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Goodbye to Canada’s ‘average’ farm

It used to be that one farm on a road was pretty much like every other. Not anymore

What happens when a country’s mid-sized farms disappear. For good or ill, Canada is well on the way to finding out, and the future for young farmers like Scott Beaton will never be the same.

What does an average farm look like in today’s Canada. If there is such a thing these days, there’s a good chance it looks a lot more like Scott Beaton’s farm than you would ever have thought possible.

Beaton didn’t grow up on a farm, or think he’d ever have one of his own, but if being interested counts, his roots in agriculture do run deep. “As a kid I always helped this neighbour family out,” he recalls. “That’s kind of all I remember of summers as a kid.”

Today that family is helping him as he endeavours to farm the few hundred acres he now rents from them.

Along the way, Beaton earned his agriculture degree at the University of Manitoba and worked a few years in the industry, too. But his first foot in the door came in 2012, while working with a conservation group helping farmers develop environmental farm management plans. He met a local landowner and somehow as they talked, they had a meeting of minds. Without a successor of her own, she agreed to a rent-to-own arrangement with Beaton for an 80-acre parcel of her land.

And that’s how it happened. Another neighbour loaned him equipment, and Beaton got his start. More recently he’s also begun to rent an additional 200 acres from another farmer who wants to step back a bit.

Coincidentally, the land he began farming in 2008 is just down the road from where his grandfather once took a crack at farming.

At the age of 33, Scott Beaton is just at the beginning of his farming career. photo: Sandy Black

“He had a short-lived farm, you could say,” says Beaton. “It was kind of to be his retirement, but he had to quit in the mid-1980s.”

Beaton, now 33, is just getting started. And he’s serious about trying to do something different, paying close attention to markets, niches and trends.

Meanwhile, though, more and more of Canada’s productive capacity is at the opposite end of the farm spectrum. It’s owned and operated by the country’s largest farms.

If it’s boom times for small farms, it is for our biggest farms too.

So where does that leave our in-between farms, and the farms that we used to call average?

That, as they say, is a horse of a different colour.

More farms then

Canada’s farm scene looks vastly different than 40 years ago.

Not only did there used to a lot more farms than there are now, but they were also a lot more similiar to each other in size and structure, too.

By contrast, today’s farms are increasingly differentiated, including by size.

Alfons Weersink. photo: Supplied

Alfons Weersink, an agricultural economist at the University of Guelph, has explored these changes, looking not only at the statistics, and the reasons for them, but the implications for agriculture as farm size and structure become much more diverse.

The drop in farm numbers has been going on for generations, says Weersink. But what he has discovered is that the erosion hasn’t hit all farm sizes equally.

The trend goes back to the end of the Great Depression. In 1941, there were approximately 733,000 farms in Canada. Now there are fewer than 194,000 farms run by 272,000 farmers

Importantly, the decline has occurred mainly among mid-sized operations.

“The drop has been particularly significant in the mid-size category resulting in a ‘hollowing out of the middle,’” Weersink says.

Also striking is the increase in the absolute number of farms in the largest farm categories, and an increase in their share of Canada’s farmland

On its own, that won’t surprise a lot of farmers. But there’s something else that probably will.

An unexpected trend

Researchers are finding something surprising in the census numbers.

“There has been a steady decline in the number of farms for the last 70 years (around 1.5 per cent per year),” Weersink says. Okay, so no surprise there.

“But the sector is actually much more dynamic,” he goes on to say. “Around one-quarter of census farms are new entrants. They were not in operation in the previous census.”

Percentage of total sales

Beyond farm size, there’s a more telling measure of the changes over the last four decades. This is the percentage of total sales generated by different farm size groups.

In 1981, one-third of the farmers had sales between $100,000 to $250,000, representing about one-third of all agricultural sales.

By contrast, in 2016, over half of all sales came from farms selling more than $1 million, and they represented around 15 per cent of the farms.

This accounts for what at first seems a contradiction. As noted above, the number of small farms continues to grow, but the average size of a Canadian farm continues to grow as well. And again, this bears little resemblance to the kinds of trends a generation ago.

Increasingly, Canada’s farms are ultra-large, or they’re like Scott Beaton’s, with a couple hundred acres kept together by a drive to succeed. photo: Sandy Black

In the 1980s, farms were operated by a single farmer and they supported a single farm family. The operator worked full-time on the farm, too, and these farms tended to be diversified with multiple crops and/or livestock species.

As many readers will also remember, though, those farms tended not to make much money.

Now, farm structure is much more complex with a farmer having multiple operations or with multiple farmers involved in a single farm with off-farm income playing a growing role.

All of this developed steadily over time, of course, although the pace varied depending on events and prices.

Commodity and regional variation

The story varies from commodity to commodity, and region to region.

For example, changes that have come to the dairy sector are relatively less pronounced compared to other livestock sectors, says Weersink.

Dairy is still comparatively more homogeneous relative to other commodities, he says.

“There has been obvious growth. But it has been limited by the ability to get quota, and, in comparison to other supply management sectors, very small herds are infeasible compared to small flocks of chickens or hens.”

Canadian hog farmers tell a much different story. Major structural changes in the late 1990s and early 2000s took place in their sector as a result of low prices, the emergence of hog loops, and packing plant changes, says Weersink.

On his south Interlake farm in Manitoba, George Matheson, has had a front row seat to all of that.

Still a hog producer today, and chair of the Manitoba Pork Council, Matheson remembers when he was just getting started in the 1980s himself. There were far more farms around, including hog farms, but far fewer hogs were raised on them, says Matheson.

“Roughly speaking, I would say we’ve probably dropped in the last 40 years from 3,000 producers in the pig business to 300 producers,” he says.

“And there might have been a million hogs per year, or slightly more per year produced (at that time),” says Matheson.

“Now we produce eight million.”

“Average size” — if average actually means much anymore — also varies region by region nowadays.

Average farm size has increased by approximately 10 per cent between census years for farms in Saskatchewan and is now 1,784 acres, points out Weersink. It has increased by half that rate in Ontario, where average farm size is now 249 acres.

Other signs of growing heterogeneity in the farm sector are what farms specialize and focus on, where their markets are and what their ownership structures look like.

The major drivers behind it have been technological innovations and consumer demand, combined with information technologies, which has fostered the growth in niche markets.

These niche markets have arisen due to the growing heterogeneity among consumers, adds Weersink.

Notably, what’s been happening in the farm sector is mirrored across other parts of the agri-food industry, too. As he also points out, there were, for example, about a dozen breweries in the mid-1980s in Canada.

“Now there are close to 1,000, with most of those micro or craft breweries.”

Similarly, there are many abattoirs in the country, but most meat-packing occurs in a few plants across the country.

More specialization

It goes without saying that farm expansion across all sectors is driven by owners seeking economies of size and scale to boost profitability and clear a path to bring adult children on board.

These larger farms now regularly support more than one generation of the family, and individuals are often in specialized roles, says Len Kahn, head of Kahntact Marketing, based in Guelph, Ont.

“There’s more and more specialization on the farm,” he says. “One guy is more on the agronomy side. Someone else might be more focused on the finance, and someone else may be more focused on machinery.”

If there’s no average, what should the goal of Canada’s farm policy be? Should it focus first on helping new farmers, or on stabilizing the large farms that are our backbone? photo: Sandy Black

Kahn says they are also seeing more examples of larger commercial farms adding smaller niche production into their operations, although it’s too soon to suggest that is a trend.

These farms are also renting more land as they bring another generation of the family into the business.

Land for rent

The amount of farmland rented is also growing, and one of the reasons is because farms are getting larger.

“The growing share of the large farms in total production means that transferring operations between generations of such farms is becoming even more complicated,” Kahn says.

“A consequence is more land is likely to be held in trust by the next generation rather than attempting to farm it. In addition, farmland continues to be an attractive investment for outside investors. The net result is more farmland available to rent, which increases the opportunity to farm regardless of size as not as much capital is required.”

The bottom line is that it’s becoming a lot more difficult to define an “average” farmer nowadays.

Implications of heterogeneity

And that’s where the implications of increasing heterogeneity in the farm sector lie, says Weersink.

Obviously, it’s going to be more complex to design agriculture policy.

Improving the livelihood of farmers and their families through farm price supports and extension programs made sense when most farmers were those single operators supporting their one single family on the farm. Now we have multiple operations and multiple farmers on a single farm, and off-farm income is also playing an increasing role.

“So now it is difficult to determine the objective of farm food policy and to whom it should be targeted,” Weersink says.

And, again, increasing diversity changes something else too. Average numbers from statistics used to be representative of the typical producer a generation ago, but this is less and less so as the middle continues to hollow out.

It all means that assessing the economic conditions for farmers now requires looking beyond the average numbers, Weersink says.

As an example, in the midst of the commodity price boom a decade ago, average profit margins for Ontario crop farmers were surprisingly negative, he notes.

“The paradox was associated with diversity,” he says. “For that year, two-thirds of the crop farms in Ontario sold less than $100,000, and this represented 1.5 per cent of the total crop sales. Many of these small crop farms had negative margins, and given their large numbers, the average was also negative. Note for that year, the largest eight per cent of Ontario crop farms had more than 90 per cent of all field crop sales and were very profitable.”

One-size-fits-all programs such as single-desk selling agencies also feel the pressure with increased heterogeneity, as farmers feel they can do better outside these systems.

And who is the target group of policy efforts towards agri-environmental initiatives? In his research Weersink raises an important question: with approximately 40 per cent of farmland now rented, should the incentive be targeted toward the landowner or the tenant farmer?

Farmers across Canada, meanwhile, are seeing the effects of heterogeneity in things like the way extension program delivery is shifting. Larger commercial farms have by-passed traditional extension efforts, which partially explains the reduction in extension delivery by government, notes Weersink.

But what about those just getting started, and, especially, those without traditional farm backgrounds, and the smaller operations they’re starting up?

There’s still more to learned about this other size category of farm operations.

One study done by FarmStart in 2016 found that aside from the young moving into existing and generally larger operations, other new farm entrants were young and seeking entry into a niche market, or middle-aged and looking for a second career, or new Canadians looking for a start.

Most are small farms near urban areas, and Weersink says many are short-lived. Half may disappear in a decade.

“This suggests that there is an issue with retaining these farms rather than attracting them.”

Back in Manitoba, Beaton has some ideas about that.

“You start out with a good idea, and maybe then have a tough couple of years, make some mistakes and learn some hard lessons. By that third or fourth or fifth year you maybe are starting to think this should be your hobby and not your business,” he says.

“So, then you change your response to that census question.”

For his part, he had a good education at university but he does think schools of agriculture tend to be designed for kids going back to family farms.

Is that the best that Canada can do, he asks.

“I wonder if there might be room for a second stream there, for those people who are interested in farming that really didn’t come from a farm.”

About the author

Associate editor

Lorraine Stevenson

Lorraine Stevenson is associate editor with Country Guide. She has also covered agriculture and rural issues since 1995 as a reporter with the Manitoba Co-operator and Farmers’ Independent Weekly.

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