Bumper crop in Manitoba expected to have ‘huge impact’ on local economy

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This article was published 29/09/2017 (3139 days ago), so information in it may no longer be current.

With 25 to 30 per cent of Manitoba crops still waiting to come off this fall, the president of the Keystone Agricultural Producers doesn’t want to jinx what is fast becoming a solid and highly profitable harvest season in the agricultural sector.

“As far as some producers going on media saying, ‘I’ve got the best crop ever,’ it doesn’t make the rest of the industry feel very good because there’s still crop out there. And some people are hurting,” KAP president Dan Mazier told the Sun this week. “You need a little bit of luck.”

Nevertheless, Mazier says this year’s canola and grain yields are “definitely above average” in southern Manitoba, in spite of a rough spring and some hot, overly dry weather in July. And while this is certainly good news for Manitoba farmers, it will also translate into strong sales for retail merchants, car and implement dealers, carpenters, plumbers, and pretty much every business that connects to Westman’s agricultural sector.

“You may not be directly dealing with a farmer, but you’re dealing with business that deals with a farmer,” Mazier said. “And that’s where we talk about that multiplier effect — that story doesn’t get talked about enough, what it really means to Manitoba when we grow an above-average crop. Never mind about a bumper crop. You can put a hard number to it. An extra $100 an acre — right across the province, you start doing that, it doesn’t take long to make up a billion dollars. It’s a huge impact.”

Ron Krahn, who farms with his father and brother under the name Providence Farms north of Rivers, says this year’s crop has been particularly “surprising,” given that it has been so dry in the region compared to growing conditions over the decade prior.

“There’s a fair bit of surprise that the crop was as good as it was,” Krahn said. “Our wheat and canola were very good — well above average.”

When producers have a good year — like this year — Krahn says it allows a farm to catch up on updates or upgrades that have been put off for a few years. A good year might mean the purchase of a new tractor or sprayer, or catching up on the house or garage or basement project that needs to be finished up.

“For a farm family, often many wait for one of those good years, and you say, ‘Oh, this is our chance to make a change, an upgrade,’” Krahn said.

“Or maybe you go on a winter holiday, or a year you can put away a little more for a kid’s university,” Krahn said. “You’re able to make some changes. Those are the kind of things. It very much has a trickle-down effect.”

It’s an experience echoed by retired producer Walter Finley, who still helps out the individual who purchased his family farm north of Souris a few years ago. Finley, who spent his entire life as a producer, says the extra cash flow generated by strong growing years filters down throughout the entire local economy.

“You can pay outstanding debt or pay it down, or you can upgrade machinery, etc. Maybe do some repairs, or put up some new grain storage,” Finley said, adding that when producers make improvements, it benefits so many other people, including “electricians. We’re talking plumbers. We’re talking everything. The whole economy.”

Brandon-based Mazergroup owner Bob Mazer said his implements dealership has had a quiet summer, as producers held their breath during the long, hot month of July. A grain producer himself, Mazer said farmers were concerned that the crop was “burning up” under the summer sun. And when producers are concerned, it sends shivers through the local economy.

Mazer used the 2015 fiscal year as an example. That year the implement sales industry took what he called a massive nosedive.

“The dollar dropped like a rock,” Mazer said. “And really all of our equipment is priced … in U.S. dollars. And so our combines went up $100,000. And so it sent shockwaves throughout the system. (That year) we saw upwards of a 30 per cent drop in new volumes in the industry, and 2016 was around the 15 per cent mark. Between the two, the volumes dropped dramatically.”

But this year’s crop has Mazer optimistic, with the drop in sales having levelled off. And while he’s not sure they will fully recover the lost sales, he says in general, “we’re looking at a reasonable 2018.”

“Anytime agriculture does well through good crops or good prices or a combination of the two, it has a massive effect on the economy of Manitoba,” Mazer said. “I think agriculture is in the 25-30 per cent of the Manitoba GDP. If agriculture is good, it’s going to have pretty much a trickle down effect in

just about everything — construction, merchandising, retail. It has an effect. Particularly in some locations like Brandon.

NetSet Communications partner and Brandon Chamber of Commerce president Tami-Rae Rourke Clements says most people don’t realize just how much the agricultural industry touches all aspects of business in the community.

“I had spoken with a friend yesterday that’s in the dealership business with cars. And he said, as soon as harvest is done, my business picks up. So there’s a direct impact right there,” Clements told the Sun yesterday. “Any positive to the ag biz is felt here in Brandon. When there’s a bad year we all feel it. We definitely follow the trend of their success, I think, from my business point.”

While the harvest news is good, Dan Mazier told the Winnipeg Free Press earlier this week that producers might be a little cautious with their cash for the time being while negotiations over the North American Free Trade Agreement continue.

Manitoba agricultural exports make up a significant chunk of the province’s economy. In 2015, agricultural products made up 21.7 per cent of Manitoba’s $13.7-billion foreign export market. Given all the uncertainty surrounding NAFTA and proposed changes to federal tax laws, Mazier said producers will likely “give everything a sober second thought.”

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