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Transition Planning for Farmers: Diversified Operations Case Study

Last updated: Apr. 21, 2022 

This case-study is a follow-up to the Transition Planning for Farmers: Diversified Operations article.

From crops to biogas, how and why one farm made a drastic transformation post-transition.

Gerald and Birthe Perry had always planned to retire at 60 and put the farm in the hands of their two sons, Chris and Harold. Chris’s dad drew up a plan that divided the farm into three separate corporations. He knew firsthand how difficult it is to split a business up later, having fallen out with his own brother years earlier. Building diversity into the plan was crucial, both in terms of dividing duties and finances. Later, Chris and his brother, the fourth generation on the farm, implemented a diversification plan of their own.

After studying engineering in university, Chris hadn’t planned on coming back to the farm. But after a few years working in the city, he realized farm life was more in line with his goals. At 27, he returned, but not before completing a bachelor’s in agriculture, technology and management at Washington State University. Brother Harold, on the other hand, always knew he wanted to farm. He went to school, studied agriculture, and went straight back to their southern Alberta operation.

In those days, Chris’s parents grew mostly potatoes and sugar beets on rented and traded land. Land was cheap to rent back then, so it didn’t make sense to buy. The family owned about 800 acres at that time.

“It was never really on his radar to invest heavily into land,” said Chris of his father.

But when he and his brother returned home to farm it became quickly apparent that they needed to secure land. The farm grew from 800 acres to 1,000 acres to its current 5,000 acres for irrigated land. Investing in land wouldn’t have been possible without using the farm’s equity, he said.

Today, the Perrys produce a mix of crops, including mixed grains, green peas for Bonduelle, hay and silage, and seed canola. They also produce cover crops and green manure crops. Mostly, though, they are potato farmers.

As per Chris’s father’s instructions, the farm is divided into a trio of corporations, which are owned and operated by Chris, his brother Harold, and his parents. Early on, his dad had the farm appraised, froze its assets and developed a plan from there. Chris has an older sister who was not interested in farming. He and his brother eventually bought her out. Their parents, now in the late 70s, are still active on the farm.

“I give a lot of credit to Mom and Dad for the way they set that up and thought about it,” said Chris.

Working closely with their accountant, Chris’s parents decided to move much of their capital out of the farm and in RRSPs. The financial restructuring had very little impact on the day-to-day of the farm, and using the equity, Chris and Harold were able expand the farm together, but separately. Chris’s dad felt the structure would work better than what he and his brother had.

“A lot of that falling out was caused by them being under one umbrella and sharing all the same private expenses,” explained Chris explained. “It led to some dissent, and it caused some trouble.”

“He didn’t want that to happen to us,” he added.

In the beginning, though, their parents still held the signing rights at the bank, which gave them the authority to stop the brothers from making any ill-advised decisions.

“When we wanted to invest heavily in land, which we did, we needed their support to do that,” said Chris.

When Chris returned to the farm, he brought with him a real drive to build an environmentally sound business model. He and his brother decided to build a biogas plant waste energy facility. The biodigestor utilizes manure, culled potatoes and some other waste products and produces a sort of natural gas. They use the gas to power a 633-kilowatt generator, which in turn, produces electricity.

The idea was to reduce their energy footprint and become carbon friendly. To further those efforts, they started a data-driven agriculture partnership in 2012. Their aim was to conserve water and reduce reliance on synthetic fertilizers and inputs through variable rate technology and using satellite and drone imagery. While it has brought them many accolades—McCain’s and Frito Lay like to showcase their farm as an example of what is possible in potato production—it hasn’t exactly made them rich. Yet.

“Right now, it’s looking like a very good move because there’s a very big appetite to partner with source products from our customers, like McCain’s and PepsiCo.,” said Chris. “They love what we’re doing, reducing our carbon through regenerative agriculture.”

Recently, the brothers added an upgrader, which upgrades the quality of the gas produced, making it renewable natural gas (RNG). They were able to establish a contract with FortisBC, which runs that province’s natural gas grid. The company is interested in the gas the Perry family produces because it has low carbon intensity.

Looking forward, Chris would like to offer his own children a role on the farm, if they so choose. He has three daughters between 18 and 22. Harold has three daughters, 17 to 21, as well as a 12-year-old son. Some have expressed interest in farming. Chris said he would like for them to make a decision by the time they reach 25, that way he and his brother will know how to further diversify the farm. Currently, they’re seriously considering adding a dairy or a greenhouse.

“We want to maybe delay those decisions ‘til we see how actively they want to be involved,” said Chris.

Arguably, what makes the farm so successful is its structure. Working separately has allowed them to better work together. Harold works more on the agronomy side, which Chris is more into the management of the business. Their skillsets overlap, as well. Chris owns and operates CKP Farms Ltd. His brother Harold owns and operates Perry Quest Ltd., and his parents own and operate Perry Produce Ltd.

“Our vision is to grow, live and be the change,” said Chris.

Moving forward, he hopes to grow the farm using the very best technology and improvements to make the farm resilient and viable for the next generation. Always, though, there’s a focus on sharing and networking with like-minded people with the aim to be the change they want to see of in the world. Timing is everything when it comes to diversification, though. If it doesn’t make sense, wait. Go once the time is right, he said.

Don’t want to wait for Part 5? Download the full guide to Transition Planning for Farmers here:

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