- As a farm adds people and enterprises, the business structure can become problematic
- The Berthiaume family farm has found a way to manage 14 different enterprises successfully
- This complex business structure allows several family members and their operations to benefit from a range of financial programs
As a farm adds people and enterprises, the business structure can become problematic. The Berthiaume family in the Beauce region (south of Quebec City) is in the process of transferring its family operations to the third generation, but this family farm group now has a corporate structure the first generation would hardly recognize.
Second-generation shareholders Cécilien and Sylvie, Mario and Solange, along with third brother Marco, brought their individual companies together when they built a feed mill, even though their enterprises were involved in very different sectors. The feed mill redistributes its profits among the other enterprises and lets the family group take advantage of market opportunities. The third generation has adopted the same forward-looking vision and follow their parents’ approach as operations are passed on to them.
Several family members and their respective operations can be involved in the farm group and benefit from the range of available financial programs.
Nimble, flexible and diverse
That third generation – Lori-Anne and François, and their cousins Alex and Yan – now have shares in the feed mill and find it does provide significant savings for the 14 enterprises in the group.
Along with their father Cécilien, Lori-Anne and François are also shareholders in a number of operations, and are primarily engaged in hog production and real estate. Alex and Yan co-own several corporations with their parents, Solange and Mario, and their uncle Marco. The businesses range from dairy and maple syrup production to raising broiler chickens and hogs to accounting services that cater to other producers.
Why such a complex structure for a farm? Basically, it’s a way several family members and their respective operations can be involved in the farm group and benefit from the range of available financial programs.
There’s a place for everyone, both in terms of the work they perform and as owners. Lori-Anne, for example, initially thought her finance degree would take her off the farm to work. Instead, she applies her financial skills to benefit all the enterprises in the family farm group, even though she doesn’t set foot in the production buildings every day.
The structure also allows the family to add (or remove) lines of business, or make acquisitions without impacting the other companies – they only need to include those individuals who are directly involved. Alex and Yan are the only two family members who are shareholders in the dairy and maple operation, LaitPorc MC. Mario and Solange are shareholders in Encans Sélect Gène, a livestock and machinery auction business, along with four other partners who aren’t related to the Berthiaumes.
Lastly, as the family members learned from the significant hog pricing cycle fluctuations in recent years, having a structure where each company is a separate entity minimizes the risk that an unproductive line of business will be detrimental to the others. Even if one bale falls off the wagon, the stack stays standing.
A constant evolution – people and technology
The current aggregation of farming enterprises under the Berthiaume umbrella continues to evolve as the interests and involvement of the family members change and new opportunities arise. That’s what happened with Construction Solupro. A construction company may seem out of place in the mix, but when Cécilien, Sylvie, François and Lori-Anne saw a chance to develop real estate in the village of Saint-Elzéar, they seized it. That business decision clearly illustrates the entrepreneurial spirit that runs through the Berthiaume family.
Although eight family members are actively involved in the various farming operations, labour remains the biggest challenge. “It’s tough to find local people willing to do the physical chores and work the kind of hours that farming requires,” François explains.
He flashes his smartphone to show the computerized pen-monitoring system used in the hog barn – just one of many technological advances adopted by the family in order to remain productive and reduce reliance on labour. Still, they’ve had to bring in two temporary workers from Guatemala.
Communication and education key to success
How have the Berthiaumes managed to pull together all the pieces of this jigsaw puzzle? Effective communication is critical, says Lori-Anne, emphasizing that the spirit of openness has always been part of their family culture.
Yan adds that his parents wanted to be sure the transfer from one generation to the next would be successful. “My grandparents would be proud of what we’ve accomplished, just as they were when they managed to transfer their farms over to our parents.”
Education is another key component for these young farmers. All four have some post-secondary education, yet Alex emphasizes that the important thing wasn’t so much what subject they studied, whether agriculture or another field. “Our education gave us better organizational skills and the ability to think more about what we wanted to do,” he says.
Lori-Anne wholeheartedly agrees. She is about to complete her MBA, building on her degree to give her a stronger foundation in finance and a more global perspective on their operations. “I find that I now explore each point further, do more research, and have developed a totally different vision.”
The main factors behind this corporate yet family-owned structure are the same ones that ensure the profitability of those enterprises. Farmers are constantly assessing the benefit of buying more land, machinery or buildings. Such discussions prompt the next generation of Berthiaumes to continue following the vision their parents had when, in 1995, they built the family feed mill that became central to all the entities in the farm group.
At that time, Cécilien, Mario and Marco felt it was a priority to achieve a return on their investment quickly by controlling feed costs and quality – and using less labour to do so.
Investment ideas continue to be a frequent topic at the Berthiaume dinner table and management meetings. They realize they will need more space if they continue to expand, but buying land is not the only option they consider. Whether it’s diversification or production methods, they routinely evaluate their options as the collective-enterprise model of their family farm group continues to progress.
From an AgriSuccess article (March/April 2016) by Hugh Maynard.