One of my favorite assignments each year is a speaking tour with the Royal Bank of Canada and engaging with Canadian agriculture leaders. Often, the U.S. takes our loyal neighbors to the north for granted. In the agriculture industry, Canada represents over $20 billion of agriculture export trade and usually ranks as our number one customer. A recent speaking tour in the Prairie Provinces and Ontario provided some keen insight and perspectives into the Canadian agriculture industry.
First, grain producers in Canada are doing quite well economically as a result of the low value of their currency, commonly known as the loonie. A challenge for the grain industry is delivering product to international markets. Much of the rail capacity in Canada is used by the energy industry, similar to the conditions in the northern tier states like North Dakota and South Dakota. This places Canadian grain producers at a competitive disadvantage.
The large farms and fields in western Canada are very adaptable to the latest technology in the grain industry. More producers are gaining efficiencies and using the power of data integrated into their operation. This technology also provides market advantages through sourcing inputs, environmental compliance, and moisture usage.
Just like their American counterparts, Canadian producers are very concerned about NAFTA negotiations. Two-thirds of their products are exported, with a large share having a final destination in the U.S.
One of the biggest challenges on Canadian farms is transition management. The Royal Bank of Canada is taking a new approach because many businesses tend to procrastinate transition planning. Instead of using the name “transition planning,” the Royal Bank of Canada uses a new term called “business ownership planning,” or BOP. This concept brings a greater sense of urgency, whether for a family business or one that is integrating new partners.
Six years ago, I visited a robotic dairy in Ontario that provided an excellent example of business ownership planning. The farm was strategically designed and positioned to attract the family’s daughters to return to the business. Through some rigorous business ownership planning, one of their daughters, who was a consultant in Europe with an accounting firm, returned as a manager. She was able to integrate her business and information management skill base with her dairy knowledge to take the business to a new level with a productive labor management team. Observing a forward thinking family executing a plan provided me great hope for the future of North American agriculture!