The Rural Voice, 2019-06, Page 62 For Canadian agriculture, 2019 is
all about managing change. Primary
producers are embracing all the
capabilities of technology to move
towards efficiency. Like never
before, they’re capturing and using
data to manage for higher production,
more sustainability and developing
financial and marketing strategies.
More young entrepreneurs are
coming back to farms, so planning
for business transition has become
vitally important. While all these
internal shifts are happening, the
marketplace is being tossed around
with changing global weather,
consumer demands and politically-
loaded trade deals.
In our look at what themes will be
prevalent in the agriculture industry
this year, we want to highlight that
embracing these advancements is
critical to the success of current and
future farming operations.
Rapidly changing technology
For the last decade, agriculture
has been going through a
technological metamorphosis that’s
impacting all parts of the industry.
The advantages of technology in
agriculture is giving producers more
power than ever to be more efficient
and successful. “Today Canadian
farmers are using global information
available at their fingertips, 24-7,”
says Maggie Van Camp, National
Agricultural Practice Development
Leader. “They’re adopting robotics,
artificial intelligence, genomics and
more. Soon this will be one of the
first industries to apply autonomous,
driverless equipment.”
Moreover, mobile apps are being
used to track equipment status;
drones are tracking where crops need
to most effectively apply farm inputs;
and auto steer tractors are easing the
effort used by farmers and their
teams.
Like never before, farmers are
leveraging data for more
environmental and financial
sustainability. Food can now be
traced from the farm to table.
Strategically managing inputs and
yields with historical production data
balanced with financial information
is a way to manage risk, control costs
and maximize assets.
Changing demographics
While the average age of farmers
in Canada is 55 years old, we’re
seeing more young farmers than ever
before. According to the 2016
Census of Agriculture, the number of
farmers continued to shrink.
However, the proportion of operators
under 35 years of age increased for
the first time since 1991. Yet only
1 in 12 operations reported having a
formal succession plan laying out
how the operation will be transferred
to the next generation of farmers.
It has been estimated that $50
billion in assets is to be transferred to
the next generation over the next
eight to 10 years; creating what some
call a tsunami of change. “Planning
for a smooth inter-generational
transition is one of the key concerns
of our farm clients, not just from a
financial perspective, but from a
family perspective,” notes Brent Van
Parys, Partner in Business Transition
Services.
We’re also seeing a change in the
agricultural workforce. More farmers
are hiring non-family employees. Our
government incentive and human
resources advisory practices are
seeing these trends in the help they’re
providing the agriculture sector. For
instance, farmers are taking
advantage of foreign worker
programs to help grow their farms
effectively.
Changing marketplace
When commodity prices are in
flux and margins become tight, it
becomes imperative for farmers to
use reliable numbers to make
marketing and other business
decisions. It starts with knowing their
own numbers and maximizing
production, no matter the size of the
operation. “I have seen successful
farms of 1,000 acres, and
unsuccessful farms of 10,000 acres,”
says Mark Verwey, Partner and
National Agriculture Leader. “The
key difference isn’t the land or the
equipment or the weather, but the
management.”
Better farm management equals a
much greater ability to adapt to the
changing and uncertain marketplace,
whether those changes come from
trade agreements, the weather, world
production, tax changes or
consumers’ diets. “We see the effect
of market change and uncertainty not
only with our clients but in our BDO
partnership group as many on our
Ag-focused teams operate farms as
well,” says Verwey.
Managing your financials during
times of change is critical.
When dealing with your farm’s
business activities, it’s important to
use data to establish sound tactics
and know the numbers so they can be
leveraged advantageously. Whether
expanding to take advantage of
new markets, or weathering a tough
year, constantly monitoring your
financial information—including
benchmarking and trend analysis—
ensures farmers can make informed
decisions. ◊
58 The Rural Voice
Managing change
in agriculture
Maggie Van Camp
is the National
Agricultural
Practice
Development
Leader for BDO
Financial Management
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