Dairy farmer sings praises of Ontario's near north

Bruno Schoenauer makes the most of his variable soils

By Don Stoneman

Powassan area farmer Bruno Schoenauer doesn't understand why more farmers don't milk cows where land is cheap, in Ontario's near north. Unless it's because of an occasional bear in the corn field. There are only 17 dairy farmers in the area encompassing Parry Sound, Nipissing East and the land stretching from Magnatewan to Mattawa. Five of them are in Chisholm Township, where Schoenauer farms. But past the scrubby trees that line Highway 11, there are pockets of good land.

Schoenauer farms on 800 acres, half an hour's drive south of North Bay. A Swiss immigrant, Schoenauer moved north five years ago looking for more land after farming for a year in Durham Region, He now milks between 60 and 70 grade and registered Holsteins in a tiestall stable.

Dairying away from traditional areas may sound daunting, but Schoenauer insists that it isn't. His land cost him an average of $500 an acre, a fraction of the value of cropland in southern Ontario, and only half as much as land two hours farther north, near New Liskeard. He gets the same price for his milk as farmers who grow feed on land costing $4,000 to $5,000 an acre in Oxford County, heart of the province's dairy industry.

Last year Schoenauer harvested 35 bushels of soybeans per acre in a 2,200 corn heat unit area. He fills his silos with corn silage, and after his last two harvests he had enough left over to make high-moisture corn worthwhile. This fall he bought a corn head for his International 1440 combine.

Schoenauer is able to make the most of his variable soils, which lean heavily towards highly organic muck.

He grows an alfalfa-grass mixture for forage, and takes corn off as silage. He cash-crops short-season soybeans, Hi-Soy, a Growmark variety. His first crop, in 1998, yielded an average of 35 bushels per acre. This year he planted his soys on May 21 and 22. The first frost came on September 22.

Corn seed went in the ground this year between May 13 and 18, about the same time as last year. Schoenauer grows Pioneer and Pickseed varieties. Corn heat units total 2,300 to 2,500 at most. The average in his area is 2,200, which is good enough for silage. Companies are picking up low heat unit corns again, he says. Because corn silage is more popular, "they are pushing the shorter-season stuff." The excess corn is combined. Last year Schoenauer's grain corn crop averaged 100 bushels per acre. This year he expects to harvest 120 bushels or higher. He grows 150 acres of corn altogether. One backfield this year was prone to visits by a black bear, which has been seen occasionally by neighbours. Schoenauer isn't sure if the bear eats corn or just likes to knock it down.

Schoenauer stores his feed in two silos; haylage goes into a 24-by-780, corn silage, into a 20-by-70. Even in this northern climate, the cropping schedule isn't much different from that in the south. Schoenauer started cutting his haylage crop on May 29 this year. His first cut averaged 19 per cent protein, the second cut 20 per cent and the third cut 23 per cent.

Both grade and registered Holsteins are milked, and Schoenauer is in the process of upgrading the herd using a Holstein Canada program. All are bred AI. The herd is on official AM/PM testing with Ontario DHI. Production averages 10,300 kg of milk per cow with a rolling BCA of 213, 213, 216 on 70 records. Schoenauer's herd was milked three times a day from February until mid-September. When his student labourer left, Schoenauer returned to the normal 2X-a-day schedule .

Labour requirements for feeding are greatly reduced on the Schoenauer farm by a "smart" machine. Like clockwork, an automated feed cart rolls up and down the alleyway of the barn six times a day. The cows are fed an individual Total Mixed Ration (TMR) ration from different compartments in the mixer. The machine is called a Rovibec. Fully loaded, it weighs 1,000 kg. The cart is suspended from a round steel rail in front of the feed manger in the 200-foot-long tiestall barn. It operates on four rechargeable 12-volt batteries, which rejuvenate between feedings.

A device on the track in front of each stall identifies the cow for the feeder, which delivers the computerized, custom-mixed ration. The machine even provides a special pre-calving ration to cows that are due to calve soon.

"It sure is a labour-saver," says Ron Patton, Schoenauer's herd manager. "You can have a very high-producing cow standing beside a dry cow. It even has a compartment for a closeup dry-cow ration."

© copyright 1999 AgMedia Co-operative Inc..

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Why attitudes differ on quota prices

By Don Stoneman

Demographics get blamed for ups and downs in job markets, stock prices and land values. Can the same be said for quota prices as well?

Demographics, the study of population trends and how different age groups affect society, are part of the answer, says economist George Brinkman of the University of Guelph, but attitude is even more important.

Brinkman is studying why quota prices vary from one eastern Canadian province to another. The eastern provinces in the so-called P5 commissioned the study after it became apparent more than a year ago that a single quota pool was untenable. His report is due later this fall.

The demographics of dairy farmers are similar in all the eastern provinces, Brinkman says. The average age of single owners of farms buying quota in Quebec in the 1997-98 dairy year was 43. Farmers in Ontario and Nova Scotia were slightly older, at 45. The average age of quota-buyers on farms that are owned by two partners is 42 in Quebec, 41 in Ontario and 42 in Nova Scotia.

While ages are similar there is a striking difference in what farmers in different provinces are willing to invest in the right for a piece of the domestic milk market. In 1997 the price of quota in Quebec was about $17,000 per kg, $2,000 more than in Ontario. Quota prices have risen in all provinces since then, but the gap between Quebec and Ontario prices is now between $6,000 and $7,000 per kg.

One hypothesis is that there are differences in lending practices between provinces, says Brinkman. While his figures are still preliminary, he thinks that psychology may be just as important. The difference may lie in expectations in the future of the industry. "It's important to realize that there is more difference in expectations between buyer and seller than there is between buyers in Ontario and Quebec," Brinkman says. "The buyers in Ontario, Quebec and Nova Scotia are all quite optimistic about the future of the industry, the sellers much less so."

Some farmers are able to buy quota because they can crank out more production without other expenses. Brinkman points out that if a farmer is already producing milk over quota, he doesn't have to add stalls to a barn or buy cows to take advantage of the quota purchase. So the farmer can afford to bid higher than a farmer who doesn't have excess capacity.

Despite concerns about the future of supply management, farmers in Quebec are willing to commit to an investment that will take them longer and longer to pay off. In the past, Brinkman says, a quota purchase took seven years to recover. At $24,000 per kg it takes between $10,000 and $12,000 to pay off, even at the lowest cost of producing milk.

He thinks farmers in Quebec ( including New Brunswick, which is counted as part of the Quebec quota pool) and Nova Scotia are counting on a "salvage value" for their quota, being able to sell it after it is paid off. Thus, the only real cost of buying quota is the interest charges on a loan, and buyers are willing to bid higher.

There is also a connection between current high quota prices and the price for over- quota milk. Brinkman points out that export milk has dropped in value from $26 per hl to about $18 in the last few months. The difference between the value of over-quota milk and within-quota milk has changed dramatically, from $32 per hl to $40. So lower world prices make quota worth more, too.

The fact that farmers are bidding up the price of quota can be interpreted in two ways, Brinkman says. They believe either that the system will be in place for many years or that they must position themselves in a larger operation to take advantage of changes to trade rules.

One in Three Plans to Expand A recent survey revealed that one dairy producer in three plans to expand operations in the next five years, says David Alves, Fergus-based epidemiologist for the Ontario agriculture ministry. Another 20 per cent are undecided about expansion, while about 50 per cent have no plans to put more cows in the barn.

Alves asked the question about expansion to farmers who are taking part in the Ontario Dairy Farm Accounting Project (ODFAP). The results of the survey were published last month in Ceptor, a newsletter sent to animal health professionals.

The ODFAP project is considered a solid indication of what is going on in the dairy industry in Ontario. Every year just over 100 dairy farmers fill out an extensive questionnaire that is used to develop a consistent pattern of production on which policy, research and extension can be based. Many of the questions are financial. The information gathered during the survey is also used nationally to develop a cost-of-production formula.

Alves is particularly interested in the expansion question because of its implications for herd health. As an epidemiologist he studies patterns of disease in animals. He is concerned that with expansion, there might be an increase in diseases as farmers bring more animals into their herds without taking proper precautions.

Phil Cairns, director of economics at Dairy Farmers of Ontario, thinks the survey's figures sound right. During the '97-98 dairy year 20 per cent of producers bought quota. Cairns thinks a lot of this has to do with demographics and the age of farmers.

Every 20 years you can expect to see a turnover in the industry, he says. An ODFAP survey conducted last year showed that the average dairy producer was 45 years old, the same average age as farmers who are buying quota. Farmers who weren't on the exchange averaged 49 years of age. Those who were selling out averaged 53.

© copyright 1999 AgMedia Co-operative Inc..

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