While Kristjan Hebert’s working life hasn’t changed drastically through COVID-19, the pandemic has helped refine his ideas on how the grain industry could move forward from here.
Mainly, it’s convinced him even more than before that farming is a people business.
“I still feel that people are our number one asset,” he says. “If we spent more time figuring out personalities and compensation schemes than the next big thing in technology or agronomy, we’d be better off.”
Hebert put in place safety protocols for the 17 employees he had during seeding 2020. Like other farmers, he also had to pick up parts a little differently and didn’t see the staff when he delivered grain.
“We were deemed an essential service, and the guys were willing to keep working, so seeding went on pretty much as normal,” he says.
Hebert grows 22,000 acres of canola, wheat, malt barley, yellow peas and sometimes fall rye in Fairlight, a couple hours east of Regina. He was also named Farm Journal’s Top Producer for 2020 at a summit held in Chicago, Illinois, in January.
Effects of the pandemic
Hebert did have a emergency plan in place and added a few points, including doubling sick days for workers. He also had hand sanitizers available everywhere and put up signs reminding everyone about coughing into their elbows and staying home if they felt sick.
“They (his employees) didn’t have to worry about finances, which I found was more of a concern than the actual virus,” he says, adding that southern Saskatchewan didn’t really have as big a problem as other areas of the country.
“It’s not that hard to socially distance here,” he says.
He also thinks that, overall, the grain industry was less affected by the pandemic than other industries.
“Most of our businesses qualify for the $40,000 loan, and most qualify for the wage subsidy, depending on how you’ve been affected on the farm,” he says, adding that some grain growers were hit harder than others. “Compared to what’s going on in horticulture and livestock, as well as restaurants, we’ve been pretty blessed.”
In spring 2020, he thought that farmers and small businesses of any kind needed to get a better deal from the government, given the fact that most are shareholders and don’t necessarily draw a salary.
Hebert says that transportation issues prior to the pandemic affected the industry far more than the virus. The effects of the blockades of the rail system in early 2020 were still being felt in the spring.
“For three months, the disruptions slowed everything down — grain was moving at about 50 per cent of normal — which created cash-flow issues that spilled over into spring seeding.”
He says cash flow for grain farmers in Western Canada is as tight as it has been in a number of years. Crop prices have been trending down, growing conditions haven’t been great in the past two to three years, and fixed costs “always come down a lot slower than commodity prices do.”
The pandemic shone a light on ongoing issues and made them come to the forefront.
“COVID has also opened up some opportunities,” he says, pointing out that debt restructuring is a good idea, given that interest rates are so low.
Diesel fuel is also less costly, at 40 to 50 cents, and because the oil patch is doing so badly, getting help on the farm is not as difficult as in other times.
As a result of things slowing down, Hebert spent some time tightening up his budget, including doing capital allocations for the next two to three years and holding back on some purchases.
“We broke repairs down by every piece of machinery to determine which ones were costing us the most and causing the most downtime,” he says. What he found, interestingly, was that their “peripheral” equipment were bigger culprits — semi-trailers and rock-picker tractors.
There have also been marketing opportunities — in lentils and canola — although they didn’t last long and everything’s pretty volatile. Wheat prices were a bit better in Canada than the U.S. as a result of lower currency values.
Over the longer term, Hebert thinks technology is going to continue to disrupt agriculture, and points to the 80-foot drill run by a single human on his farm that would have been a 35-foot drill with no GPS in the past. He feels that productivity has gone way up as a result.
Looking for better ideas
Hebert’s focus is currently far more on human capital than technology.
He has a score card that shows things like how many hours are worked per day, how long it takes to put in crops and how much overtime is paid. He then compares the cards year over year, trying to find areas where he can drive down costs.
Hebert’s operation runs on a 24-hour basis. While that sounds like people would be working too long, he says the average shift is 13 hours.
“I believe the hours per person trend down using the 24-hour model, they don’t trend up,” he says.
This planting season, he lopped an hour off the average working time, and tries to keep the number of 16-hour days to an absolute minimum because fatigue is the enemy of productivity.
“Every year, we get a little bit better,” he says.
Even so, Hebert is convinced that farmers have to look past the farmgate for help to eliminate more black swans before they happen.
He believes, for instance, that commodity groups need to work more collaboratively, and they also need to spearhead good government policies and programs that get supported because they work for all small businesses, not just agriculture.
He also would like to see government work more vigorously on export issues like the tariffs put on pulses by India and Turkey and the problems with China and canola.
Says Hebert, “This should be a much higher priority for the government.”