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Taking over the shop

When the big chains consolidated their outlets, business-minded locals and farmers started up their own independent farm supply businesses. They’re succeeding too, but it isn’t simple

Old habits were dying hard, even on a personal basis. Here, about two hours west of Prince Albert, Sask., the Canadian National Railway abandoned the branch line that used to run up from North Battleford, connecting the little towns that had been my stomping grounds.

It happened just a couple of years after I finished high school in Turtleford, but whenever I came home from university, I would stop at the tracks before I remembered I no longer had to look out for any trains rumbling down those rails. The railway was just that deeply ingrained in us.

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people gathered around farm machinery at Agritechnica

But that was the least of the problems that the rural communities faced with the closure of branch lines. The elevator companies soon padlocked their sites too, deciding it was time to pull out of the countryside.

Farmers still did big business with those line companies. They bought inputs in the spring and sold grain in the fall even as the companies started building big terminals in larger regional centres such as North Battleford, apparently confident the traffic would follow them to their new sites.

But if that was the assumption, it was a miscalculation. Nature abhors a vacuum, and so does business. In the space left by the elevator companies, independent ag retailers have started up and in many cases thrived.

Since 1995, market share has steadily grown for these new local enterprises.

Cavalier Agrow is one of those companies. Started by Martin and Monique Detillieux in 1999 at the ghost town of Cavalier, it now also boasts locations in Medstead, Meadow Lake, and Spiritwood, with 30 full-time staff. The Cavalier location features a new office, shop, and chemical warehouse, plus the first liquid fertilizer facility in the area, something they saw a need for during the dry years.

If you’d told Martin and Monique 20 years ago that they’d one day be running a business this size, they might not have believed you. Martin had worked for the elevator in Cavalier for 13 years already. They were raising their family, which would soon include four kids, and were happy to be part of the tight-knit Meota/Edam community.

But then the elevator closed. Pioneer transferred Martin to the Saskatoon area, and although the couple started looking at acreages around that city, Monique says it just didn’t feel right.

Martin agreed. “I gave it a try. I spent three months in Saskatoon. And it just didn’t really appeal to us as much as staying here in small-town Saskatchewan.”

Innovative HR is as crucial to the success of rural independents as it is for farmers, say Monique and Martin. They’re convinced it’s less expensive to invest in staff they already have, than to hire new ones.

Innovative HR is as crucial to the success of rural independents as it is for farmers, say Monique and Martin. They’re convinced it’s less expensive to invest in staff they already have, than to hire new ones.
photo: Rebecka Bloom

It didn’t feel right to his customers, either. The Cavalier site is nearly 50 kilometres northwest of North Battleford, and farmers weren’t thrilled about driving farther for inputs. Nor did they want to lose another rural business, or give up on the idea of strong, local relationships.

In fact, relationships are so important that there’s now a sign glued to the wall of their Cavalier boardroom: Our business is all about relationships.

Cavalier Agrow isn’t the only independent ag retailer in the area. If you drive 25 kilometres north on Highway 26, you’ll find Warrington AgroDynamic, which sits just outside the town of Mervin.

John and Roger Warrington started out growing seed and operating a seed-cleaning plant, then moved into fertilizer. In the early ’90s, they saw a need for custom spraying, and added that to their business. Today they focus purely on inputs and agronomic services.

I’m reminded it’s a tight community when I meet in the boardroom with Roger, general manager. Also at the table are John’s son Greg, the location manager, and Ian Weber, their sales manager. Greg and I had been in the same graduating class, and I was in 4-H with Roger’s daughters, and they always struck me as calm and confident.

Ian has been with the Warringtons for nearly 10 years, but he easily recalls the exact date he started working with them because of their different philosophy. He says their whole business model is based on providing services the big companies won’t.

“They were trying to force growers into doing things that they didn’t want to do, like driving their grain an hour and a half out of the territory,” says Ian. “They forced them into doing that by closing the elevators. And they figured their inputs and crop supplies would follow.”

But as the elevators left, the Warringtons’ business expanded, Roger says. “When everybody else was leaving, we were putting money back in.”

But that doesn’t mean there weren’t tough decisions. As farmers upped their use of fungicides, the Warrington crew worried about the growing risk in their custom application business. The acreage they needed to cover was increasing. Their clients didn’t own sprayers, and the application windows were very narrow. Ian says dealing with sudden insect infestations was particularly stressful.

So the Warringtons moved out of custom spraying, encouraging clients to invest in their own sprayers, and they focused on inputs and agronomy.

Warrington AgroDynamic now boasts a new office, with a neat bin yard and chemical warehouse. Greg points to their 14,000-tonne dry storage capability, which ensures product is there when farmers need it. They’ve recently hired two new full-time employees, too, and in spring, with their seasonal staff onboard, they have 12 staff.

While customer relationships are top-of-mind at both companies, supplier relationships are important too. They’re not afraid to ask their suppliers questions when they need more information about a product. An important part of their job is to be the interpreters between the farmer and the supplier, he explains.

Martin echoes that sentiment. He says their suppliers have always wanted to see their retail business succeed. Suppliers offered them credit for inputs when they were starting up, and he’s worked with some of them for over 20 years.

Human resources and other business

Ag retailers face some of the same business challenges you’ll find in every industry. One of the big ones is finding and keeping talent.

Greg says Warrington AgroDynamic doesn’t have the brand or name recognition of a big company like Cargill outside their trading area. They’re also a couple of hours drive from Saskatoon, and some people hesitate to move to a remote area. And, he adds, some people like the in-house training and perceived security of working for a large company.

"We want to keep opportunity here,” says Roger Warrington. “We think it lies with independent people, not with multinationals.”

“We want to keep opportunity here,”
says Roger Warrington. “We think it lies with independent people, not with multinationals.”
photo: Rebecka Bloom

But others find working for smaller companies more exciting and engaging, he says. Ian is probably the best proof of that. He likes to have a meeting, discuss what needs to be done, and then go do it. He found this more difficult to do in the large company he used to work for, where decisions coming from upper management didn’t always make sense in the field.

So how did the Warringtons recruit Ian? He happens to be best friends with Cavalier Agrow’s location manager, who knew the Warringtons were looking for an agronomist, and suggested Ian talk to Roger.

With new personnel about to join the company, the Warringtons realized they needed to brush up on their human resource policies. They’ve signed on with a Canadian company that offers HR services through an online platform and over the phone. Greg has talked to their HR advisers, and says they’ve been pretty helpful.

“There’s a lot to HR,” he says.

The Detillieuxs don’t ignore their human resources either. They look first for personality and passion for agriculture, followed by paper (i.e. credentials), and they recruit university and college students to their in-house Field Scout Apprenticeship Program. About half their permanent employees have come to them through that program.

They also have a personal development program that is built into their bonus structure. Staff are expected to take part in three levels of training. This includes training that they send staff to and in-house training, as well as training that staff ask to be sent to, such as the Canola Labs.

But there’s also a budget for personal development. This can be work-related, but it doesn’t have to be. Employees have used this money for gym memberships, cooking classes, bow-making courses, and photography courses.

Why would Cavalier Agrow pay for someone’s bow-making class?

“Happy people make happy staff,” Monique says.

Martin hopes that every time they draw a string on that bow, they think, “Cavalier Agrow helped me do this.” Besides, he points out, it’s less expensive to invest in the staff you already have than to recruit new ones.

After we’ve finished the official interview, Monique gives me a tour of the building. She shows me the kitchen and lunch area where they all eat together every day. Each location has a kitchen, she says, and they all have catered lunches during the busiest seasons. Cavalier has catered lunches for their staff year-round.

The lunches are so good that some staff also wanted an on-site gym, so they added it when they built their new office three years ago. Monique planned the gym so their customers could use it as well.

Both Cavalier Agro and Warrington AgroDynamic are also part of United Suppliers, a network of sorts that negotiates better prices on behalf of its members.

It also offers training in the spring and fall to the employees of independent ag retailers, and both companies have taken advantage of that. Ian says the network gives him a chance to talk to other managers and agronomists. It also helps them source new products that work and are a good fit for the area, he adds.

Small size means an independent can deliver better service, say Greg (l), and Roger Warrington and sales manager Ian Weber. All levels of management in the company, they point out, are firmly grounded in the field.

Small size means an independent can deliver better service, say Greg (l), and Roger Warrington and sales manager Ian Weber. All levels of management in the company, they point out, are firmly grounded in the field.
photo: Rebecka Bloom

A foundation of sound agronomy

Of course, neither the Warringtons nor the Detillieuxs have had success just fall into their laps. When opportunity presented itself, they were ready to leverage it.

Sound agronomy that creates value for customers is at the core of both Warrington AgroDynamic and Cavalier Agrow. In fact, Martin has also posted this on the boardroom wall at Cavalier, as a reminder during staff meetings.

This has turned into a timely policy as well. Once the Canadian Food Inspection Agency dropped the efficacy requirements for fertility products, farmers started seeing and getting calls about new products with big promises.

Sometimes the product claims are valid, Martin says, but some sales reps are overclaiming.

“It’s turned into quite a sleazy market on the foliar nutrition side of things. And we haven’t seen the end of it,” Martin says.

Location manager Greg says that even agronomically sound products don’t necessarily perform well in their area. They only want to sell products that give their customers a return on investment, he says.

“Just an example is canola seed. Varieties that perform well in Lethbridge or Saskatoon are not necessarily going to work in Mervin or Turtleford,” Ian adds.

For years, the Warringtons conducted on-farm trials to try out new products and farming practices. Roger says they used to weigh the results in the seed-cleaning plant.

Once Ian joined the company, they implemented protocols and repeatability to make the trials more scientifically rigorous. They bought a weigh wagon so they wouldn’t have to rely on suppliers to have one on hand when it was time to harvest trials.

If you can show a product or practice has a consistent return on investment, “it becomes a no-brainer,” says Greg. It’s easier for farmers to pencil it in when it’s going to give them a return, he adds.

Not every customer values the trial work, but Roger says they’ve noticed the farmers who value the trials are expanding their operations.

Cavalier Agrow has been running trials from the beginning. They now run between 120 and 150 field trials per year with farmers, and own a weigh wagon at each location.

Martin says they wanted to quantify sound agronomy, and their trials, branded agProve, are a way of “sorting through the chaff.”

Running trials at each location is important, even though it makes their business more complicated. What works near Cavalier may not work in Meadow Lake, Monique explains, whether because of growing degree days, soil, or microclimates. “There are just so many factors.”

Ian says the biggest recent shifts in agronomy have been around fertility and fungicides. They do a lot of soil testing and can custom blend anything required by a field. And fungicides weren’t common in this area just a few years ago.

“Now they’re a big part of our business. They add a lot of money to farmers. The return on investment is huge,” says Ian.

Both companies see precision agriculture and data management as the next big shift. But both were cautious about aligning themselves with any one system, preferring to do more research to identify their best options.

Innovative HR is as crucial to the success of rural independents as it is for farmers, say Monique and Martin. They’re convinced it’s less expensive to invest in staff they already have, than to hire new ones.

Innovative HR is as crucial to the success of rural independents as it is for farmers, say Monique and Martin. They’re convinced it’s less expensive to invest in staff they already have, than to hire new ones.
photo: Rebecka Bloom

Martin is sceptical about using NDVI images and sparse soil testing to create field zones. Instead, Cavalier Agrow does extensive soil testing to create management zones. They eventually settled on a precision ag and data management platform called iFarm, which has gone over well with their farmers.

They didn’t know how long it would take farmers to see an economic return from the variable rate, but they started seeing it right away, Martin says. But there’s also value in the record-keeping aspect of the program, he adds. For example, in the future, malt barley contracts might require a few years of farming records.

“They have to start today to see the benefits in three or four or five years… They have to get on the bus now,” he says.

Warrington AgroDynamic has just chosen to align with a company called Decisive Farming. It also offers data management, precision farming, and grain marketing to farmers who sign on.

The record-keeping aspect is also important to the Warringtons. Greg points out there are already countries where farmers face more regulation around how they use inputs. Whether that will come into play in Canada remains to be seen, he says.

“It’s better to be proactive and already have a system in place,” says Roger. When the regulators come knocking, you’ll already be ahead of them, he adds.

The biggest risks

When I ask Monique and Martin what their biggest challenges are, Martin lets out a long, low whistle.

Martin and Monique see risk and challenge a little differently because of their individual personal approches, and they have participated in a personality test designed to help people understand each other better.

Monique is squarely in the cautious and sceptical quadrant, which seems very appropriate since she’s the director of finance. Martin is in the more outgoing and fast-paced camp.

Growth is necessary to stay in the industry, Monique says. “But growth for me is scary, because I’m questioning and sceptical, and he’s got all sorts of ideas, and I sit back and say, ‘OK. What are the consequences of this?’”

For example, the bigger they grow, the more closely they have to watch that they aren’t jeopardizing their rules around sound agronomy, creating value for customers, and focusing on long-term success, she says. They also don’t want to jeopardize relationships with current customers by growing too fast, says Monique. “That’s what keeps me awake at night sometimes.”

After opening new locations, Cavalier Agrow is now focusing more on their current trade areas and their core customers. That seems to be paying off. When the new Cavalier office opened in 2013, they built five extra offices for future employees. Those offices are now occupied.

Martin worries about the criticism farmers and the ag industry face from outsiders. That’s part of the reason they brought Rob Saik, CEO of Agri-Trend and agriculture advocate, in to their Farm Forum. They hoped Saik would open farmers’ eyes to how people outside the industry view them. Sound agronomy and record keeping are part of their defence against such criticism, Martin says.

He also feels responsible for his customers’ success or failures on the farm: “If the growers fail, we failed, even if it’s because of the drought.”

Over in the Warringtons’ boardroom, there’s consensus that they face the same weather and market risks that their farmers do. But they don’t have the same risk management tools as farmers. Greg says they try to help their clients manage risk, in an effort to manage their own risk.

They also have very little in-house credit for that reason, Ian says. Instead, they’ve partnered with Farm Credit Canada to offer their farmers credit for inputs.

This works for farmers, too. Farmers can farm better with proper credit in place, Roger says. “It’s part of a business plan. You’ve got to have cash flow. Farmers are way better at that now than they used to be.”

While no one can control the weather, it’s amazing how well crops can perform these days under poor conditions. Last spring was cold, with several late frosts, and it was very dry right through June. Yet local farmers pulled off good yields despite the early lack of heat or moisture. Monique says it was one of their better years for yields.

Some of that comes down to new technology and better varieties, but both businesses agree that farming practices get a huge share of the credit. Farmers can grow much better crops with very little moisture, due to minimum tillage and better weed management.

“The soil quality has changed so much from when I started. It’s so much better now,” says Roger. People outside the industry think farming is doing so much damage, “yet I think it’s way better than it was.”

Both companies not only employ local people, but support everything from 4-H to hockey teams. Martin says they’ve included community support into the company’s code of ethics.

As for Roger, he says he’s always felt like he’s working for the community. The community has invested in their business, he says, so they have a succession plan to ensure the company continues to work for their community.

Roger explains why that community connection is so important. He used to play cribbage with his uncle John, who homesteaded the farm after coming to the area looking for, and finding, opportunity, he says.

“We want to keep opportunity here,” Roger says. “I think it lies with independent people, not with multinationals.”

About the author

Field Editor

Lisa Guenther is a field editor for Country Guide.

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