Our special guest on this episode live from Saskatchewan is Kristjan Hebert, President of Herbert Grain Ventures and the EY Entrepreneur Of The Year® 2022 Prairies winner. In other news, we discuss the recent quarterly results of Loblaw's and the political theatre of grocers confirmed to appear in front of the Standing Parliamentary Committee on Agriculture in Ottawa on March 8. Lastly, we discuss new Post bedtime cereal and upcoming research from the Dalhousie Agri-foods Analytics lab.
Welcome to The Food Professor podcast. We have a special guest live from Saskatchewan, Kristjan Hebert, President of Herbert Grain Ventures and the EY Entrepreneur Of The Year® 2022 Prairies winner.
We talked to Kristjan to get his overall view of the state of Canadian agriculture today, including the grain market for 2023 and beyond, the impact of the Ukraine War on the market and planting and the challenges affecting the agriculture industry in Canada. We talk about encouraging young farmers to enter the industry, what the government can do to ensure a strong future for farming and farmers in Canada, and if we ask Kristjan if he were the Canadian Minister of Agriculture for one day, what three changes he would make.
In other news, we discuss the recent quarterly results of Loblaw's and the political theatre of grocers confirmed to appear in front of the Standing Parliamentary Committee on Agriculture in Ottawa on March 8.
Michael asks Sylvain what questions Parliamentarians should ask the grocers and has a few suggestions himself. Lastly, we discuss new Post bedtime cereal and upcoming research from the Dalhousie Agri-foods Analytics lab.
About Kristjan
Kristjan Hebert is the President and CEO of The Hebert Group and Managing Partner of Hebert Grain Ventures, a 30,000-acre grain and oilseed operation in southeast Saskatchewan, Canada. He is also the co-founder of Maverick Ag Consulting which provides custom-designed lending, accounting and insurance solutions to producers and Farmer Coach, a business management coaching program for farmers. Successful entrepreneur, and leader in the agricultural sector, Kristjan Hebert is passionate about advancing agriculture in Canada and globally.
About Us
Dr. Sylvain Charlebois is a Professor in food distribution and policy in the Faculties of Management and Agriculture at Dalhousie University in Halifax. He is also the Senior Director of the Agri-food Analytics Lab, also located at Dalhousie University. Before joining Dalhousie, he was affiliated with the University of Guelph’s Arrell Food Institute, which he co-founded. Known as “The Food Professor”, his current research interest lies in the broad area of food distribution, security and safety. Google Scholar ranks him as one of the world's most cited scholars in food supply chain management, food value chains and traceability.
He has authored five books on global food systems, his most recent one published in 2017 by Wiley-Blackwell entitled “Food Safety, Risk Intelligence and Benchmarking”. He has also published over 500 peer-reviewed journal articles in several academic publications. Furthermore, his research has been featured in several newspapers and media groups, including The Lancet, The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Washington Post, BBC, NBC, ABC, Fox News, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.
Dr. Charlebois sits on a few company boards, and supports many organizations as a special advisor, including some publicly traded companies. Charlebois is also a member of the Scientific Council of the Business Scientific Institute, based in Luxemburg. Dr. Charlebois is a member of the Global Food Traceability Centre’s Advisory Board based in Washington DC, and a member of the National Scientific Committee of the Canadian Food Inspection Agency (CFIA) in Ottawa.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc. and a Senior Advisor to Retail Council of Canada and the Bank of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience with Levi's, Black & Decker, Hudson's Bay, Today's Shopping Choice and Pandora Jewellery.
Michael has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated worldwide in thought leadership panels. ReThink Retail has added Michael to their prestigious Top Global Retail Influencers list for 2023 for the third year in a row.
Michael is also the president of Maven Media, producing a network of leading trade podcasts, including Remarkable Retail , with best-selling author Steve Dennis, now ranked one of the top retail podcasts in the world.
Based in San Francisco, Global eCommerce Leaders podcast explores global cross-border issues and opportunities for eCommerce brands and retailers.
Last but not least, Michael is the producer and host of the "Last Request Barbeque" channel on YouTube, where he cooks meals to die for - and collaborates with top brands as a food and product influencer across North America.
Michael LeBlanc 00:05
Welcome to The Food Professor Podcast Season 3, Episode 14. I'm Michael LeBlanc.
Sylvain Charlebois 00:10
And I'm Sylvain Charlebois.
Michael LeBlanc 00:12
Well Sylvain. I am back in Toronto, back from podcasting live from Hollywood there I get to see that again.
Sylvain Charlebois 00:18
That's right. Yes, the big (inaudible) and you actually flirted with some stars over there. I heard.
Michael LeBlanc 00:23
That's right. Well, you kind of bump into them, you just have to ride an Uber in LA and you meet all kinds of actors and actresses,
Sylvain Charlebois 00:32
That's right, (crossover talk).
Michael LeBlanc 00:35
Who are, (crossover talk) you know, it's a great job. They don't wait tables anymore apparently, you know, that was the classic, the classic gig but now with, with Uber and Lyft they can just turn on, turn off and you know, it's perfect for them they got an audition, turn off and they go so they were all very, very nice people anyway, it was, it was great.
Sylvain Charlebois 00:47
And you had a great time there.
Michael LeBlanc 00:49
Yeah, the first, I had a great time, I was there for business and then like we talked about in the last episode, but then had a couple of days of R&R but a torrential downpour, you may have seen in the news and listeners may have seen in the news, it was hailing and a bit of snow in California. I mean, it was, it was, you know, climate change in action, right. It was not trivial. Like it was pouring, pouring rain and it was six degrees for LA in Venice Beach. So, it was, you know, that part wasn't fun, but we went to some museums. And that was all, (crossover talk).
Sylvain Charlebois 01:16
You went to Venice Beach, (inaudible) beach when it was six degrees.
Michael LeBlanc 01:20
Yeah, it was,
Sylvain Charlebois 01:22
Yikes.
Michael LeBlanc 01:23
You know, we booked the hotel and anyway, anyway it didn't work out. (Crossover talk) but it has beautiful people and, and we'll go back, and you know, it will all be good. Our very special guest this episode, live from Saskatchewan, EY Entrepreneur Of The Year® 2022 For the Prairies, Kristjan Hebert, President of Hebert Grain Ventures. What a great interview, what an impressive organization and great perspectives that will, the audience can listen to a little later in the show.
Sylvain Charlebois 01:48
It's always a special episode when we actually host a farmer.
Michael LeBlanc 01:52
Yeah.
Sylvain Charlebois 01:53
I mean farmers are always vulnerable. They're up the food chain, few people actually get to meet farmers and understand their story. So, I'm glad that Kristjan is joining us today.
Michael LeBlanc 02:05
Yeah, I'm really happy this season that we've got more, you know, whether they're farmers who lease land, or whether they're farmers that are growing chickens in large (inaudible) steel containers, or if you call them a farmer, I mean, you know, we're stretching, (crossover talk) the definition,
Sylvain Charlebois 02:18
Is this our third or fourth farmer now?
Michael LeBlanc 02:21
Yeah, in the show's history. Yeah, for sure. I mean, and, and we've got more coming up this season. We've got, we've got lots more coming up this season.
Sylvain Charlebois 02:27
(Crossover talk), we got a vertical farmer.
Michael LeBlanc 02:30
A vertical farmer. And then we have DuBreton pork coming up, (crossover talk). So, it's really great to tell their story, because it's really a treat to get their perspective and ask the easy, and the hard questions. So,
Sylvain Charlebois 02:38
That's right.
Michael LeBlanc 02:40
And lots of great, lots great insights coming up shortly in the episode. And then, in our now weekly episodes coming up. Let's jump into the news. So, let's start a little bit of something we talked about last episode, Double-Double Trouble with RBI. Now you wrote, you know, there's an article in The Globe and Mail that was talking about the franchisee relations. We talked about it a bit now, you wrote an op-ed. And you know, did you get any feedback from the op-ed in the Globe and Mail? You kind of explained what was happening to the people? Did you get any feedback from, from the people or from RBI themselves? Talk about that a bit.
Sylvain Charlebois 03:20
Yeah, I got a complaint and feedback, actually. Because the, the op-ed was on Friday, and I just, I just forgot to say that I was an advisor for the AS, the ACF for about a year and, and
Michael LeBlanc 03:36
You did say that in the podcast? You did, you did mention that in the podcast.
Sylvain Charlebois 03:38
I did mention it. I just forgot to write it to the Globe and Mail. So, they just added the line, but I did get a response from Tim Hortons, and the RBI. And so, we basically had a chat with Duncan Fulton, who's been involved with the franchise for many, many, many years. He's well known. So, we actually had a great chat. In fact, at some point, we may want to invite him on to this podcast. So, we talked about, you know, what's going on, and he absolutely agreed with the op-ed. The only thing that he didn't agree with was that I actually made comparisons with Burger King. I do, I am suggesting that at some point, you know, as, as, as a portfolio holder you want to deal with, like large scale business. businesses, instead of actually dealing with small operators of one or two restaurants. It's more work.
And so,
Michael LeBlanc 04:36
For Sure.
Sylvain Charlebois 04:38
But he said, well, that's not exactly what we want. But we do want to increase the average size of franchisees in terms of the number of restaurants so and in a few years from now, Tim Hortons will actually have more restaurants outside of Canada than, than in and so, (crossover talk).
Michael LeBlanc 04:53
Yeah, it's fascinating. I know Duncan as well. You know, I interviewed him at the Restaurants Canada Show before you and I had our podcast. So, he's been on The Voice of Retail.
Sylvain Charlebois 04:58
Okay,
Michael LeBlanc 04:59
Yeah. And of course, he came out of the Canadian Tire Group, which of course is, if they call them associates or dealers, the rules are different, but so he's not unfamiliar. So, he's a great choice to lead.
Sylvain Charlebois 05:11
He's pretty pumped with Patrick Doyle's arrival, formerly from Domino's. He feels pretty good about the change. Because it was anno-, it was, it was announced very recently that there's been a change at RBI at the top and yeah, he sees some great, great potential in terms of growth internationally with, with Patrick Doyle. So, yeah, a good, good chat. We chatted for 15-20 minutes. That's it, but it was nice of him. It was nice for him to reach out.
Michael LeBlanc 05:46
Well, Duncan, if you're listening, call us up, we'd love to have you as a guest.
Sylvain Charlebois 05:48
Absolutely.
Michael LeBlanc -05:49
And talk about global expansion and all the kind of the state of the restaurant business and the changes, you know, I'm talking to retailers this week about this just continued change of demographics of how people are, you know, work at home really affects would of, would affect where and how your restaurants work, right? Because you, you don't need them in the office buildings, and you don't have the volume you used to? I mean, it's a really changing dynamic. All right. Well, let's move on. In the news last week, Loblaws released their quarterly earnings, fiscal 2022, you know, for, for some media it was like, oh, the prophets and in other media it was like, oh, you know, we keep getting hammered by vendor requests for increases, you know, so different kinds of narratives coming out from the media. What did you think of the results that they posted?
Sylvain Charlebois 06:36
Well, I mean, they were, they were good. I mean, they were good. And, and frankly, I wouldn't be alarmed by them overall, but I mean, it's, things are sensitive right now. I mean, were you, were you shocked by the results? I mean, was there something that really surprised you in any way?
Michael LeBlanc 06:57
I mean, listen, I guess we're gonna learn a bit more, because I understand that the dates are set now for a visit from Galen and I think Michael Medline and, and our friend Eric LaFlèche from Metro.
Sylvain Charlebois 07:13
I would go to Ottawa, to take a picture with Galen Weston and Michael Medline. In the same room, together, I don't think it has happened since, since the bread thing, I don't think and so it'd be interesting. And Eric LaFlèche, ironically, he's the closest guy of the three, he's in Montreal, and he's not showing up in person. I mean, it is political theater. Don't get me wrong. But it is the House of Commons, you do want to show up and show respect. You know, that's the thing, and I don't think the committee is going to accomplish much. But a couple of questions I would ask, (crossover talk).
Michael LeBlanc 07:53
And I was gonna ask you, what if you, if you were on the committee, and you had the opportunity, what would you, what would you ask them?
Sylvain Charlebois 07:59
How much profits are coming from food sales? Specifically?
Michael LeBlanc 08:03
(Crossover talk) pharmacy you, there's, because they're complex businesses, right?
Sylvain Charlebois 08:07
Yeah. And I think Canadians would want to know that.
Secondly, operating margins are double of what they are in the US. If you look at Kroger and Albertsons, I would ask the CEOs why? I know the answer, it's rhetorical, but you would want to ask them about the competitive landscape in Canada. Why, what's going on in Canada? Why aren't we seeing more investments? There, there is this period of detente right now. I mean, let's face it, grocers are pretty cozy right now. There's not a whole lot of, there's not, there's not a menace in the air like Target coming in, or Amazon Fresh or, or Lidl, ALDI and so they're pretty comfortable right now. And so how do we actually make it a more competitive landscape? I certainly would.
I'd be curious to actually hear either Galen or Michael, on this issue. I mean, how do you actually make distribution, (inaudible) distribution more competitive in Canada? Do we need a standalone discount, grocer? What else? Is the Code of Conduct going to make any difference? I would ask them that for sure. Because I actually raised a point on December 5, when I actually testified before Parliament. And frankly, between you and I, Michael, I don't know if you saw the session, but I actually looked around the committee and I'm not sure they understood what I was talking about.
Michael LeBlanc 09:23
Yeah, I'm not sure. I'm not sure they do. And those are, listen, those are, you know, super-interesting questions. I'm pretty convinced that, (crossover talk).
Sylvain Charlebois 09:30
But when I was there on December 5 with CFOs. I mean, they were wasting their time. And commit-, the committee wasn't asking really good questions. To be honest, I was very disappointed. So, hopefully it will, It will be time well spent for both CEOs and the committee.
Michael LeBlanc 09:48
Well, and for Canadian citizens. It's a great opportunity to hear from important business leaders.
Sylvain Charlebois 09:52
What would you ask?
Michael LeBlanc 09:55
I would ask three things, question one, (crossover talk).
Sylvain Charlebois 09:59
Galen's favorite color? I think we all know that it's yellow.
Michael LeBlanc 10:04
I would say question one, if you were to estimate food inflation, if you had simply passed through and accepted all requests from the vendors, what would food inflation be? Question one.
Sylvain Charlebois 10:09
A very good question.
Michael LeBlanc 10:12
Question two, is there any government policy or program today or in the near future that could help grocers control for external price shocks and reduce price inflation in food for the people? We've talked about a bunch of those things.
Sylvain Charlebois 10:20
Absolutely.
Michael LeBlanc 10:21
And, and number three is who's got the best cars in the parking lot, your merchants are the vendors. So, what, why do I ask that? It's because I remember a CEO I worked for, and he, he, he was getting us inspired. And he said, Listen, I want you guys to drive cars as nice as the people who sell us stuff.
Sylvain Charlebois 10:55
I can only picture that scene of A Few Good Men in court, you know, you can't handle the truth.
Michael LeBlanc 11:03
Well, I would say, okay, I have a bonus question. And the bonus question is, is there anyone that they think should be here with them? Testifying or, (crossover talk).
Sylvain Charlebois 11:12
Well, you know that McCain is testifying two days before eh, and nobody's talking about that. On March the sixth, the CEO of Maple Leaf is going to be there. In person.
Michael LeBlanc 11:22
Can you think of any food retailers that haven't appeared yet?
Sylvain Charlebois 11:26
Walmart, I don't think Walmart has been called yet and Costco. I don't think Costco has been called yet. So,
Michael LeBlanc 11:33
Anyway, those are some of the questions I'd ask I think, I think that's a fair question to ask. I mean, these are accomplished business leaders, it'd be great to also among us get their opinion about what the government can do to help them and the people, right, because that's what, (crossover talk).
Sylvain Charlebois 11:45
And again, this morning, I don't know if you saw my tweet about gaps between food inflation, and general inflation. Canada is about average, if you compare Canada with the UK, Germany, Brazil, Russia, the United States, France, all of these countries, the gap, I mean, it's pretty substantial, but Canada's about average at 4.5%. So, this is important for people, for Canadians to understand this is a global phenomenon. And so, grocers are just part of a system that really is under a lot of pressure.
Michael LeBlanc 12:03
Canada is not the only place where the government is calling groceries in to talk to them. In the UK, I understand that groceries are being called to account for a different issue. Why is there no food on the shelves? I have friends in London telling me,
Sylvain Charlebois 12:31
I know.
Michael LeBlanc 12:32
You know, like, you know, one pepper a week kind of thing and, (crossover talk).
Sylvain Charlebois 12:35
No tomatoes, no cucumbers, bloody hell.
Michael LeBlanc 12:42
Am I, I want to get your impression. I wanted to get your impression on this. So, my assumption is that a lot of this is an own goal to use the football phrase that the Brexit breakup has really disrupted grocery, but some of the things I was reading about the UK situation is like under you know, that didn't get good yields out of Africa or something Do you have any sense of, of what's going on in Europe and why there's no food on the shelves in, in the UK?
Sylvain Charlebois 13:09
Well, Brexit is, is is more than two years old now. It happened in January 2020. And Brexit was an issue for a while, for when it comes, when it came to trades, and specifically human trade, employees, (crossover talk).
Michael LeBlanc 13:26
There’s nobody to pick them, pick their produce, all those, yeah.
Sylvain Charlebois 13:28
Exactly. And so 50% of produce consumed in the UK is produced in the UK, the rest is imported. I think it's a mixture of different things. Brexit has made things a little bit more complicated. For example, when you were part of the EU, there were subsidies to support transportation, for example, or the movement of goods while with Brexit, the UK doesn't have access to those funds, so they are, they're on their own. That has made the costs to do business with the UK a little higher. So. is it, (crossover talk).
Michael LeBlanc 14:04
Wait a minute, I thought the selling point to Brexit was we're, we're giving all this money to the EU. Like Britain was saying we give billions of dollars to EU agriculture (crossover talk) we will be better off (crossover talk). It seems like it's not happening.
Sylvain Charlebois 14:17
No, it's not happening. But I would say that climate is a big issue as well. And Brexit is a bit fuzzy depending on who you are, but I actually do think that Brexit is a bit of a factor due to workers. And the other issue is energy costs. I mean, energy costs have gone way up and a lot of, a lot of producers in the UK just didn't see, didn't see the business case to grow this year just because of higher energy costs. And it's the same in Germany and other places. So, (crossover talk).
Michael LeBlanc 14:38
Some of that due to the Ukraine war, right that, (crossover talk), that would be the war in Ukraine, yeah.
Sylvain Charlebois 14:42
Yeah, the context is a big deal right now, it's impacting what's going on in the UK. So, I feel bad for, it's, it's, it's really unfortunate of what's going on. But the shortage seems to only be impacting produce. That's my understanding. Well, we'll pay attention to that. There's lots going on globally. Now, it reminds you that we're pretty lucky in Canada. I mean, (crossover talk).
Michael LeBlanc 14:56
No shortage on our shelves, (crossover talk).
Sylvain Charlebois 14:59
I know a lot of people are suffering right now, with a high inflation rate in Canada. But overall, we have a really, really solid food system in our country.
Michael LeBlanc 15:21
Yeah, I would just get back to it. I don't want to dwell on it. I would hope the first thing the MPs do when they have the grocers in front of them is thank them for getting us all through COVID. Because, you know, memories seem to be pretty short. But we're pretty thankful,
Sylvain Charlebois 15:29
I know.
Michael LeBlanc 15:31
hat there was food on the shelves during a global pandemic. So,
Sylvain Charlebois 15:36
Exactly, exactly. From hero to zero. Yeah,
Michael LeBlanc 15:41
I would, I would hope they'd have some, some tact and do that. But anyway, you were with Boeuf Québec. And I understand,
Sylvain Charlebois 15:49
While you were in exotic LA in Hollywood, I was in Drummondville Quebec.
Michael LeBlanc 15:54
Well Drummondville is a nice place.
Sylvain Charlebois 16:02
The team was born.
Michael LeBlanc 16:05
Drummond-, and, wh-, where, from which, your book was birthed, so to speak.
Sylvain Charlebois 16:08
That's right.
Michael LeBlanc 16:10
Now, I also saw, and we talked about this last year, that there is an inevitability to beef cost, because the feed of, because what you feed, the beef goes up, grains go up, eventually the price of beef is going to go up. Are we seeing that? And what were your learnings? And what did you hear at the (crossover talk) at the table in Quebec in Drummondville.
Sylvain Charlebois 16:20
If you look at cattle futures right now, they're skyrocketing.
Michael LeBlanc 16:23
Okay.
Sylvain Charlebois 16:24
So, my guess, I'd say probably in the fall will be hit by what's going on right now. And that's due to BSE case in Brazil. So, China is saying no, to Brazil, no to beef coming from Brazil. So, there’s, there's a lack of capacity in the market. The US is actually dealing with extreme weather conditions that which is not helping either. So, that's one thing. Now with Bœuf Québec, in particular, what I find miraculous is that the sector in Quebec is very small. I mean, it's just, it's 80,000 heads of cattle. That's it. It's very small. And in Alberta, you there's one feedlot with 150,000. I mean, just one feedlot.
Michael LeBlanc 16:45
Yeah. It's a small business.
Sylvain Charlebois 16:47
So, it's amazing what they've done. And they've capitalized on two things, vertical coordination. So, avatars are involved in discussion. So, there's not just one, there's a few now,
Michael LeBlanc 16:54
The processing is there, yeah.
Sylvain Charlebois 16:57
And they're creating the pull effect. Branding, with consumers wanting beef from Quebec, basically, acknowledging that beef exists in Quebec. And they've aligned the brand with a much larger, more powerful sectors, like the hog industry in Quebec, which is used, it's, they produce 9 million pigs a year, we talked about that with Yanick of Olymel, I mean, it's, it's a huge industry,
Michael Leblanc 17:08
Huge, huge.
Sylvain Charlebois 17:10
In Quebec. And the other thing is poultry. You know, poultry is a big sector in Quebec. So, they've actually created products, like pies, meat pies, with collaborating with other sectors to sell at retail, and people are looking at these logos retail, and they want more. And yes, they're, they're more expensive, but they want more.
They want beef from Quebec, it's been an amazing story. And they and when, so when, when we go out west and talk to cattle producers. I mean, these people are, are good savvy business, folks. But they're there, there's lots going on right now in the market. Bœuf Québec they started with nothing. So, they're adapting their message about the environment, about diversity, about all these things that are important to consumers in a really effective way.
So, I, I, my, I, I took about five minutes to congratulate them because I spoke to them about five years ago. And five years later here I was with a group of individuals that just had nothing five years before and now you got billboards as you actually drive away from the airport. You got billboards, advertising beef, from Quebec, it's amazing.
Michael LeBlanc 19:00
From Drummondville, Quebec to Saskatchewan. Let's take a break down and bring in our interview with Kristjan Hebert. President of Hebert Grain Ventures, another very innovative agriculture farmer, a different (crossover talk) in Canada but let's have a listen and hear his story.
Sylvain Charlebois 19:18
All right, we're joined by Kristjan Hebert, a farmer out of Saskatchewan and entrepreneur. Welcome, Kristjan.
Kristjan Hebert 19:28
Hey, thanks for having me.
Sylvain Charlebois 19:29
Yeah. So, welcome to the podcast. Is this your first podcast? I assume not.
Kristjan Hebert 19:32
No, no, I've done a few of them. Yep.
Sylvain Charlebois 19:35
Cool. Excellent. Well, listen, thank you so much for your time. I know it's a little bit early where you are in balmy Saskatchewan minus 26 this morning. But tell us a little bit about yourself. What do you do for a living and, and, and tell us more about your company?
Kristjan Hebert 19:54
Yeah, so I mean, I'm just a small town kid from Moosomin. I actually grew up in a town south of here called Fairlight, 24-25 (crossover talk) people. Yeah, I swear to God, they don't all have the last name Hebert.
But so, I, you know, I went to university to take an act-, to be honest, I took a pre-med degree and wrote my MCAT and said, What am I doing and I was going to go into agriculture. And my dad said, why don't you try our business? I think I can teach you how to farm if you want to farm and, and it really was my business degree.
And then after that, you know, I did my CPA with Meyers-Norris-Penny and that led me into wanting to be in agriculture and loving the industry. So, I gotta, you know, I got a wife, Teresa and two little kids, I got an 11-year-old boy and an eight year old daughter. they're my reason to get up every morning and to love the industry, and hopefully, you know, build rural communities to keep agriculture going. And we got a group of companies.
Kristjan Hebert 20:53
As I grew up, you know, we were 1500 to 2500 acres and had 150 to 250 cows. When I moved home, my brother and my dad, kind of, we've split the cattle in the grain up so it's two different farms. We'll crop right around 33,000 here this next spring, and I guess, you know, we also on the consulting side, after I left Meyers-Norris-Penny, we were, we were getting a lot of requests around consulting and CFO work for farms and, and also a request from multinational companies and some of the government's kind of on where agriculture is going.
So, we started a consulting company out of Saskatoon called Maverick Agriculture. It does lots of work in, in finance and mitigating risk and, and CFO work for large farms. And just this last year, we launched Farmer Coach, which I would just describe as, as an executive education course, for farmers, I just, I took TEPAP down in the US and obviously I did my CPA course and I've done a number other courses and found that a lot of farms were looking for it. So, we just launched that in November.
And this spring, we launched a foundation called Deep Roots Foundation that really just invests in all the local communities we deal with, to really try and keep the rural community vibrant. We think it's really the number one driver to keep agriculture rolling in, in our country.
Sylvain Charlebois 22:01
Holy smokes you got lots, (crossover talk).
Kristjan Hebert 22:05
Multitask, I guess, right? You know, I coach both kids’ hockey, and I think most people find that as a job. And to me, that's, that's kind of my release, I really enjoy, you know, coaching the kids. And, you know, I spend lots of time with the family and, and you (crossover talk) I think you can test human resource policies way better on eight- and 10-year-olds, and you can on grownups, most of them, most of them wear their heart on their sleeve and haven't figured out how to be deceptive.
Sylvain Charlebois 22:21
Hockey, it's pretty intense in Saskatchewan.
Kristjan Hebert 22:25
Yeah, for sure. I mean, you gotta have something to do when it's this cold out.
Sylvain Charlebois 22:29
Yeah, exactly. So, we're at the end of February, early March, you're, you have a lot of balls in the air. What's, what's keeping you busier this time of year right now?
Kristjan Hebert 22:42
Currently, right now, I spend a fair bit of time in the office to tell you the truth, working on strategy. And obviously, this year's budgets and plans, we're just finalizing, lots of them are put in place, you know, in July the year before, but kind of finalizing that and working on team and team additions and where we're trying to be three, six and 10 years from now is, it's kind of my job. It's really, these last three to five years, our management team and our teams in general, have really become quite strong. Some days in February and March, I kind of question what my job is other than to solve puzzles and think about the future. It's pretty fun most days.
Sylvain Charlebois 23:16
So, how do you, how do you qualify the state of Kane agriculture? Like right now, there's lots going on, as you know, and you're not the first farmer that has joined us on our podcast. So, we've had a glimpse of, of ho-, what people are thinking out there. What are your thoughts about what's going on with, with agriculture in general right now?
Kristjan Hebert 23:40
Well, I mean, I think it's kind of twofold. I think right now, the last two years and including this year, and probably the year after that, are some of the biggest opportunities the majority of Canadian agriculture has ever seen. While meanwhile, it probably will be in the highest risk environment it's ever operated in from a cost structure, but usually with risk comes reward. So, it just takes a little extra planning, I'd say.
Sylvain Charlebois 24:03
Yeah, so what's, what's worrying you right now from a cost perspective? What's worrying you the most?
Kristjan Hebert 24:10
Well, I mean, if you talk to my management team, they'd tell you that I probably don't really know what stress, stress feels like it's not my nature but you know, if I was to give some general terms from the consulting side is you know in grain farming, I would say cost of production over the last 24 months is probably up a full 50% Just ballpark terms. I'd say you know two years ago, a crop would cost, cost a Saskatchewan farmer especially but in general across Canada pretty similar. You know that $350 an acre to 400 for dryland farming and, and,
Sylvain Charlebois 24:25
Yeah.
Kristjan Hebert 24:26
Now that number is more like 550 to 600 for a number of different reasons, right? We all know land cost has increased, interest cost has increased, equipment is up substat-, and input costs I mean are pretty significantly.
But I would also tell you, you know, the 10-year average that a lot better farms were looking for, for, for dry land net income was around $50 an acre. So, go back two years ago, and they're hoping for revenue in that 450 to 500 range. And right now, with crop prices where they are last year and this year, I think you're seeing dryland farms trying to hit 750 to $1,000 an acre and, (crossover talk) rather than two. So, as I said, you have to have a plan on the cost structure because it is up really significantly, and it's more of a cash flow issue than a risk issue. But then get your risk planned because I do think there is more opportunity on the revenue side than we've seen in, well, in a number of years.
Sylvain Charlebois 25:39
So, on your dashboard, on your grain market dashboard for this year, what, what, what are you looking at right now? How are you strategizing for this year's crop, in general? What are some of the things that you're really, you're interested in planning, others that you're not so much? What are your thoughts?
Kristjan Hebert 25:58
Yeah, for us, I mean, we've grown up to five crops. We do, our main three crops are, malt barley, canola, and hard red spring wheat. We mix in hybrid rye, yellow peas, and oats, depending on the year. To be honest, last year, and this year, when the chance of profitability is where it is. My idea is just keep it simple. So, we have a three-crop rotation this year, malt barley, hard red spring and canola. And we see a pretty significant upside in all three of them.
I mean, right now you can pencil a pretty decent profit. And I think, I think all of us would agree that world volatility probably is gonna give some upside and downside to all those markets. So, we've pre-sold some obviously for cash flow in the fall months. But we're also finding that there's pretty big volatility in, in bases and in futures, offering a whole bunch of reasons whether that be currency and, and then everything that's happened in the logistics side of agriculture that we maybe didn't know existed until 18 to 24 months ago.
Michael LeBlanc 26:58
Is one of your biggest unknowns, what happens ultimately with an around the Ukraine war, and whether grain moves or doesn't move or resumes production? Is that, is that kind of one of those, of all the different inputs of how you think about what could drive price or volatility is that pretty close to top of the list?
Kristjan Hebert 27:15
Well, I mean, for sure, I think it, and the biggest thing on that I would say is, is the, the big money in the market, not necessarily the farmers and the commercials, you know, they, they tend to trade news versus actual.
So, you look at the actuals there and you can't get insurance to go in and out of a Russian port. And there's numbers of ships that have been sunk in a lot of the ports in Ukraine, so you can get ships in and out of there. It's a long-term problem before we're going to see supply, be where it should be out of those two countries.
But I mean, I think as farmers, we probably spend more time reading about global policy and global issues such as that than we have in the past. I mean, I've been a huge follower of Peter Egan for, for a number of years, but I probably follow him closer than I, than I have in a long time and, and I think you follow some of his stuff in population demographics and the Ukraine Russia war, and what that does for, say, a crop like wheat that hasn't been Uber profitable in the last, say two decades, and in most of the world looks like it has a lot of upside over the next decade.
Michael LeBlanc 28:15
Let's take a different tact to, different let's step back so to speak, let's talk about the industry itself. I mean, listening to you, as I listened to you, I know, I'm very impressed by your approach to farming and you sound quite optimistic. Are you, how are you thinking about the industry itself, about the trade craft and the trade of farming? Are you seeing young, young people get into farming, get into the industry? Is it a case that well, now I can make money so I can attract more talent? Is it, is it, is that what you're seeing? And what does it take to grow the profession in the trade of farming in this country?
Kristjan Hebert 28:47
You know I would say, I think it's getting better. I mean, I just turned 40. And I would say kind of my age and five years older than me and five years younger, there was a real drain in agriculture, where the majority of parents are saying, don’t come home and do this. I mean, there's not enough money in it, it's too much risk. It's really hard labor. That was kind of the feeling. And so we got a bit of a hole there. But I would say now you're seeing more young people come back into the industry. It's exciting. You know, they have to be a little careful, because arguably the last three years have been really good. But you know, agriculture as a general trend has been pretty good since the early 2000s. When it comes to the increase in land prices and what commodity prices have done.
Kristjan Hebert 29:15
I would say production agriculture really needs to do a better job of marketing that it's not just a farm laborer or a hired man or a hired woman, right? There's, there's careers to be had in pre-, production agriculture, because I'd say a lot of young people are going into the multinational companies and what I call the Ag servicers, you know, those that keep the farms going not necessarily on to the farms themselves. So, we need to do some work there. And yeah, I mean, I think that obviously, I'm in the industry, so I'm pretty, I'm a pretty big believer in the opportunities that are available and really the only things that worry me right now are, are, are bad policies in rural communities. I mean, bad policies can, can ruin a lot of farms. And if there's no smart people and people willing to work in rural communities, it's really hard to grow the food that everybody wants. And so those would be kind of my two high level issues that are more long term planning that we're trying to do a bit more work on than we have in the past.
Sylvain Charlebois 30:22
You're saying there's bad policy right now? You’re kidding.
Michael LeBlanc 30:27
Oh, Sylvain. Kristjan let's unpack that point a bit. Because as I think about and you know, as a pure observer and learning from Sylvain the issues for farmers, I think of things like transportation, right? Is there enough rail capacity to move the product? I think about, as you said, government programs or costs or climate change costs, and I think of things like telecommunication right is, you know, I'm sitting here in Toronto, Sylvain's is in Halifax, high speed, wi-, you know, we take it for granted that it can't always be taken for granted in smaller communities. Are these some of the, the top things that are, that are the challenges affecting agriculture in Canada right now?
Kristjan Hebert 31:05
Oh, for sure. I mean, I think Supply Logistics was a real eye opener for a number of operators and a number of companies in the last 24 months, I don't think any of us thought, you know, that a ship block and a canal or, or COVID could shut down the deliverability of a lot of our, of, you know, of seeds and chemicals and fertilizers that we need and, and North America is probably set up better than anywhere, to be able to handle it. And we still failed in a lot of fronts, from the delivery of that to actual farms. It's been a long time since you went to buy a certain canola seed or diesel fuel, and got told no. So, I think that risk is a new risk that we will have to be prepared for and, and have some better infrastructure on a farm to do that. And definitely, I mean, the Wi-Fi and the availability. I mean, I think that's one of the biggest deterrents to the long term of autonomous farming, we have to have a way better network,
Michael LeBlanc 31:40
Right.
Kristjan Hebert 31:41
Where reliability is too high. I mean, I could tell you that I drive from, you know, from Moosomin to Brandon and then I'll drop cell phone calls three times, switching towers. Now, it's way better than it used to be. But it still has a long way to go. And I also think that a lot of our discussion around carbon and sustainability, etc, is going to take a lot better sensory network than we have available right now if we want to do it right. And that's going to take, you know, that's also going to take a bit more investment and infrastructure around that.
Michael LeBlanc 32:26
What does that mean? Unpack that for the listener's sensory talk about that?
Kristjan Hebert 32:30
Yeah, so I mean, right now, everyone's obviously pretty big on the term sustainability and regenerative and carbon. And first of all, I kind of like to thank everybody for joining it. I mean, for 100 and some years we've cared about farming.
Michael LeBlanc 32:39
Yeah.
Kristjan Hebert 32:40
Now that they got two new words for it, somehow, we lost ownership of it, but I guess,
Sylvain Charlebois 32:50
Shame on you, shame on you.
Kristjan Hebert 32:51
Yeah, exactly. We did a bad job of marketing in agriculture,
Sylvain Charlebois 32:56
That's right.
Kristjan Hebert 32:57
Yeah. But I think long term, you know, perfect world, every acre of Canada's is soil tested to have a baseline for these kinds of discussions and have MRVs. But that's really expensive. And I don't think it's going to happen long term. So, I mean, it's no different than, than H&R Block using Watson to do tax returns, we have to do the same thing on our soil across Canada over the next decade. And, and that's gonna take sen-, more sensors in the soil and in the sky, running algorithms on what's actually going on. And, for instance, we have, we got a weather station every 2500 acres on the farm right now that has four foot soil probes on it and measuring what's going on every 10 centimeters with the water in the, in the soil. And I would say I've learned more about what's going on in the four feet of soil in the last 10 years than we have in our whole life. And it makes me feel like I you know, maybe know less about,
Sylvain Charlebois 33:38
Very controlled. Yeah.
Kristjan Hebert 33:40
Growing crops that we used to.
Sylvain Charlebois 33:44
That's great. Listen, since you've, you've been, you've been talking about policy and things that need to change. If you were the Minister of Agriculture in Canada for one day, what are the three things you would do like right now? That (crossover talk) that's one thing wanted to ask you?
Kristjan Hebert 34:04
I figured this was maybe coming. The first thing I'd do is change the Ministry to the Ministry of foods so that a consumer actually cared about my job.
Sylvain Charlebois 34:13
Bingo.
Kristjan Hebert 34:14
Instead of calling it the Minister of Agriculture.
Sylvain Charlebois 34:17
I'll vote for that. Yeah.
Kristjan Hebert 34:19
The second thing I would do is create an ambassador of agriculture. That is the one that tells our story to our nation. And all that gets all the grower groups on the same page for lobby, as well as tells our positive story worldwide. I think. I think we're failing at that right now. Our policymakers are telling everybody what we could do better. Instead of telling everybody what we're doing right and what, what we could do better should be talked about behind closed doors and what to improve. So, I think we need an ambassador of agriculture for, (crossover talk).
Sylvain Charlebois 34:50
And there's lots of crazy things happening just in Saskatchewan alone. I mean, there's a lot, there's some processing happening. I remember when I was living there, I advocated for more processing and there's lots of new plants now.
Kristjan Hebert 35:01
So, many neat things, right.
Sylvain Charlebois 35:03
Yeah.
Kristjan Hebert 35:04
And then, and then third, I mean, I'd have a real look at how we spend our, our agriculture budget, both the feds and the provinces spend, you know, approximately 65 to upwards of 80%, depending on the year on, on crop insurance agristability, agri-invest what we call BRM programs.
Sylvain Charlebois 35:22
Yeah.
Kristjan Hebert 35:23
And the other, you know, 20 to 30%, on what I'd call the future. And I mean, I don't believe any business leader would tell you that if you want to tell the world you're a global agriculture powerhouse, and then you explain to them that only 25% of your budget is spent on the future and 75% of it is spent on retroactive, that's hard to believe. So, I would maybe, I would, I would reallocate dollars, on, on how we're spending our, our budget and what's focu-, on what it's focused on to really, to really capture the opportunity that is there for Canada to be a global you know, powerhouse in agriculture.
Sylvain Charlebois 35:56
Where can we find information about all of the things that you're doing?
Kristjan Hebert 35:59
Yeah. So, I mean, our kind of group of companies website is hebertgroup.com. And as you said, our farm website is hebertgrainventures.com. The consulting website is maverickag.com, farmercoach.ca is the consulting website and deeprootsfoundation.ca is our Foundation website. But you know, on social media, we're pretty active in most cases too. To be honest, the only one I really use personally too much is Twitter. I don't know why I'm addicted to it a little bit. But most of the other stuff, most of the other social media we're active on, but it's the team that's active on it.
Sylvain Charlebois 36:26
Yeah.
Kristjan Hebert 36:27
You know, Twitter and LinkedIn are probably my most personal, the one you'll catch me personally on and the team kind of keeps everybody updated on what's going on in our group of companies through the other channels.
Sylvain Charlebois 36:45
Could you, can you let your farmers, farming colleagues know that if they're on Twitter, they should stop bragging about the fact that they're losing money? It just doesn't make agriculture attractive and sexy.
Kristjan Hebert 36:59
Yeah.
Sylvain Charlebois 37:00
So, I mean, you make it sound interesting and sexy. But every day I see farmers, I'm losing money. And while that's why agriculture is not an attraction, that's a problem.
Kristjan Hebert 37:14
Yeah, I mean, so one of my mentors, out of the US is a guy by the name of Dr. Danny Kleinfeld, he was at Texas A&M and one of his big things in the past was that, you know, the top 20% of any industry, there's a significant gap between the top 20% and the other 80%. It doesn't matter what the industry is. I would argue now that in our industry, and in our consulting side, we're actually seeing that maybe there's a pretty big gap between the top five and then the rest, and then another big gap between the top 20 and the rest. But you know, when it comes to social media and the news, everybody gets the same vote and the same comment. So,
Sylvain Charlebois 37:42
That's right.
Kristjan Hebert 37:44
We need to, we need to pick who's kind of painting the picture for agriculture. But you know, and I think the other thing too, that skews the mindset in agriculture is that there's a lot of people that feel cash poor, but there's a big difference between managing cash and net worth. And, and some,
Sylvain Charlebois 37:56
That's right.
Kristjan Hebert 37:58
People are good at that. And some aren't, and, you know, new combines and pre-buying fertilizer can make you feel cash poor, and yet, you could still be a multimillionaire and need to put that in perspective,
Sylvain Charlebois 38:11
That's right.
Kristjan Hebert 38:13
For the rest of the world. You know, and I mean, it's probably gonna come up because I know you Sylvain. And, and, and I mean, the same crowd tends to get mad at large farms. So, agriculture industries (inaudible), large farms and so are the consumer sometimes. And, you know, I kind of argue back, there's two modes to that thought. In the world of agriculture, if you're a farmer that doesn't like a large farm, do you not like them because they're a large farm? Or do you just not like them because you didn't buy land over the last 10 years? It was a pretty good investment.
Sylvain Charlebois 38:40
Exactly.
Kristjan Hebert 38:41
You know, and secondly, for the consumer, I haven't met too many consumers that when they argue that I shouldn't farm what I farm right now, when I asked them back, what did they make in 1990? And are they willing to make that right now? None of them have answered yes. You know, they're, they were okay with inflationary pressures on their own T4, but they're not okay with it, you know, when it comes to the world of agriculture, and so I just, I think in agriculture, we need to ask good questions to make, make it relatable to other people.
Sylvain Charlebois 39:19
I mean, consumers who support farming and artisanship without understanding how scalable the farming can be, don't necessarily understand farming or modern agriculture, I would say.
Kristjan Hebert 39:34
I mean, I think I look at our team. I mean, my metrics are we want one full time person for about every 2000 acres, which is not a lot different than having a whole bunch of 2000 acre farms. At our Christmas party last year, we had 30 kids under the age of 14 that all go to all the local schools. So, I mean, that's one kid per 1000 acres. That's not a whole bunch of different than it used to be. And I mean, we're, we're crazy to think the world is going to be what it was 30 years ago. I mean, none of us, none of us seem to want to go back to not having cell phones and not having an internet and, and making $15,000 a year yet we're quick to judge, you know, businesses that have captured those same scaling opportunities.
Sylvain Charlebois 40:14
Yeah, I remember when I was in Saskatchewan, I penned an op-ed in The Globe, I think it was like in 2005, or something. And the and the title of the op-ed was we're losing farms in Canada, and not fast enough. And I got some really nasty emails from mostly from Toronto and Montreal, but I don't think they just understood, they didn't understand the economics of modern farming at all.
Kristjan Hebert 40:37
Well, I mean, I think it's one of the biggest issues in StatsCans numbers right now is their definition of a farm. The majority of (crossover talk) the definition is a hobby.
Sylvain Charlebois 40:42
Yeah, absolutely.
Kristjan Hebert 40:43
Right. I mean, I, you know, I think I don't know if it's still exact, but I mean, you still only need $10,000 in gross revenue, to qualify for a farm fuel discount and get qualified as a farm and I mean, I know a lot of people that spend that on their, on their hobby, whether that be golf or kids hockey, or you know, whatever kids are doing gymnastics and, and yet we can qualify that as a farm business for the StatsCan results. Yeah, I would question the parameters.
Michael LeBlanc 41:09
Interesting. Well, Kristjan it has been such a great interview, and it's been such a treat speaking to the future Ministry of Food. So, I'll look forward, (crossover talk).
Sylvain Charlebois 41:14
That's right.
Michael LeBlanc 41:16
To, to your that, to that in your future. But listen, and oh and by the way, congratulations on winning the Saskatchewan EY Entrepreneur of The Year™ 2022, fantastic.
Sylvain Charlebois 41:21
Bravo.
Michael LeBlanc 41:22
Congratulations. From this interview, we can clearly see why. Well listen, thanks so much for joining us on The Food Professor podcast. It's a real treat to get to know you. And we'll put links in the show notes for folks to go learn a bit more. I think you've moved the needle a little bit, certainly with our listeners around understanding farming. So, thanks for coming on. And taking the time to do that with us.
Kristjan Hebert 41:48
Yeah, thanks for the invite. And you know, as always, we're, we're pretty passionate about the industry and we like meeting up with people that we feel are the same.
Michael LeBlanc 41:56
Last couple of things. You know, did you see that Post Cereal is now releasing a sleep cereal? A bedtime breakfast cereal, I guess it's a bedtime evening cereal, and, and it's, it's called Sweet Dreams healthy sleep cereal and it's intended with whatever's in it to increase melatonin, (crossover talk).
Sylvain Charlebois 42:17
Is it cannabis infused? Is it, huh?
Michael LeBlanc 42:19
I didn't read the ingredients.
Sylvain Charlebois 42:21
Here you go kid, Sweet Dreams, Lucky Charms, don't forget about those (inaudible).
Michael LeBlanc 42:31
Anyway, so I thought that was kind of fun. nutraceuticals comes to you know, I know lots of people have a little bowl of cereal before they go to bed. And I guess,
Sylvain Charlebois 42:36
Really.
Michael Leblanc 42:37
it took them decades to put one-to-one together. And let's have a bedtime cereal. Anyway, I thought that was kind of fun. Hey, let's talk about what's coming up. Speaking of innovation, what's happening in the lab? What kind of research are you guys getting from upcoming studies? What have you got, what and when are you, (crossover talk).
Sylvain Charlebois 42:56
Well actually next week we will be talking about our study on the food guide, we actually you know we were, we're back at it for the second time in 2019, we actually calculated how the new food guide was cheaper or more expensive than the old one. And in fact, we realized that the new one was actually cheaper four years ago. But now we went back and evaluated. We just, we were just waiting for our paper to be accepted in the academic journal, which it is now and so we're coming out with our study on March the ninth the day after Mr. Weston testifies. And the day after Woman's Day and the day after the Bank of Canada releases its, its, its recommendation for, for the overnight benchmark. So, lots going on there. And,
Michael LeBlanc 43:20
A busy news week, yeah.
Sylvain Charlebois 43:23
We're doing some work on local foods with Nova Scotia, with Quebec as well. We're doing some studies on, on food banks, on campuses, on university campuses right now. That's drawing some interests and, and also, we, we're working with the University of Toronto, on a front of package labeling on the front of package labeling policy, how people will react and when three years from now when you walk into the grocery store, you'll see these major big logos telling you whether or not a product has too much sodium, sugar or fat. We talked about this in the past, but we're actually evaluating how people will respond to those, to those labels in retail. So, stay tuned.
Michael LeBlanc 44:32
Interesting, lots of stuff going on. Well, we'll look forward to that. And stay tuned to this podcast where you'll hear about it first or certainly you will hear about the story behind the story first, so,
Sylvain Charlebois 43:37
Oh yeah.
Michael LeBlanc 43:39
Well listen, let's, let's leave it there. A great episode, lots going on. As I said, let's leave it there. I'm Michael LeBlanc, Consumer Growth Consultant, keynote speaker and podcaster and you are?
Sylvain Charlebois 44:53
I'm The Food Professor Sylvain Charlebois.
Michael LeBlanc 44:56
Well, thanks for listening everybody and be sure to tell some friends in the foodservice, grocery and restaurant industry to tune in and until next week. Safe travels everybody.
Sylvain Charlebois 45:05
Take care folks.
SUMMARY KEYWORDS
agriculture, crossover, farmer, people, farm, Saskatchewan, Canada, Brexit, Quebec, farming, bit, called, pretty, food, year, talk, big, lots, question