On most Canadian farms, technology’s big role is to make production more efficient. If marketing goes high-tech, it’s at the edges instead of at the core, such as with smart phones to track grain prices.
That’s the first paradigm that John and Eadie Steele have turned on its head. Technology is at the heart of the marketing strategy at their Norwood, Ont. farm. Combined with shrewd animal science, technology has successfully differentiated their farm within one of Canada’s oldest markets.
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In fact, their strategy has differentiated them so well, they now have a two-year waiting list for their composite lamb ewes, and they sell 1,500 annually.
John Steele says this demand has been driven by both quality and quantity. The major selling feature is that all their sheep have health records. John knew from growing up in England, where sheep are traded everywhere all the time, that ensuring healthy sheep adds extra value.
“Along with health, if you could have uniformity and a larger quantity of production recorded animals, you could get a niche market,” he predicted.
Their offer is further differentiated by their size. The Steeles’ flock is among the largest in Canada, so they can sell larger groups, giving them an advantage in a marketplace saturated with smaller producers.
When the Steeles started farming in 1990, people were amazed — and sometimes dubious — when they heard that John and Eadie were bent on building a 1,000-ewe flock. Such a farm was unheard of in Eastern Canada. Today, however, the Steeles have nearly doubled their original goal, and now are executing a plan to reach 3,000 ewes.
While the Steeles do sell individuals and small groups, they apply volume discounts to larger orders. They also have discount prices for return customers, no matter how large their order. “It’s part of our relationship management,” says John. “We have a reputation and stand behind our stock.”
Chipping in
Keeping up with the paperwork on a flock of 1,000-plus ewes by pen and paper soon became cumbersome and often inaccurate. So about eight years ago, John sourced a rugged fully submersible hand-held computer and combined it with a radio frequency identity reader for about $3,000. Then, he and local Ewebyte programmer Bob Comfort went to work and developed a touch-screen software program called Flock Hand Manager.
Now, John, Eadie and their two employees collect, file and compare health and performance data on each sheep in the field or barn by scanning ear tags with computer chips.
“Certainly the computers are not 100 per cent,” says John. “But if Eadie sent me out with a blank piece of paper, I’d sometimes come back with a whole new flock.”
The software is also on John’s cellphone, and he uses a Bluetooth stick to read the RFID tags. “I have my whole flock on my phone,” he says. “But the cellphone isn’t rugged enough.”
There’s also a computer at their scales to record and file weights and ID numbers, and a rugged, simple scanner to identify sheep. The Steeles can enter individual disease observations while doing the routine work with the flock, such as tagging and docking at lambing. The Steeles also blood test and vet monitor to verify that their flock is free of a litany of ominous-sounding diseases, including Q-fever, chlamydial abortion, contagious foot rot, Johne’s disease, caseous lymphadenitis, maedi-visna, and scrapie. And it’s all recorded on their data base.
When a computer or cellphone goes down in the middle of the day, at least they have multiple units. “It’s just another tool and we’ve had to learn how to use it,” says Eadie.
John Steele and Bob Comfort won the regional Premier’s Award for Agri-Food Innovation Excellence in 2009 for developing the program and hardware that allows shepherds to collect and review data in the field on the durable hand-held device. The Steeles can upload data from all these devices to their office desktop. Then from the desktop they can download or upload purebred registrations from the Canadian Livestock Registration Corporation as well as information for the Sheep Flock Improvement Program, a record-of-performance system.
Bad benchmarks
While the Steeles were taking the George Morris Centre’s C-TEAM farm management course, one of the leaders asked them if they knew how many lambs per ewe they marketed. The question made them reassess their plan. The Steeles knew how many total lambs they marketed per year, and they knew how many total ewes they had, but they didn’t know how many little feet went to market from each ewe.
“Once we started connecting that financial data with the performance data, we noticed that there were sheep around here that weren’t working as hard as we were,” says Eadie.
“Sometimes we have to force ourselves to do it (calculate key profitability indicators),” says John. “It’s critical to our business to know our field cost per animal, cost per lamb marketed, and how many lambs were marketed per ewe.”
One of the challenges the Steeles face is that the sheep industry in Canada doesn’t have good benchmarks to compare operations, production or business ratios.
“The sheep industry benchmarks in AgriStability (formerly known as CAIS) are crap,” Eadie says bluntly. Currently, the Ontario Sheep Marketing Agency is in the process of collecting data from 30 larger flocks to create industry benchmarks. Of course, the number-loving Steeles are one of those flocks.
Meanwhile, John says that selling proven stock into a relatively small industry without the support of budgets or templates for establishing its value can be frustrating. But so is comparing within the Canadian sheep industry because of our wide spread in production systems and geography.
Smart expansion
In 1990 when they started their flock on Eadie’s family’s home dairy farm, John continued working as a banker. “As a new entrant to Canadian farming it was great way to see operations and as a banker you see it altogether,” John says.
John says that allowing farmers to use cash accounting is an excellent way for young farmers to build up inventory. They can work off-farm, increase inventory and take a tax loss against their off-farm income.
“I like it for tax, not management reasons,” John says. “It’s a tremendous way to grow and build up assets.”
Over the years the Steeles have focussed on investing in the sheep flock. It’s the flock that is their most productive asset, they stress, not the land or equipment. The Steeles own only 300 acres and rent 700 more. Their goal is to expand enough so the farm can generate a good living for their children (ages 18 and 15) if they wish to take over the operation.
Early into their farming careers the Steeles made a key decision and signed up to participate when the Ontario Sheep Marketing Agency started a Ontario Lamb Improvement Breeding Strategy. The program involved flushing super-ovulated ewes and implanting those fertilized eggs into on-farm ewes.
The resulting composites were kept as a separate flock, with a separate farm, building and even clothing.
After building up the number of composites, the Steeles sold off the non-health and performance recorded flock. Today the Steeles sell young, open ewes instead of mature ewes for $275 to $245 each. The ewe lambs are a month away from being mated so buyers don’t have to wait too long before cash flow.
With a replacement rate of 18 to 20 per cent, they select the top females to maintain and improve the genetic capability of the flock. “The mature ewes are my team,”says John.
All the ewe lambs are sired by top rams, as they keep only the top one per cent of their rams for service The extra pure-bred rams are sold for breeding for about $1,000 each. The remaining male lambs are sold for meat, some 1,500 a year. The average meat lamb is worth about $150.
The Steeles continue to focus their investment in their flock. This fall, they’re performing artificial insemination on both their maternal flock and a Texel flock with New Zealand performance-recorded sires from flocks genetically selected as resistant to pasture worms. A. I. in sheep is a surgical, expensive procedure, costing about $100 per lamb.
Advertising
Many marketing programs are built on advertising but the Steeles only print advertise in the annual Wool Growers catalogue. They also have their own website, www.shepherdschoice.ca
Originally the Steeles hired a third party to create a website with the intention of maintaining it themselves. However, after a business review Eadie revamped the site herself, replacing the warm and fuzzy information about their farm with more concrete information about what they’re selling, including a price list and videos of the Steeles using their Flock Hand Manager programs.
The Steeles don’t show in fairs to limit health risks to their flocks and instead opted for a trade booth. “We try to talk to new people,” says Eadie. They attend seminars and meetings and volunteer for the Outstanding Young Farmers, which they won in 2002.
The Steeles are professional farmers but still ooze with passion about what they do. “We are 110 per cent committed to the industry,” says John. “This is our only income and we need to stand up and say what we think.”
New business model
A few years ago, the Steeles reviewed their business and looked at the long-term trends of rising energy and feed prices. They decided to mitigate their risks by developing a pasture-only system in their own area, which happens to be one of the best value-for-pasturing areas in Canada while still being close to the Toronto ethnic market for meat. “Our new business model is not necessarily transferrable to areas with higher land values,” says John.
This new model means switching from accelerated lambing to a lower-cost annual lambing on pasture. Confinement lambing results in three lambing periods in two years but outside lambing has one per year.
“It’s easier to expand ewe numbers on an annual system because you don’t have the capital tied up in buildings and equipment to grow feed,” says Eadie. They considered the trends for the next 10 to 15 years and decided that a low-input, low-capital system would allow them to continue to expand.
Originally the Steeles built greenhouses to house their flock in the winter. If they were going to continue with accelerated lambing, they would also have to build higher-quality facilities to accommodate a growing staff. “Employees require better facilities with washrooms, and an old bank barn won’t do,” says John.
International Influence
For the last decade, the Steeles were also riding on an inspiring supply-demand curve. Per-capita lamb consumption in Canada increased by 67 per cent from 1997 to 2008, and since BSE struck the cattle industry, the number of sheep in Canada has shrunk by about 19 per cent.
However, the Steeles had a waiting list before the BSE crisis. Ironically, the U. S. border is still shut to small ruminants, even though sheep don’t get BSE (although they do carry a related disease). “A few years ago Canada opened the border to U. S. sheep, and being good boy scouts we thought they’d reciprocate,” says Eadie, obviously disgusted. “It hasn’t happened yet.”
The Steeles have a network of associates, friends and family in major sheep producing countries around the globe. They continually source information, genetics and technology from these places and recently hired an employee from New Zealand.
The couple met on a Junior Farmer exchange to New Zealand. John was originally from a large farm in the UK and Eadie from Canada.
Despite ongoing trade issues, the price of lamb in Canada has increased due to the buy-local phenomena and increased demand from a growing ethnic community. “We have the strongest unsupported price for lamb meat in the world,” says Eadie. “Our friends in other countries are envious of our price.”CG
