LANIGAN, Sask. – Kalissa Regier had a clear answer when MPs asked her what was the biggest difference between business challenges now and when her parents started.
“Farmers are competing against each other more than they ever have,” the youth president of the National Farmers Union told members of the House of Commons agriculture committee April 28 when they stopped in Saskatchewan on a cross-country tour studying young farmer issues.
MPs on the committee certainly heard complaints from farmers across the West last week about their weak market position and the lack of farmer power.
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Yet hours before the Lanigan public hearing where Regier spoke, committee members visited a local enterprise that some saw as the epitome of a modern version of farmers co-operating to gain market power.
They toured the Pound-Maker feedlot and ethanol plant, where more than 200 mostly farmer investors have created a company that markets more than 40,000 head of cattle through a feedlot, buys more than two million bushels of grain from local farmers for cattle feed and more than 1.3 million bushels for ethanol production and employs scores of local residents.
“I wanted to show the committee an example of someone who has thought outside the box, saw an opportunity and created a model that others can use,” said Saskatchewan Conservative MP Randy Hoback.
The Pound-Maker plant, created in the 1970s as a feedlot where local farmers could receive better value for their low-priced grain, has become a major closed shareholder company worth millions of dollars and with a business plan that moves the company beyond the uncertainty of agricultural markets.
“We want to get out of the cyclical agricultural cycle,” Pound-Maker president Brad Wildman told MPs touring his plant.
The company has moved from a feedlot to an ethanol plant to a collaborator with the University of Saskatchewan on fractionation of ingredients from grain. Its next venture is to try to get into energy production through biodigesters.
However, Sask Power, a provincial crown corporation, has been reluctant to allow power generation from biodigesters into the grid.
“We could produce enough power for 3,300 homes,” Wildeman said. “We have some system problems we have to work out. It is not simple.”
A biodigester capable of powering the ethanol plant could cost as much as $20 million to install, which means it would make business sense only if the surplus power could be sold to the Saskatchewan grid.
So far, that has not happened.
“We have been saving for the past 10 years for the next phase and it will happen,” Wildeman said.
MPs were impressed.
“This is a case of farmers working together to create a very successful company with some market clout,” said Ontario Liberal Francis Valeriote.
Wildeman said the business model has been to reduce dependence on the unpredictable agricultural economy. Still, he expects the company’s feedlot to thrive in the next year.
“We’ll see the highest prices for cattle in history in the next two years,” he said.
“That will help keep us profitable.”
