Farming is the Rodney Dangerfield of Alberta business.

Can’t get no respect!

Add up crops and livestock gross sales, and you’re at 3.6% of the provincial economy.

Toss in food-related manufacturing, it jumps to 7.9%, or 22 billion dollars.

But unless there’s a crisis as at XL Foods — one year ago — agriculture stays under the media radar.

Which, considering the ritual whipping of the oil/gas industry every day at high noon, might be a good thing.

Over the next 10 days, however, agriculture is spotlighted in the weakening late-autumn sun.

There’s the cattle-centric Farmfair International (Nov. 3 to 10) here at Northlands, the farm implement-focused Agri-Trade show in Red Deer Nov. 6 to 9, and, of course, that rural playground known as the Canadian Finals Rodeo at Rexall Place Nov. 6 to 10.

So welcome to the Hicks on Biz annual Agricultural Review.

Here’re the mega-trends happening out on the flat, fertile prairie. I’m much obliged to agricultural consultant Jerry Bouma, who has this stuff at his fingertips.

There’s a real interest in local-sourcing - organics, farmers’ markets, 100-mile eating, the restaurant trade, top-notch but expensive products and produce, all well-celebrated in Edmonton’s food magazine The Tomato.

But the “carriage trade” represents less than 2% of Alberta’s agricultural production.

Farming is big business – and big business is a cold-hearted thing.

Farmers must change, grow and adapt – or else they’re out of business.

This business – with the $$$ involved – is not for the faint-hearted. As the average farmer’s age touches 60, a generational change is happening. If the kids take over the farm, it’s as an incorporated business that needs 10,000 to 30,000 acres of land to prosper. Two decades ago, two sections (1,280 acres) was a big farm.

The “kids” are sophisticated, highly educated agri-managers. If they stay in the business, they are competing with, and becoming like, the big agri-companies that make management decisions, rent the land, then sub-contract the actual work to other companies specializing in crop operations, livestock-raising etc.

The technology is either awesome or scary, depending on your outlook. “Humans aren’t really needed on the latest combines,” an implement dealer tells me. “Automation, tracking and guiding systems and intelligent sensors do the work.”

An “intelligent” fertilizer or spraying machine can make-on-the-spot decisions, with instant soil analysis, as they roll around the field. Abe and Howard Silverman of Edmonton’s 0Global Agricultural Products are selling an Israeli-made self-propelled feeder-mixer that, with one operator, will load, mix, precisely calibrate and then deliver food formulas to livestock.

Livestock farmers have to stay on top of genomics. Beef producers now realize genetically-informed breeding will produce more weight-gain per pound of feed grain. The days of Ferdinand the bull romping with the cows are coming to an end.

The bloom is off the farm real-estate rose. Land prices between from 2008 to 2012. The drivers of that surge – investment gains, drought-caused high crop prices, bio-fuel demand – have slackened. “In the last 80 years, farmland has appreciated about 3% a year. It’ll stay that way in the long-term,” says Jerry.

Hutterite colonies remain major players. “They are superbly competitive, excellent farm managers with commitment, knowledge, labour and financing, ” says Bouma. The colonies produce 80% of Alberta eggs, 40% to 50% of our pork, and have diversified into agriculture-related manufacturing.

Look for corn to slowly dot the countryside. New varieties can mature within Alberta’s growing season, but won’t produce the nutrients per pound that make corn the feed grain king south of the 49th parallel.

“Diversification” and “value-added” always remain mantras. Food processing is growing. But we’re still best at producing top-quality basics – wheat, canola – for mass shipment overseas.

“The CIA (spies like to watch food) says only six countries will be net food exporters by 2020 – Australia, France, Kazakhstan, Argentina, Ukraine and Canada,” reports Jerry.

“And in Canada, it’s just about all Alberta and Saskatchewan.”

 

Farmfair factoids:

 

Over 40% of Canada’s cattle population is located in Alberta.

The highest cattle population density in Canada is within a 300 kilometre radius of Edmonton.

More than two-thirds of Canadian beef processing occurs in Alberta.

More than 90,000 guests come to Farmfair International to view, show and sell top quality livestock.

Over 15 purebred beef breeds are shown and over 800 head of quality cattle exhibited.

 

Other Alberta Agriculture factoids

 

Total Farm Cash Receipts, 2011, $10.5 billion

Add in Food Manufacturing, $22.6 billion

Add in grocery and retail liquor sales, $35.5 billion

Add in restaurant and bar sales, $42.8 billion

Total food/drink sector percentage of Alberta’s 2011 Gross Domestic Product: 21%

Graham Hicks

780 707 6379

graham.hicks@hicksbiz.com

www.hicksbiz.com