A decade ago, a fresh-faced group of graduates jumped into a grain industry beaten down by prices and Prairie drought, and a livestock industry ravaged by the bovine spongiform encephalopathy (BSE) debacle.
It was hardly the best of times. By the end of 2004, a year and a half after the BSE crisis began, Canadian beef producers had already lost $5.3 billion, and with slaughter prices still trading far below their May 2003 levels, many were openly asking if financial health would ever return to the sector.
Meanwhile, corn prices had stagnated below $2 per bushel, and realized net income on Canada’s farms seemed to fall month after month.
Nor was that the only tough news. Consumers had started questioning conventional farming methods too. Genetically modified crops were in newspaper headlines, and organic had evolved from a fringe fad into an established market with presence in mainstream grocery stores.
A few years later, California voters overwhelmingly passed Proposition 2, a ballot that said egg-laying hens had to be able to stand up, lie down, turn around and fully extend their wings. It was the beginning of the war on traditional livestock production techniques.
Perhaps the biggest wonder is that in the classrooms of Canada’s agriculture colleges, some of the top students still wanted to farm. But they did. So they did what any smart business person would do; they looked for viable alternatives and applied their formidable brainpower and passion to that goal.
Two of those top graduates were Mark Bernard from P.E.I. and Jonathan Bouw from Manitoba. They had gone to college as mature students to pursue a career in farming, and somehow they made it work.
Today both are farming… unconventionally.
As they approach the 10th anniversaries of their farming careers, Bernard and Bouw shared with Country Guide how their farms have changed through those years, and how their education prepared them — or didn’t prepare them — for the past decade, as well as their hopes for the future.
At 23, Mark Bernard knew he wanted to take over the family farm so he went to Nova Scotia Agricultural College, now Dalhousie faculty of agriculture. He had already taken a business course at a community college and had worked on and off his family’s farm for a few years.
He was a good student, and in 2006, Mark not only earned a diploma in agricultural business and plant science, but at graduation he won the FCC Farm Business Planning award too.
For one of his class projects, Mark had written a theoretical business plan to convert his family’s conventional potato farm to an organic grain and oilseed operation that would sell its crops to organic dairy farmers in the Maritimes.
When his dad, Wendell, studied Mark’s numbers back on the farm at Freetown, a half-hour west of Charlottetown, he suddenly saw the possibility of a future for his son taking over the farm.
Until then, the prospects had seemed daunting. The Bernards had been successful table and seed stock potatoes growers, but the spread of potato virus Y (PVYn) and potato wart disease had disrupted exports and put the brakes on the expansion of processing in the Maritimes.
In short, their markets had been pummelled, and when Mark enrolled at school, the family rented out their 550 acres.
Soon after seeing Mark’s business plan, Wendell started converting 50 acres to organic through the three-year certification process. By Mark’s graduation it was already in organic production and by 2010 the farm was fully certified. Now they maintain a five-year rotation of wheat, soybeans, barley seeded with field peas, and oats — all 100 per cent organic.
“I had a blank slate to come home to,” says Mark.
It was a good thing his plans were written on that slate in chalk, however, because the 10 years since have seen a continual process of change — and small growth. “My dad allowed the farm to take a new direction,” says Mark. “You see other farms with 80- or 90-year-olds trying to control everything and it’s a rough road to keep going on.”
Since the farm was already incorporated and involved only one successor, the transition between generations was a simple valuation, share freeze and buyout.
Sticking with the direction he had outlined in his class project, Mark’s original business plan had been to sell to organic dairies that had been proposed for in the Maritimes, but when they didn’t materialize, he wasn’t able to direct market everything right away. Instead a nearby organic hog farm became a significant customer until its production contract was not reassigned. Once again Mark was forced to diversify — this time by putting the grain through chickens on the home farm.
Today, Bernard’s farm, Barnyard Organics, has 100 customer/shareholders of a meat and egg CSA (community-supported agriculture) enterprise. Every Tuesday through the summer and fall, the Bernards pair up with a vegetable grower and a baker to meet their CSA customers in a church parking lot. This marketing route frees them from spending long hours at farmers’ markets and generates improved cash flow as payments for shares are collected in the spring. Also, it helps them build relationships with stable customers, and has opened links to other markets, such as selling grain to the baker.
They sell organic chicken and hog feed, and organic roasted soybeans, and Mark is continually trying to encourage new farmers and to help them make it work economically.
In effect, Mark is trying to help develop an organic local food industry within his area.
Since graduating, he has watched the shrinking number of farmers with dismay. “Bigger acreages, bigger equipment. But we need better ideas, better farmers and better food in general… And to do this we need more players, not less,” says Bernard.
By continually asking questions, Mark and his wife, Sally (also a graduate of the class of ’06) have found opportunities where others would see roadblocks. For example, after being selected as Atlantic Canada’s Outstanding Young Farmers in 2012, Mark was misquoted in a newspaper article as selling feed.
When CFIA inspectors popped in to check out their phantom feed mill, instead of getting angry, Mark asked the inspectors about the processes to be able to make their own feed. This led to them investing in the feed mill that now supplies organic feed throughout the Maritimes, using all their grain and sometimes even buying in a little extra.
Between 2006 and 2012, sales of organic products in Canada increased from $1 billion to $3 billion. There are lots of opportunities for growth, Mark says. You just have to see them, start small, and be willing to put in the work.
For example, to enable timely and quality processing of their chickens they set up their own provincially inspected slaughterhouse on their farm. Then they can kill as many as they need, when they need them for the fresh market.
In retrospect, Mark wishes the courses he took at university had covered more about marketing and human resources. “I wish I had more confidence with employees,” he says.
On the other hand, the weed management class he took at university has helped him immensely with organic crop production. He learned weed identification, and the professor at the time included cultural practices as well as chemical controls.
Mark wonders if more work experience at college, like the research work he assisted with, would help other graduates. It would give students more experience in different industries, sectors and commodities.
In his opinion, one of the most significant changes since he graduated has been the introduction of global positioning systems, becoming standard equipment a few years later.
However, he doesn’t believe technology is always good, especially when his customers are paying a premium to stay away from it. “GMOs are an unneeded technology,” he says. “If we have time, grow cover crops and use proper rotation, we can grow crops without it. It’s just another tool in the tool box but many farmers are using it as the only tool, they’re reliant on that only tool.”
Sally and Mark have four children, and they are encouraging them to become involved in agriculture. You get to be your own boss, with many job titles in a day and produce quality food for people, Mark says. “Farming is the best job in the world. It’s so diverse, so free, so satisfying.”
With an enthusiasm mixed with resolve, Jonathan Bouw talks about farming since he graduated a decade ago: “The ethanol boom went bust. They promised $7 corn forever and now it is less than half of that. The BSE crisis took out a generation of cow-calf producers. Many of the older guys retired or went bankrupt. Their sons went off to the oilfield and are not coming back.”
In 2005, Bouw graduated at the top of the agricultural diploma class at University of Manitoba. Even at that time, the job postings outnumbered the 50 graduates from the program. Although Bouw was invited to take an MBA at Asper School of Business, he declined in favour of coming back to work on the family farm a half-hour east of Winnipeg at Anola, Man. He had already earned a bachelor of arts at Bible college with the original intention of teaching, but the land called.
Back then, the farm consisted mostly of a struggling traditional beef feedlot. Today, Jonathan, his brother Stefan and father Herman graze 150 purebred Angus cows and 300 ewes on 1,700 acres, and also harvest 80 acres of organic grain. Going forward they’ll continue to retain heifers and expand the purebred herd to 250 cows.
In 2009 Jonathan’s brother Stefan joined the farm permanently and they incorporated the farm to facilitate succession from their parents. Jonathan says the biggest succession challenge was to define roles and responsibilities, and it was also important to learn how to make group decisions for some of the bigger choices by including his wife Eileen and sister-in-law Kendra.
For the first few years in this post-BSE era, it was tough sledding: It helped that his mother, Marilyn, worked an off-farm job as a teacher, and that interest rates stayed low, helping them survive the BSE crisis. “We swallowed a lot of equity,” Jonathan says.
Along the way, they refinanced, moving some long-term debt from their line of credit to a mortgage. They also shopped around for their mortgage and switched lending institutions to a credit union. The local credit union loans manager knew they always paid their bills, looked at more than their three-year history and understood their business plan was financially cautious, even though it involved untraditional farming methods.
The Bouws are leveraging the trend toward consumer involvement in their food that Jonathan has watched accelerate in the last decade. “The grassroots groundswell of folks looking for local, organic and sustainable has changed the most in agriculture,” says Jonathan.
Today, he sees even more growth ahead, with consumers becoming more aware of how their food is produced and putting more value on it as an opportunity.
Other than purebred sales, 15 to 20 head a year are sold for direct sales of natural grass-fed beef sold as quarter-dressed carcasses. They are grazed for six-plus months of the year and raised without hormones or antibiotics. No grain is used to finish in their feedlot, just second-cut hay and alfalfa/grass silage.
Right now, their beef is cheaper than retail, but when livestock markets and grocery store prices go down Jonathan is counting on his margins staying positive. “When commercial beef prices drop, we hope they (his customers) will stick with us,” he says.
They’re already testing their customers’ resilience this year by moving from February calving to May, which caused a waiting list for quarters of beef. In the longer term, Bouw is excited about the opportunities for continuing to develop and sell breeding stock that is pasture hardy and will finish easily on grass. He feels this will better meet the need for farmers with off-farm jobs or new-entrant farmers.
If you buy hardy cattle you can pasture and buy hay for 50 to 100 cows with one skid steer or a loader tractor, Jonathan says. “Cattle prices are encouraging now, but the industry will require low-cost producers to stay in the long haul. Plus low-cost production models allow new people to get into it.”
They started into the purebred business back in 2000 when Stefan started keeping some heifers back for 4-H and bought a few Angus, but found they didn’t thrive in the low-input ranch environment. Since then, the family has been sourcing genetic lines that do better on grass, buying cows from breeders with similar goals.
They’re currently investing in their purebred Angus herd, largely with a concentration on growing internally, but with some strategic purchases as opportunities arise. Throughout the last decade, however, their focus has also narrowed as they’ve honed their breeding goals and philosophies. They’ve only been selling two-year-old bulls for eight years.
Becoming part of the Manitoba grass-fed beef association and learning about holistic management has been transformative for Jonathan. He describes their farm as a growing forage-adaptive Angus enterprise, an increasingly successful organic cropping enterprise, a challenging yet profitable sheep enterprise and a sold-out grass-fed beef enterprise.
The greatest thing Bouw learned in his post-secondary education is that curiosity and love of learning can bring success wherever you go. Over the years, he has continually used his research and learning techniques, marketing and people skills. “Things change so fast, and there’s so much information to sort through, so make sure you see evidence on the ground before believing a salesman or a study,” he says. “Keep learning and reading so you’re a lifelong learner.”
Looking back, Jonathan wishes he had been taught more business and financial know-how, including things like cost-of-production analysis, or how to use debt successfully to build a business. In retrospect, it would have helped if he had learned up front how to better market his own products instead of allowing middlemen to profit when they were barely breaking even.
From his worn tractor seat, he thinks the production lessons should include the importance of soil health beyond macronutrient balance and how grassland agriculture can regenerate soils and reverse erosion. “Think long term, build soil, don’t pillage it,” Jonathan says. “The soil is alive, so respect the living beings.”
If you’re farming, question everything, and don’t do something because that’s the way Grandpa did it, says Jonathan.
He says that more “agvocacy” is needed so that people know farmers well enough not to be frenzied by fearmongers and activists. “Embrace change and find ways to improve your soil,” Jonathan advises. “Talk to the disconnected urban consumers. Tell your story.”