Virden, Man. – When running a large scale grain and cattle operation, working together pays off in efficiency and economies of scale, according to Perry Chapman.
He, along with his cousin Rob and brother Darren, farms more than 12,000 acres near Virden.
The Chapman operation began in 1944, when their grandfather Robert moved to the area from Plumas, Man., and bought a 580 acre farm.
In the early 1960s, their fathers George and Russell started expanding, a process that continued to the late 1980s.
Rob, the eldest at 43, has two daughters and a son. He is the cattle and machinery specialist.
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Darren, 41, who runs the hay and seed cleaning business, has four daughters. Perry, the youngest, at 35 with two daughters, handles the marketing and accounting.
All three went to the University of Manitoba. Perry has a degree in agriculture economics, and Rob and Darren have diplomas in agriculture.
The succession process, which began in 2003, was finalized last year. Professionals were hired to help with the transition.
“It wasn’t an overnight project,” said Perry. “Our accountants had been doing things to prepare for it for a few years before that.”
All three Chapmans operate their own corporations, owning and renting land on an individual basis, but share equipment and buy inputs and fuel as a group.
“Equipment is getting more expensive all the time, and you use it only about one month out of the year, especially your seeding and harvesting equipment,” said Perry.
“With the bigger tractors, you want to make sure that you are getting enough hours out of them that they are paying for themselves.”
The three Chapmans share grain storage space and often market their crops together to negotiate better prices. Inevitably, there are conflicts.
“We have had our moments, I guess,” said Darren. “Most of the time, if you look at the other person’s point of view and stop to think about where they’re coming from, you can kind of reason it out.”
“Without guns,” joked Perry.
Keeping in mind the well being and best interests of everyone involved gives them reason enough to want to resolve their differences quickly and move on.
“It has worked out well and keeps an environment going for a lot of other families as well, like our workforce of hired men,” said Darren.
They employ five hired men full time and two or three extra seasonal workers. One of their workers has been with them for more than 25 years.
Having a large operation means that they are better able to retain staff by keeping them on the payroll even during the winter months.
“If you can’t keep a guy around year round, then it seems like you can’t keep him around,” said Perry.
Future expansion plans will depend on the availability of workers. The current boom in the nearby Sinclair oil field, which saw 478 wells drilled in 2006, means the Chapmans are forced to compete for workers with companies that pay up to $30 an hour.
To get an idea of the size of the boom, just 354 wells were tapped in 1955, the previous record-setting year.
“The biggest reason we’re not going bigger is probably the manpower issue,” said Perry.
Rob added: “Not that many years ago, people were knocking on our doors spring and fall looking for work. You don’t see that anymore.”
Land prices in the area can vary widely, from $40,000-$50,000 a quarter section, to up to $100,000 for top quality land.
“It reflects the yield potential or the crops that are growing on it,” said Perry.
The Chapmans grow wheat, canola, barley, oats and peas, as well as dairy and horse quality hay for local sale and export to the United States.
Their cattle herd, which they started building up in 2000, is mainly Black Angus.
With grain prices rising on the strength of ethanol expansion in the U.S., Perry said things are looking up. However, input costs for nitrogen fertilizer are also up, for the same reason.
“When things start looking good on one side, the middleman sees an opportunity to take a little bit more,” he said.
Being bigger pays off with programs such as Canadian Agricultural Income Stabilization, said Perry.
Farmers who have to supplement their income with off-farm or custom work miss out on some of the benefits because the program doesn’t allow such earnings into their calculations.
“To get the full benefit of a lot these programs, it seems like you have to own equipment and have enough land base to utilize it to its full potential,” said Perry.
Whether the next generation of Chapmans will stay on the land is an interesting question for the three men, who have been blessed with an abundance of female offspring.
“That’s the big question, whether daughters can marry sons-in-law, and sons-in-law can work together,” said Rob.
“It depends whether they show an interest in it or not is the big thing,” said Perry.
“The only way they are going to show an interest is if it has a future. If it’s making money, the younger generation will be more interested.”
The lure of high paying jobs in the nearby oil fields may prove irresistible, compared to the cyclical ups and downs of farming, he added.
“But there’s nothing guaranteed in the oil patch, either,” said Rob.
