Farmers aren’t alone in their struggle against a sagging farm economy. Many agriculture businesses are also fighting to keep their heads above water as commodity prices drop, debt piles up and banks keep calling.
“We live and die by the farmer,” said Dwight Walz, manager of Green Acres Fertilizers in Kerrobert, Sask.
The business has seen its share of troubles in the past three years and he doesn’t predict rosier times for the near future.
“People are already coming in and asking for advances on supplies for next (spring),” he said.
Read Also
Going beyond “Resistant” on crop seed labels
Variety resistance is getting more specific on crop disease pathogens, but that information must be conveyed in a way that actually helps producers make rotation decisions.
“We’re becoming more of a banker than we want to. Everyone wants to be paid, but we’re about 17th on the list of priorities.”
Walz said Green Acres must carry these debt loads if it wants to stay competitive, but the IOU pile is growing high.
“About 10 percent of our accounts receivable are more than a year old,” he said.
“There’s a handful of customers still carrying debt from last spring, but our suppliers want to be paid by the end of October.”
The problem is not limited to Saskatchewan. Craig Miller, manager of Clement Farm Supply in Russell, Man., said his business has had to get tough with people who have outstanding debts.
“That means going to the courts or whatever’s necessary.”
Miller wasn’t surprised by how the year has turned out, but he isn’t happy about it. The cash crunch has forced the short-line equipment and fertilizer dealer to turn away new customers asking for credit.
“If they weren’t a long-standing customer, we didn’t feel comfortable about it,” he said.
“For every dollar we put in receivables, it’s one more dollar we have to get from somewhere.”
The struggle to maintain service while carrying a large debt load is shared by most prairie agricultural retailers, said Robert Dyck, president of the Canadian Association of Agri-Retailers.
“When the customers aren’t doing well, the businesses can’t do well,” he said.
“The debt loads are getting bigger and farmers are feeling the pressure to delay payments.”
But not all businesses are feeling the pinch.
“We’re actually doing better in comparison to last year,” said Joe Nast, manager of Saskatchewan Wheat Pool’s farm service centre in Saskatoon.
Nast said good yields in his service area have kept grain bin sales brisk, which has made a big difference. The centre has also received good response from its decision to accept used equipment and bins as trade-ins.
Nast said some outstanding accounts will have to be dealt with, but many are from last spring and will likely be paid by Oct. 31.
“I’d say about 90 percent of the farmers we talk to are pretty happy,” he said.
Bert Horvey, agro division manager for Wetaskiwin Co-op in Wetaskiwin, Alta., also said business has been good this year. Feed sales have been lively, although equipment sales have slowed.
“We’re taking action to keep things going, and so far it’s working,” Horvey said.
The co-op recently joined forces with another Alberta farm supply dealer to increase inventory, suppliers and customers.
“In this business, you have to grow to survive,” Horvey said.
“We’ve gotten a very positive response from our customers.”
Horvey said he is concerned that some of his clients are having trouble, but added he is trying to stay positive.
“You have to be prepared to handle changes. It’s not as bad as it could be.”
Others may disagree. Walz said his business is all right for now, but things must improve drastically soon.
“We’ll get through this year, but we need more than just staying alive.”
Dyck does not expect quick improvement and said retailers will have to “batten down the hatches” to ride out the situation with their customers.
“I don’t know that we’ve seen the light at the end of the tunnel just yet, but the low point has been reached.”
Miller said it’s hard to stay positive.
“I don’t know. It’s got to change. It can’t stay like this. It has to get better. It has to.”
