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MNP Farm Management

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Learn about the state of Canada's agriculture industry for 2015 / 2016 in this insightful presentation, as well as ways to protect your operation and gain support from MNP's Farm Management Consultants.

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MNP Farm Management

  1. 1. Presented by: Date: Jonathan Small P.Ag B.Sc March 2015 MNP Farm Management
  2. 2. • Industry Outlook 2015/16 • Our People • Special Situations • Contacts Table of Contents
  3. 3. Industry Outlook 2015/16 Safe Guards • Ensure all property of creditor included on debt security • Verify proper registration on land and related farm equipment • Verify crop insurance & AgriStability status Crops • 2014 statements not looking too good as predicted. • Money flow as important as S&D in 2015. • US Corn S&D changed from “very- tight” to “supply-surplus”. Soy too. • Outlook Bearish
  4. 4. Industry Outlook 2015/16 Supply Managed (Poultry) • H5N2 Virus in North America causing concerns and export restrictions (bigger threat than supply disruption). • BC Outbreak Jan 2015 was H5N1. Restrictions mostly removed. • Supply is plentiful. Poultry winning in the meat wars with beef. Safe Guards • Ensure all property of creditor included on debt security • Verify proper registration on land and related farm equipment • Verify crop insurance & AgriStability status
  5. 5. Industry Outlook 2015/16 Safe Guards • Understand the quota: • Provincial legislation re: transferability • Debtor’s utilization and options to lease out quota • High land values may support security position Supply Managed (Dairy) • Stable but industry highly leveraged • Low ROI and low margin of error & quick to hit Debt Service issues. • High barriers to entry but guaranteed price • Some producers in trouble in 2013/14. Now passing.
  6. 6. Industry Outlook 2015/16 Safe Guards • Perform walk-through on short notice • Verify inventory and require manifests and/or proof of purchase or sale. • Verify AgriStability status & other risk management practices. Cow/Calf • Limited signs of US rebuilding & CDN herd shrinking (lowest since ’92). • Limited supply/cheap(er) feed points to good outlook. • Low CDN$ combined with continued strong calf prices in Canada. • Can insure $2.40/lb next year for $12/hd.
  7. 7. Industry Outlook 2015/16 Safe Guards • Verify inventory and require manifests and/or proof of purchase or sale • Verify AgriStability status • Ensure lands properly captured in loan documents and registered at land titles • Check risk management practices Feedlots • Outlook fair/good. Big margins. • Cost to fill feedlots has doubled. Risk management has not. • Long term decline in consumption continues – beef is most expensive protein. • No BSE impact.
  8. 8. Industry Outlook 2015/16 Safe Guards • Perform walk-through on short notice and assess condition of herd and barn operations • Verify proper registration on land and related farm equipment • Verify AgriStability status and HPIP contracts Hogs • Expansion phase underway, supplies growing - margins shrinking & likely negative by Fall. • Futures showing sharp declines. • PEDv lessened impact, industry has adapted. • CDN inventories up 1.7% (sow herd up 0.5%).
  9. 9. Industry Outlook 2015/16 Safe Guards Verify no CFIA warnings/proceedings, HACCP compliance Verify no Food recalls and whether Enterprise Risk Program in- place to protect against same. Agri-Food (Food and Beverage Processing) • Outlook promising, but consolidation will continue. More closures than openings. • “Local-Food” trend offering niche opportunities. • Trade deals go both ways. How ready are Canadian companies to take on the world?
  10. 10. Industry Outlook 2015/16 Safe Guards • Verify AgriStability status • Verify proper registration on land and related farm equipment Greenhouses • Outlook stable, consolidation ongoing, “local food” trends. • Key in this sector in Canada is energy-costs. Currently relatively low. • Canadian producers at forefront of efficient energy use/traceability technology. • Weaker $CDN levelling playing field with US/Mexico.
  11. 11. Industry Outlook 2015/16 Safe Guards • Verify Inventory • Confirm terms of licence being met • Seek rolling 5 year plans/third-party input Wineries • Two outlooks. Larger, well capitalised operations enjoy a stable to good outlook. Smaller or poorly capitalised operations have a poor outlook • Cash and Inventory management is key. • BC good vintage 2014 but demand concerns.
  12. 12. Our People The MNP Advantage: • Offices in strategic rural locations • Experience with 15,000 commercial and 300 Hutterite Colony farm clients • 50 years service to agriculture has given us unparalleled and unrivalled access to the industry from the producer level all the way up to industry associations and government. Nobody does it better.
  13. 13. Our People “Think Global, Act Local” • Over 75 offices from Quebec City to Vancouver Island • Member of Praxity Global Alliance of Independent Firms giving us worldwide presence • The only professional accounting firm with a dedicated Farm Management Consulting group • We have specialists located in the areas necessary to meet the needs of our agricultural clients
  14. 14. Our People Over 600 professionals focused on the agriculture industry with niche specialities in: • Farm Management • Crops • Livestock • Farm income stabilization programs • AgriStability and AgriInvest • Agriculture specific accounting & tax • Food & Ag Processing • Hutterite Colonies
  15. 15. Our People Farm Programs Farm Programs are a complex and highly specialised service-line. With several hundred file preparers preparing over 9,000 applications a year backed up by 100 internally certified specialists MNP is the only firm in Canada to: • Take a full-service approach to Farm Programs. • Develop a specialised team to maximise program-revenue for our clients. • Prepare such a large volume of applications.
  16. 16. Our People Farm Programs A Full-Service approach means that MNP does more than just complete the forms – we know what and how much we are applying for which means: • We know when payments are wrong and when it is worth following up and/or appealing. • We get what we claim 90% of the time. • We have a robust track record of reviewing non-MNP prepared applications and collecting under-claimed amounts.
  17. 17. Our People • The 25 professionals in MNP’s Farm Management Consulting group bring to bear a combination of on-the-farm experience and formal education • Education and experience include: Bachelors of Science in Agriculture (B. Sc.) Professional Agrologists (P. Ag) Certified Agricultural Consultants (CAC) Former and current farm managers and producers
  18. 18. Our People Within the Farm Management Consulting team we have niche professionals in: • Crop production and marketing (dryland and irrigated) • Intensive livestock production and marketing • Supply managed (dairy and poultry) • Commodity and food processing • Exotics • Greenhouse and Market Gardening • Orchard Fruit
  19. 19. Special Situations Working closely with Corporate Recovery Services, the Farm Management Consulting team have assisted with the provision of: • Initial assessment of a debtor • Monitoring • Restructuring • Liquidation
  20. 20. Special Situations The Farm Management Consulting team has provided the following services to Corporate Recovery Engagements: • Assisting with taking possession of farm operations • Determining and executing strategies for ongoing operations • Providing executive management of day-to-day farm operations • Consulting on key decision points in farm operations • Preparation of risk analysis and mitigation strategies • Providing input into realization plans
  21. 21. Contacts Farm Management Consulting Jonathan Small, B.Sc., P. Ag. Direct: 403.356.1281 Cell: 403.352.3704 jonathan.small@mnp.ca Corporate Recovery Services Victor Kroeger, CA•CIRP, CFE Direct: 403.298.8479 Cell: 403.870.1827 vic.kroeger@mnp.ca

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