Resilience in Agriculture: How Farms Adapted During COVID-19 and Beyond

The Spring 2021 issue of Intelligent Farmer explores how Canadian farms navigated the challenges of COVID-19, from pivoting business models to understanding the pandemic’s impact on farmland values. Here’s a snapshot of key insights:

Click here to download the full Spring 2021 issue of Intelligent Farmer today

Herrle’s Country Farm Market: A Case Study in Adaptation

When COVID-19 disrupted in-person shopping, Herrle’s Farm Market swiftly implemented curbside pickup and online ordering. Key takeaways:

• Family collaboration was crucial, with staff and relatives stepping in to manage hiring, packaging, and customer service.
• Weekly family meetings ensured agility, allowing them to address issues and share successes.
• The Garage, a throwback to their original roadside sales, became a hit, offering a safe, outdoor shopping experience.

COVID-19’s Impact on Southwestern Ontario Land Values

Despite the pandemic, farmland values in the region remained resilient, with modest growth in areas like Perth, Wellington, and Waterloo. Factors included:

• Urban migration: Remote work drove demand for rural homes, boosting land prices.
• Low interest rates: Kept borrowing affordable, supporting land investments.
• Strong agricultural demand: Minimally improved farms and vacant land saw premiums, especially near livestock operations.

Tax Strategies for Farm Vehicles

Properly classifying vehicles as Class 10 (no depreciable cap) vs. Class 10.1 ($30,000 cap) can significantly impact write-offs. Key rules:

• Class 10 eligibility requires the vehicle to be used >50% for farm business (e.g., transporting goods/equipment).
• Luxury or extended-cab trucks may struggle to meet the 90% business-use threshold for Class 10.
• Logbooks are essential to document business vs. personal use and avoid standby charges.

Financial Planning: Record-Keeping & Tax Tips

• Accurate records are vital for informed decisions and lender approvals. Track costs per acre/animal and monitor cash flow.
• Deferring taxes on inventory can backfire; consider paying lower rates annually to avoid higher brackets later.
• Capital gains exemptions (up to $1 million for qualified farm property) should be utilized strategically.

Don’t miss the full issue.

Read the Spring 2021 edition of Intelligent Farmer for deeper insights into pandemic adaptations, market trends, and financial strategies to future-proof your farm.

RBC Dominion Securities Inc. | Lorkovic DeKoning Wealth Management