I recently returned from TEPAP in Texas, a well-known program for agriculture executives to level up their knowledge. This was my first time attending and I took so many notes I have an entire spreadsheet of actionable items, new one-liners and future to-do’s. I’m getting older and if I don’t write it down, it doesn’t stick.

I can honestly say it was a humbling experience. I think I’m a hard worker and to learn that some of these producers are working 1,000 hours more than me per year was astonishing. And while that type of lifestyle is neither desirable or sustainable, you can see why these other producers have been incredibly successful. 

I had the privilege of being in a room with the best of the best – let me throw some stats your way:

  • 43 other producers (that is just level 1, other levels are running simultaneously)
  • Combined assets owned worth  $1.145 billion
  • Combined gross revenue  of $518 million/year
  • Combined total liabilities of $474 million 

And this is why we go. Because just when you think you’ve got the ag puzzle figured out, you realize you’re not actually as far ahead as you first thought. To see, hear and learn from other producers (most from the US) is, in my mind, the best professional development you can get. 

Here are some of my key takeaways:

Appointing a Safety Director

We currently don’t have a safety director and I think this is something a lot of farms are lacking right now. 

If you’ve never worked on a farm, it may surprise you to learn that we often have near misses. Here’s an example – we’ve got a guy on top of a fertilizer bin as it’s filling and the bin fill spout falls, almost knocking him off a 40-foot bin. I’ve seen it happen. We often shrug it off and say we just got lucky.

We never make the time to talk about it and learn from it. As our operation grows and our team grows, it’s becoming clear to me that we need to start giving it the due diligence it deserves. 

Another safety concern is cell phones and driving. We know this can lead to driver inattention and, potentially, accidents.  It got me thinking…we could get headsets for the crew, which might solve part of the problem. Yet we communicate on an app, called Voxer, all day long, so this will be a challenge. But, it’s something that’s now on my radar as a priority. Open to other thoughts from folks out there who may be struggling with the same issues. 

Does having an MBA make you a better farmer?

I’m pretty sure most of you out there might say no, but in today’s increasingly competitive and large operations, I think it’s something we should consider. After all, they’re managing multi-million dollar businesses. 

I had some great conversations with other producers who are sending (and paying for) team members to attend university to get their MBAs. Previously, this is something only the corporate world did. It’s refreshing to see that this is happening and I do think there is benefit to training guys on business fundamentals. While it might not improve the day-to-day dirt work, I think it can provide high-level strategic focus for team members who are keen to move into management positions.

Avoid Chauffeur Knowledge 

I love a good story and one of the speakers recounted this one: A medical doctor/professor and his chauffeur did a year-long roadshow of speaking engagements. The chauffeur sat in the back row and listened to every single presentation. Towards the end of their trip, the chauffeur says he’s pretty sure he knows enough to give the entire presentation. The chauffeur went up and recited the presentation, but couldn’t answer a single question from the audience. He was a deer in the headlights. Bottom line, lots of us have high-level knowledge but don’t fully understand the nitty-gritty details. We can’t just memorize things, we need to understand things. 

My takeaway here is that we can’t make decisions based on chauffeur knowledge – whether that’s on the farm or in life. There’s a never-ending supply of armchair quarterbacks, media pundits, ag commentators and even politicians who will spout out information without really understanding it. Don’t fall for it. A word to my team…I may be using this one often.  (wink emoji)

Job interviews go both ways 

In our tight labor market, this was a good reminder that as head of HR, it’s also my job to sell our company, the opportunity and the path to advancement. We get so focused on finding the candidate who checks all the boxes, and when we finally find them, we see that maybe they don’t want us. It is up to us to explain to potential hires why it’s a great place to work, the perks that come with the job, the lifestyle and, most importantly, that we have a plan in place for career advancement. When today’s young folks can go work for a tech, chemical or fertilizer company in the city, we’ve got our work cut out for us to make primary producer agriculture an attractive option. When it comes to the interview process, it’s a two-way street.

Keep an eye out for the “C” Student

When interviewing candidates, particularly summer students or new grads, marks don’t tell the whole story.  One of the speakers at the conference shared with us that it’s often the “C” student who may surprise us with their strong work ethic, leadership and great ideas. While “A” students are most likely to go on to academia and research, and B students are the worker bees who keep the economy going, the “C” student might just be the next entrepreneur or successor to your business. 

People’s feelings are (or can be) human collateral in getting things done

Does that sound harsh? Probably because it is, but it’s also true. There’s a great saying that goes along with this…three in a relationship is a crowd. Everyone wants to be involved in the decision-making process, but at the end of the day, we can’t rule by committee. I 100% agree in collaboration and soliciting team feedback, but we can’t have analysis paralysis. We need to make swift decisions on time-sensitive things or else we won’t get a crop in the ground. Sometimes, that can result in hurt feelings, and people need to realize you can’t take that personally. 

We can’t ignore geo-political issues 

We heard from an insightful geo-politicist at TEPAP who encouraged us to keep our eyes on China. As probably the single biggest importer of our canola, and with canola being the most profitable crop right now, losing China as a customer would be disastrous. China seems to be kicking sand at everybody right now, but we need to find ways to keep that international trading relationship strong and we need strong leadership from our federal government.  In Saskatchewan, we’ve made good progress on crushing almost half of our canola domestically, but we could see a drop in canola prices in a few years if trade relations break down. 

He also pointed out that China’s birth rate is decreasing, largely due to the one-child policy, and demand may not continue to be as strong as it once was. Bottom line – we can’t get caught putting all of our eggs in one basket. 

The “greenlash” is coming

I don’t have much interest in politics, but I do know how our industry is sometimes portrayed in the media and on social media, and it’s frustrating. So, for me, this was a hopeful sentiment expressed at the conference that I’m holding onto. Speakers pointed out that the environmental movement and current obsession with “sustainable” and “regenerative” farming will go through three phases – obsession, disillusionment and then enchantment. I think this is where we’re at right now…the disillusionment of things like the carbon tax, electric vehicles and fake meat. 

We all know we’ve got to do something about climate change and our farm is a leader in sustainable farming practices, but I think the dust is starting to settle. We’re really going to make progress over the next few years in determining what are the most sustainable technologies that are worth investing in and which ones are a fly-by-night trend based on the popularity of the green movement.

Farm succession

Now, here is one area where I can wholeheartedly say HGV ranked above most producers at TEPAP. I was surprised by how many older producers still have not had conversations with the second or even third generations about what succession on the farm will look like in the future. HGV has spent a great deal of time thinking about and creating the structure of how the operation will carry on, with joint owners that are outside the Hebert Family. One thing I’ll say is Kristjan and his father, Louis, have been very transparent about this and the team appreciates this. Many producers I spoke with are dreading these conversations with their younger generations and the longer they put it off, the more difficult it becomes. 

Know Your Numbers

I have the privilege of working with two experienced accountants so HGV is pretty clear when it comes to profit margins, borrowing, debt, land acquisition, forecasting, etc. Not every operation is like this. You can read many of our Farmer Coach blogs that outline the importance of this. As farmers, I’ll just say it, most of us are drawn to the machinery, being outdoors and living the rural lifestyle. After a few good years, we like to buy our “toys” (typically, the boat, cabin at the lake, new truck) and we’re not great at making sure we can weather the down cycles. The numbers aren’t sexy, but they are important. If you don’t feel you’re strong in this area and don’t have the means to keep someone in-house, there is always the option of hiring a fractional Chief Financial Officer (CFO), which is becoming increasingly common and worthwhile.

TEPAP was a great experience and I’ve started to realize that investing in one week of continual development per year is good for me, the business and my mindset. The sun and warmth of Texas in January doesn’t hurt either. 

-Jeff

Earlier this fall, we had a team of European producers visit the farm on a fact-finding mission to learn more about farming in Canada. Of course, we welcomed the opportunity to host Tammo Gläser and his delegation. The farmers were from Germany, Austria and Switzerland and they were keen to learn about our crops, farming methods and business practices, particularly around finance.

I think they learned a lot by visiting us and a few other farms across the Prairies, but one piece of advice we shared completely blew them away. We told them to grow the farm, we don’t immediately buy new equipment and instead, we focus on adding team members and running longer/more shifts. Once we have the team in place, then we can responsibly take on more acres.

Tammo Glaser and the team from Farm World.TV visiting the farm in September

It’s about managing human resources effectively instead of buying new equipment. Tammo shared with me that this was something they’d never considered before – it completely changed their perspective, in a good way, since equipment costs are one of the largest expenses on a farm.

We’ve also had quite a few of these similar growth moments over the years – many have come from conversations with bosses, mentors, business coaches, and sometimes complete strangers.

Let’s continue exploring some of these concepts that have had a profound impact on our business model at HGV.

If you treat your farm like a business, it can be a great way of life. If you treat your farm like a way of life, it can be a really bad business.

This saying I first heard from my friend Gerrid Gust – it’s foundational to our business and it’s one you will often hear me repeat when speaking to a crowd. It always makes people stop and think. From the moment we set up our management structure, with an Advisory Board, it was decided that we would run the farm like a business. Even though it’s a family farm, emotions are not part of the decision-making matrix. Yes, it can be difficult at times but, at the end of the day, we run the farm so it can sustain itself financially, so we have something to pass on to the younger generation.

To Get the Future You Want, Create It 

We love this quote from Henry Ford – ‘If you always do what you’ve always done, you will always get what you’ve always got.’

“It has stuck with me over the years as I have witnessed our farm going to the bank and giving them a list of what we want. In contrast, I’ve seen other farms ask the bank for what they can get. We are very clear in our goals and the strategy of how we want to get there – this is how we now do business. If you never ask, you will never get it.”  – Evan 

Management’s job isn’t to be a boulder, it’s to remove them 

This is in line with the Bring A Shovel saying we talked about in our previous blog, but this one really stresses a manager’s role as a problem-solver.  

“I had a problem employee tell me one time, ‘It’s easier to work with people than against them,’ and it stuck with me. From the janitor to the CEO, all employees have issues that cause them stress during their working day.  A good manager doesn’t minimize these issues because they aren’t important to them, they help the employees overcome these stresses.” – Jeff 

Don’t sweat the small stuff; focus on the big picture

“When I was in the grain business we had a short crop one year so, naturally, my first reaction was to cut expenses. I drew up an elaborate plan to cut expenses which included laying off staff, many of whom were loyal and dedicated employees. After reviewing my plan, my supervisor looked at me and said that maybe I needed to worry more about generating more revenue and less about cutting a few pennies here and there. Expenses are on the rise in primary Ag, how do we produce more, how do we market better?” – Jeff

Win-Win

This one is pretty self-explanatory but it is a game changer when you begin to think about everything through the lens of building relationships – with team members, employees, neighbors, vendors, etc. Finding mutually beneficial outcomes for all involved is one of our core values and we do live it. By building trust, encouraging collaboration and reducing conflicts, this simple adage, time and time again, has allowed us to grow and further the business.

I hope you’ve enjoyed these concepts and stories – we repeat them so often around the farm they’ve become ingrained in our subconscious. Every once in a while it’s good to reflect and share with others. Just as Tammo showed us, we can all learn from one another.

With 2024 fast approaching, our team is taking some time to pause and reflect as we think about our goals and strategies for the next business cycle. The winter months are a great time to revisit our business plan and to go forward, we must look back.

So, on that note, I asked our key team members to reflect on moments or sayings throughout their career that have inspired change, a mental shift or a game-changing concept that has changed the way we do business at HGV. And, interestingly, they sometimes come from who and when you least expect.

Here are five concepts from my team that have become “game changers” on the farm:

3+3=6, 2+4=6, 1+5=6  

 

“We had an employee who would tell us this all the time when we would suggest an alternative way to do the task he was in the process of completing. Unless we want to micro-manage every task to ensure it’s done as we would do it, we have to learn to let people do it their way as long as we get the desired outcome. I learned from this employee that, as a leader, you must overcome the urge to micro-manage if you want to scale your business.” – Jeff Warkentin 

Bring a Shovel 

“This was the moment I realized I was no longer an employee and was now a leader on the Hebert Group team. The actual quote was, “ If you are going to bring dead cats, bring a shovel.” It’s the idea that if you are going to identify issues or concerns, make sure you come with solutions for the group as well. Too often employees rely on complaining or can easily come up with things that are going wrong.  The quote opens free thought and lets individuals provide thoughtful solutions before bringing up the issue.” – Evan Shout 

Managing people would be a great job if it wasn’t for the people

“I had a boss who used this line a lot. It was obvious that he didn’t enjoy his job and really should have been in a position that allowed him to work alone most of the time. Some people seek management positions because they associate it with prestige and a higher salary. This quote had a huge impact on me because it helped me decide I did want to pursue a career in management so I could build and lead a successful team.” – Jeff  

 

The Gap and The Gain

This is a popular one on our team and it has had a huge impact on all of us. The Gap and The Gain is a book by Dan Sullivan of Strategic Coach. It refers to the idea that if we’re chasing perfection, we’ll never get there – that’s when you’re in the gap. But, when we measure ourselves against our previous selves, we can see how far we’ve come – that’s what Sullivan refers to as “the gain.” This is particularly important for entrepreneurs and management because we are always moving the goalposts and can tend to feel like we’re not getting anywhere. At certain times in your career, or in farming, you need to stop and look back at how far you have come. Then celebrate the wins as you constantly move the goalposts further out. For our team this became apparent when we started using the EOS (Entrepreneurial Operating System); it requires that you break down long-term goals into short manageable periods, quarterly for us. This way you always get to see the achievements throughout the year and you are not waiting for a decade before you identify how far you have come. – Evan

If you build it, they will come 

“This was a constant message that Kristjan provided when I started at Hebert Group regarding opportunities. If we focused on what we were good at on both the farm and the consulting business, opportunities would approach us, and we would not have to go looking. Our consulting business was built on zero sales or marketing and most of Farmer Coach was industry and producers coming to us. We don’t pay for marketing or leads for either of these businesses, but we do invest in public relations and social media. Even when it comes to land expansion, we have people approaching us because we’ve established a reputation as great operators, with a strong brand and high level of financial acumen. “ – Evan

One of the best things you can do as a leader is to share these concepts with your team. Don’t keep the gems you’ve learned to yourself. When leaders can admit they’ve made mistakes, learned, and grown from them, they’ll inspire your team to do the same.

We’ve got a few more to share with you in Part Two of our next blog.

 

Four students to receive scholarships and optional work terms on progressive farm

May 30, 2023 – Moosomin, SK – Hebert Grain Ventures is excited to announce a new recurring scholarship program for agriculture students attending Olds College of Agriculture & Technology. In addition to the $1,000 entrance scholarships awarded this fall, two of the four students will be selected for a paid summer 2024 internship at HGV’s grain and oilseed farm near Moosomin, Saskatchewan. Upon completing their internships, both students will have their tuition fees reimbursed up to a maximum of $10,000.

The scholarship is open to full-time students enrolled in Precision Agriculture-Techgronomy diploma, Bachelor of Applied Science -Agribusiness degree or Bachelor of Digital Agriculture degree at Olds College. They must also be willing to relocate to Saskatchewan for the summer work term. 

Hebert Group president Kristjan Hebert says he has hired Olds College students in the past and is always impressed with their level of knowledge, work ethic and appetite for learning.

Statistics from RBC’s Farmers Wanted report examining farm labour suggest 40% of Canadian farmer operators will retire by 2033 placing the agriculture industry in a precarious state if younger talent isn’t ready to step in and fill the void.

“It’s one of the most exciting times to work in agriculture and we want to give that opportunity to students who may not have grown up on a farm,” says Kristjan Hebert, President of the Hebert Group. “The financial award will help them pay for their education and the work term will give them the practical experience they need to complete their degree and get hired. We believe they will be exposed to many exciting learning opportunities at our farm, including digital and precision agriculture and the business side of the operation.”

Established in 1913, Olds College is one of Canada’s top 10 research colleges. Through its applied research and integrated learning, it is Canada’s Smart Agriculture College, specializing in agriculture, horticulture, land and environmental stewardship. It works closely with industry to advance and adapt programming to ensure its graduates have the skills to succeed.

“As the agriculture industry continues to evolve, technological advancements have made data-driven decision-making increasingly crucial. Today’s students require advanced critical thinking and data literacy skills to succeed upon entering the workforce. Olds College is grateful to HGV for recognizing the importance of educating the next generation of agriculture professionals,” comments Todd Ormann, Vice President, Development, Olds College.

Recipients will be chosen from an application process that includes most recent transcripts and a written essay.

The four or eight-month paid internships with Hebert Grain Ventures will satisfy the Integrated Learning requirement of the students’ chosen programs.

The deadline to apply for these scholarships is October 31, 2023. You can read more about it here.

 

 

 

Study will inform a national carbon credit measurement, verification and reporting system 

 

News Release

 

April 26, 2023 – Moosomin, SK – Hebert Grain Ventures will be the site of a national case study that will see HGV’s 32,000 acres of grain and canola farmland used to quantify the amount of carbon being sequestered with the ultimate goal of developing a measurement, verification and reporting system that will help Canadian farmers generate and sell quality carbon credits.

The Canadian Alliance for Net-Zero Agri-food (CANZA) will work with HGV and researchers from the University of Saskatchewan. Other collaborators involved in the study include the University of Ottawa’s Smart Prosperity Institute and the University of Guelph’s Arrell Food Institute. Advisory support is being provided by RBC, Nature United, Nutrien, Maple Leaf, Loblaw and Boston Consulting

Group.

“We’re really excited to be involved in this study as it demonstrates our interest, willingness and optimism that carbon credits can provide another stream of revenue for Canadian farmers without jeopardizing agricultural output,” says Kristjan Hebert, president of the Hebert Group, a family of agricultural companies including Hebert Grain Ventures.

Up until now, Canadian farmers have been reluctant to participate in the carbon offset market due to confusion over carbon credit eligibility, invalidated credits and low carbon offset prices. 

“Many farmers think the carbon offset program is just a bunch of government hearsay. We’re attempting to gather the data to prove that using farming practices that lower emissions is not only good for the environment but can actually translate into revenue and a cheque,” says Hebert.

The 12-month in-field, research and development case study will begin this month. Researchers will test and validate new technologies, like remote sensing and spectroscopy, that can potentially measure carbon more efficiently.

“Rigorous testing of these technologies will ensure we have scientifically-defensible methods for quantifying and comparing the impact of management changes, over time and across different soil types and climate zones,” said Angela Bedard-Haughn, Professor of Soil Science and Dean at the College of Agriculture and Bioresources at University of Saskatchewan. “Building a comprehensive soil organic carbon database will also provide a foundation for modeling future change under further land use and climate changes.”

By the end of the project, the goal is to develop a prototype MRV (measurement, reporting, verification) system that has the capacity to measure & model the impact of soil health management practices and generate high-quality carbon assets that meet industry verification standards.

Canada’s farms manage one of the world’s largest inventories of agricultural land and sustainable practices can give farmers unparalleled power to cut emissions, and improve air and water quality, soil health, and biodiversity,” said Mohamad Yaghi, Agriculture and Climate Policy Lead at RBC’s Economic & Thought Leadership.  “And while the credit market could be enormous – as much as $2 billion to $4 billion more by 2050 – there remain significant economic obstacles to farmers adopting these practices. Kristjan is the innovative farmer Canada needs because of his dedication to building innovative solutions to evolve the entire industry and help producers get rewarded for what they preserve.”

The next phase of the study would see the low-cost, scalable prototype MRV system used for production testing through a pilot program during the 2024 growing season.

-30-

 

About Hebert Grain Ventures (HGV):

HGV is a progressive 32,000-acre grain and oilseed operation in Moosomin, SK. HGV is obsessed with solving agriculture’s puzzles. HGV is built on the belief that it leaves the land and the financial statements in a better state for future generations. 

 

About Canadian Alliance for Net ZeroAgri-food (CANZA) :

CANZA is associated with the RBC Climate Action Institute which works closely with businesses and industry partners to design practical ways to reduce net emissions. It will focus initially on buildings & real estate, agriculture, and energy systems.

 

At Hebert Group we wanted to take time today to recognize the contributions of women in our industry.

From female producers to ag influencers and women who work full time on the farm to those who balance off-farm employment and being a Mom (the most important job there is!), there are so many opportunities and roles for women in agriculture.

I think the Hebert Group is a great example.

Hebert Grain Ventures’ controller, Mariah, runs the financial day-to-day on the farm. 

Theresa Hebert is a partner of Hebert Group, she does a great deal of community outreach, does meals in the field during the busy growing season, and she pitches in wherever is needed.

Courtney at HGV manages Kristjan’s schedule, does parts runs, moves vehicles, and gets her hands dirty with any other odd job required.

Jenn at Maverick Ag is a trusted advisor for a large number of Saskatchewan farms in planning their risk management strategy.  

Founding partner Karen Hebert, though semi-retired, still helps with bookkeeping, is active in the community and provides meals in the field during the busy season.

Maverick Ag’s Stephanie is a key advisor to many of our progressive farm clients and manages the Deep Roots Foundation, Hebert Group’s Foundation focused on contributions to Agriculture, Athletics and Community development.

As for myself, I wear many different hats within our organization. I’m the controller of our consulting company, Maverick Ag, administrator and creative lead with our executive management training program Farmer Coach. I’ve been able to grow professionally as our company grows as a single mother raising my beautiful daughter Norah, which is something I’m extremely proud of. 

I could go on. Hebert Group has female partners, administrators, machinery operators, managers and advisors. Women are involved in every area of our operation, something I think we have in common with many farm businesses.

Right person, right role. This is one of our fundamental beliefs and one I think fits perfectly. 

Whatever way you choose to contribute to our industry, whatever brings you joy and fulfills a need in your operation, we recognize the value of those contributions and are thankful for you. I’m proud to be a woman in agriculture amongst so many other incredible female leaders who are moving our industry forward.

 

Lauren Parker

Hebert Group

 

 

Moosomin, SK – Jan. 9, 2023 – The Hebert Group will be making significant financial investments in several southeastern Saskatchewan communities through its new Deep Roots Foundation. With the goal of improving the quality of life for those living in rural communities, the charitable foundation has three priority areas including agriculture, athletics and community wellness. 

To kick off the launch of the Foundation, all employees of the Hebert Group received $500 in December to donate to an organization of their choice. 

“This is something that we have been wanting to do for a long time and is really important to our team. We all live and have kids in these communities and we want to see them thrive here – whether it’s a new rink, hospital equipment or a 4H Club. We love rural Saskatchewan and want people to stay here,” says Kristjan Hebert, President of The Hebert Group.

The goal is to make significant investments in the five rural communities and city where the Hebert Group operates. Those communities are Moosomin, Whitewood, Redvers, Wawota, Maryfield and Saskatoon. 

The Deep Roots Foundation Scholarship Fund will award scholarships to post-secondary-bound grade 12 students pursuing studies in either agriculture or business. Annual scholarships of $2,000 will be awarded at each of the five local high schools. 

Hebert says the Foundation will also work closely with the Community Builders Alliance on the new Moosomin airport expansion project. Hebert Grain Ventures has already committed $25,000 to the project.

“Having an upgraded airport in Moosomin has become critical for our region. A regional airport contributes to the local economy and supports vital public services such as air ambulance, law enforcement and fire suppression,” says Hebert.

The Foundation is welcoming requests from local groups and organizations. Application forms can be found on the Deep Roots website. Completing this form is the most efficient way to ensure your request is considered. 

 

 

In November, the HGV team headed to Calgary to proudly accept the EY Entrepreneur of the Year Award. I felt privileged to have my wife Theresa, my parents, and management partners Evan Shout and Jeff Warkentin accompany me to accept this award. It may sound cliché, but I really do consider this an award for the entire team.

It simply isn’t possible to run a group of companies without the right people in place. I always say I don’t hire smart people and tell them what to do. Rather, I hire smart people so they can tell me what to do.

Our entire team works hard every day to help run the farm and feed a growing population. In recent years, we’ve been able to expand our offerings to knowledge-based businesses, like Maverick Ag and Farmer Coach, to help support all Canadian farmers with the unique challenges they face in a volatile commodity-based business.

At the awards ceremony, I met with many other entrepreneurs from other types of businesses. I always take inspiration and wisdom from each and every one of them.

I’d like to send out a huge congratulations to the other Prairie winners including Aliva’s Foods Ltd., Chandos Construction, Eagle Builders, Homestyle Selections LP, Redekop Manufacturing and Peavey Industries.

It was Doug Anderson from Peavey Industries who said something that really resonated with me. He thanked his family for allowing him to pursue his dream and he also thanked his wife for “the years I wasn’t there.” As an entrepreneur, husband and father, we don’t want to work long hours, miss kids’ activities and take business trips away from home, but sometimes it’s the nature of the beast. I try hard to balance work and family life and most of the time I do pretty well, but the support I receive from my family is deeply appreciated and doesn’t go unnoticed.

The Prairies winners will move forward to compete against peers from the Pacific, Ontario, Québec and Atlantic regions at the national awards celebration in January of 2023 – good luck to all!

 

We are learning more about our soil with every passing year. 

Together, Dad and I have farmed about 50 crops since 1978 and, over the last five years, we are finally starting to understand what’s happening in the soil thanks to sensor technology that feeds directly into the Crop Intelligence platform, as well as satellite technology we use at Global Ag Risk.  

The system isn’t making decisions for us (yet!), but it is helping us with the timing of our decisions which continue to greatly impact and benefit production.

How does the system work?

We have a network of 12 soil probes each having numerous soil and weather sensors in the soil feeding us almost real-time data on soil moisture. We typically keep the probes in from April to October and, this winter, we decided to keep two probes in through the winter freeze so we could be better prepared heading into the spring. The system also pulls in data from John Deere weather stations in the area. The system is able to make general yield predictions based on those variables.

It’s a subscription service that we pay for annually. 

How intelligent is it?

Here’s a screenshot of how things are looking on our 30,000 acres in the southeast corner of Saskatchewan. It’s an area that was somewhat spared by the drought conditions across the Prairies last year. We were lucky; I know many farmers lost entire crops by July, without a drop of rain during 30+ degree temps. However, you can see on the left-hand side,  we actually got rain during June, July and August.

What we really like about using the Crop Intelligence system is that during the growing season we can actually see the plants wicking moisture down into their roots. We’re shown the daily use of moisture, which is a level of detail we never had before.  By the third week of June, the plants will already be drawing moisture down into their roots. I can pull up this data on my phone while out in the field and see projected yields changing day to day, and sometimes by the hour, depending on the weather.

The data and insights also help us make decisions when it comes to fertilizer application – will we need to top-dress, how much, when should we apply it? Based on moisture levels, we will tweak the prescription accordingly. Fertilizer is to plants what calories are for humans, so this is a key metric that greatly influences production.

Our goal is, eventually, for this technology to help me make decisions at least weekly, if not daily.  I tell stories of farming having its own probability cheat card like BLACKJACK, where every day we are given the odds on the decision we are about to make before we make it.  

Spring 2022 conditions and predictions

Right now, we’re heading into the 2022 seeding season with really good moisture levels thanks, in part, to the amount of snowfall we had over the winter. The soil moisture has been re-charged and we are forecasting a normal crop. If all goes well, we have the potential to grow an above-average crop this year.  Although the yield predictions are for the average parts of the field, we can see variability depending on topography, salinity, etc.

The increasing cost of seed, fuel and fertilizer are other key considerations this growing season.  An average cost of production in the black soil zone is $400 an acre, but it’s estimated some producers will see that rise to $550 an acre or more because of the cost of inputs. The current price of nitrogen is 150% higher than when we purchased it last year and potash is almost 300% higher, then add on fuel, equipment and labor all adding to the inflating cost structures for farms..

One strategy we use at HGV is to carefully manage our working capital through some unique financing strategies.  This allows us to have an aggressive pre-purchasing strategy on fuel and inputs when we feel there are opportunities. It can occasionally be a  bit riskier as no one can predict future prices, but having such a strategy this past year, as well as storage infrastructure, has been a big win.

Risk of early frost or drought conditions could negatively affect our best laid plans and projected yields, which is why we still must have a robust risk management plan (a topic for a future blog). Needless to say, we’ll be watching weather conditions closely over the coming weeks and try to adjust as necessary. 

Wishing you all the best for #Plant2022.

Kristjan

At HGV, we hear from a lot of other farmers. Sometimes, we hear things that we know just aren’t true. Our Managing Partner Kristjan Hebert and Chief Financial Officer Evan Shout sat down to debunk some popular myths that they believe can hinder a growing farm. While there isn’t a one size fits all solution, we think you may find these tips helpful.

1. Myth: Bigger is better.

  • Fact: Size is not a function or profit. Some of the best producers we’ve seen are what you might consider “small,” i.e. between 3,500 – 5,000 acres in western Canada. In Saskatchewan, we still have many hobby farmers and the average size is actually closer to 1,500 acres. The bottom line – even small farms can be profitable. Instead of “Bigger is better,” we like to say, ”Better is better.” Constantly assessing and optimizing farm management practices will drastically improve your bottom line per acre. Sometimes those efficiencies are labour, not machinery. For example, we added 5,000 acres last year, but didn’t need to add more staff.  A unique value proposition is if you can scale better is better.

2.  Myth: Machinery should be my most important investment.

  • Fact: Labour almost always trumps machinery Yes, every farm needs new equipment, but it shouldn’t be the focal point of your efforts. Instead, equipment should allow you to use your labour more efficiently. Recently, we did a combine trade that allowed us to reduce 2 machines from our combine fleet. While these are bigger combines, it’s actually less machinery, and they free up our staff to do other jobs. Also, consider the costs involved. A new employee may cost you $60,000 – $100,000, while a new combine these days can run from $250,000 to $1 million.

3. Myth: You should find low-cost labour during the growing season.

  • Fact: Farming can be a full-time career that pays well. At HGV, we pride ourselves on finding the best people, paying them well and keeping them on staff year-round. Our mindset is that farming is an attractive career and we needed to start paying our full-time hires what they’d be making in other industries, whether it be mining, oil and gas, etc. We don’t hire and fire, we don’t have the cost of recruitment and we rarely end up being short on labour. Instead of looking for the cheapest workers, find good people, make them feel like part of the team and pay them what they’re worth!

4. Myth: It’s impossible to run a 24-hour farm operation during seeding.

  • Fact: We have been doing this for the last decade. By adding 12-hour day and night shifts, our productivity increased, and our employees were happier (some like the night shift!) and they didn’t feel “burnt out.” Because our employees were able to go home and get proper rest, our safety record improved as well. We have found historically that anything over a 16-hour shift will cause safety concerns and mistakes that could cost us in the long run. By implementing two shifts our employees work less hours per day than most farms that run during daylight hours.  All it took was planning to proactively deal with challenges we may face at night.

5. Myth: Family farms can’t be treated like businesses.

  • Fact: You must treat your operation as a business or it will not flourish and survive long-term. A great quote I heard from my friend, Gerrid Gust, is: “If you treat farming like a business, it’s a great way of life. Treat it like a way of life, it is a poor business.” At HGV, some of our team members have an ownership stake in the business, which is almost unheard of in agriculture. Setting up the business this way helps us attract and retain top talent so we can run the business more effectively. Treating it as a business does not take away from the family dynamic, which is at the root of HGV. The family legacy is still intact, the Hebert children will still have the option to run the business (if they want and are capable) and HGV has the best expertise it needs, which sometimes, isn’t family. It can sometimes be difficult, but families need to leave emotions out of business decisions.

6.  Myth: We don’t need new technology on the farm.

  • Fact: Technology is rapidly changing a farm’s profitability and efficiency. Agriculture has been slow to adopt new technology likely because it isn’t tangible – a farmer can’t really see it, use it and play with it and the ROI isn’t always immediate. About 75% of the farms we counsel have taken the leap towards adopting technological advancements, but 25% still seem stuck in the mindset of “We’ve always done it this way.” It’s a dangerous mindset and farms that don’t adapt will be left behind. Most farmers are cost-sensitive and technology isn’t cheap. But, its ability to make our jobs easier is without question. We find technology increases in ROI as farms implement multi-machine functions, whether that be multiple combines, sprayers, air drills, and even multiple yards and multiple operators.  Technologies such as prescriptions and guided mapping during the seeding season may make operations and setting machines much easier and more efficient (fewer mistakes). We need to embrace, not fear, farm technology.

7. Myth: We don’t need data and analytics.

  • Fact: Knowing your numbers can drastically decrease costs and increase profitabilityGetting really clear on your financial data is key and there are various platforms out there that can help you do it. Here’s a great example: last year we hauled our own grain while many farms hire a 3rd party trucking company. Once we analyzed our costs, labour, etc, we determined that we made money by trucking our own grain. We kept all full-time employees on the payroll, we chose how much grain and on what days – it was a win-win. But, that is something we would not have realized until we analyzed the numbers. There are many assumptions and misconceptions in farming, but your data will tell you the true story.

8. Myth: Weather is the biggest risk to my business.

  • Fact: currency and policy are the biggest risks. In farming, you can insure against the weather. There are a number of companies, including Global Ag Risk, that will insure against the weather so farmers avoid huge losses. You might wonder why many operations don’t make strong risk management choices. It’s a cost issue and many believe because they have had strong historical results that it won’t happen to them or they decide to gamble and take on the risk. If more farmers were properly insured against loss, if they fully understood how much equity they were risking, we would hear far fewer demands for government handouts and subsidies. If you could insure the highest net income you’ve ever had, before even putting the crop in the ground, why wouldn’t you do it?

  • Currency and policy are two things that are out of our control as farmers. Government policies that aim to limit fertilizer, control the growing process, fluctuating exchange rates and inflation that then drive up the cost of inputs are the things we need to be worrying about. These are outside the control of insurance or decision-making.

9. Myth: We can’t share our ideas with other farms because it will make us less competitive.

  • Fact: Sharing challenges and learning from others will help you avoid costly mistakes. Call it ego, competitive nature or rugged individualism, the biggest downfall for some farmers is their inability to ask for help and learn from others. Why do they think they must learn it the hard way? It’s simply not true. The growing prominence of peer groups, business coaches and farm financial advisors means you can share knowledge, ask questions and learn from others. This is the way it works in other industries, so why not farming too? Even though you may be in competition for land with a neighboring farm, it doesn’t mean you can’t work together to help each other’s businesses succeed. This is the difference between a growth mindset and a fixed mindset.

10. Myth: If I was not around tomorrow, the farm wouldn’t continue.

  •  Fact: A properly run farm has a transition and succession plan in place. The HGV team is fully empowered to run the farm in the event of death, disability, or succession. This is largely due to the amount of trust the owners have instilled in one another and staff members. Many farmers refuse to let go and fail to adequately prepare the next generation to take over. Most farms haven’t separated the cost and value of labour, management and equity making the discussions very intimidating.  The average age of a Canadian farmer is between 60-65, so transition planning is essential. Having a strong succession or transition plan in place, that includes staff, management, and leadership, is key to the continued legacy of most farms. The next generation depends on us being around long enough to transition OR having the proper plan in place to make sure the business is sustained. If you died today, would your operation run tomorrow?

Let us know if we missed any. We always appreciate your thoughts and comments. Please share with someone who might find this information useful for their operation.

 

Kristjan and Evan