EARL GREY, Sask. – Stephen Brewster is a rarity.
He’s young, educated, with work experience in agricultural lending and he’s started farming because he believes it’s a good business decision. And he appears to be reasonably sane.
Brewster said despite tight margins, unpredictable trading partners and a “hodgepodge” of government policies that make farming difficult in Canada, he sees a bright future.
The Earl Grey farmer spent five years as an agricultural loans officer with the Royal Bank after studying agricultural business at an Alberta college. The bank posted the young lender to small towns across the eastern Prairies.
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He learned a lot about the business of prairie agriculture by dealing with a large number of farmers “with a bunch of great strategies for survival and even profit … as well as some with plans that didn’t work.”
When his father’s health began to deteriorate, Brewster felt confident leaving banking for a life on the farm.
“Part of my confidence in agriculture comes from my parents. They saw the farm as a business and weren’t afraid to expand that into manufacturing, custom spraying and other agricultural support businesses that were complementary to farming. Whatever it took to make ends meet.”
But the younger Brewster keeps an even sharper pencil than his father or mother, a bookkeeper specializing in taxes.
He has to.
In 2004 he expanded, something he does regularly, to seed 11 different crops into nearly 6,000 acres of dryland dirt.
“It is a lot of record keeping. There has to be if you are going to be successful at this,” he said of his separate records for each field.
He said ongoing expansion is necessary every year until it no longer makes sense.
“I expect that will be a long way off.”
Labour is the major limit to the farm’s growth.
“We need to be able to attract and retain good employeeÐpartners in this business. That means having enough work to keep someone on year round. I heard too many farmers say they couldn’t get good help that would stay, but they paid poor wages and employed them for half the year. It meant those farmers couldn’t grow or even maintain their operations as they got older.”
Brewster’s business plan includes many partners from his employees to his parents, to an engineer that farms 1,500 acres part-time with Brewster, to a sister who has purchased 320 acres to rent to him, to the landowners he rents about half his land from and the suppliers he counts on for inputs.
“I see them all taking an income from this farm and I treat them that way. This farm makes their money too and I need to listen to all of them if this is going to work.”
To finance the operation Brewster used his banking experience to create a combination of equity positions from family, his part-time farming partner and out-of-province investors with traditional debt operational financing from the banks.
“I know the ratios the banks need to see and I make sure they keep happening.”
Brewster said the relationship between farmer and banker is often not as good as it should be. But both need to remember that they’re partners. Neither can survive without the other, he said.
Selling his crops takes most of Brewster’s winter. He favours spreading the job between grain brokers and elevator companies and uses Canadian Wheat Board contracts. To make sure he is “getting the most we can get” he participates in a farmers’ marketing club.
Brewster takes a moderate view when it comes to production, opting to use two seeding units and two combines.
“We don’t push all of our inputs to the maximum. Some of the land is not so good that it can be pushed reliably. Each field will respond differently and when you get larger, that is when record keeping becomes really important,” he said.
“Too big equipment costs money to own, too small hurts opportunities to make money by slowing you down. It has to be right.”
Brewster is building a commercial seed cleaning plant on the site of Earl Grey’s former grain elevators.
In its first year of operation the plant added income to the farm through custom cleaning neighbours’ grain. The young farmer intends to build up to 80,000 bushels of storage on that site and use the plant to clean and manage all of the farm’s output in the future.
“Blending for better grades shouldn’t only be a way for the elevator company to make money. I want to eliminate the middlemen wherever I can,” he said.
He intends the cleaning plant to provide year-round employment for his workers and eventually provide enough screenings to grow a small cattle-feeding operation.
In 2005, the farmer plans to expand his use of global positioning equipment and put his records on computer.
