Kroeker farms winkler

KROEKER FARMS LIMITED: EXPANDING HEMP PRODUCTION Jessica Kelly wrote this case under the supervision of Mary Gillett solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright © 2018, Ivey Business School Foundation Version: 2018-06-19

In November 2016, Jason Peters, agronomist at Kroeker (pronounced “Kraiker”) Farms Ltd. (Kroeker), was meeting with staff to review the past season and prepare a capital budget proposal for the year ahead. Peters had worked at Kroeker for three seasons overseeing all non-vegetable crops, with a primary focus on the farm’s certified organic acreage. Kroeker had 500 acres of organic hemp in 2016 and planned to expand to 1,100 acres in 2017. Peters knew that the existing equipment used in hemp production was at capacity, so further investment in equipment was a necessity. However, he had to decide whether to simply buy larger field crop equipment or invest in newer technology. The new technology option would require equipment to be imported from Europe, so timing was critical. KROEKER FARMS History Kroeker dated back to 1928, when Abram Kroeker, a second-generation immigrant, and his wife Elizabeth, sold their share in a family-run general store to begin a farm in Winkler, Manitoba. Initially the farm consisted of 280 acres of cultivated land and 80 acres of pasture and poplar bush and specialized in producing Yorkshire pigs and Latham raspberries. In response to the significant price, the weather, and the pest adversity he faced in his early years of farming, Abram Kroeker introduced corn production to the prairies, producing seed corn and constructing the first corn-drying kiln in Canada in 1936. The farm continued to grow rapidly and evolve over time. In 1942, potatoes became a main emphasis of production, and in 1955 the farm was incorporated, with Abram Kroeker and his nine children as shareholders. As potatoes and other vegetables were typically grown in one year of a three-year crop rotation, Kroeker worked co-operatively with other farmers—renting land from other farmers in the “vegetable year” of their rotation and renting out land owned by Kroeker in “non-vegetable years” of the rotation. In 2000, Kroeker experimented with its first organic crop—30 acres of potatoes—motivated by the personal interests of both the farm manager and shareholders. Kroeker did not have partners to share the rotation schedule of its certified organic land, as it did with its conventional (i.e., not certified organic) production.