Possibility & Passion

Friday, December 31, 2021

Farm Credit Canada's Wilson talks farming.

By Becky Dumais

Starting from the ground up is true on-the-job training. That's what Farm Credit Canada's (FCC) newly appointed vice-president of operations Perry Wilson did. Literally.

Wilson, who stepped into the role last April after the retirement of John Geurtjens, garnered his early experience in ag, growing up on a hog farm in Oxford County, near Uniondale. Wilson began his career with FCC more than 26 years ago. He has held various leadership roles since 2005.

His vision for his role – and the organization – is an extension of FCC's higher purpose, which he says is to "serve the industry that feeds the world inspiring possibility and passion," accomplished through "great relationships, innovation and growth."

Wilson's professional development essentially started early on in the form of family farm life. It provided perspective and appreciation for the industry in which he serves. "I was raised on a small farrow to finish operation and I do appreciate the practical experience of growing up on a farm," says Wilson. "Farming is a part of our family. I have many family members who are farmers. As you can imagine, farming is a discussion topic at the Sunday dinner table," he adds. Farming "was very much part of my life and continues to be today."

Producer roles now extend to his sister and brother-in-law and both Wilson's children chose to get involved in ag related careers. He says that he can't help but think it's thanks to all those positive dinnertime discussions that pointed his children to their careers too.

Involvement in ag always held Wilson's interest. Even though he first worked in automotive manufacturing, after a few years of experience he says he found his way back. "As a lender, I think it's important to have different careers and a range of experiences. For me, it makes me appreciate FCC and also our industry that much more. I get so much enjoyment out of playing a role in assisting folks with the achievement of their dreams."

A producer's job is never done and there are lots of lessons to be learned in the field, in the barn, and when working together. "A strong work ethic is one of the most important lessons I learned growing up on the family farm, nothing trumps hard work," he explains. "I'd also say the importance of community. It's these friendships that mean having each other's backs in times of need.

"Also: optimism. In farming, you're at the mercy of mother nature. You need to be a certain type of person to be a farmer. You have to have faith that your hard work and the risk mitigation measures you put in place will see you through the tough times and you need to celebrate. To that point, I would say agility is also very important. Being agile and able to adapt to unforeseen circumstances is so important."

He similarly attributes valuing passion to something he learned from his youth. "Not only for your career but for family too. Farming taught me that success is contingent on the strength of the family partnership." Hearing the enthusiasm when his sister and brother-in-law speak about their farm business is cheering. Passion is "what I see in them when they're talking about the business: they're passionate about it, and work is fun."

Today's agronomics has changed considerably, and Wilson says it has become better, "because there are so many more resources and experts at our disposal. The world is more complex than ever before, and at the same time, we're now more aware of what is going on around the world and how it has an impact on our businesses here in Ontario. So, it's kind of a double-edged sword."

FCC's economics team, which includes chief agricultural economist J.P. Gervais, provides market information that helps producers understand global markets and make sound business decisions at the local level. Ontario's portion of FCC's portfolios has increased since Wilson started working at FCC in 1995. Today, Wilson's team in Ontario looks after roughly 10,000 customers in a $9 billion portfolio. In 1995, FCC's national portfolio totalled $3.5 billion.

FCC released its Farmland Values report in September and Wilson says farmland values are continuing to increase, "which isn't surprising given the overall strength of the economy – it's pretty strong right now. And interest rates are quite favourable now as well."

A clear example of Ontario's strong economy is that FCC's farm customer arrears rates are at an all-time low: 0.01 per cent. "This overall rate speaks to the strength of the agricultural economy and of course the overall financial strength of our customers. It follows that Ontario producers are excellent at managing their finances and running their businesses," he says.

"Our knowledge offerings are heavily focused on the importance of producers continuing to develop solid business and risk management skills. Understanding these skills contributes to individual farm success and overall health for the agriculture sector in Ontario which we are seeing."

With producers producing, land sales more than steady, plus keen interest rates, what does that say for the outlook for ag in Ontario?

When Wilson spoke with Gervais recently, he relayed a few points. There are "strong commodity prices but they've backed off over recent weeks based mainly on favourable reports coming out of the U.S. Vegetable oil prices are strong based on demand for biodiesel.

"Regarding interest rates, the Bank of Canada is not predicting a bump in short-term rates until the second half of 2022," shares Wilson. "That said, the markets are pushing bond rates up which impacts longer-term rates. For this reason, you may want to consider taking a look at your interest rate strategy."

Wilson notes that Gervais also commented that a general rule of thumb is that your operation should pass a sensitivity test of a two per cent bump in rates.

Gervais also conveyed his thoughts to Wilson on the current labour shortage, exacerbated by the pandemic, both in primary ag and food production. "The industry needs to rally to address the issue," Wilson says.

Agriculture is painfully aware of the labour shortage.

According to the Canadian Federation of Agriculture (CFA), there were an estimated 63,000 job farm job vacancies across the country in 2018, with a prediction it will increase to 123,000 by 2029. The Canadian Agricultural Human Resource Council (CAHRC) notes, as the CFA cites, that it estimates the labour shortage during COVID resulted in $2.9 billion in lost sales, which equals about 4.2 per cent of the sector's total.

In an Oct. 13 press release, the CAHRC and the Future Skills Centre announced a partnership with the CFA and Food and Beverage Canada to develop a National Workforce Strategy. The project aims to address the persistent and growing labour and skills shortages affecting Canada's agriculture and food processing industries.

"The agriculture and food and beverage manufacturing sector must address these ongoing labour challenges in order to remain viable and competitive," said Paul Glenn, CAHRC Chair. "As a significant contributor to the economic health of Canada, it is essential that there be a sufficient, predictable, reliable, and skilled workforce in place to support the success of the sector. The need for this strategy has never been stronger."

Labour force shortages have plagued the agriculture and food and beverage manufacturing sector for the past decade. By 2025, food and beverage manufacturing businesses located across the country will experience an employment gap of up to 65,000 people.

Compounding the issue, recently published CAHRC research revealed that Canadian farmers suffered lost earnings of $2.9 billion in 2020, equivalent to 4.2 per cent of the sector's total sales, due to labour shortages as a result of the COVID-19 pandemic.

The CFA reports that nearly all unfilled jobs are taken by international workers and that four in 10 employers weren't able to hire all the workers they needed.

Wilson also shares that automation is a continuing trend, linking the lack of workers to heightened growth in automated systems. The RBC's 2019 Farmer 4.0 report pointed out "The Internet of Farming, powered by advanced technologies like autonomous tractors and drone-mounted sensors, is already transforming the way we produce food." It also concluded that the right mix of skills, capital and technology, agriculture could add $11 billion to Canada's GDP by 2030.

Regarding strategy and planning, "farmers are used to operations, meaning the work and the doing," says Wilson. Looking ahead is vital. "They also need to spend some time to reflect and have a vision. This can be hard mental work, but strategic work is necessary," he says. "Put a team around you, including your family, peers, your lender, consultants, other professionals who will support the development and execution of your vision."

In the case of transition or succession planning, he also suggests having that conversation just as mentioned for strategy and planning and to consult your lenders, FCC business advisors and other professionals.

Yes, setbacks happen, which can be in one form or another – including having to re-examine your operation or business model as a whole after facing rejection. "You may see an answer of ‘no' as a setback," says Wilson. "This may mean you need to do a little more work to think through your project to be set up for success later on when the answer could be a ‘yes,'" he explains. "I've seen this many times and I've been thanked for giving that ‘no' as an answer. It means we care about you and your operation and we want to see you succeed. That does not always mean we will agree."

Above all else, producers remain passionate. Wilson was uplifted recently during some producer tours in eastern Ontario; he visited one customer who's been a client with FCC for 20 years. The client, who started their farm business with the help of some neighbours and family, bought their first farm on a vendor takeback, then with the support of FCC went on to build their operation throughout the years and have been able to branch off into other avenues.

"The producer walked us through their operation – I almost had to jog to keep up because they had so much energy and they were so excited about their story and so appreciative of the part that FCC had played in that," he recalls. Now their children are also involved. "That's what makes a career here so gratifying." BF