Wheat & Chaff – for Mar. 9, 2009

PRACTICE, PRACTICE, PRACTICE

You need to know what farmers across Canada and in competing regions around the world are doing to reduce costs and increase quality. This is called benchmarking, and it’s a key component in pushing your business further. Having lots of land is a good way to spread out fixed costs, but it’s not the only road to success. It might not even be the smoothest or most direct road.

In business, the biggest player is not the only winner. There can be many winners, including many smaller-sized winners. But to be among the winners, you still have to know what the people in your business are doing to improve, and then copy them or do something different and better. This is general advice for success in any business. Grainews is in a competitive business. We watch what other farm papers are doing. We aim to lead where we can lead. And we try to catch up where we need to catch up. It’s a never-ending challenge.

I listened to a podcast on Canada’s Department of Foreign Affairs and International Trade website (www.international.gc.ca)with George Yip, dean of the Rotterdam School of Management. The topic was global value chains. You’re probably sick of the term “value chain,” but it’s part of growing, processing and selling food and anything else. It’s not some novel concept. It’s how business works. (Being in value chain doesn’t mean you have to invest in upstream processing. If you’re in the business of producing crops, you’re in a value chain.) Yip didn’t mention agriculture at all, but he made some points that could apply. The importance of benchmarking was one of them. “If your competitor is already doing something to get lower costs or higher quality, then you’d better be doing it,” Yip said.

His other important point was in reference to small-and medium-sized enterprises (SMEs), a large group that accounts for 95 per cent of the businesses in Canada, including every farm. Yip recommends that an SME be “very good at one capability in one region, and think of itself as being part of someone else’s value chain, especially if it’s making an intermediate product.” He’s talking about you.

Think about his words “very good at one capability.” Canadian farms are blessed with a broad array of crops that work in this region. You’ve probably tried 15 crops over the years and still have five or six in regular rotation. But while this keeps us in a lot of markets, someone from the outside might look at this and say, “These farmers don’t know what they’re good at.” You probably want to keep four or five crops in your rotation, but maybe pick one or two that work really well in your area and that have good buyers (and ideally processors) in the neighbourhood. Become really good at those crops.

Malcolm Gladwell makes many really interesting observations in his book, “Outliers.” One point is that natural talent doesn’t get you very far in anything, from hockey to music to business. You need to practice, practice, practice. Say you want to be the best flax grower — and be known as the best flax grower, which folds you tightly into the value chain. Then immerse yourself in that crop. Visit flax processors in Canada and abroad. Talk to flax growers in Europe. Read all the latest on flax production. And grow the crop every year and pay attention to all the little details on agronomy, pest control and quality. In short, know the benchmark and then rise above it.

In Outliers, Gladwell tells stories of how Bill Gates got to be so smart, and how the Beatles got to be so talented. Circumstance was part of it. But more importantly, as Gladwell notes, they worked very, very hard at their crafts. Two years before the Beatles hit it big in the U. S. and the world, they were in Hamburg, Germany playing five-hour gigs day after day for months on end. Not only did they get very good at their hit songs, but these long gigs forced them to play many different songs and write more and more material to fill the hours. They didn’t get famous by accident. They worked their butts off.

SHOP THE WORLD FOR PARTS

James Cooper, a farmer from Essex, England, e-mailed me in February to say how much he enjoyed my blog, which was really nice of him. He also shared some of his farming experiences. I was surprised to find out that he buys many of his combine parts from Miller Farm Equipment in Brandon, Man.

Cooper has a Case IH 1660 Axial-flow combine. “I have been buying parts from Miller Farm Equipment for a couple of years now as they are a lot cheaper than the U. K., even with taxes and postage. A set of bearings for my combine would have cost about 400 here and I got them for 150 from Canada,” he writes.

I asked how he connected with Miller Farm Equipment. “We were looking for prices on parts in the U. S. and Canada, because we had a U. S.-built header on our old combine, and couldn’t get parts in the U. K. very easily. They were the only people to reply to our e-mails,” he answered. “They tell us we spend more money with them than local farmers.”

This is a great lesson in the power of the Internet to make contacts around the world. You can shop pretty much anywhere these days, and who knows, you might find a supplier in Argentina who can deliver OEM parts for cheap. Of course, there are many benefits to working with your local dealerships, but it doesn’t hurt to check around from time to time.

James Cooper also explains how and why he uses Pod-stick to seal his canola pods before straight combining the crop. Read my blog from February 17 for details.

IN THE SPIRIT OF FARM SAFETY

Many farmyards have overhead power lines and it could be just a matter of time before someone touches them with an auger, hoisted truck box or an extension ladder. Maybe it’s time to bury those lines before someone gets zapped.

Reynold Bourdeaud’hui buried the power lines on his yard near Bruxelles, Man., and “safety was the whole reason.” (Reynold is father to Cory, the ad sales manager for Grainews.) It was in response to a close call. He was clearing manure out of a cattle pen when he saw the yard pole snap off in the next pen over. Then he looked up and noticed the power line caught in his grapple. He had lifted the bucket too high and had snagged the wire — without noticing. It was covered wire, so it didn’t short, but if there was a bare spot somewhere, a pole or a building might have caught fire or someone or some animals could have been electrocuted. Reynold decided at that point to bury all his power lines. He had 440 feet in total. The total cost, including wire, trenching and hook up, was $2,500.

DOES YOUR PROTECTIVE GEAR FIT?

The theme for this year’s farm safety week, which is March 11-17, is “PPE only works if you use it!” PPE is personal protective equipment. Marcel Hacault, executive director of the Canadian Agricultural Safety Association (CASA), says the PPE campaign is twofold. Part one asks farmers to think through your work before starting so you can anticipate and correct any hazards that may occur. The second part encourages you to make sure your PPE fits and is there when you need it. Put simply, you want to avoid hazards in the first place so “accidents” don’t happen. Your PPE is the last line of defense, so you want to make sure rubber gloves, coveralls, goggles, ear covers and boots protect as they’re supposed to. Farm Credit Canada, a sponsor of farm safety weed, has a safety quiz for you at the website www.fccfarmsafety.ca.

NEW DICTIONARY DEFINITIONS

These dictionary updates are making email rounds:

Cigarette: A pinch of tobacco rolled in paper with fire at one end and a fool at the other!

Conference: The confusion of one man multiplied by the number present.

Smile: A curve that can set a lot of things straight.

Experience: The name men give to their mistakes.

Diplomat: A person who tells you to go to hell in such a way that you actually look forward to the trip.

SIGN OFF

This is the last of the five “weekly” Grainews editions for this spring. We come out every other week for the next eight weeks, then we’re back to monthly mode. I hope you’ve time to read them all and I hope you find at least one idea to save money or increase profits. For a mere $37 per year, it doesn’t take much for your Grainews subscription to pay for itself. Thanks for reading.

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