Trees on Farms in British Columbia

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Trees on Farms in British Columbia

This week’s release of the 2016 Census of Agriculture data provided an opportunity to check up on the use of trees on British Columbia (BC) farms for production and conservation. There are no statistics gathered to help us differentiate what management systems are employed, hence the numbers presented here represent the use of trees in a blend of conventional horticulture, farm forestry and agroforestry.

All raw data has been derived from the Statistics Canada’s Census of Agriculture for 2011 and 2016, tables 004-0200, 004-0208, 004-0214, 004-0218, 004-0219 and 004-0220.

Tree Fruit and Nut Production Increases

When classed by the North American Industry Classification System (NAICS), 3,180 farms representing 18.1% of all BC farms were categorized as fruit or tree nut farms, up from 17.0% in 2011, and well ahead of the national proportion of 4.1%. These numbers however, include a significant number of berry producers (blueberry, raspberry) concentrated in the Lower Mainland region. In specific tree fruit categories, BC has 3,921 ha of apples (0.4% increase from 2011), 259 ha of pears (0.4% decrease from 2011), 191 ha of plums (1.1% increase from 2011), 1,987 ha of sweet cherries (17.5% increase from 2011), 42 ha of sour cherries (5.0% increase from 2011), 522 ha of peaches (2.2% increase from 2011) and 98 ha of apricots (a decrease of 4.3% from 2011). These plantings represent 22, 29, 29, 91, 4, 20 and 66%, respectively, of the national totals for these tree fruits.

Tree fruit production is highly concentrated within the Okanagan Valley. The Okanagan-Similkameen and Central Okanagan Regional Districts account for approximately one-third of the provincial tree fruit and nut farms, and 79% of the area planted. Domestic markets are important for fruit and nut sales, but export markets are on the rise. The large expansion in cherry plantings can be almost wholly attributed to BC sweet cherry exports to China creating much stronger demand for these high quality soft fruits.

Big Increases in Forest Products Sales

Forest product sales from BC farms rose 40.1% from 2011 to over $6.3 million, and representing about 9% of the total sales of forest products from farmland across Canada. The large increase in raw log sales from farms reflect, in part, shrinking supplies from Crown lands, where the mountain pine beetle has run its course and salvage harvest volumes are declining. Overall however, wood sales from farms in BC remains a very small proportion of the harvest from Public lands, and sales from farmland have not yet rebounded to pre-pine beetle levels.

Non-timber Forest Production Declining

Production of non-timber forest products (NTFPs) on BC farms has weakened since 2011. The total number of farms growing Christmas trees has declined by 21%, and the area planted by 23%. Total farm area dedicated to Christmas trees now sits at 2,016 ha, but importantly from a total industry standpoint, does not include the area of public lands used for Christmas tree harvest.

BC’s burgeoning bigleaf maple tapping sector gave mixed signals on it’s growth. The number of farms reporting maple taps decreased by 7% from 82 to 76 farms, concentrated heavily on Vancouver Island. A portion of this decline may however be attributed to errors in prior reporting. Some interior farms may have included taps on paper birch trees as maple taps in statistics prior to 2016. Birch tapping data are not collected by Statistics Canada. Encouragingly, though the number of farms reporting taps declined, the number of spiles employed increased by 11% to 4009. The number of maple spiles in BC only accounts for a fraction of the Canadian total (dominated in Quebec and Ontario). Bigleaf maple syrup insiders also note the number of small-scale producers tapping for their own consumption (and thus not captured in the Census) is likely in the hundreds on the Island.

Trees for Conservation Expands

The use of shelterbelts and windbreaks on BC farms (both natural and planted) continues to increase. Over 27% of BC farms employed shelterbelts in 2016, a relative increase of 40% in use of this conservation / agroforestry practice from 2011. BC still lags the national average with 36.4% of all Canadian farms using shelterbelts or windbreaks. BC Peace River regional farms have significantly higher use of shelterbelts with approximately 58% of farms in the Peace River and Northern Rockies Regional Districts reporting this practice.

Diversify, Don’t ‘Diworseify’

Diversification can be a double edged sword. Know yourself and your capacities to find winning business ideas.

Don’t put all your eggs in one basket. An oft repeated axiom (particularly by me) for farm, woodlot, ranch or any enterprise highly dependent on one revenue stream. Recent painful lessons in what can happen to the highly concentrated abound. Lumber and log markets tanked in the wake of the US housing collapse; meat export markets frozen after disease outbreaks for beef (BSE), chicken (avian influenza) and pork (swine / Mexican / North American / H1N1 / your name choice here flu); E. coli found in one lot of spinach and sales plummeted across North America.

Clearly there can be a high degree of risk in relying on a single commodity or market, and losing that market can be fatal to your business. But does diversification always make sense? Is it possible to weaken your business by straying from the core? In short, the answer is a resounding yes. Diversification does not always lead to success.

I’m self-employed, and like many other entrepreneurs, I rely on my own resources to fund my potential emergency, disability and retirement needs. This means investing has de facto become one of my hobbies. As such, I do my best to keep up to speed with what’s happening on Wall Street, Bay Street and even Howe Street (although, admittedly I should be paying more attention to financial districts in Mumbai and Sao Paolo). Long before Jim Cramer was launching chairs across his set at CNBC (a kinder, gentler Cramer has stopped this practice in recent years, but he is still the most animated and entertaining financial adviser today) I teethed my self-guided portfolio education on the sage words of Peter Lynch. The highly successful manager of the Fidelity Magellan Fund shared his winning investing strategies with the retail investor in “One Up on Wall Street”, one of the best selling financial books of the era. Lynch’s advice on stock picking included a chapter on “Stocks I’d Avoid” in which he coined the phrase, “diworseification” to describe companies that bog themselves down with non-complementary subsidiaries (often through costly acquisitions) that end up draining the organization by moving it away from what it does best.

The same can hold true for small businesses in forestry and agriculture (or any sector). Diversification becomes diworseification when the cash flow or profits from your new venture don’t come close to compensating you for what you will lose by taking time and resources away from your main business. Clearly, diversification can be a double-edged sword. Being overly concentrated entails risk, but so does straying too far from core competencies. There really is no clear way to know before hand (sorry, the free market never comes with guarantees), but there are some steps you can take to avoid diworseifying and give your new venture the best chance to prosper.

First, do your homework and find your niche. This can be done with ‘bottom-up’ approach of finding someone successfully doing what you are interested in and copying them, or through a top-down approach of studying the trends for “good ideas”, finding a new or under-served market niche that fits with your goals and capacity and building a business plan to capitalize on it.

Second, filter your ideas with your personal interests, strengths, weaknesses and capacity. Follow your heart, the best of ideas will wither and die if you can’t devote the time to develop it into a new venture, and you are most likely to keep at something that interests you, rather than simply jumping on a ‘hot idea’. Look at your current production constraints, time commitments and resource needs and decide if the new work will complement or clash with it. Understand and be honest about your weaknesses. Some can be over come with education and support, but others may doom your venture. For example, you wouldn’t consider adding a highly service-oriented component to your enterprise such as farm bed and breakfast if you truly don’t interact well with the public.

Finally, don’t ride a bad idea into the ground. Not every business idea or new market entry is going to be a success. No one bats 1000. Part of any good small business strategy should be a formal business plan. This will help you keep focused and will also allow you to revisit your diversification venture and see if your expectations are being met. Pride and an exaggerated sense of determination can become your worst enemy. We all want to stand tall in the face of adversity and no one would be in business if they collapsed at the first road block. But you must remain realistic about the long-term viability of your businesses, and if the market consistently tells you that you don’t have a winner, it’s time to cut your losses and move on.

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