Gervais sees growing impact of technology on the farm as a solution to labour challenges

“I would say the number one thing that still makes me quite positive about the industry’s outlook is that the demand for what we sell - despite challenges in trade and all that sort of stuff - the demand for what we sell as commodities in food coming from

Producers from across the Southwest were given a series of practical takeaways for understanding their key farm management practices during a recent Farm Credit Canada workshop in Swift Current.

The January 8 event provided producers some insights into agricultural business management topics, and farm transition planning, along with presentations on other topics.

One of the highlight sessions was presented via video conference by J.P. Gervais, FCC Vice-president and Chief Agricultural Economist.

During a phone interview following the workshop, Gervais agreed that winter information sessions and workshops are important opportunities for producers.

“Research has shown over and over again is that there are benefits of working on the business, on understanding the numbers,” Gervais said.

“A lot of producers do, I would say though that there are some farms that don’t necessarily understand all of the numbers of that farm and that they get the first step in trying to ramp up your management skills. But the second thing is, once you do that, is what do you need to focus on? And I think that’s the purpose of the workshop.”

workshop, what really need to investigate further on my own farm. Five dimensions talked about in the workshop, dig a little bit more into the financials of the operations. while others work on transition plan.

“It’s a time to sit back, work on your strategy if that’s the case as well, just to find where you need to take that next step. The key thing, that’s the right time to do it right now.”

WEATHER

During the phone interview he spoke about the importance of weather to upcoming cropping decisions. Prairie producers just have to reflect on the past three years, and particularly the challenging weather conditions of 2019, to understand the impact of weather on agriculture.

“2019 which was a pretty difficult year when it comes to weather. But really the last three years on the prairies, and some of the challenges, and some of the opportunities perhaps. So we have to ask ourselves, it’s a time to take a step back from production and ask ‘where do I stand?” If weather is going to bring a little bit more volatility to my business and production, do I have the right strategy in place? Does the risk exposure that I have, is that the right risk exposure. We are in the business of taking risks, producers are. You’re never going to get away from all risk. The point is making sure that you do have an understanding of all the different risks out there.”

“I would argue that in some cases it brings up maybe some opportunities.”

He added the global weather also impacts the industry.

“You look at the crops in South America right see that. If you look at futures markets certainly, soybeans and canola being linked to soybeans, you’re starting to see prices move up a little bit because of warming relationship between China and the US.”

“Any reversion back to tit for tat, everything that we witnessed in 2019, I think it’s a potentially big disruptor as well.”

TECHNOLOGY, AUTOMATION AND INNOVATION

With margins getting tighter on the farm, when combined with flat growth revenues and rising expenses, Gervais sees technology, automation and innovation playing a bigger role in agriculture.

“Producers have no control over input pricers. So what are the things that they can control?” he said of the areas of expenses and inputs.

“Amid all that, we have some serious labour challenges as well in Canada across all industries. When we are fortunate enough that you find some qualified labour to work on the farms, it does command a significant wage.”

“For businesses that have labour challenges and face labour challenges, automation is a nice opportunity.”

“I think we’re going to see more and more of an introduction of automation on Canadian farms.”

“It’s already here. The next 10 years are going to be really a big deal and really important in making sure that we keep up with technology on our farms because that’s going to be a major, major driver of future profitability.”

“I think it’s important that given all the technology and benefits of innovation, that farms and farm operations to keep that top of mind when it comes to automation and technology.”

OPTIMISM DESPITE CHALLENGES

Gervais said that despite the challenges, the agriculture industry has responded to producer success.

“With prices lower than the five year average, I think we’ve moved from a price driven market to a volume driven market. And we’re being challenged with weather conditions and trade and so forth. So it’s an environment that’s quite challenging, but the opportunities are there.”

“I would say the number one thing that still makes me quite positive about the industry’s outlook is that the demand for what we sell - despite challenges in trade and all that sort of stuff - the demand for what we sell as commodities in food coming from Canada is actually very strong. It remains very strong for all different reasons, population, income, and so forth.”

“I think that’s the number one thing that we need to remind ourselves on is the demand for what we have to offer is absolutely strong. Now market conditions have changed, the environment’s changed, but the underlying driver behind all that, that I think is really, really positive, is just the demand for what we sell.”