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Road map to growth

When U.S. farm adviser Family Farms Group came north to help Canadian farmers grow — exponentially — Alberta’s Mike Kalisvaart signed on

The Kalisvaart family knows first hand about the ups and downs that farming can dole out. When they started into the hog business just north of Edmonton in 1979, though, they thought they had it figured out. By the mid-’90s, they had doubled their hog operation, they were profitable, and says Mike, who grew up on the farm during those years, “we were feeling pretty good.”

Then came 1998 and 1999. “We were blindsided by the new reality created by Smithfields,” Mike says. “We thought we were where we needed to be, we didn’t see it coming, and a lot of producers exited the industry.”

The Kalisvaarts were lucky enough to be able to switch gears and focus on grain farming, which had been Mike’s passion anyway. But the experience is still fresh in his mind.

“There’s a Wal-Mart effect,” says Mike. “It happened in hogs, it’s happened in chickens, and it’s going to happen to grain farming too. It’s almost an inevitability.

“It has become my vision,” Mike now says. Today, he farms with his father Jack, his brother Dan, and sister Stacey and brother-in-law Greg Bajema, but he still asks: “How do we take control so it won’t happen?”

His answer has meant recognizing the need to break out of old management patterns. It has meant acquiring new skills and new capabilities. But it has also meant asking an even harder question, Mike says. “How do we make it all work together to achieve the goals and objectives we need to achieve?”

Half a continent away in Brighton, Illinois, economist Allen Lash thinks he knows the answer. The key, says Lash, founder of Family Farms Group, is not only to acquire those skills, but to get support in using them to execute on a growth plan.

Nor does Lash — or the diverse farms across the continent that have signed on to the Family Farms program — make any apologies for stressing growth.

Lash has a controversial reputation among U.S. ag economists, yet his demeanour is quiet. You instinctively lean close when he speaks, and you concentrate hard to follow his train of thought. And as he reaches to pet Koby, a stray Labrador-mix who showed up at the company’s front door one day and who is now always within a few feet, Lash exudes a reassuring sense of competence and calm.

It isn’t until you understand what he’s said that you begin to appreciate the apocalyptic nature of it.

Because Lash is convinced that the only way to save North America’s family farms is for farmers to take their management to the next level, and to move the size of their farms up even more than that.

“Write down the numbers,” Lash told a group of farmers the day I went to Brighton to meet him with Kalisvaart and a handful of farm members from across the Corn Belt.

Lash wanted to know how much growth their parents had put their farms through during their generation. While the numbers varied, mosts had grown six to 10 times. If the farm had started out at 200 acres, for example, the operation was farming 1,200 to perhaps 2,000 owned and rented acres by the time the parents retired.

Then, Lash said, “How are you going to achieve that growth?”

In the corridor afterward, Lash dismissed any hope that agriculture has entered a new demand-led paradigm, where prices will be bouyant enough to save smaller farms. “Our farmers must be leaders,” Lash said. “We’re talking
about survival.”

Planning for growth

Kalisvaart admits to being a numbers geek. He is this year’s Outstanding Young Farmer for Alberta (the results of the national competition weren’t known at press time). He has already taken the Canadian CTEAM course, as well as programs through AgriSolutions.

Now he believes he needs to keep making shrewd management decisions, harnessing even more skills and capabilities for the family farm, and the farm itself needs to grow vigorously.

“What drives me to grow is a desire to choose my own destiny,” Kalisvaart says. “I want to drive the bus.”

The farm is already about 8,000 acres, but he hopes to grow by up to 25 per cent a year. “I look back to when I was 25 and 2,500 acres was a big farm, and I thought we were in pretty good shape,” Kalisvaart says. “Big farms like 20,000 to 30,000 acres only look as big as what 10,000 acres did 15 years ago.”

Extra acres make sense in another way too, he says. “As CEO of a larger farm, I can pay attention to the bigger picture and have a sizable capital budget so we have room to maintain our current direction, yet have some funds allocated to R and D and innovation.”

More from the Country Guide website: Fearless financing

Kalisvaart’s brother-in-law Greg is taking the Operations Manager from Family Farms Group, which means the farm will not only be more efficient, it will be faster at adopting new technology and it will be a better employer and partner, Kalisvaart says. Each of those traits will be critical to farm growth, he believes.

It also means that he will be free to focus his own time on growth. “We have growth targets that we want to hit,” he says, “and these are requiring more and more time dedicated to developing relationships with landowners.”

The Family Farms method

In fact, one of Kalisvaart’s key learning moments with Family Farms came early in the process. The company is built on essentially two platforms. First, it acts as a sort of warehouse of management skills, with in-house capability to do training on everything from writing job descriptions to getting access to additional capital.

The company also walks members through a diagnostic system that aims to help the farm articulate its key objectives, and define the management steps for achieving them.

Throughout the process, peer support from other farms on the team helps keep the process focused, and a coach is assigned to monitor and encourage progress toward the farm’s unique set of three to five key management accountabilities.

Early on, the system also walks farm members through a who-does-what reality check. It means creating a set of boxes on paper to put all the farm’s important responsibilities into groups. For Kalisvaart in particular, the learning was immediate. “My name was in each one,” he says. “If you try to do that, not only can you not succeed, it eats into your family time. It’s too much.”

“For me,” says Kalisvaart, “the focus became, how do I get my name out of those boxes?”

Karmen Mehmen of Iowa, whose family was one of the earliest Family Farms Group members, found the box concept has paid off throughout her family’s involvement. “We had reached our glass ceiling and didn’t know it,” Mehmen recalls.

The box concept let the family divide responsibilities among different members, so each member could become expert in their area, and not have to worry about being expert in everything. Their total expertise rapidly grew, Mehmen says. Importantly, family relationships got healthier too, she says. “We say to each other all the time, ‘You’re in my box.’”

For the Mehmens, business planning centred on an “influence the acre” strategy. The family had already owned a truck, and did seed corn sales as well. So when the next generation was ready to start farming, they concentrated on growing their umbrella of income opportunities, not just on corn and soybean production.

“It’s professionalism,” Mehmen says. “As a family, we know where we are going, and we know how to make the progress that will help us get there.”

Across the border

After its birth in 2006, Family Farms Group was often accused of being secretive. At best, it was clearly careful about publicity. Today, it is more transparent, even opening its head office to journalists. It is still close mouthed about its fee structure, however, so it’s impossible here to rate how its compares on cost.

Still, Family Farms Group now has about a dozen farmers signed on in the West, and a handful in Ontario. “They recognize the need to become more Canadian in their program if they want to gather the acres they desire,” says Leo Kosokowsky, Saskatchewan farm adviser. “I am sure they will have some success here. Adaptation and implementation that will be the determining factors.”

Lash is confident. Canada has its own specifics, he says, but when Canadian farmers look out at a world full of potential competitors, they see the same world that American farmers need to prepare for, and they have the same kinds of strengths and weaknesses to work on in order to meet that competition.

Besides, Lash also believes Family Farms Group will deliver more. As more top farmers sign on, he says, the company will help farmers source cheaper, better field inputs while also helping members gain better access to more capital. Members will also share data, and Lash is convinced their internal numbers will rival the value of the USDA’s.

These expectations are crucial to Kalisvaart, who formulated a strategic objective even before finding Family Farms Group of partnering at some level with “something bigger that could achieve some influence in the marketplace on a bigger scale than I could achieve on my own, and that I could have influence with.”

Lash says progress is on track. “As a group, we’re innovating farm business,” he says. “A model is emerging.”

At our meeting at the Family Farms headquarters in Illinois, Kalisvaart sat close to Matt Simms, an Indiana farmer about the same age and facing similar challenges and opportunities. “We joined at a good time,” Simms said of his start in farming. “We could make a few mistakes and still stay in business. But we have got to grow.”

If the farm doesn’t grow, he was saying, that will be the one unsurvivable mistake.

Kalisvaart seemed to nod. “I see a road map,” he tells me.

About the author

Editor

Tom Button

Tom Button is editor of Country Guide magazine.

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