Making milk: Transfer of a large Operation

by Patrick Dupuis

Photo : Claude Lavoie, Les Entreprises Lavoie, Saint-Isidore, Alberta

In the same feature:
Making Milk: Growth & Efficiency
Making Milk: Milk Ingredients
Making Milk: Quota and Supply Management


Owners of large dairy herds in Quebec, Ontario and Alberta share with us their vision for their operation’s growth and for the future of dairy production in the country. 

Transfer of a Large Operation

The three producers agree on the fact that the growth of their operation is a good way to prepare for a transfer. It allows everyone, transferor and transferee, to get along.

“The big farms are sexier to transfer,” believes Jérémie Pittet, who has owned 20% of the operation since 2012. “They offer youth a bunch of possibilities to expand in various projects and activity spheres. I manage the machinery, fields, new building construction, and work teams. My dad has fulfilled his part; I can too.” The same goes for Nick Thurler. His sons each have owned a share in the operation since last year.

But a transfer, that must be planned. Before Ferme Pittet even gave a share to Jérémie, they had five years of frank discussions with the CRÉA (regional farm transfer centres). It’s more of a partnership than a transfer.

As a manager, Richard also surrounded himself with professionals in business development to facilitate the determining steps. Then, the farm was equipped with a mission: prosper in the dairy industry while remaining as a regional economic force and an employer of choice.

Yet the cliché has been around for a long time: a big business can’t be transferred. “We are being held responsible for the end of the family farm model,” contends Alphonse Pittet. “This is not at all what is happening. On the contrary, we have invented a business model equipped with a vision to get bigger.”

Alberta, where farms are larger on average than the rest of Canada and where the price of quota has not been capped, doesn’t necessarily have the model for the future according to Claude who has travelled a lot, particularly to Quebec. “In Quebec [and in other P5 provinces], we see the cap on the price of quota as a way to make it easier to transfer to another generation. It is harder for me to buy my dad’s farm at $36,000 per kilogram than at $24,000 or $25,000.”

The next generation of farmers don’t have the necessary liquid assets available to acquire a very large operation. Selling it at market value will make the transferors rich, but it will burden the transferees. The simplest, safest and most promising method for the two parties seems to be that the transferees pay an income to the transferors.

Like Claude Lavoie and Jérémie Pittet, Robert and Michel Thurler’s vision is to grow their operation. They are going to expand the current barn in 2016 to house more animals. In the longer term, the Thurlers are going to build another, wider one equipped with a bigger milking parlour. Over the next 10 years, they’re looking to increase to 700 or 800 kg to take further advantage of economies of scale.

For Alphonse Pittet, the challenges for the new generation of young farmers are to know, understand and be involved - because ignorance will cost them dearly. Such things as regulations, the economy, and politics can no longer be left behind. “I’m confident that the youth are going to shine. It’s amazing to see!” he says. 

Vous pouvez lire le dossier complet dans l'édition de février 2016 du magazine Coopérateur.

In the same feature:
Making Milk: Growth & Efficiency
Making Milk: Milk Ingredients
Making Milk: Quota and Supply Management

Patrick Dupuis's picture

Patrick is Deputy Editor at the magazine Coopérateur.Agronomist graduated from McGill University, he also studied sustainable development. He works at the Cooperateur for over twenty years.