Cover Story: Farming Northern Style

Thursday, December 3, 2009

BOTH OPPORTUNITIES AND CHALLENGES AWAIT THOSE WHO SEE THEIR FUTURE IN THE NORTH

Cheaper land is the drawing card for those who move their operations to Timiskaming, New Liskeard, Earlton and other points north. A shorter growing  season and far-away markets pose challenges

by DON STONEMAN

Dave Schill and his busy farm family in Wellington County were looking for more space to farm and found it, nearly 570 kilometres to the north.

He grew up near Drayton, and his father and brothers still farm there.

His father Larry, a former wheat board director, bought 1,500 acres in Timiskaming District in 2001 and Dave, his wife Stephanie and two-year-old Emma moved to a farm near Earlton in 2004.

"Moving here was the easiest part," says Dave, now 32, who manages 5,000 acres of land he and his family own. The "locals" tell him the last two years of farming were the toughest in 50 years.

The backwards spring and cool summer across southern Ontario in 2009 were felt even more in the Clay Belt area that lies more than a two-hour drive north of North Bay. Schill, who farms a few miles from the site of the 2009 International Plowing Match, says single-digit temperatures and rain prevailed in the first half of July. The sun shone throughout Plowing  Match week, starting Sept. 22, and Schill's soybeans were ready to combine. He was swathing canola and a late ripening oat crop stood in the field. The first frost hit Sept. 20, capping corn heat units recorded since May 1 at 2100, according to local agricultural representative Daniel Tassé. Normally, the area records 2300 CHUs. "The heat lamp wasn't working very well this year," Tassé quips.

The favourable weather ended with the plowing match, keeping combines in drive sheds. Nearly a foot of wet snow fell just after Oct. 20. At the end of the month, many fields were still too wet to harvest.

Schill is far from being the first southerner to move to that area seeking opportunity and room to farm, and finding that it's no picnic.

"I used to jokingly say it was one of the few areas where you could cash flow" a land purchase, says Jack Wilkinson, who moved from Lambton County to Belle Vallée, east of New Liskeard, in the early 1980s. Timiskaming land prices are linked to commodity prices, says Wilkinson, a former Ontario Federation of Agriculture president. Across Ontario, farmland values generally rise when commodity prices rise, but don't come down again when prices drop. Timiskaming is an exception. (See Figure 1).

Recent high crop prices everywhere drove Timiskaming land values up and the subsequent run-up in input costs make a positive cash flow less likely now. But Wilkinson expects that farming returns will pay for the purchase of Timiskaming farms again, but maybe not family expenses, he notes wistfully.

Full-time sheep farming
"You'd like to think there is still someplace in the world where a young person can go out and make a living farming," says 45-year-old New Liskeard sheep farmer Jim Johnston, who moved there from the Ottawa Valley with his wife 17 years ago. Johnston worked at the ministry of agriculture's research station as a technician until 2002 before plunging into sheep farming full-time. (Read about the potential for sheep production on page 20.)
Johnston says he was one of the few in his area to take an off-farm job to help buy a farm. He and Wilkinson speculate that the lack of off-farm income is a reason that Timiskaming area farmland prices rise and fall with commodity prices. But off-farm job opportunities remain scarce, Wilkinson says.

Paying for a farm purchase with cashflow anywhere in the north requires careful cost-cutting, warns Ron Bonnett, another former OFA president, who farms  a six hour-drive away from Timiskaming at Bruce Mines, just east of Sault Ste. Marie. There are pockets of good soil across the north, he says. Most is better suited to grazing animals, while Timiskaming has cash-cropping potential.

One sign of that potential is the row of shiny grain bins along the east side of Highway 11 at Earlton. They mark the headquarters of Koch Farms/Agri-Sales Inc., adjacent to the host farm for the International Plowing Match last September.

"I consider us a family farm with 10,000-11,000 acres," Koch says from his bustling farm office, where he calmly takes calls from his land line, his cell phone and a two-way radio squawking in the background.

His apparent calmness belies a deep determination. Koch was a passenger in a sports utility vehicle involved in a fatal accident on June 25, 2006, near Cochrane. He considers himself lucky to be alive after being ejected from the vehicle when it rolled. The driver of the other vehicle, who ran a stop sign, was killed. Koch now sports a plate in his forearm. His shoulder was also damaged. He continued to trade grain from his hospital bed and in his home while he recovered.

Koch, who farms with his wife Gwen and two sons, Rob and Chad, came from New Hamburg, west of Kitchener, in the 1970s to build barns and silos. He bought his first farm property in the north in 1982 and moved to Earlton in 1986. Including custom work, they tackled 16,000 acres of grain this fall with a fleet of six combines equipped to take cereals standing or swathed. You can expand your harvest window that way, he explains, noting that the biggest reason for farming in the north is cheaper land.

Koch and the Schills aren't alone in seeing opportunities in the north.

"I can count 10 different people from southern Ontario who own land and share-crop with people like myself" or have some other farming arrangement, he says.

Koch Farms' office is the hub of a local agricultural and agri-service empire. Those shiny bins store a little less than one million bushels of spring and winter wheat, oats, barley and canola.

The Kochs farm 90 separate properties. Their trucking business carries 90 per cent of the inbound freight for the former Feed-Rite mill at New Liskeard, now owned by La Co-op Féderée. Koch says locally grown grain is too valuable to feed to livestock and draws higher prices from markets in the south.

The Ontario Northland Railway, which brought visitors to the plowing match from North Bay, freights grain south. Koch leases a siding in Earlton and ships 80-100 rail cars of barley to markets as far away as Hiram Walker's distillery near Windsor. Wheat is milled into flour in southern Ontario and the United States. Each car carries 90 tonnes. Koch brings in six to eight cars of fertilizer as well as meal for feed. Rudimentary handling facilities suffice, for now. Meal and fertilizer are unloaded with augers and tractors move the railcars when it is necessary. "We can't build an expensive facility and be feasible," Koch says.

Beef farming evaporates

Koch has watched agriculture in the area evolve rapidly. In 1986, there were 128 dairy farms and "lots" of beef farms, mostly cow-calf and back grounding. But beef farming has evaporated as farmers sold out. With low prices this fall, the sell off here, as elsewhere in the province, is expected to accelerate.

Now, dairy farms number in the 50s, with production staying in the area until recently. In the last three to four years, some quota has moved to southern Ontario. "It's too bad," about the disappearing beef industry, Koch says. There is so much land that would be better as beef pasture than as cash crop land.

However, beef is no worse off here than elsewhere in the province, says local producer Matt Bowman, who calves out 150 cows. He points out that Koch now cash-crops land that was formerly used for beef.

A proposal to build a federal plant to serve producers – and markets – on both side of the Quebec-Ontario border is at the "initial discussion stages," according to Ontario agriculture ministry livestock specialist Barry Potter.

Just one pork producer remains in the district. Schill says pork producers who quit were too new to have enough equity to survive the recent downturns. "Our equity has done well for us," the cash cropper says.

Koch built a 1,200-head finishing barn 10 or 11 years ago, working with the former Feed-Rite mill at New Liskeard. Then Feed-Rite moved out of Ontario and the Ontario barn closed. A sister barn in Quebec remains in production. While the Timiskaming area of Ontario and Abitibi-Algoma in Quebec are essentially one farming area, the Quebec farm received payments from the ASRA income support program, Koch says.

The old Feed-Rite mill brings in grain to make feeds because locally produced barley is worth more in human consumption markets.

Koch sticks with tried and true northern crops. His one concession this year was a single field planted to corn. He has shied away from soybeans so far, even though other farmers are growing them. Koch's feeling is that corn and soybeans aren't ready for that area yet, in particular soybeans. "Soybeans need sunlight," he explains.

The Koch grain storage is a loop system. There is no elevator leg. A height restriction because of the nearby Earlton airport is one reason, but there's another. The bins must be spread out or the underlying "greasy clay" soil will sink. Koch learned this as a silo builder.

How deep is that famous clay? Koch says that when the well was drilled at the region's only contract pig-finishing barn, the driller went through 132 feet of clay and 32 feet of broken rock before hitting solid rock.

All fields should be tiled, Koch says. He prefers 66-foot centres on the tile runs. A lot of tiling in the past was on 100-foot centres with the intent to fill in the 50-foot difference later.

We keep pushing the province to increase the amount of tile drainage loan money that is available, Koch says. It is used up year after year.

In spite of that; "you still have people clearing land and tiling land every year," says Wilkinson.

"The shovel went in the ground" for a small biodiesel plant at Englehart. "That will be a plus." There's  talk of a straw pelletizing plant in the area that will provide a small but dependable market for straw every year.

"There still is a significant number of people . . . who are seeing an opportunity to expand their farm operation where they didn't see that opportunity in southern Ontario."
"There is a sense that agriculture is growing in the area," Wilkinson says. BF
 

SidebarsSheep have potential in spite of distance from marketsHalf of the sheep in northern Ontario are located in the Timiskaming area, says local producer Jim Johnston, who is also secretary for Ontario Sheep Marketing Agency District 11.

The Ontario agriculture ministry estimates there are 6,000 ewes there and the sheep agency thinks there are more.

The market for heavy lambs is good, says Johnston. Producers typically pay $8-$10 an animal to ship 100-pound heavy lambs to Cookstown, 435 kilometres and 5.5 hours south of New Liskeard, and prices there range between $1.50 and $1.80 a pound liveweight.

Johnston and his family run 600-700 ewes, lambing on grass in May and June. There are 10-12 operations in the district with 200-plus ewes, he says, and many more with 40 to 100 ewes.

There are few accelerated lambing programs, because of the inclement weather in the winter. Those who run them have 100 ewes or less.

A number of Mennonite and Amish families have moved to the area and some of them are interested in sheep. Johnston welcomes any increase in local sheep production. He predicts it will lead to more expertise in feed mills and also more truckers to haul lambs to market. BF

What's good and not so good about farming in the north

From Ron Bonnett's point of view, land costs are relatively low and new crop varieties more suited to northern climes have been developed over the last 25 years.

Timiskaming is a good area for cash crops. Much of the rest of the north is better suited to pasturing livestock.

The downside is distance to markets. There isn't much finishing of livestock as corn-based rations must be shipped from the south.

Bonnett moved north from southern Ontario in the 1970s. At that time, he says, the north was about a generation behind in adapting new ideas. He thinks that's because farmers could fall back on mining and forestry rather than intensifying farming, but that changed in the late 1980s. Now farming advances apace with the south because information is available on the Internet and people are travelling more.

 One downside is that Internet connections are not land-based but rather satellite-driven and there are some wireless connections.

Bonnett says American and European interests are buying land. Younger people are renting and farming it to reduce their capital costs. There is likely more opportunity here to get a return from cash cropping than in the south.

Another shortcoming is that infrastructure for crop storage may be lacking. "You need the critical mass to put a storage and drying facility together," he says.

On the upside, interest from southerners in buying land in Timiskaming continues. Norm Koch and others mention that, recently, seven Mennonite families from southern Ontario bought land and will back ground beef cattle for feedlots in the south, milk cows and cash crop. Four Amish families also bought land at Charlton, north-west of Earlton. They operate without hydro, and use horses rather than tractors. Two ship goat milk and two are woodworkers. There are other goat farmers in the area already so transportation costs to markets in the south are shared.

Another plus, Dave Schill says, is that there is lots of land available to be cleared and potential in farms that were left neglected. He says that $40,000 buys a quarter section of uncleared land. That'­­s $100 an acre. It costs $1,000 to clear it and $700 an acre to tile it.

While the Timiskaming farming area is still under-serviced, the railway is starting to be exploited, he says.

Norm Koch's grain elevator and agri-service company, connected to grain trading company Parrish and Heimbecker, was a sea change. "It's just been phenomenal for me," Schill says.

"There is a sense that agriculture is growing in the area. You still have people clearing land and tiling land every year," adds Jack Wilkinson. But, he says, transportation costs are "a big negative."  Trucking grains south "takes $40 a tonne off everything." There are few opportunities for a trucker to backhaul a cargo into the area and reduce trucking costs.

Still, it's a far cry from Wilkinson's early times in New Liskeard. He recalls that, sometimes he couldn't find another farmer with a dryer to handle his crop and he would put wet grain on trucks to be hauled to elevators in the south. BF

The nuts and bolts of farming in the north

"Be ready to work" in northern Ontario, Dave Schill says. "The seasons speed up on you. You need lots of equipment.

It all has to be going hard and fast to get the crop off in time."

Typically, at spring planting, fields are fit to plant when there is still snow on the fence lines. Spring comes very fast. By the time you realize it is time to be on the fields, you are two days late, Schill says.

Planting starts about April 25, barely later than in the South. Schill plants corn and wheat first. Canola and soybean seeds go into warmer soils later.

He crops in a tight rotation of wheat, canola and other cereals. Spring cereal planting must finish by June 10 to achieve maturity before frost.

Crops are insured, but Dave says that, in moving north, the Schills took a 25 per cent cut in their crop guarantee. "That was difficult to endure," he says.

This year, Schill planted 2000-2100 heat unit corn. In the late 1990s, corn heat units were recorded as high as 2700, but in 2004, 2,150 was recorded. There are only two or three corn varieties to choose from and stacked traits aren't available in those short-season hybrids, he says.

Growers don't get a respite from corn and soy pests just because they are moving north from Ontario's cornbelt. Prevailing winds carry corn borer, soybean aphids and rootworms from North Dakota and Minnesota. "The corn borer pressure was phenomenal," Schill says. "Same problem. Different spot on the map."

Schill sprays weeds with Roundup. Wild oats have built up over the years and twitch grass is prevalent.

The Kochs plant as much wheat as they can in the fall, and in the following year finish their wheat acres with spring varieties, using two Case-IH 30-foot air seeders and one 40-footer. They plant 1,500 to 3,000 acres of winter wheat and 3,500 to 5,000 acres of canola, as well as oats, barley and spring wheat.

Oats and canola are planted between wheat and barley to break the diseases common to both of those crops. BF

Cheap land and a favourable policy make timiskaming a good dairy area

Cheap land makes Timiskaming a good place to produce milk, says Yves Gauthier, a third-generation dairy producer from Earlton and arguably one of the province's most prominent and high profile dairymen.

Producing milk in the north depends upon a transportation policy at Dairy Farmers of Ontario that pools the costs of transporting milk to plants in the south, largely in the greater Toronto area. "If the transportation policy changed, we would figure something out," Gauthier says.

As a driver of change in the area, Gauthier knows what that's about. When his father Albert Gauthier built a freestall barn for 150 cows in 1976, the farm west of Earlton was among the biggest operations in Ontario. In 1979, North Haven Farms shipped 3,900 litres of milk every other day.

Five years after building, Gauthier senior replaced the freestall with a tiestall operation.
Yves had a vision and made a deal with his father. He sold replacement heifers, as many as 50-60 a year locally and in nearby Quebec, and re-invested half the money in better genetics.

The results showed in the milk tank. Today, Yves Gauthier ships 4,200 litres of milk daily from 20 fewer cows in the same tiestall barn and has an operation that is now average-sized for the area. Management and feeding plays a role, but genetic improvement is the major factor. It's no wonder that Gauthier has been a big supporter and promoter of Gencor, the farm co-operative genetics company.

So much so that Gauthier, now 41, ended a 12-year term on the board last April, after serving in various positions – as president of Gencor, Thornloe Cheese (the local plant purchased by Gencor when owner Parmalat announced it was closing it) and the controversial (and now defunct) packing company that Gencor owned in Kitchener.

Thornloe Cheese has been more successful and is marketed "all over," including some Loblaws stores, "ma and pa shops," gas stations and meat shops, Gauthier says.

A sunset clause prevents Gauthier from continuing on the Gencor board, but he is retained as a consultant. Gauthier cash crops 2,000 acres, buying 1,000 acres of land just last year. In mid-October, he burned the last 300 acres of this year's oat crop in the field. Even that didn't work well because of a heavy wet snowfall, he says. BF