When your neighbour is a mega-farm

This is the third instalment in a series of stories exploring the trend toward mega-farms across Western Canada and what it means to the farmers who work the fields.

Alan Brecka blames his mega-farm neighbours for preventing him from expanding his modest grain farm.

The 32-year-old got into the business 10 years ago, renting 320 acres near Picture Butte, Alta., from his father. He now rents two sections from his father and owns another, farming a total of 1,920 acres.

His goal is to expand the operation to 3,000 acres, but that appears to be an unrealistic objective. Brecka can’t afford the local prices of $2,200 per acre for dry land or more than $1 million a quarter for irrigated land with a pivot.

“I can’t pencil in much more than $1,300 to $1,400 (an acre),” he said.

Brecka claims land prices have been inflated by his mega-farm neighbours. He has to bid against two Hutterite colonies and a number of feedlots such as Cor Van Raay Farms.

However, the large operations say they are just as handcuffed by escalating farmland values as is Brecka and haven’t been expanding their operations.

Brecka said he’s up against unfair competition. He said that the Van Raay operation is using millions of dollars in government subsidy money to buy farmland, which it received as compensation for damage to its feedlot business stemming from the BSE crisis.

“All these guys got this huge payout and they managed to expand and get bigger,” he said.

“These mega-farms seem to want to farm everything.”

Darren Van Raay, president of Cor Van Raay Farms, said the family operation he runs with his three sisters consists of 11,000 acres of crops and a 25,000-head feedlot.

“I don’t know if we’re a mega-farm. I think we’re probably an average size,” he said.

According to Statistics Canada, the average Alberta farm size was 1,168 acres in 2011.

Van Raay can sympathize with the plight of a young farmer trying to expand his operation given today’s high land prices, but he’s not willing to shoulder the blame.

He recently bought four quarters near Brecka but that was a personal purchase. The company hasn’t been active in the land market for six or seven years.

“Seems like since BSE I can count the amount of acres that I’ve bought on my hand, almost,” said Van Raay.

His father, Cor Van Raay, acquired most of the land in the 1990s when the dollar was weak and the cattle business was strong.

Not much farmland hits the market these days and when it does, Van Raay said he has a tough time bidding against the Hutterite colonies and other buyers.

A competing feedlot recently sold five quarters of irrigated land to a British Columbia greenhouse for in excess of $1 million per quarter.

“I’m actually in the same boat (as Brecka). Some of the prices for land, even for us, are getting astronomical,” he said.

George Wurz, manager of the Albion Ridge Hutterite Colony near Picture Butte, can’t believe what has happened to real estate values in the area.

Ten years ago, the colony could buy a quarter section for about $400,000. Today, the same land is worth up to $700,000.

“We didn’t drive it up ourselves. The farmer comes along and he wants that kind of money. We have to pay it. We can’t do nothing,” he said.

“I don’t know who drives it up. (We) just about can’t afford it now.”

The colony owns 8,600 acres and rents another 5,000.

“We haven’t bought land for 10 years now. If any land comes up for sale, bang, it’s gone,” said Wurz.

Van Raay said his operation needs farmland to supply feed to the feedlot and to spread manure.

“So if there is a piece across the road from me for sale, I am going to be pretty aggressive on that just because I can save money in the long run on manure costs,” he said.

Brecka said escalating land costs are only one of the downsides of living next to a mega-farm.

“There seems to be no neighbourly interactions anymore. When you look to a mega-farm, it’s all go, go, go,” he said.

“You don’t know who’s running the tractor. You don’t stop to talk to them anymore because they got to go.”

Brecka said Van Raay employs a lot of Mexican Mennonites, who he said are standoffish.

“The community aspect is all gone. They don’t curl. They don’t play hockey. They don’t come to social functions. What they do is they stick to themselves and that’s about it.”

Van Raay estimates 20 percent of the farm’s 50 employees are Mexican and a number of those are Mexican Mennonites.

He agreed that he doesn’t see them at the rinks, but they attend local fairs and patronize restaurants, hardware stores and other businesses.

“They’re just generally a little quieter people. They don’t go to the bar,” said Van Raay.

He would happily employ more local kids if they were willing to do the same work and put in the same long hours, but there is a shortage of that type of labour.

“At the end of the day, I need somebody to drive a tractor and I need somebody to work in the feedlots,” said Van Raay.

He said feedlots tend to be a lightning rod for criticism, but a lot of the BSE money his farm received bolstered feeder cattle prices and kept hundreds of local cow-calf producers in business.

Van Raay contends towns like Picture Butte wouldn’t be the communities they are today without the economic activity generated by area feedlots.

He denied the allegation that the company has gone on a post-BSE spending spree with government money.

“Without that money, we wouldn’t have been around,” he said.

“It hasn’t exactly been a walk in the park, to be honest, since then.”

Van Raay said more feedlots are selling land than buying land and those that are buying are increasingly growing cash crops such as canola rather than feed crops because there’s more money in grain farming than the cattle business.

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