Archive for the ‘management’ Category

Part 1 of 2 Lloyd Dyck CEO Brett Young -The Future Success at Brett Young is in Biologicals and Leveraging Strong Strategic Relationships

March 25, 2009

This is part 1 of 2 of my interview with Lloyd Dyck, CEO of Brett Young. Brett Young is truly unique because it is family owned and provides a a very diversified product line to the marketplace. In this video Lloyd discusses how the future growth of the company is in biologicals like PodCeal and Bio Boost and how it leverages strategic relationships to build the business. Lloyd is a well respected strong businessman who has a tall task to compete against very large competitors like Monsanto, Bayer and Viterra. As Lloyd mentions in the video, Brett Young has found success by leveraging their strong relationships with like minded companies like Miller Chemical and DL Seeds.

There Will Not Be 17 Million Canola Acres In Western Canada in 2009

March 21, 2009

There is much speculation around canola acres for 2009 in Western Canada. Farmers are hesitant to order canola seed, retailers are hesitant to speculate on inventory, distributors are cautious, and seed companies will not treat on speculation just to make sure seed is available for spring. What we have here is a system that is so built on just in time inventory management that with every day that passes the opportunity for the industry to supply 16 to 17 million acres of seed becomes impossible.

What makes this year different than others is that the industry has the bare seed available to supply these records acres. The challenge is that orders are very slow as farmers have shown hesitation across the prairies in ordering canola seed. This wait and see strategy is applicable in cereals but in canola it could cause forced seed shortages to the marketplace. Canterra Seeds, Brett Young, Monsanto (Dekalb) and Pioneer do not treat their entire inventory and wait for the farmer to make up his mind. All bare canola seed is not treated until the order has been placed by the distributor who has an order from the retailer who has an order from the farmer.  The reason that no one in the chain is willing to spec on inventory to ensure that there is in season supply is because the inventory carry over penalties are very punitive. Probably the only company that treats all of its inventory every year regardless of orders is Bayer (Invigor) because they are always sold out with the exception of this year.  The only companies rumored to be up in sales versus last year at this point are Dow (Nexera) and Cargill (Victory).  

My suggestion is that if you are planning to plant canola this spring book your seed now to ensure that you have supply.  If there is going to be demand for 16 to 17 million acres it will be a good idea to have your canola seed variety ordered.  Based on the just in time system that we have created to manage inventory costs, everyday that passes without canola orders will raise the probability that canola acres will not reach 16 or 17 million acres this year because there will not be enough seed on the retailers warehouse floor.  The big variable is whether or not one of the companies places a  big bet and treats a bunch of spec seed to ensure they will be able to supply the short market in the spring.  It should be interesting.    

Is Bigger Better?

January 22, 2009

When I took economics in University, one of the concepts that I was taught was economies of scale. This concept is defined as obtaining cost advantages that a business obtains due to expansion. In farming there is a constant thirst by farmers to add land or head space to their operation. It is quite common for fellow farmers to judge success by the size of the operation and not profitability. Of course this makes sense because profitability is not a public figure due to the fact most farms are private enterprises.

As your farm grows larger the potential rises for lower costs of inputs, better interest rates and increased commodity market access. Another benefit of improved economies of scale is the lower of your fixed costs per units produced. A great example of this is spreading your office expenses (overhead) over more acres farmed provided that you keep your office expenses flat.

There are challenges for growing farms that are trying to achieve the optimal size and gain real economies of scale. As I talk to many farm customers that are larger farms, there are several common issues that they have to deal with that can be challenging:

  1. Finding staff–For the past five years, finding staff has been terribly difficult. On top of this there has been high rates of turnover as it has become trendy to look for the greener grass all the time.
  2. Managing staff–When you are working for yourself it is easy to justify that you need to work a little harder or longer hours to get the job done. When you are dealing with employees you must manage the balance of their personal life and the jobs at hand. This is not as easy as one would suspect because not all employees view the company’s objectives as their own and may have different values or personal goals.
  3. Handling the change in role–As farms get larger the owner must begin to make choices as to what is the best use of his or her time. This is a challenge for any business owner as the business succeeds. Being the entrepreneur is a much different role than the manager.
  4. Competing with smaller operations head to head–Larger operations have larger overhead costs than in comparison to smaller operations. The larger operation is fighting to survive on volume and thinner margins against a low overhead, smaller operation. To make this clearer think of bidding on custom feeding.

Don’t get me wrong the trend of larger farms is not going to slow and it does happen for a reason as equipment gets gets more productive and the quest for economies of scale are present. Like any other business you need to understand that as your farm grows the role that you may play as the farm owner is going to change and challenges will always be there. Bigger does not mean better for everyone.

Crop Week – What Farm Credit Canada is Hearing

January 13, 2009

In my role at Haney Farms, I get to chat with many farmers from across the country which allows me to keep my finger on the pulse of the farming community. Another great way to further understand the pulse or the issues of farmers is to talk to equipment dealers, grain buyers and financiers to name few. At the Crop Production Show I chatted with Denton McGregor, Relationship Manager at Farm Credit Canada in Saskatoon to get his read on the current situation and what he is hearing from his clients.
Denton also talks about Ag Day in Canada which is hosted by Farm Credit Canada on January 28th. If the video does not embed properly in your browser click here for the video.

Haney Farms has GIANT VIEWS

December 1, 2008

Recently I did an interview with the Owner of Germination Magazine, Robynne Anderson. In terms of my writing interests, Robynne has been a strong mentor for me. I was quite honored to have Robynne ask me to participate in her GIANT VIEWS program. Robynne’s company Issues Ink is the North American leader in covering the issues affecting the seed business. Click on the title of this post or below to see my interview with Robynne.
http://www.seedquest.com/hosting/germination/giantviews.htm

Use Input Financing Programs Wisely

November 11, 2008

There are very advantageous pricing programs out in the market right now for inputs (seed, chem fert) before the year end. Along with that there are financing programs that may include do not pay or no interest until a given date. These can be fantastic programs for farmers but you need to be careful. Here are some questions to ask.

  1. Will this input financing agreement be in violation of my covenants with the your other lending institutions I use? For example the covenants that you have on your operating line at the bank.
  2. Are there are up front fees or admin fees? I don’t mean to avoid these sort of programs but make sure you are aware of the total costs of no interest programs
  3. Once the interest starts calculating, is the interest owed back dated to the beginning of the contract or does it start fresh?
  4. At the end date of the contract, can I extend the agreement or is the full balance owed at that time?
  5. Is there a limit on the account and what information will I have to supply to set up the account initially?

Input financing programs can definitely be advantageous to your operation so just ask the right questions and your farm will prosper.

Mistakes Can Be Costly

September 27, 2008

Today has driven me crazy. I realized that I made a mistake at work that is not going to create a huge loss on a deal but a loss nonetheless. They say that you should learn from your mistakes but that does not make me feel any better at all. I hate making mistakes because it just grinds at me. When I make a mistake that is noticeable to employees and co-workers it really does motivate me to be better and raise my level of execution. The saying is that no one is perfect but in reality you need to be in today’s world of hyper competitiveness. Although I made a relatively small mistake this morning, big mistakes can hurt your reputation and bank account. One thing is for sure…..When I get to work on Monday I will have a new sense of focus so that I can be better for the company and customers.