If you ever doubted those tales of eternal optimists who beat the odds to reach distant dreams, you should talk with a few Canadian farm families. In fact, the classic film ‘Field of Dreams’ pales next to today’s farmers, who think long-term to build multi-generational operations, despite uncontrollable weather, commodity prices and input costs.
And, these long-term-thinking farmers credit their partners on Scotiabank’s Agricultural Banking team, who help them achieve their decades-spanning plans, and ‘keep fuel in the tractor’ through their operational ups and downs.
Long view of land and livelihood
“Our customers don’t just take a long-term view – they take a ‘generational perspective’, since many expand their operations so they can pass it on to their families,” Roxane Lieverse, Director and Group Lead, Agricultural Banking in Alberta, who has more than 15 years’ experience serving Canadian agricultural clients. “They are optimists because they are building for generations ahead. They must be inherently long-term thinkers because their main input is their land, which is limited.”
“Our clients possess eternal optimism, because it takes persistence to keep growing despite some tough years, with weather and market pricing beyond their control. They make decisions today about what to plant, so they can maximize efficiency, support their growing families and keep the operation viable for the future.”
These growth-driven farmers can find a like-minded ally in Scotiabank, notes Jeff Werre, Senior Client Relationship Manager, Agricultural Banking in Medicine Hat, Alberta. With his 26-year tenure in Scotiabank’s Agricultural Banking group, Werre’s clients view Scotiabank as a ‘lender for the long term.’ “Many of our clients have been with the Bank for 50 plus years, so when I bring on a new client, I tell them that, ‘We’re going to be long-term partners,” explains Werre. “I’m here to understand their business and represent their needs within the Bank, where all of us are aligned around our clients’ goals.”
This teamwork includes Scotiabank’s agricultural credit adjudication team, a group that is unique among Canada’s financial institutions in its ability to understand farming, deliver responsive service and expedite credit approvals.
“There’s almost no limit to our solutions, from traditional borrowing to equity or leveraged debt instruments, because our credit support team is integrated with the agricultural industry and many of them come from ‘ag’ backgrounds too.”
“My clients know we are really invested in them and understanding what they want to accomplish for their business and the next generation,” adds Gogal. “Then, we build the right financial package that matches their long-term plan, whether that’s flexible upfront financing or restructuring existing debt to make it all work.”
Farm pivots, transitions and growth
This combination of a long-term mindset, industry knowledge and ‘can-do’ attitude has enabled many Scotiabank clients to adapt to changing conditions, pivot into new growth businesses, or transition between generations.
Werre recalls a client who wanted to make a massive investment in the greenhouse space to capitalize on rising market prices: “No one else in the province had tried this technology, so it was a pretty drastic shift for their business. We took the time to understand their vision, and we came up with some pretty creative financing options, including subordinate debt to help them make a successful pivot for promising long-term growth.”
“The most successful companies have that long-term mindset, and Scotiabank is eager to help them innovate, to diversify into new crops, adapt to extreme weather with water reduction technology, or address labour shortages by investing in robotics. The exciting part of my job is hearing their ideas to grow or mitigate risks and help them make it happen.”
He adds that one of biggest changes is transitioning farm management: “For farm succession from one generation to the next, you need to add scale. That means capital to buy increasingly expensive land and equipment, and also preparing the next generation, so they can manage that larger scale operation.”
To do so, Scotiabank advises clients on the intricacies of succession planning, with the support of their colleagues from Scotia Wealth Management, and by introducing specialized third-party lawyers and accountants.
“We engage families in the process early, so their financial structure is cohesive and the transition can be as smooth as possible.”
He recalls hosting a meeting for 20 family members, so the kids could be part of the generation succession plan and understand the financial aspects of the operation.
Eyes on the future, and today’s hurdles
While Scotiabank helps clients prepare for the future, they also help plough through near-term challenges in their path.
“We have a very long history of supporting clients through difficult times, and our partnership model has helped us work though many things together. We really ‘get agriculture,’ including their ups and downs, because our team has so much industry expertise, from dairy to feed lots.”
She points to the 2003 mad cow disease crisis when Bovine Spongiform Encephalopathy (BSE) crippled Canada’s cattle producers.1 “It took more than a decade for that industry to recover, and we did not lose a single cattle client during that time.”
“I’ll never forget BSE,” recounts Werre. “I had clients come to my office with zero dollar bid prices for their cattle and they still had to feed the herd. We worked with each of them to remain viable and keep the fuel in their tractors.”
And if history is any indicator of Scotiabank’s commitment, one should consider Scotiabank’s 50-plus year, three-generation relationship with Witdouck Farms of Iron Springs, Alberta. Founded in 1950 by Julius Witdouck, the 11,000 acre, irrigated seed and pollination farm is today owned and operated by brothers Brian, Calvin and Dale, who oversee diverse crops, from alfalfa and canola seeds to leafcutter and honey bee pollination.
“The Witdoucks are a terrific example of an agricultural operation that is firmly focused on the future,” says Werre, who commutes an hour and a half to serve them in person and provide a range of revolving, non-revolving, and operating facilities, cash management, FX, plus retail banking and wealth management services. “They are a solid, cohesive operation and they make decisions together in the best interest of their long-term success.” He notes how the Witdoucks recently diversified into potato production, with support from Scotiabank to make the sizable capital investments in high-tech facilities and equipment.
“We’re proud to be a multi-faceted business that has spanned four generations of ownership, but we understand that agriculture is a very different industry from when our grandfather and father used to farm. There is no doubt that farming is a business nowadays and must be operated as one. The ability to effectively manage people, information, technology and capital assets is more essential than ever before,” says Brandon Witdouck, CFO.
“That’s why we value our relationship with Jeff and the entire Scotiabank team. They clearly understand the challenges and opportunities facing the agriculture industry and work closely with us to understand the impacts to our business and what we are trying to achieve. It is important that we have a partner that truly works to develop solutions accommodative to our unique business and the various markets we operate in.”
He notes that Scotiabank continues to play a critical role in executing the farm’s succession plan and the ongoing transition of leadership to the next generation of the Witdouck family.
A shared view of the future
Reflecting on the long-term optimism of farm clients, Lieverse opines that,
“These are very large family corporations who must manage many risks while they focus on their future. It’s a great partnership because these are expansion-oriented companies who bring their challenges to us, and we use all of our tools to help them overcome the hurdles and position their operation for long-term growth.”