Not only does poor writing not accomplish the goal of communicating the intended information, it also wastes the time of both reader and writer.

The number one goal of good writing is clarity, says Ron Champion, a long-time writing instructor at the University of Waterloo.

And while there may have been a time when the quality of your writing didn’t really matter on the farm, it certainly does today. Increasingly writing — whether electronic or with ink — is an integral part of daily life for farmers.

Whether you’re posting to your farm’s Facebook page, writing a blog, sending emails, creating signage, or commenting on a proposal from a potential business partner, you want to ensure you communicate your thoughts clearly.

Good grammar, spelling and punctuation are also critical.

“You want to make sure you say what you mean and mean what you say,” says Champion.

Before you write

It doesn’t help that “English” and “communications” classes have ranked for generations among the lowest of the low priorities at ag colleges and universities. But getting on track really isn’t that difficult if you remember these pointers.

Before you write anything, Champion advises considering your audience and how the written work will be used. If you are writing for a non-farm audience — which can include various professionals, municipal officers, etc. — don’t use jargon. Non-farmers don’t know what a forage is, they have no idea what a grain cart looks like, and it may even be better to say “young female cow” rather than “heifer.”

“Keep it short, keep it simple” is Champion’s guiding principle when it comes to writing anything. “If you want someone to read an email, don’t make it any longer than it needs to be.”

Champion also warns against the trap of using bigger words to try to sound more impressive. He recommends using the smallest word that expresses what you’re trying to say.

On the other hand, short cuts used for texting sometimes creep into more formal applications where they are not appropriate. “Don’t use ‘ur’ for ‘you are,’” he says. Only use “LOL” and emojis when writing to a friend.

If you’re writing the text for a sign, keep the number of words to a minimum and ensure the lettering is large enough to be viewed, especially if it’s a sign at the end of the lane that’s intended to be read by passing traffic. Also, think about how the sign will be mounted. Champion says we’ve all seen signs put up with bolts that obliterate some of the letters.

If you’ve found English spelling to be a challenge, you’re not alone. Given England’s long history of being invaded by or invading other countries, English has influences not only from German, Dutch, Danish, French, and Latin, but from around the world. This has resulted in many inconsistencies in spellings and pronunciation.

Unlike some languages which have government agencies which set the rules for correct spelling and usage, English is an evolving language with regional variations. Here in Canada, we tend to use some American spellings (organize vs. organise) and some British spellings (colour versus color), but these usages do shift over time.

When it comes to choosing whether to use an American or British spelling for a word, Champion says the most important thing is to be consistent. Whether you use “plough” or “plow,” be sure to use the same version throughout the document.

Spell it write

You don’t have to look far to find examples of weird English spellings (note weird has a weird spelling which breaks the “I before e except after c” rule). Indict, conscience, rhythm, liaison, cemetery and espresso are just a few examples of words with unusual spellings.

If you want more examples of the irregularities of English, consider the following words which contain the letter combination “ei” but with different pronunciations: weigh, seize, height, forfeit.

Champion recommends creating a list of the words that you tend to misspell and keeping it handy when writing. The old adage “if in doubt, look it up” still applies.

Don’t rely on spellcheck to find all of your spelling errors, warns Champion, although he notes the electronic check has prevented uncounted cases of “pubic” being used unintentionally instead of “public.”

Even so, spellcheck will never find the wrong word that’s been spelled correctly.

Champion also stresses the importance of watching that autocorrect doesn’t change the word you meant to another word with a completely different meaning. As an instructor at Renison College, Champion discovered autocorrect had been changing “Renison” to “venison.”

Careful proofreading can help you spot your errors, says Champion. We all make them, he adds.

Reading your work slowly out loud from a hard copy will help you catch your errors, he says. If you have time, leave your written work for a day or two so you can proofread it with a fresh eye, which makes it easier to catch mistakes. And if you can, have someone else read it over to ensure the meaning is clear to others.

Champion offers these additional proofreading tips:

• Work from the top down. Make big revisions before you worry about individual words and marks of punctuation.
• Proofread for one type of error at a time so you don’t feel overwhelmed.
• See the words. Make yourself focus not on what you know you meant to say, but on what you actually wrote.
• Watch for homophones. These are words that sound the same but have different meanings: “weather/whether,” “their/they’re/there,” or “two/too/to.”

Then, if you’ve made changes, be sure to read your work over again to ensure you haven’t introduced new errors into the piece. People often leave extra words after changing a sentence.

This article is only a very small slice of what we need to know when it comes to good writing but fortunately, there are many good resources (both books and online; see below for a few) available to help us improve our writing.

Remember even the so-called experts make mistakes sometimes so don’t be intimidated. Be gentle when you find errors in other people’s writing, and hopefully others will do the same when you mess up (as you sometimes well!).

Common errors to avoid

Some examples of common mix-ups from the Purdue University Online Writing Lab (OWL) (owl.purdue.edu/owl):

Its, it’s
It’s is a contraction for “it is” while “its” shows possession.
Examples: The crab had an unusual growth on its shell. It’s been raining for three days.

We’re, where, were
We’re is a contraction for we are.
Example: We’re glad to help. Where is a reference to location as in, Where are you going? Were is the past tense form of the verb be. Example: They were walking side by side.

Your, you’re
Your is a possessive pronoun.
Example: Your shoes are untied. You’re is a contraction for you are. Example: You’re walking around with your shoes untied.

Online resources

• The Online Writing Lab (OWL) at Purdue University
• Grammar Girl
• Grammarly Blog

Books

• On Writing Well by William Zinsser
• Eats, Shoots & Leaves by Lynne Truss

The post The ‘write’ way appeared first on Country Guide.

“It’s the only weed I’ve seen that can drive a farmer out of business,” says Purdue University weed specialist Bill Johnson.

And it’s heading north, almost within sight of the Canada-U.S. border.

While Canadian weed specialists say Palmer amaranth may not thrive here as well as it does in the southern U.S., it’s clearly worth monitoring its spread, and if possible, stopping its march northward.

Palmer amaranth has been found in several North Dakota counties, says Brian Jenks, a North Dakota State University (NDSU) extension weed scientist.

The first case was reported in McIntosh County in August when a farmer out hand-weeding kochia happened to find two plants that looked unusual. Less than a week later, another plant was found a few miles away. Since then, samples have been found in other counties in the central and southern parts of the state, says Jenks.

“We haven’t received confirmation from the lab but I’m 100 per cent sure that it’s Palmer,” he says.

It was only a matter of time until Palmer amaranth made it into the northern states. But so far no cases have been reported north of the border, and Manitoba weed specialists caution that other weeds are a higher priority for the time being.

“While we do need to be aware of it and concerned about it, it isn’t currently as adapted to our area as it is farther south,” says Tammy Jones, weed specialist for Manitoba Agriculture. “We’ve seen it creeping north but we haven’t seen it move as fast as some people expected.”

Identification

Palmer amaranth, a type of pigweed, is fast-growing and highly adaptable. Populations are resistant to at least five modes of action in the U.S., including glyphosate, says Rob Gulden, University of Manitoba weed scientist.

Gulden says that if Palmer amaranth is growing in North Dakota it’s already adapted to Canada’s cooler temperatures. “It seems to be surviving in that climate, so it might not be quite as competitive, relatively speaking, but judging by the pictures (circulating online) it’s going to be formidable weed to contend with,” he says.

“The real question in terms of what that means on the adaption side is how early it produces viable seed,” he adds. “If it takes well into the fall after most crops are off to produce seed, there’s a way to manage it. On the other hand, if it produces seed early, that complicates management.

“It’s relatively new to the northern states so how it behaves is unknown — it will take a few seasons to understand it,” Gulden says.

While he agrees that other weed species such as waterhemp, Powell amaranth (also known as green pigweed) and glyphosate-resistant kochia should be higher on producers’ radar, he says they should be aware of what’s happening south of the border.

Scouting is key for all of these weed species, and while most pigweeds “stick out like a sore thumb” late in the season because of their relative height, producers should look out for any plants that look unusual, intensifying scouting after herbicide application to see what wasn’t killed. “It’s not a fair assumption that the herbicide kills everything,” he warns.

Producers who find unusual weeds can reach out to Gulden, Jones or any Manitoba weed supervisor to help with identification.

“The amaranth species look fairly similar as seedlings. Nobody wants to wait until they’re in seed to figure that out. When in doubt, ask an agronomist,” says Jones.

Palmer amaranth and tall waterhemp are both Tier 1 noxious weeds in Manitoba, meaning they are considered serious threats and must be destroyed without conditions.

Control options

The dwindling number of chemical control options in the U.S. is one reason it’s important to be vigilant in scouting for Palmer amaranth north of the border.

Jenks says his focus in North Dakota is on identification. “We’re not even talking control yet. We’ll talk control this winter to those counties where we’ve found it,” he says.

The North Dakota samples were all found in soybean fields, says Jenks, and because they were found late in the year it’s possible that they emerged after herbicide applications.

Any Palmer amaranth population that arrives in Western Canada will likely already have resistance built in, says Gulden, pointing to the fact that when waterhemp entered Ontario it was already resistant to glyphosate.

Gulden says that since Palmer amaranth isn’t yet a weed of concern to Canadian producers, it isn’t on many herbicide labels, although products that tackle redroot pigweed would likely be somewhat effective against Palmer.

Pre-emergents could be useful if they broaden the number of modes of action used against the weed, but Gulden stresses that since Palmer amaranth can emerge at any point during the growing season, pre-emergents could have limited impact.

In other words, producers should be thinking about integrated weed management when it comes to weeds like Palmer amaranth and manage their crops as competitively as possible, says Gulden.

Palmer could set foot in any crop, he says, but Roundup Ready soybeans are automatically vulnerable because they’re a slow-to-start crop typically grown in wide rows and most new weed threats have been glyphosate resistant.

“Wide rows aren’t a good idea if there’s no inter-row tillage, because that forces the herbicide to do all the work. Set up the crop to compete as well as possible,” he says.

In the case of Palmer amaranth, an ounce of prevention is worth much more than a pound of cure. The seed can spread by wildlife via contaminated cattle feed or on equipment.

Producers should be on the lookout for Palmer amaranth in any seed imported from the U.S., although because the seeds are tiny and look like other pigweed seeds only a lab test can make a positive identification.

Gulden says it’s absolutely critical to ensure machinery moving across the border is clean when it arrives and then is cleaned again in the farmyard before it goes out to the field.

Jones adds that producers shouldn’t be afraid to talk about herbicide-resistant weeds they’ve found in their fields.

“I’ve been at meetings where, when you ask people if they have herbicide-resistance weeds they don’t really want to talk about it, but it’s so much better if they do talk about it so that we can be more effective in helping control it,” Jones says. “Knowledge is power.”

The post The U.S. ‘No. 1 weed problem’ heads north appeared first on Country Guide.

Jayson Lusk, the head of the Department of Agricultural Economics at Purdue University, told the George Morris AgriFood Policy Lecture on the future of food that influencers are younger, urban, have a higher income and often involved in the food movement.

The lecture was put on by the Department of Food and Agricultural Resource Economics at the University of Guelph with funding from an endowment from the dissolution of the George Morris Centre. Lusk was the keynote speaker and also part of a panel on communicating about the future of food.

Lusk says that there is a growing divergence between eaters and growers, with a decrease from 75 farms per 100 people in the U.S. in 1900 to 6.7 farmers per 100 people in 2010. Add to that that only 7.5 per cent of farmers produce 80 per cent of agricultural output.

“There are a lot of people with less knowledge of where food comes from,” he says.

There are other areas where farmers have little influence, but are important to understanding the complexities of food conversations.

The first is that there’s increasing inequality and divergence in food preferences of the rich and the poor.

“The people influencing the conversations in food and agriculture are eating out of a very different bowl than people affected by food movements.,” says Lusk.

That means while some people pay more for niche foods, including organic and non-GMO, there are others who are just trying to get an appropriate level of food into the mouths of their family. They are motivated by price.

It’s not just the quantity of food that’s the issue, but the quality of food. A higher diversity of diet is related to the healthfulness of a diet.

“Advocating for food systems that are more expensive is not a big deal to higher income people, but it is a much bigger deal to lower income,” says Lusk.

A third larger issue affecting communication with the food movement is diverging population growth in high and low income countries.

As income increases, birth rate decreases, so North America and Europe have stagnant population growth, while other areas of the world continue to have young populations with an increasing overall population.

That falls in with the argument popular in the agriculture world that productivity increases are needed to feed nine billion people on the planet by 2050.

Lusk says he doesn’t argue that there won’t be enough food to feed that many people, but he says it doesn’t resonate in Canada and the United States where population is stagnant.

“If you are producing food that you want people to buy, you might want to think about what this narrative is saying to them,” he says, referring to North American consumers.

“We need to feed the world, but it’s hard for people in relatively rich countries to feel that message,” he says.

“Productivity is the forgotten cornerstone of sustainability.”

Communicating about food and agricultural productivity means appealing to consumer values, which is the direction that Lusk took in his most recent book Unnaturally Delicious: How Science and Technology are Serving up Super Foods to Save the World.

Lusk was joined on a panel by University of Guelph Professors Dr. Mike von Massow and Dr. Iris Joye. They agreed with Lusk on the scale of the challenge when communicating to consumers with little connection to the food system.

“People have a profound disconnect from how we produce food,” says Von Massow. When we want to have a discussion with consumers about how productivity and health can be improved based on a type of technical change, and they are going ‘huh?’ it can be a challenge, he says.

There’s also a lack of trust in experts and academics.

“People aren’t looking to academics for answers, but that doesn’t mean we don’t have a responsibility to communicate more broadly.”

Joye says academia has work to do, especially with the specific language of their expertise. Teaching students with “very big words” and then releasing them to the industry, means there can be communication disconnections, she says.

Oversimplification can also be a challenge, says Joye, as it can create problems when the public isn’t given the whole story.

All three of von Massow, Lusk and Joye agreed that there is opportunity to create more conversations about the food system, as there is so much interest in food.

When Lusk graduated as an agriculture economist, he felt like there were people wondering why he didn’t want to be a “real” economist.  That’s no longer the case, as Lusk publishes columns and is a source in major mainstream media.

“People seem to care about what we do. In some ways there’s never been a better time to be an agriculture economist.”

The post Big trends drive diverging high and low income food interests appeared first on Country Guide.

It was enough to make those sporadic reports of feedlots shutting down, U.S. crop farms going bankrupt, and Midwest farmland prices dropping seem all the more foreboding.

Compared to 2013, Chapter 12 bankruptcy filings across the top grain-producing states in the U.S. climbed 50 per cent in the 12-month period ending on June 30. In Iowa, the biggest corn producer of all, they jumped a massive 125 per cent. (These Chapter 12 bankruptcies involve farms with less than $4.03 million in debt.)

Then in August, the 2016 Purdue Farmland Value Survey revealed that Indiana farmland values had plunged another 8.2 to 8.7 per cent after having fallen five per cent in 2015.

Declines this big have not been seen since the mid-’80s, the university said. And now, farm surveys were also reporting similar drops across the Midwest in cash rents.

These ugly reports contrast wildly with the bullish news from Canada, where last year’s average net farm income set another record, and where land prices are still strong, and cash rent is still in the stratosphere, topping $300 an acre in eastern grain regions.

How can that be?

FCC economist J.P. Gervais is cautious. He says his team is monitoring land values very carefully, and he plows his way through a list of recent internal FCC reports, with land values in B.C. and Ontario stable and in Saskatchewan and Manitoba slightly up.

“Land values are generally fairly stable and up in some parts of the country,” Gervais repeats.

But why the disparity in land prices compared to south of the border?

Among other factors, Gervais says, the most significant is the drop in the loonie, which pushed our 2015 farm receipts to record levels and gave farmers here more ability and appetite to buy.

That drop in the Canadian dollar basically cushioned the fall from the bull market that has dominated grain farming for the last seven years.

Farmers south of the border didn’t have that cushion, and they fell hard, Gervais says.

It also helps, he adds, that we have a different lending structure, and that farms are generally a smaller scale here so they didn’t expand in the same size chunks as some of the U.S. mega farms.

However, this year the change in the dollar had already been assimilated into the market.

“Actually, we are in the beginning of a softening in the ag commodity cycle,” says Gervais. “Definitely, in the overall agriculture economy, we are seeing tighter margins.”

Gervais conservatively forecasts a potential five per cent decrease in farm receipts in 2016. Since land prices tend to follow trends in net farm income, appreciation will likely slow down with the expectation of lower crop prices over the next two to three years.

In Ontario, land prices this year were still well above the 20-year average, ranging from $5,000 to up to $25,000 per acre, says Ryan Parker, partner with the London, Ont.-based appraisal company Valco.

The value of farms in Ontario has stalled. But it definitely has not gone down.

Although the volume of trades shrank slightly from last year, there’s still a good number of trades going on, says Parker.

“Farmers are not being reactive to their change in incomes,” Parker says.

But there have been significant, trend-inspiring changes to the fundamentals. The disparity between good and bad land is becoming more normalized, with untiled and poor land getting discounted more heavily than during the market peak.

“There’s smarter buying now,” says Parker.

In southwestern Ontario (which has a reputation as a bellwether for the direction of national land markets), land prices have flatlined or in some cases are slightly higher. Parker says this demand is being driven by the intensive livestock operations in the area, including supply managed livestock, beef, and hog farms.

Livestock farms are also building and renovating barns at a record rate this year. “2016-17 is the year of construction,” says Parker.

Broiler barns are being built to accommodate continued allocation of additional quota, sow barns are being expanded, renovated or built from the ground up to accommodate sow loose housing, while beef farmers are reinvesting after a few years of good prices and dairy farmers are renovating or building to improve and prepare for potentially tighter margins in the future.

These livestock farmers say if they’re going to continue in business, they need to make improvements when their balance sheets are strong and interest rates are low, says Parker. “Between BSE and the sow buyout program, we are left with some very strong livestock farmers. They have good balance sheets now and along with the dairy and broiler business, they make it competitive for land.”

In Ontario, rental rates are tough to track as most are handshake deals and there’s no register or survey. When Parker does farm assessments, he asks what rents are in the area to get a general idea of rental trends. His anecdotal summary is that this year rents have not moved. “Cash rents here are just as inelastic as land values,” he says.

Parker chalks up both these buying and renting inelasticities to farmers who “cost-average” their land and other fixed assets, and who rely on land values continuing to increase, or at least not decrease.

Most farms have a part of their rented acres in long-term agreements. Often those agreements are at a lower rental rate because they have unwritten trade-offs for looking after the property, or they include provisions about managed inputs or farming practices, or things like cleaning out the driveway. Then, for the rest of their rented acres, some farmers are motivated to pay more, in some areas over that $300 per acre, says Parker.

Although most rental agreements are still cash deals, Parker is seeing a little more creativity so there’s some sharing of risk and reward. The number of farmers sharecropping, he thinks, hasn’t really changed.

Land “management”

Bruce Simpson, a founder and senior partner at Serecon, a large land appraisal and management company in Alberta, says flexible lease agreements are becoming more common there. However, cash rentals still dominate.

“Although some succession planners promote production-sharing joint ventures for tax advantages, most are still straight up cash rents for simplicity and less in-depth lease management requirements,” Simpson says. “Rental rates have not decreased this year as there has not been any softening in farmland values and commodity prices have remained decent throughout the year.”

Local competition, land values, soil types and increased productivity because of new technologies and crops are helping to sustain higher land rental rates.

Across the Prairies, the percentage of land that gets rented has increased significantly over the last 15 years. By 2011 about 45 per cent of farmland in Alberta was rented. This was an increase from 2001 of about four per cent, or more than two million acres. Similarly, the increase in Saskatchewan was about two per cent, the same as in Manitoba, where about 40 per cent of farmland is now rented.

About 25 years ago, Simpson and partner Don Hoover established Serecon as an agricultural appraisal and consulting practice in Edmonton, opening an office in Calgary in the early 2000s. Today, about half of their services are valuations, with 40 per cent in management consulting.

About 10 per cent of their portfolio is farm asset management, although this area is growing. Today, the joint venture company, FNC-Serecon Inc., “manages” land in Alberta and Saskatchewan, and the company plans to extend into Manitoba and Ontario in the future. In their first growing season they managed slightly less than 10,000 acres in Western Canada. However, with the large base their joint venture partners have south of the border, they feel they can take on the larger acreages when they become available.

In the U.S. companies manage millions of acres for absentee landowners, and demand for this service is spreading north. The trend to more non-farmer land ownership has spurred farm asset management services, like Serecon FNC. (In 2015 Edmonton-based appraisal business, Serecon, formed a joint venture with Farmers National Company [FNC], headquartered in Omaha, Nebraska, to give them additional experience and support tools and systems to work with in this field. FNC manages more than two million acres for about 5,000 landowners across the U.S. Numerous companies south of the border offer similar services (www.asfmra.org/farm-management/) but very few in Canada.)

In the Canadian west, Simpson says most rental arrangements have always been done between neighbours across the kitchen table. Yet management of farm assets for absentee owners is increasing through the Prairies because more land is being transferred, more land is being inherited by non-farming children, and more people are retaining the ownership of their land and having it as part of their investment/retirement income.

Besides, land values continue to increase, so there’s little incentive to divest.

“Our main customers are absentee landowners — sons and daughters who have inherited land but live remotely from the property and want to maintain the land as an investment,” says Simpson.

Part of the service Serecon provides is to match landowners to tenants and write lease agreements. Finding tenants is not an easy task, says Simpson. It boils down to three key factors — agronomic knowledge and land stewardship, financial competence, and technical skills. “We approach it by first talking to the previous owner or the vendor, neighbours and contacts we have across the Prairies.”

The appraisal part of Simpson’s business, he says, has become more complex with the level of technology involved with production agriculture. “The adverse effects, different easements, ever-changing market values, the lack of good solid information are all contributing to farming becoming a much more complex business,” Simpson says.

This fall Simpson said the price of land in central Alberta was at unprecedented levels, from $1,500 per acre to $7,500 per acre for dryland in the agricultural producing areas. By comparison, in 1991 these farms sold at $300 to $1,000 per acre.

And the demand does not seem to be abating, even though the Alberta economy is under duress.

This is due to some strong financial years on farms, but also to non-farm purchasers for acreage living, hobby farming and outside investors.

“The demand in 2016 is strong across the province for all forms of agricultural lands,” says Simpson, who expects land values to continue increasing, but at a slower rate.

A large part of Serecon’s appraisal business has been driven by the oil, hydro and gas industries. They use software called an Obstruction Mapper program which measures exactly how many acres are missed or how many multiple passes with equipment and inputs (seed, fertilizer, spray) are required when there’s an obstruction, like a hydro line or a oil pump, in a field. Then the software calculates how it’ll impact costs and revenue for the farm.

“This tool has many applications, from impact studies, to identifying the best field pattern to minimize impacts, to calculating the acres in fields and acres impacted by spray drift or animal intrusion onto crops,” says Simpson.

Go-go farmers

In the Midwest, they’re called “go-go farmers,” a group of farmers who borrowed heavily to expand their farms soon after grain markets began to boom in 2007, and then borrowed more to plant their way out of the following commodity price slump.

These are farms that tended to be driven by a younger generation that had not had previous exposure to the bottom of a commodity cycle, and many of them based their buying decisions on super-strong financial statements from 2008 to 2012.

However, when grain prices fell and cash flow tightened, they borrowed to rent land and also to buy equipment, seeds and pesticides, which meant that they were even more exposed to crop prices as they continued to fall.

According to the latest USDA data, the proportion of extremely leveraged grain and other row crop farmers in the U.S. (those with debts totaling more than 71 per cent of assets) doubled, to 2.4 per cent, between 2012 and 2015.

As well, delinquency rates on farmland and production loans are rising sharply.

Michael Langemier, Timothy Baker and Michael Boehje, agricultural economics professors at Purdue University, Indiana, further examined the worrying trends in farmland prices and cash rents, using data from surveys by Iowa State University (Ag Decision Maker), the Illinois Society of Professional Farm Managers and Rural Appraisers, and Purdue (Dobbins and Cook).

They compared declines in cash rents and farmland prices to what happened in the grain price bear market of the 1980s, which lasted six years after the initial crash.

Over the first year of the six-year decline back then, average cash rents in the three states increased two per cent, and average farmland prices declined 5.3 per cent.

This time, however, from 2014 to 2015, average cash rents and farmland prices for the three states both declined, falling 2.1 per cent and 2.2 per cent, respectively.

In the 1980s, earnings per acre were relatively low for five straight years (1982 to 1987) and similarly, earnings per acre have been relatively low in 2014, 2015, and 2016. Continued weak earnings currently appear likely, and will put further downward pressure on cash rents and farmland prices, say the reseachers.

One major difference between the two periods is interest rates, so there’s much more cash flow now. Also, they note that inflation is much lower, and they say the percentage declines in cash rents and farmland prices in Iowa, Illinois, and Indiana are not expected to be as large as those experienced in the 1980s, unless earnings per acre collapse even more, or inflation and interest rates increase dramatically.

When they analyzed farmland price per acre divided by cash rent per acre and then cyclically adjusted this P/rent ratio for interest and inflation, they found it continued to be substantially higher than historical values in the 1980s. This means that to maintain current high farmland values, cash rents would have to remain very high, or even move higher, while inflation and interest rates would have to remain very low.

However, rental rates have tracked land values at about three per cent of land values in the last three years. The survey in 2015 was the first since 1999 to report a statewide decline in cash rents across all land qualities. Statewide cash rents in 2015 declined 1.3 per cent to 2.4 per cent. Again this year, the survey found another statewide decline in cash rents. Cash rent dropped about 10 per cent in the last year, with average land renting for $204/acre.

More than half of the respondents expected cash rent to be lower in 2017, decreasing from one per cent to 35 per cent.

To read the full Purdue Agricultural Economics Report articles as a pdf, click here.

Property assessments multiply

It was a beautiful busy summer day when I received this year’s MPAC farm value assessment from Ontario’s Municipal Property Assessment Corporation. But when I opened the nondescript envelope on my way back from the mailbox, the birds seemed to stop singing.

I shook my head and closed my eyes, tight. Could this be right? My new MPAC assessment said my farm had more than doubled in value since buying it 10 years ago. This would likely mean a massive property tax hike.

Farmland assessments in Ontario and Manitoba took a huge jump this year. And usually when assessments go up, so do taxes.

The new MPAC assessments in Ontario are actually more accurate, closer to market value now, says Ryan Parker, partner in Valco, a company that focusses on real estate appraisals in southwestern Ontario. “Generally, they were undervalued before, and in 2012 the new assessments weren’t aggressive,” he says.

MPAC does the assessment for the province and individual municipalities set the net tax rate. So potential increases in property taxes will still have to be set by individual municipalities.

“The tax rate is a separate issue,” adds Parker.

So here’s to hoping for reasonable councils that keep a limit on tax rates, because now that the MPAC assessment is actually fairly accurate, assessment appeals are not likely to win except for the odd case with a standout situation.

The post A shadow on land prices appeared first on Country Guide.

An ag economics professor there named Mike Gunderson was early in the agenda, and clearly felt that all of us needed to be reminded of some home truths.

“The goal of the market is to put the average business out of business,” Gunderson said.

He isn’t the first to say this, of course. Nor, despite the highs of the last decade, can we really shake the theory that the average long-term price of a commodity is just below its average cost of production.

Of course, there’s one big factor on the horizon that has made it all too easy to dismiss the risks inherent in such thinking.

That is global population growth, and the dire need to feed 10 billion people by 2050.

But this may not be the rock that we have been hoping for. It’s easy to forget that the UN’s projections of only a decade ago called for a global population of 13 billion, and that while it still officially clings to a forecast for 10 billion, practically everyone outside the UN has lowered their estimate to nine billion.

There is also the all-too-real fact that, in the marketplace, need doesn’t matter. Ability to pay is all that counts.

Farmers have long produced enough food to provide 2,500 calories a day for everyone on the planet. Agriculture has done its part. The fault is in the distribution, and the market on its own has no capacity to solve this.

Population is growing in areas where there isn’t enough income to add demand. And in areas where there is income, population isn’t growing. We only need to look at population growth in the developed world. Even during the years of its “one-child” policy, China’s population grew faster than Europe’s.

It’s easy and it’s comforting to keep saying that global population growth will ensure farmers a good living, except it means today’s young farmers may well be embarking on a career with greater challenges than they are expecting.

It is a sobering reality.

Yet there is encouraging news too, including new research into today’s multi-generational farms that you will read about in coming issues of Country Guide.

On farms where parents and children are able to chart their way past all the potential family pitfalls, and where they are able not only to deal with the communication demands and the emotions, but use them to build something positive, the opportunity for our farms to be globally competitive is historic.

There’s almost a kind of magic on farms where the generations work together, building on each other’s capabilities with a focus on making better decisions within a framework of best business practices.

More and more farms see how important it is to get there. This is deeply encouraging.

Are we getting it right? Let me know at tom.button@fbcpublishing.com.

The post Editor’s Note: The competition appeared first on Country Guide.

Since 2000, the Purdue University Extension has been offering a skills assessment they call “Are Your Farm Business Management Skills Ready for the 21st Century?” It’s no more than a simple collection of checklists which ask participants to rate their own abilities in a wide range of categories, including production management, procurement and selling, financial management, personnel management, strategic positioning, relationship management, leadership, and risk management.

Neither long nor exceptionally scientific, the tool was created to help farmers think more concretely about the activities they perform and what skills will become more critical to their future success, says Craig Dobbins, one of the original authors.

In fact, says Dobbins, the team of researchers who wrote the assessment (he was a member) were driven at the time by a need for succession planning tools. Recalls Dobbins, “We were just trying to get people to think about what they bring to the table and what the business needs, especially with family businesses where the main criteria in joining the business is simply being family.”

As it turned out, the list did make a great conversation starter, and Dobbins personally witnessed more than one occasion where it successfully changed family discussions into a much more focused and professional process. Dobbins says he doesn’t really know just how often the assessment has been used because it’s now so widely available, but initially they had hoped it was something farmers would consider using regularly as a way to track their own progress in professional development.

The authors also hoped the systems would see farmers transfer management tasks to other members of the team or hire the expertise where they lacked it, rather than allow identified weaknesses to persist without working to correct them.

Of course, the system could also help farmers find their inherent strengths and do a better job of building on them as part of their business’s overall strategy.

As time passed, however, the extension service itself moved to using personality assessments instead, Dobbins says.

“We found that getting people to talk to one another was more important than identifying skills, and the Myers-Briggs assessment really did help,” Dobbins says.

“I think that there is a place for skills assessment in managing your career,” he continues, and he believes it’s always good for managers to know as much about their own strengths and weaknesses as they can.

Nor, really, does he think most farmers would be shocked by what the assessments uncover. Instead, he sees them more as confidence boosters that help to confirm things people think they know about themselves already.

But personality assessments are not to be confused with skills assessments, says Portia MacDonald-Dewhirst, executive director at the Canadian Agricultural Human Resource Council (CAHRC).

While the Myers-Briggs assessment may have uses in succession planning, it doesn’t tell you whether someone is well prepared for a specific job. “Personality assessments are about characteristics that define your personality and don’t necessarily have any relevance to a position,” MacDonald-Dewhirst explains. “What you really want are knowledge and skills to be aligned with the position.”

Once you have someone working at the job, you can then go further by examining their competencies, described as the underlying factors that have an impact on how people get work done, not just what they do.

CAHRC has also created a database of national occupational standards and competence profiles. In creating skills assessments, they worked with an extensive network of farm managers, workers, and specialists to specifically focus on positions in primary production. Their latest project, the Labour Market Initiative, will go even further to outline skill shortages on farms across the country when it’s released in March.

In truth, however, it’s actually something of a concern that farmers’ ability to think clearly about skills assessments is likely to become even more important, MacDonald-Dewhirst says. That’s because, as many farmers would agree, human resource management isn’t something they excel in.

“Farmers are really good at what they do, they’re focused on production, and they didn’t go to school to study human resource management,” MacDonald-Dewhirst says, “but whether you’re managing yourself, family, consultants, or staff, you’re managing people, and you’ve got to do it in an effective way or you’re leaving money on the table.”

Although many of the tools offered may appear to be tailored to farm managers with a lot of staff, MacDonald-Dewhirst says farmers can also apply the skills assessments to themselves. Business people who want to conduct their assessments privately are encouraged to do so. In fact, she thinks many farmers would get great professional development value out of identifying their own strengths and where they could use some assistance or additional learning opportunities.

For example, Sandra MacKinnon, who works for the Prince Edward Island department of agriculture and forestry, says she has personally seen skills assessments be used well by farmers in her region through the Future Farmer Program (FFP).

When the program was launched in 2003, one of the critical pillars that was developed for it is now known as the Farm Manager DACUM Chart. MacKinnon says that basically, they collected a group of farm owners and managers together for a few days to talk about what they all do on a daily basis. After they’d listed all the skills they needed to do those jobs, they organized the list into general areas of competency, highlighting the skills that the group felt were most critical for a new farmer to work on first.

Today, when farmers enrol in the FFP program, the first thing they need to complete is a self-evaluation that questions their abilities in 200-plus skill areas. “Some future farmers love the idea of going through the checklist, others are less enthusiastic,” MacKinnon admits. “Personally, I really feel it helps to focus in on areas that you may not have as much confidence in.”

Much like the Purdue checklist, the skills assessment used in P.E.I. covers financial, human resource, production and marketing skills, but also addresses record management, regulation interpretation, communication, environmental management, and personal competency development skills.

Interestingly, the two largest general areas of competency were the business strategies and personal competency groups. However, when the group identified core skills critical for new farmers to learn  first, production management became the largest of the general areas.

Simple as it may sound, MacKinnon says, it’s really helpful for young farmers to identify that “Manage herd/crop health,” “Prepare product for sale,” and “Monitor and control costs” are more important to learn immediately than “Secure insurance,” “Plan tax strategies,” or “Evaluate genetics.”

“Time is so precious to people who are just starting out,” she says. “They’re going to be very selective in what they are choosing and what skills they want to improve.”

Once the five-year guidance program is complete and these new farmers are completely on their own, MacKinnon doesn’t know how many will revisit their original checklist to re-evaluate their progress or identify new competencies to begin developing. But the chart does very effectively demonstrate how skill development does evolve through a farming career.

Many mid-career farmers will master the basics and can start to develop other identified skills, such as succession planning, lobbying, dispute resolution, developing comparative standards, systems evaluation, and maintenance of personal health.

Regardless, whether you’re just starting out or whether you’ve been in the industry for years, mapping a path of professional development can be a lot more strategic, and also a lot more rewarding, than it used to be.

The post Your own HR scorecard appeared first on Country Guide.

As well, farm real estate is often the main retirement fund.

There is no question, too, that farmland has been an incredibly good investment in recent years. If you purchased farmland in Ontario for the average price of $3,000 per acre in 1994, that land would have been worth about $11,000 per acre by 2012, essentially quadrupling your initial investment.

With these kinds of returns to ownership of farmland, how can there be any question about the value of investing in it? But with any investment, past performance is no guarantee of future returns. Instead we need to look to the fundamentals and at what gives land its value.

Is land still a good investment?

Dr. Michael Langemeier at Purdue University urges caution: “We are already seeing weakness in the farmland market in the U.S.”

If cash rents go down because of lower commodity prices, there will be an impact on land values, Langemeier says. In fact, Langemeier believes land values will go down faster and harder than rent.

As well, land prices may be sideswiped as the economy improves and interest rates inevitably go up interest rates can hurt land prices too.

Langemeier suggests farmers calculate a Price/cash rent ratio (P/rent) on land they are considering. In the paper, “Farmland: Is It Currently Priced As An Attractive Investment?” which Langemeier co-wrote with Dr. Timothy Baker and Dr. Michael Boehlje, the researchers say P/rent over the past 50 years has averaged 18.2. This is relatively close to the average S&P 500 price/earnings ratio of 18.7 for the same time period. However, since 2004 the P/rent has been well above the average. Land prices peaked in August 2014 at 33 times rent.

The authors also compared a running 10-year average of the S&P 500 P/E and the P/rent and found that this ratio (i.e. P/rent10) now exceeds the peak S&P P/E10 recorded during the dot-com stock bubble in the late 1990s.

Their study concludes: “Land buyers beware… current farmland values are now extremely elevated in relationship to underlying economic fundamentals. If we are correct, this means that those purchasing farmland at current prices have a high probability of experiencing buyer’s remorse in coming years.”

Should you buy now?

For many farmers, owning land is more an emotional decision than an economic one. As long as they can make the payments, they are willing to purchase land. They justify their purchase, saying, “if I don’t buy it now, I will never get another chance.”

That may be true, but is ownership of that particular piece of property worth the risk that you will not be able to make payments if interest rates go up or commodity prices go down? Are you willing to tie up equity you already have in other owned land in order to secure an overvalued mortgage, especially since you will then not have that equity available for other needs? Are you willing to forgo the returns you are receiving on current investments which will have to be liquidated to meet the down payment for a land purchase? Can you live with the reduced cash flow?

Then there are also the “economic” arguments. We often hear that land has always gone up and it has outperformed the stock market. Lenders and those selling real estate or investments in farmland like to remind us of this, and over the long term it may be true. But like all investments, land appreciation is not smooth, constant, or guaranteed. We have seen land drop in value, as happened in the early ’80s, after which prices took a decade or more to recover.

Unlike investments such as stocks, you cannot easily liquidate overpriced land if land values begin to fall. It is much harder to sell to cut your losses on land than many other assets. You are making a long-term ownership commitment, so you better be sure you are not buying at the market peak.

With a P/rent of 40 or more, as it is right now in central Alberta, is this a wise time to purchase? Would you buy a stock with a P/E ratio of 40? Maybe you would if you felt it had good growth opportunities and had safe earnings, but can you say that about land today, given falling commodity prices, the risk of rising interest rates, and record-high land values?

Not making it anymore

Next there is the argument that “they aren’t making land anymore,” so it will always be worth more. But is that true?

U.S. farmers harvested 20 million more acres of corn and soybeans in 2014 than they did in 2005. A good portion of that land came out of the Conservation Reserve Program. We are also seeing large increases in seeded acreage in South America and Eastern Europe, and there is a large untapped potential in Africa.

But what about the two billion more people who will need to be fed by 2050? Interestingly, CNBC reported FAO estimates that while there is 0.218 ha of farmland per person today, that ratio will only decrease to 0.181 ha/person by 2050. If this is true I wonder if increased efficiency and production could easily compensate for this reduction in land per person.

Finally, potential buyers will argue that if they own the land, they do not have to pay rent. But rent is actually the return on your investment in land. You should still be paying rent to yourself on owned land, at least on paper. You are fooling yourself if you are allocating all your returns on owned land to the farm operation and paying yourself nothing for your investment in land.

This article was originally published as “Our other business” in the April 2015 issue of Country Guide

The post The business of owning farmland appeared first on Country Guide.