It’s tough to be a lone wolf these days, given the costs and complexity of modern agriculture, which is why more farmers are partnering.
But how do farmers go about finding the right partner?
Consider the example of Pat Beaujot.
On a January morning in 2006, the co-founder of air seeder maker Seed Hawk met an equipment manufacturer from Sweden and a few hours later proposed an alliance that not only transformed his company but resulted in his new partner buying 49 percent of it.
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Sounds kind of crazy, doesn’t it?
Who spends 20 years, as Beaujot did, building a company from scratch and then jumps into a game-changing partnership with someone he just met a couple of hours earlier?
But the story of Seed Hawk’s alliance with Swedish farm equipment giant Vderstad-Verken AB showcases how good partnerships are a mix of business smarts and gut instinct.
Seed Hawk was started in 1986 in the Saskatchewan hamlet of Langbank just as no-till was taking off and demand rising for air seeders that could accurately place seed and fertilizer in the ground.
The company grew rapidly, but production was still less than 100 machines annually when Vderstad co-owner Crister Stark made his fateful visit.
The Swedish company was started by Stark’s father, who had also got into the manufacturing business when he couldn’t find equipment that matched his needs – in his case a cultivator.
Like Seed Hawk, sales took off from the start, but with a quarter-century head start, Vderstad was much larger. Despite being slammed by the recession, its sales topped $200 million last year.
However, all Beaujot knew when an engineering acquaintance set up that January meeting was that this Swedish company was going to start its own line of air seeders to sell in Russia and Kazakhstan, and was looking for a supplier of tanks.
“We had never heard of them before,” Beaujot said.
“But I was impressed by Crister right away. He was so down-to-earth, not arrogant at all. He was also extremely knowledgeable about the product, to an extent you wouldn’t expect from the president of a company that size. Just getting to know him a little bit, I could see he had the same passions that we had.”
While chatting about their companies’ history and goals, the same thought kept coming back to Beaujot: he would like to do business with this guy.
“So just like that, I said to him, ‘instead of buying our tanks, why don’t you take our whole product line and market it overseas,” Beaujot said.
“It was a gut thing, but I could see these guys were the real deal. And when my gut is telling me something that strongly, I usually go with it.”
It was a leap, but not a blind one. Beaujot had solid business reasons.
At the time, he was bogged down in protracted negotiations for his first overseas sale and knew Vderstad could pry the export doors wide open, which it has done, considering that Seed Hawk has tripled in size since then.
He also knew Stark was going to visit other operations and if he let the chance slip, it might be gone forever.
But most importantly, he knew that when they sat down to hammer out the details, he would find out whether his gut was right or not.
And the deal would have to include an exit clause so either party could walk away, without hard feelings, if things didn’t work out as hoped.
“I’ve had difficult partnerships in the past and the one thing I’ve learned is that having an exit strategy actually makes the partnership work better,” Beaujot said.
It’s a simple but powerful idea. If you’ve thought about farming jointly, or even sharing equipment with a neighbour, you’ve probably worried what would happen if things went awry.
Beaujot’s philosophy is that if your brain says this could be good and your gut says the same thing, don’t be fearful. Speak up, toss out a proposal, and see where it goes.
Archived columns from this series can be found at www.fcc-fac.ca/learning. Farm Credit Canada enables business management skill development through resources such as this column, and information and learning events available across Canada.
