| SUBSCRIBE MARKETS WEATHER LINKS HOME |
|
A TALE OF FOUR FARMS: Making the most of local market opportunities to turn a profit in a tough environmentHard hit by rising input costs and hamstrung by seemingly ever lowering returns, the farm economy is staggering into a new year in 2005. But in a bleak farm economy, a handful of producers is demonstrating that by researching local markets and taking advantage of local growing conditions, by astute pricing and direct marketing to consumers, they can find a somewhat silver lining in an otherwise dark agricultural marketing cloud.by DON STONEMANThe Gorzos: Small can be beautiful in Toronto vegetable marketsJohn and Kathryn Gorzo are the first commercial artichoke farmers in Ontario. They farm under the name JKG Farms in the Bradford Marsh, north of Newmarket, and grow crops on 60 to 80 acres, which John Gorzo calls a "medium-sized" marsh farm.John's parents emigrated from Hungary in 1956 and John grew up marsh farming at Bradford. Kathryn, whose family ran a cash crop farm in western Ontario, worked in the marsh as an integrated pest management advisor for the Ontario Ministry of Agriculture and Food (OMAF). John's father, John Sr., has been wholesaling produce at the Ontario Food Terminal in Toronto for at least 30 years. About 10 years ago, National Grocers and Atlantic & Pacific bought two smaller chains, Longos and The Barn, and the future for medium-sized growers like Gorzo seemed bleak. "I knew that we had to start changing our focus," John Gorzo says. "At the size we were at, we couldn't supply one of the big chains with one of their commodities. We didn't have enough acres to do it." The Gorzos were faced with two choices -- get bigger and make large investments in land and machinery to produce commodity carrots and onions, or innovate and find a way to supply those chains with specialty crops. John and Kathryn took the specialty route. Today, they grow artichokes, parsley root, celery root (traditional European vegetables that are relatively new to Canada) and exotic carrots -- red, white purple, yellow and baby bunch carrots, each of which has its own distinct flavour and texture. These products are mostly wholesaled through The Food Terminal, but in 2004, for the first time, the Gorzos sold them out of a stall at a farmer's market at Square One, Mississauga. John Gorzo considers this booth to be a form of market research. The chain stores want to see if products sell in Gorzo's booth first, before they will put them on their shelves. There are nine stores under The Barn name in the A&P chain of 234 stores and 11 Fortino stores are part of the George Weston Group and Loblaws. Loblaws' Web site doesn't say how many stores are in the chain, but it describes itself as "Canada's largest food distributor." "With all the new stuff we're growing, we need to do some consumer market research. It takes four or five years to get into the chains," says Gorzo. They won't buy it unless they see it is selling. He started with coloured carrots four or five years ago. Now, these products are going mainstream in much larger volumes and at lower prices. "A bunch of other growers want to get in on some of that action. I won't be able to supply it all anyway. Hopefully I will make my money by then," he laughs. "And of course, that's when I get on with my next project. I always start a couple of projects each year." Gorzo says several elements are involved. One is "a matter of marketing (a new product) and finding the right outlet for it." The other element is finding seed. Availability "is a major problem with specialty crops. That's why it takes four or five years. They can produce all the fancy seed they want," he says, but someone has to plant it and see if it grows. Artichoke seed came from a seed company in Canada. It is produced in California and it is a public variety.
In 2000, Borland was farming 600 of his own acres, and worked full-time in a factory. He owned a 1666 International combine with a 25-foot header and custom-combined for other farmers. At the peak of his custom business, he was harvesting crops from 2,000 acres a year. But he saw the writing on the wall. "Farms were being sold. Everybody is getting old around here," he says. "I was losing money on the grain and oilseeds big-time." When a major customer bought his own harvester, Borland sold his combine and let go a couple of the rented farms. Borland and his wife Maureen still cash crop about 400 acres in Essex County, but they also raise lambs from about 250 ewes. Essex isn't exactly prime sheep-raising country, and neither Bill nor Maureen had experience with sheep, or even grew up eating lamb. But lamb raising has taken off with a local abattoir marketing to a thriving market in an ethnically diverse market in Essex County and nearby Windsor. Which came first, the move into the sheep market or the realization that they were in a highly-ethnic area? Maureen Borland says it happened at the same time. She was wondering how they would sell all the lambs that they planned to produce. Then they discovered that Windsor is among the most ethnic cities in Canada. Hay fields are part of the crop rotation now and next year Borland won't have to buy feed for his animals. The next step will be to put sheep out to pasture. BSE has been one challenge. Another was cash flow that didn't coincide with bill payments. He got financing from Woodslee Credit Union and it didn't have experience with livestock operations either, he says. The Borlands' 134-by-38 foot lambing barn cost $18 a square foot to build. There is also a 48-by-56 foot hay barn. Borland still runs the cropping operation, but it is dragging down his income. "I'd like to get rid of the rest. I hate to take money from the sheep operation to keep the grain and oilseeds going," he says. He has an arrangement with a young farmer, who works full-time but owns a combine, which Borland drives. "I quite believe that sheep are the only thing that a young farmer starting out in Essex County can make a living on without having to work off the farm," Borland says. But livestock farming in Essex isn't all bliss. Borland says a neighbour objected to the Township giving permission to build a house for his son next door and the Ontario Municipal Board ruled against the municipality. This will put a crimp in expansion plans because their 30-year-old son must live adjacent to the farm in order to share barn chores. Most of the Borland's lambs go to Fuerth's abattoir in Essex County, but some customers buy lambs to slaughter at their home. Without the abattoir nearby, sheep production wouldn't be viable, Borland says. It's a three-hour drive to the closest auction in Brussels. "Fuerth says he'll take every lamb that I deliver to him," Borland says, and there is no formal contract involved. The Borlands sell 60 lambs a week on order from Easter through October. "We haven't had any problems with markets, even with borders closed," says Maureen Borland. She stresses that that the Internet was critical to researching the sheep project, as was connections to the local abattoir owner. They visited a number of farms to see barns that they thought would work. The barn they have now "is a kind of a combination, and what we could manage financially." While the Internet was helpful, Bill Borland says the agriculture ministry was a disappointment when it came to building a new barn. "There is no government help from Ontario for anything," he says. He looked at plans for sheep barns that are on the Ontario Ministry of Agriculture and Food Web site and found designs that dated back to the 1970s. Eventually, the Borlands built a barn that was a combination of good points from three or four other barns that they had visited. Borland says his lambing barn cost him $18 a square foot to build and there were some problems with materials that didn't stand up and let in drafts. The errors have been corrected. In retrospect, he figures he could easily shave $10,000 off the cost. Other sheep producers were most helpful, he says. "They are very open about their books. They tell me that 'we are in the business of selling lambs for production. If somebody isn't making money, they aren't going to buy any sheep.'" Borland says prices at Brussels are further depressed now because of imports from Alberta. "We are killing everything that Alberta is raising." The current Canadian Agricultural Income Stabilization Program (CAIS) program has been no help to local farmers, Borland says. "Everybody said they got a letter telling them they weren't eligible." A group of local farmers is now appealing the decisions, Borland says. It's been a tough year and he predicts that some producers won't be able to pay their bills. Fuerth's abattoir is called Ewe Dell Family Farms. Rick and Carolyn Fuerth and their son Jason have been operating it since 1991, when the Fuerths got out of dairying. "It was getting to the point where we needed major renovations and an increase in numbers to be viable," says Carolyn Fuerth. "Nothing had been done to the barn since we came home from university in 1973." The abattoir kills about 3,500 animals a year, mostly lambs, sheep and the odd goat, she says. The slaughter averages 100 to 120 sheep a week, always on Friday mornings, with numbers varying with the season. Fuerth confirms that the Windsor area has a highly diverse ethnic population. Windsor, she notes, "has the largest Serbian population outside of Serbia," and an increasing Moslem population. A Moslem man comes to say a blessing over the lambs as they are slaughtered in order to fulfill requirements for the halal market. A single day a week slaughter is not the most efficient use of shackle space, she admits. "That's all we need to meet demand." There are seven people working at the plant on Friday mornings. As if he didn't have enough to do, Rick Fuerth keeps busy constructing farm buildings.
One of the brothers, Perry Allossery, has his daughters boosting the deposits into their education funds by getting a premium for roadside stand sales of early season sweet corn planted with homemade, but very effective machinery. Allossery uses one homebuilt machine to spread plastic mulch and a homebuilt planter to direct-seed through the mulch. "I saw one (planter) at a show. I just looked at it, took some measurements and then that was it -- I built one," says Allossery, who is a licensed carpenter. "I can physically see it before it exists and I can build it. I guess engineers have that kind of ability." The plastic sheeting costs $300 an acre, but Allossery says the extra cost is worthwhile because hand-picked early sweet corn commands a premium price of about $4.50 a dozen and is ready for market in early July, a week to 10 days ahead of direct-seeding competitors in the area. He says quality is better than the mass-produced and machine-harvested corn from the Leamington area to the south. Allossery says he is getting customers who wouldn't otherwise be buying sweet corn because of the consistency he gets by careful hand-harvesting. "The people who look to buy fresh corn won't buy imports," he says. The plastic comes in a roll about 54 inches wide and Allossery fertilizes, spreads the plastic with one homemade machine that puts dirt on the edges of the sheet to hold it down, and then plants through it with a homemade two-row planter. A double row 20 inches wide is planted every 60 inches. Seeds are placed eight inches apart in the rows. The early season corn is grown on only about one quarter of the sweet corn acreage and it is slow work to get the seed placed correctly. Seed usually goes into the ground around Apr. 15. Last year, three or four days of frost came after the corn had emerged but the mulch protected it.
A few years ago, he grew sweet corn seedlings in his tobacco greenhouse and planted the seedlings. The plan was successful two years, although yields were limited, and the corn froze another two years. But Allossery thinks he might try planting seedlings into the mulch to get his produce another couple of days earlier. He might need a new machine for that.
Actual cut weight in the box averages $3.125 a pound according to the Web site for Peace River Ranch Inc, the name for his family farming company. A 40-pound "Premium" box containing grill steaks, a roast, simmer steaks and a few pounds of hamburger costs $13.75/kg. (At Zehrs grocery stores in late November, top-grade grill steaks were priced at $24.23 a kilo, simmer steaks at $6.15 and beef roasts ranged from $6.59 to $11, while hamburger in the meat case cost $6.59. Peace Valley didn't raise the price two years ago when demand and commodity prices were high, Cossack says. "Then BSE hit and we were able to keep (the price) at $2.50. "We've never been after the biggest buck," he says, stressing that he is trying to market "natural" beef without putting down product raised conventionally by other beef producers. A "city slicker" riding business called "Rawhide Adventures" supplements income and is a captive market for his beef. "We take them out to herd cows and show them our solar-powered water troughs and explain the Environmental Farm Plan," Cossack says. He also markets heavily at the Royal Agricultural Winter Fair. Cossack's Peace Valley Ranch Inc. is certified organic, but the beef the company sells is not. Cossack dips the navels of calves with iodine and he vaccinates cows. Neither practice is approved by the Organic Crop Improvement Association, which certifies his farm, and Cossack is very open about his non-organic practices on the company's Web site. Cossack isn't pinning his hopes on the U.S. border opening soon and doesn't think other farmers should either. "I have to structure my business plan, my marketing and my thinking as if the border never will open. If it does, so be it, but I will not bet my livelihood on it." And even if trade is normalized, Cossack thinks Ontario cattle producers should commit a certain number of head of livestock production to plants in this province so that they are never so dependent upon U.S. exports again. "We just need to have a little bit better brotherhood here," he says, pointing out that business with the United States will never be conducted again as it was before the BSE crisis.
"If we, as an industry, haven't learned that by now, we don't deserve any better."
BF
|