be big gains with even a modest time investment. “No matter how busy you get,” Wobick says, “if you can take a day or two out of your summer to update your plan, have a conversation with the bank, and talk to your consultants about where you’re sitting, you can set yourself up for success.”
In 2022, these are critical summer jobs, when there’s still time to adjust to the changing realities of the growing season.
“If you think about all of the decisions that have to be made on the farm, you have to be ready to go as early as possible, so we like to plan as early and as often as possible,” says Wobick. “Then you can make some strategic decisions about your business.”
Shout says it’s too easy to get reactive rather than proactive in the summer, but this means the business wouldn’t get a good look until they’re preparing for year-end. By then, they’d have missed the mid-year opportunities to set themselves up for success.
“The summer months are when we can make sure we’re actually on the trajectory we want to be on,” says Shout.
But what types of big-picture thinking should producers be doing in the summertime?
1. Ahead of the class
Winter is the perfect time to take courses and workshops, develop new skills and broaden the management capabilities of everyone on the farm. But summer is the right time to start researching those learning opportunities and get yourself registered.
“Going into the winter months is when you want to get people into training, whether that’s truck driver training or financial statement training, so start that research now,” says Shout.
Summer, though, is a great time to get registered in those programs, so you can start early in the fall. Increasingly too, summer is itself a time for learning.
“Winter has traditionally been looked at as a season for business planning and learning, and that makes sense with the cycles of agriculture,” says Mike Tisdall, director of knowledge and advisory services for FCC. “But I think there’s an opportunity for us to rethink that tradition and instead create a new habit of treating learning and growth as an always-on activity for your farm.”
Farmers who do that tend to have more profitable businesses, Tisdall says. “Learning is like fertilizer for our brain and for our businesses,” he says. “At FCC, we’ve seen a strong correlation between growing and profitable farm businesses and growth-oriented farmers who have made learning a personal development habit.”
The best way to start seeking out learning opportunities is “with the end in mind.”
“At the beginning of the season, set growth goals for yourself. Producers often set production targets and yield targets, but why don’t we set personal growth targets too?” Tisdall asks. “The alternative is random acts of learning, which are of benefit but don’t yield as much (compared to) a targeted, intentional approach.”
Then it’s a matter of finding the learning tools that will help with your growth goals, including courses, webinars, podcasts, field tours, videos or magazine articles.
“One of the barriers to people’s learning and development is seeking perfection instead of progress,” says Tisdall. “It’s important for people to start their journey with what’s in front of them, and as you go through the act and habit of learning, the pieces of the puzzle come together and show you where you need to focus.
“It’s about shifting learning from something you do once or twice a year to something that you do every day.”
2. Move up on HR
Producers usually have their staff in place by the time summer rolls around, but that doesn’t mean your HR work is done. There’s still training, onboarding and retention to execute on.
“Summer isn’t necessarily the best time to be planning your human resources, but it is a great time to be focused on training your workers and on understanding which retention strategies would work best for them,” says Jade Reeve, agrijobs and agriskills program manager at the Canadian Agricultural Human Resources Council.
That’s becoming increasingly important as labour shortages make finding workers even more challenging on farms across the country.
“Employers are struggling to find workers in all sectors at this point,” says Reeve. “It’s not a matter of trying to attract from another industry and people are leaving for higher-paying jobs — we’re just experiencing vacancies everywhere.
“So making sure you’re investing time into onboarding and training them will help you retain them.”
Onboarding helps bring new workers up to speed about the business, including any policies and procedures they need to know, and helps them feel like part of the team. “Those elements are really crucial to support new workers on the farm,” says Reeve.
But it’s also important to focus on retaining employees for the longer term during the summer. At Hebert Grain Ventures, that means going through performance goals with their workers during the summer months.
“Larger farms are starting to do short- and long-term goal-setting with their employees, and that makes sure everybody knows where they sit for the year and where they’re going,” says Shout.
Beyond that, farmers should be thinking about retention strategies that will help them recruit and keep workers on their team. In most cases, those perks help eliminate common barriers to working on a farm, including housing and transportation.
“Farmers are absolutely creative and have come up with excellent solutions to retain employees,” says Reeve. “A lot of them aren’t actually monetary benefits, but they’ve made workers want to stay and be part of the business.
“If you can mitigate those stressors to encourage people to come work for you, your retention and recruitment strategies will be more effective.”
3. Plan for future growth
It can be hard to work on your farm business when you’re busy working in the business, but taking a step back in the summertime and looking at the big picture direction of your farm can help you find opportunities for future growth.
“There is a period where the farm is ‘regular busy’ and not under the pressure of planting or harvesting in the shadow of Mother Nature,” says Paul Deighan, tax partner at Grant Thornton LLP. “That period does allow for some financial reflection, and what the farm manager should be doing during that period is assessing the financial stability of their operation for the long term.”
Whether that’s sitting down with your accountant, financial planner or farm succession consultant, planning for future growth needs to start with a financial reality check.
“In the summer, you should be looking at the direction of the family business,” says Merle Good, owner of GRS Consulting. “Each family is going to be at a different point in their journey, so in order to determine where you’re at, farmers really need a fiscal reality check.”
That’s where capital budgeting comes in.
“Capital budgeting helps people focus and pick a direction,” says Good. “Do we buy land that we’ve been renting for the last 10 years? Do we convert equity into retirement income for the older generation? Or is it a priority to upgrade equipment?
“By having these capital budgets, that will tell you what your highest priorities and your direction should be.”
The ideal time to do that advance work is in the summer, especially if you’re thinking about expanding your operation.
“Farmers are always busy. There are a lot of other things demanding their attention, so it’s easy for them not to get around to that kind of work,” says Jim Robinson, a farm management consultant at Serecon.
“But there is some execution that happens in the winter that needs quite a lot of thought and preparation, and you’re better to do that several months in advance.”
That’s especially true when you’re buying land, Robinson says. Looking for land in the area you want to farm and lining up the financing for it takes time, but if you do that work in advance, you can avoid disappointment when land becomes available on the market.
“Land is such a huge part of the business of farming, and it’s increasing in value,” he says. “Any time that you’re dealing with a part of your business that costs that much money, it takes more than just casual thought.”
Deighan agrees.
“In December, it’s not unusual at all for a farmer to phone up and say, ‘Hey, it looks like I’m going to be profitable this year — should I buy a truck?’ And I’ll say, ‘I don’t know — do you need a truck?’” says Deighan. “So the summer is a good time to be assessing the capital equipment needs. Those are big-ticket buys, and they shouldn’t be a flippant or knee-jerk reaction to managing tax bills.”
Summer is also a good time to assess and adjust business structure, he adds.
“Summer happens to be the downtime for accountants and tax advisors too,” Deighan says. “It would be a great time to be having these conversations and doing that number crunching without the stress of time barriers.”
4. Gain on markets
Even with harvest months or weeks away, the marketing moves the farm makes in the summertime can help it take advantage of pricing opportunities as they pop up.
“That’s what turns all the hard work into dollars in your pockets,” says David Derwin, investment advisor at PI Financial.
“Markets are always trading and things happen that can dramatically change what’s going on with prices. So marketing is something that really needs to be done on a year-round basis.”
That’s particularly true this year as global black swan events come together to create a highly volatile grain market.
“This is the nuttiest market I can ever remember,” says Mike Jubinville, senior market analyst with MarketsFarm. “I’ve been doing this for just over 30 years now, and we are looking at the most volatile grain market I have ever seen.
“It’s astounding — we’re up and down and back up again. I’ve never seen this kind of volatility before.”
In a normal year, Jubinville would recommend getting a handle on cost of production and forward pricing some grain for cash flow during the growing season.
“That’s in a normal year. This year is something else entirely,” he says. “We’re looking at new crop fall delivered bids on various crops at levels that are higher than anything I’ve seen before. Prospects are immeasurable right now.”
But maybe it’s also time to get serious about options. After last year’s drought on the Prairies, Canadian growers are “quite gun-shy” to forward contract, says Jubinville, but there’s also a risk the prices won’t last.
“You want to have these tools in your tool box on a regular go-forward basis, ” agrees Derwin. “So start learning about them now to get ahead of the game.”
5. Use that data
Summer is the best time to make sure your data is actually useful for the farm business.
“There’s value in data.” says Chris Corbett, senior business development manager at Telus Agriculture. “It may not be apparent today, but it’s coming, and I don’t want to be the guy scrambling to digitize when it comes. I want to get comfortable with digitization on my farm and get this data into a form I can use.”
Choosing the right digital agriculture platform will be an individual decision for each operation, as “it has to fit what you’re trying to accomplish,” says Corbett.
“There are so many platforms out there, but really, it’s about what fits your operation and what you’re comfortable with,” he says.
From there, producers will need to identify the data they actually need on the farm, and can focus on ensuring their systems are set up to maximize its accuracy.
“This can impact large-scale decisions in a farming operation,” Grain Venture’s Shout says.
And invest time in learning how to use it. “It’s about being able to pull data ahead of making big decisions so that the decision has already essentially been made for us,” Shout explains.
“We don’t want to have to make a million decisions a day that could make or cost us a million dollars. We want to have the answer before we actually have to make the decision, and that’s where data comes in.”
