Northern Vision - One farmer's plans for a better future in the Kapuskasing region

Friday, May 1, 2015

For Andrew Gordanier of Dufferin County, the north offers his best shot for a next generation of Gordaniers in agriculture. And agricultural experts and investors seem to share his view that there are opportunities to be found there

by JIM ALGIE

If Andrew Gordanier is ever to make a full-time living in agriculture, it won't likely happen on the 120-acre cattle farm where he grew up in Dufferin County.

Land costs these days in southern Ontario pretty much rule that out. Suburban-style houses line the roads leading south from Highway 89 to the stone building where Andrew's parents live, a few kilometres southeast of Shelburne. The nearest neighbours – lovely people, for sure, Andrew confides – still do have occasional objections to odours from Gordaniers' standing beef cow and sheep operations.

Besides Andrew, who is 38, just can't imagine a business plan that would enable him to buy out his parents, Bob and Elsie, and carry on with the farm they began on a firefighter's salary more than 30 years ago. Bob, now 66, was re-elected recently as president of Beef Farmers of Ontario (BFO), but he retired a few years back from the Brampton fire department and is wondering these days about his own future as a hands-on farmer.

Andrew, a late-90s student in agriculture at the University of Guelph, spent a period away from the farm working in auto parts. He lives in town with his wife Janet and their two children, Keith, 16, and Emily, 14. Since the Shelburne parts firm closed, however, Andrew has worked his way back into farming. Now he runs day-to-day operations on the Gordaniers' 40-cow, mostly Angus herd, backgrounding the calves, and manages their partnership in a 400-ewe sheep flock.

This spring, however, Andrew is thinking seriously about moving north to lease land near Kapuskasing, about 10 hours' drive and slightly north of the 49th parallel of latitude. A former board member of the Canadian Sheep Federation and the main reason why there's a flock of East Friesian milkers and cross-bred Rideau Arcott/Ile de France meat sheep on his father's cattle farm, Andrew figures the north offers his best shot for a next generation of Gordaniers in agriculture.

"I have three other siblings and so that's part of the equation," he adds, referring also to current uncertainty about precise details of his parents' plans. One brother works in heavy equipment in Alberta; another teaches school; their sister runs a health spa in nearby Orangeville. So it's a bit complicated.

"I'm not sure what enterprise we could possibly create here that would ever take our existing mortgage off," Andrew said as we sat in a heated highway trailer parked near a single-storey cow barn. "The farm we sit on here; it's worth well in excess of a million dollars," he said, estimating property values as he looked after a pair of orphan lambs one frigid afternoon in late February.

Deep-freeze temperatures overnight and multiple-lamb births had left a pair of untended newborns for extra care that day. Andrew and a French agricultural exchange student on a work term at the farm, plied woolly newborns with heat from a portable hair dryer and bottle-fed milk replacer.

Gordanier spoke at this year's BFO annual meeting in Toronto about his northern Ontario plans. Gordanier got the usual scepticism about northern Ontario snowfall, distance from major centres and reservations about the potential of wolf predation. In fact, Dufferin County's relatively high elevation generates deep winter all on its own. Andrew and his sheep dog guard animals have plenty of experience with intense coyote pressure even in the Shelburne area. And if travel distance from major centres is an issue, the Timmins airport is a two-hour drive in much lighter traffic than the drive between Shelburne and Pearson International.

Back in Dufferin a few weeks later, he expanded on the plan which is centred on a 700-acre parcel of pasture and hay near Kapuskasing with potential access to 850 additional acres nearby. The land is mostly cleared and partly tile-drained.

The business plan looks a lot like the operation he and his parents run now, but on a larger scale. That scale will come only gradually, Andrew figures, as he gets his feet on the ground, custom feeding for others, buying in western calves and gradually expanding his investment.

"We're kind of narrowed in on one place, so it's either going to happen or it isn't," he said, as a bleating lamb perched on his lap. Janet and the children seem agreeable, although the move north will likely occur over a period of years as the children complete high school and Janet, who works in health care, scouts possible jobs at the regional hospital in Kapuskasing.

"We have a unique opportunity there that I can't pass up," Andrew said. A tall, amiable man who converses comfortably and carefully, Andrew clearly enjoys this talk of the north. He collects scraps of northern lore and, after four scouting missions, has accumulated a network of contacts among existing farmers, most of whom are long-term residents or with spouses born and raised north of '49.

Exciting opportunities
Among them is Ontario Ministry of Agriculture, Food and Rural Affairs agricultural development advisor Barry Potter, who operates a cow/cash crop farm just north of New Liskeard and grew up on a similar operation near Earlton. A ministry employee in northern Ontario since 1999, a former agricultural college instructor and a technical sales advisor, Potter helped BFO consultants evolve their plan to boost northern Ontario cow production. He admitted in a telephone interview that he's "pretty excited about the opportunities for agriculture in northern Ontario."

Although BFO consultants have focused on an area near Cochrane known as The Great Clay Belt, similar opportunities exist throughout the north in Rainy River, Sudbury and Algoma districts, Potter said. Much of the region features "very heavy clay soils" and receives abundant precipitation, so drainage is a concern. But ministry research has also tracked a significant increase in crop heat units in recent years at New Liskeard, which allows for production of cash crops such as canola and cereal grains.

Amish and Mennonite settlers have established new communities in parts of the north. A group of about 25 Mennonite families moved to the Matheson area, near Timmins, over the past four years from more costly land in southern Ontario.

Institutional investors in farmland have also taken an interest. Joelle Faulkner of Toronto-based Area One Farms spoke to this year's Beef Farmers of Ontario delegates about her search for potential joint-venture farming partners in the north for her investment business, which operates similar partnerships in western Canada.

As well, Bonnefield Financial Inc., one of the country's largest institutional farmland investors, has picked up about 3,000 acres of crop land near Timiskaming over the past three years for lease-back to existing operators, according to company president Tom Eisenhauer. Bonnefield investments occurred in response to the financing needs of individual farmers following two difficult harvests in cool, wet growing conditions, Eisenhauer says. However, he also likes what he sees.

Climate-change projections and improved seed genetics mean "we're going to be able to grow more high-value crops up there and you're going to get better and better yields," Eisenhauer says. He has yet to invest in beef farms, but identifies what he describes as "a kind-of a virtuous circle" of development that should follow as farmers and others invest in improved agricultural infrastructure, particularly transportation facilities.

"In the long term it's going to make for a very attractive and very competitive farm market," Eisenhauer says.

Regional governments have enthusiastically embraced the concept of agricultural expansion. Kapuskasing Mayor Alan Spacek and Cochrane District Chief Administrative officer Jean-Pierre Ouellette were both invited speakers at this year's BFO meeting.

Kapuskasing got its start with early 20th century development of the transcontinental railway and has experienced at least two waves of agricultural settlement since then. A community of about 8,500 people servicing a regional population of about 15,000, "Kap" is better known as home to a large Tembec lumber and paper mill currently advertising for workers, the cold-weather test centre for General Motors and nearby hydroelectric power sites. But it is also the location of an experimental farm acquired last year by the municipality when federal officials decided to close the 100-year-old institution.

"In northern Ontario, we are far more than 80 per cent of the land mass in Ontario but only six per cent of the population," Spacek says. "Do the math, there's a lot of land up here and we think there's a real opportunity for northern beef expansion," the Kapuskasing mayor says.

He cites a program of subsidies from the Northern Ontario Heritage Fund to pay up to 50 per cent of the cost of land clearing or drainage. Heritage fund documents available online also describe subsidies covering up to 50 per cent of eligible business development projects, including "capital costs associated with starting or expanding a farm operation."

Low-cost land
Beef Farmers of Ontario is only the latest organization to show interest in northern agriculture. A 2011 report by University of Guelph Rural Development School director Wayne Caldwell cites at least two earlier studies identifying potential agricultural expansion, particularly in the Cochrane area. Caldwell's report describes a history of agricultural activity that peaked in 1951 near Cochrane and gradually diminished for reasons that appear to have had more to do with attractive alternatives for area residents in the region's mining and forest sectors than any inherent agronomic limitations.

In 2011, Caldwell identified relatively low-cost land in the region in the range of $100 to $500 per acre as a significant opportunity when compared with southern Ontario land values ranging between $7,000 and $10,000 per acre.

Since then, agricultural land values have risen everywhere. However, Cochrane's Jean-Pierre Ouellette estimates current agricultural land costs at only about $1,000 per acre with tiling costs at an additional $1,000 per acre.

All of this makes welcome good sense to Andrew Gordanier, who expects to make his move this year, beginning a development process he expects will take 20 years to complete. He's counting to some extent on crop heat units data showing northern Ontario as a long-term beneficiary of climate warming, but he doesn't really expect to grow crops other than feed for sheep and cattle.

"We don't need climate change to happen in order to raise cows and background calves there," he says. "We already grow a hundred days of fabulous grass there."

"Land is a huge saving," he adds. "You do want to talk about economies of scale," he says of the 250-cow, 2,500-acre farm concept he figures will generate the required income to overcome long-haul trucking costs to southern Ontario markets.

It's a shorter growing season than in southern Ontario and the days are also shorter in winter. But long hours of summer sun along the 49th parallel provide some offsets, Gordanier notes.

"Where we are now in Dufferin County, we really focus on growing grass and forages, growing spring cereals we take as silage. That's what we're going to take there with us, because up there they do very well.

"They grow amazing grass in 105 frost-free days," he says of the Kapuskasing region. "It's a short season to be sure, but the extra hours of daylight very much make up for the shorter season. It's cow country as far as we're concerned," Andrew says. BF

A huge potential for agricultural development
A Beef Farmers of Ontario plan to expand cow production in the province by as much as 100,000 head relies partly on access to relatively low-cost land in underused parts of northeastern Ontario and farmers willing to make it happen.

In development over the past two years, the concept also relies on access to government-owned, Crown land adjacent to redeveloped farms, a concept that has received strong approval in principle from both Ontario Premier Kathleen Wynne and Ontario Agriculture Minister Jeff Leal.

During a speech to the Beef Farmers of Ontario annual meeting in Toronto in February, Leal declared himself "a champion for beef farming in northern Ontario." The minister said he expects to seek cabinet approval for "a proposed policy framework" for Crown land development within the current legislative session. The concept will require that such developments are consistent with government obligations to area First Nations and are "fair, effective, efficient and transparent," Leal said.

As of the 2011 census, there were 2,261 farms in northern Ontario, about 4.4 per cent of the provincial total of 51,950 farms, according to a ministry fact sheet. That includes 146,016 hectares of crop land and 34,060 hectares of tame or seeded pasture.

The census counted 480 beef operations with an inventory of 30,783 beef cows, by far the largest sector, and 998,099 hectares of hay to go with it.

Ministry analysis also suggests northern Ontario's active agriculture sector can grow by as much as 50 per cent "by drawing idled private lands back into use." The potential for development, however, is greater than that.

Existing land in production represents only about two per cent of the potential area, provincial documents say. It cites Canada Land Inventory data identifying 4.4 million acres of the Greater Clay Belt as suitable for cultivation. Other estimates put the amount of arable land at 3.2 million acres, predominantly class three and four land.

Climate warming, new crop varieties and new mechanical harvest and storage techniques for livestock feeds provide options for northern livestock farmers that didn't exist in earlier stages of development, a paper posted to the ministry's website on northern Ontario says. Over 30 years, heat units measured at Earlton have risen from 1,800 to 2,300 crop heat units, ministry data says. It estimates crop yield for the Timiskaming district at 130 to 145 bushels per acre for corn and 50 to 60 bushels per acre for soybeans. BF

A reduced Ontario cattle herd is ripe for expansion
More than a year of record high prices for beef cattle has raised expectations for expansion which have only recently begun to materialize in Ontario in what is still a relatively small cow herd.

A 2012 industry summit convened a study group made up of veteran Alberta cattle farmers John Kolk and David Andrews together with Alberta-based agriculture communications consultant Kim McConnell. The trio proposed recommendations following a year of consultations among farmers, packers and retailers.

The project followed a Calgary summit of 53 industry leaders  hosted by the Alberta Livestock and Meat Agency, packer Cargill and the Alberta Cattle Feeders Association. It was called in response to concerns that Canada's beef industry may rely too heavily on U.S. markets.

The Straw Man Beef Industry Initiative proposed recommendations following consultations among farmers, packers and retailers across the country. They recommended immediate cow herd growth, a new grading system and stronger links among farmers, processors, retailers and consumers.

In January, the Canadian Cattlemen's Association (CCA) published a five-year National Beef Strategy. The document responds to many of the same issues as Straw Man but carries the weight of delegated participation by a cross-section of beef industry representatives.

The study underlined the need for expansion and streamlining of the country's beef production systems. It was designed to take advantage of what initiative co-chairman and Manitoba cattleman Martin Unrau described at the time as an "unprecedented opportunity" for the industry.

Ontario cow-calf producer Dan Darling, who is currently CCA's first vice-president and was Ontario's representative among strategy planners, said in an interview with Better Farming at the time that the industry's future depends on renewed self-confidence and expansion. Current low numbers create challenges for most industry participants, including meat packers, product suppliers and even feedlots, said Darling who runs a 250-cow-calf and cash-cropping operation in Northumberland County.

By most accounts, U.S. cattle expansion has begun. Canadian production lags, although the most recent data for Ontario published in March shows a slight population boost. The U.S. Department of Agriculture's Jan. 1 cattle inventory shows a one per cent increase over a year ago to 89.8 million head. The beef cow population rose by two per cent to 29.7 million, the U.S. national Agricultural Statistics Services report says.

A comparable report for Canada estimates total cattle population of 11.9 million head, down 2.5 per cent from last year as of Jan. 1. Based on a survey between Nov. 27 and Dec. 30, the Statistics Canada inventory counted the lowest number of cattle on Canadian farms since 1993. That included 3.8 million beef cows, down two per cent, and 531,000 beef heifers for breeding, down 1.5 per cent, year over year, according to estimates published March 5.

The 19,000-member Beef Farmers of Ontario (BFO) annual report published in February appeared under the heading "Expanding Ontario's Beef Industry." It featured details of an expansion plan that includes opening up new territory for cattle production in northern Ontario. In a subsequent interview, association executive director Dave Stewart said dropping cattle numbers in Ontario weaken the business case for processing in the province.

"We need to expand to secure the existing infrastructure in Ontario," Stewart said from his Guelph office. "Our processors are having trouble sourcing enough cattle. If you talk to auction markets, there's not enough cattle to keep the infrastructure that's so important to our producers, truckers and everything," Stewart said.

He was referring to a cattle population decline in Ontario of about 100,000 head in the past 10 years. As recently as 1983, Ontario farms counted 2.3 million cattle. On Jan. 1, this year, the number was 1.68 million. But that also represents a slight increase of about 0.4 per cent over 2014 when Statistics Canada counted 1.676 million head. And the Ontario cow herd has also picked up slightly with 290,400 this year compared with 288,400 at the start of 2015. In 1996, Ontario government statistics show, there were 476,000 beef cows in the province.

Ontario is not alone with smaller cattle herds. The U.S. inventory hit historic lows in recent years, driven partly by drought and relatively high feed costs.

Guelph-based consulting economist Al Mussell worked on parts of the BFO expansion plan for northern Ontario and figures the decline in Ontario cattle numbers also reflects the aging demographics of farmers and high cost of land, particularly in southwestern Ontario.

"We're in a precarious position where our real estate has essentially priced the cow-calf industry out of the market," Mussell said. "So how do we remedy that situation when we think we've got pretty good prospects for feeding cattle in the province? Well, one way to do it is to bring new land or past land into use for grazing and hay to raise beef cows and calves," he said.

Founder of the consulting firm Agri-Food Economic Systems, Mussell was a long-time researcher with a former Guelph-based agricultural think tank, The George Morris Centre. Expanded beef production in Ontario will become important as U.S. herd growth competes increasingly for western Canadian calves, Mussell said in a telephone interview.

"I think it's pretty well known that for some years now we've been about 50 per cent in deficit in terms of calves that are fed and finished in Ontario," he said. "We brought back calves from Western Canada for finishing in Ontario to try and close that gap. But there's a bit of a sense that, in part due to drought in the high plains in the U.S., there's a risk of it being increasingly difficult to compete for those calves," Mussell said.

As it is, Ontario meat packers are "hungry for cattle," he said. "You've got to have that volume of locally procured and fed cattle and we're struggling in that regard," Mussel said.

BFO president Bob Gordanier, 66, figures that lots of farmers his age have seen the past year as a great opportunity to cash out. The confirmation of a BSE case originating in Alberta in 2003 and the financial and trade impacts which followed are part of the background, as is the recent history of high cost livestock feeds and relatively lucrative cash-cropping options for farmers, Gordanier says.

"A lot of money was lost and a lot of people took out mortgages, including myself, to keep afloat. We've had too many years in a row of poor prices and not making a profit. Break evens don't do anything," he says.

"If you could tell me how long we're going to have at these good prices then I could do some more math and I could say I should have kept 100 heifers," Gordanier said, defending the industry's relatively slow response to recent market signals for expansion.

Expansion in northern Ontario makes sense as a way out of high southern Ontario land costs and a way in for the next generation of Ontario cattle farmers, he says. BF