If commodity agriculture is all about scale and efficiency, Jim Pallister is the very meaning of success. After all, Pallister’s is one of Canada’s largest farms, a massive 15,000-acre operation based near Portage la Prairie, Man.
In a region already known for supersized farms, Pallister’s is a giant. But it wasn’t always so. In fact, it might never even have happened.
When Pallister, who holds a diploma in agronomy and a degree in agricultural economics, returned to the farm from the University of Manitoba in 1976, it was to a small 300-acre operation that had been in the family for generations.
Read Also
Riding the tariff rollercoaster
Farmers are accustomed to roller-coaster years. But the current geopolitical windstorm is something else entirely. On his cattle operation near…
Pallister approached his father with a proposition — could he take out a mortage on the home farm to buy another 500 acres?
Three decades later, as he reflects on what was probably the biggest pivot point in his career, it’s clear that Pallister is still moved by the fact his father was prepared to take that risk on a young man.
“It really was quite the vote of confidence in me,” Pallister says.
When Pallister agreed to sit down with COUNTRY GUIDE this summer, we had one central question that we wanted to get to the bottom of. How does a farmer climb from a modest start to what many would view as the very pinnacle of success in his field?
The answer from Pallister is simple, and it could easily be mistaken for being simplistic. But it isn’t. One look in his
Kirschenmann says…
Until now, the projections that favour more big farms have all focused on the farms themselves. That, says Fred Kirschenmann, needs to change.
Yes, when it comes to commodity production, big farms may win because of their economies of scale. And yes, new technologies might make it much easier to run such farms efficiently.
Kirschenmann, however, sees another driver for big farms. As margins for everyone in the food chain get squeezed into nothingness by Walmart and its competitors, every efficiency that can be found in the grain system takes on huge significance.
For grain buyers, that means buying from fewer, larger farms.
It’s a concept the Kirschenmann recently got educated on by a senior Cargill exec. “It all comes down to transaction costs,” Kirschenmann explains. “It is far more efficient for them to deal with a few larger farms than a whole bunch of small farms.”
Those who want to preserve small commodity farms must grapple with the hard truth, Kirschenmann. The trendline is toward preferential treatment for larger operations, with trucking incentives, for example, and bargaining power for inputs.
eyes as he talks about it is all it takes to confirm how deeply he believes in it.
“We enjoy what we do, so we’re successful at it.”
“Then, when the opportunity to expand comes along, because we enjoy what we do, we take that opportunity,” Pallister says.
Essentially what he describes is what economists call a virtuous cycle. The business is successful, and because Pallister enjoys the business, he reinvests in it, growing the business still further and creating more resources for even further growth.
If Pallister enjoys his work, it’s clear too that part of his enjoyment is based on a healthy dose of self-confidence, which comes out as Pallister describes the farm’s relationship with debt and equity.
He laughs as he tells the story of the day years ago that he realized one reason he was feeling a bit uneasy about the farm was because he felt the operation’s bank balance was a bit too high, which to him meant two things. First, the operation probably wasn’t being aggressive enough. Second, it likely meant there was a bit of a crisis of confidence occurring.
“If I left that money in the bank, what I was really saying was I thought someone else could do a better job of putting that money to work,” Pallister explains. His solution? Pallister put the money back to work in his own operation, using it to leverage some more funds to buy more land.
“I guess I’ve always been a bit more comfortable on the debt side,” he says.
The second part of this success story is one of carefully managing and honing systems until they are absolutely humming along. With that many acres to cover every year, the slightest hiccup can quickly magnify into a major crisis, Pallister says. That means taking some fairly significant steps to make sure it never happens.
For example, the farm’s land is managed in tightly grouped blocks that eliminate downtime from shuttling equipment from one end of the operation to the other. All the equipment is also managed in matching units, so if a tractor or combine breaks down during the critical busy season, another can quickly be substituted.
The operation has also benefited from the advances in information technology of recent years. These allow Pallister to closely track the mountains of information that made earlier innovators struggle. Another operation in Manitoba approached Pallister’s scale 20 years earlier, but it failed in part due to the inability to keep track of that information, something computers, GPS systems and yield monitors have clearly aided in, Pallister says.
“There were stories of forgotten quarter sections,” Pallister says with a chuckle. “That hasn’t happened on the Pallister farm — yet.”
Marketing is also kept simple, starting with a conscious decision to restrict the number of crops he grows. In 2009, for example, Pallister focused on canola and peas. At the same time, however, he tries to understand and respond to the needs of the companies and the individuals who buy his crops, cultivating relationships and a reputation for delivering what he promises.
“The people who buy my crops are my customers,” Pallister insists. “Farmers are the only group who think they’re they’re the customers twice, when they buy their inputs and sell their crops.”
The next chapter for the Pallister farm is going to be what happens when Pallister decides to retire. He’s approaching 35 years in his business and at 53 he’s not ready to step aside yet, but he concedes the day isn’t so far away that he shouldn’t at least be thinking about it.
“I used to ignore all those articles I would to see about succession planning,” Pallister says. “Let’s just say I’m paying a lot more attention these days.”
So far his son Bryce has shown considerable interest. He joined us for our discussion and spoke very knowledgeably about the operation. But he’s also a young man in his early 20s who is busily pursuing his own dreams, in this case of country music stardom (www.brycepallister.com).
Will it be Nashville for Bryce? Or the family farm? The younger Pallister is philosophical about his chances.
“The music industry is pretty competitive, so I think it’s a good thing to do while I’m young,” Bryce says.
For Jim, who remembers how important his father was in helping him get off to his own start, Bryce’s career choices are Bryce’s to make. It’s an attitude, Jim knows, that he shares with farmers all across the country, whether they’re farms are big or small
“No matter how big it gets,” insists Jim, “it’s still a family farm.” CG
