Friday April 18, 2014




Trend ever larger in all things business

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The trends to ever larger agricultural enterprises continue.

When Maple Farm Equipment in Yorkton, a major John Deere dealership in east central Saskatchewan announced Friday it was taking on The Jim Pattison Group as a partner, it was big news locally for farmers.

Having Pattison Group suddenly entering the farm machinery business is rather significant. The British Columbia-based business has $7.5 billion in sales and 35,000 employees according to www.jimpattison.com. Those are significant numbers. Jim Pattison has a wealth of business experience in various endeavours, and the fact he has determined he wants to now be involved in agriculture through the Maple Farm Equipment group suggests a faith in the sector to continue to enjoy strength and growth. He is not a businessman to jump into a new business sector without doing his homework on that sector’s future.

So farmers can take the partnership as a good sign that someone with a varied business portfolio is investing in a related agricultural sector.

But the partnership also speaks to the trend which flows across almost every business sector, and that is that there is a trend toward ever larger business entities.

We only need to drive around a city such as Yorkton to see that.

The restaurant trade is of course a prime example. There are numerous eating establishments in the city. The majority are part of chains, eating establishments which have created a formula which works and have then built matching establishments in community after community.

In the last couple of years there have been about eight new eating establishments opening in the city, seven under names already found in other communities.

It is the same across most business sectors.

If a new store opens, it is likely to be part of a chain.

As in any city there are always rumours of new business looking to establish in the city. Most are businesses associated with chains.

That makes sense in terms of brand recognition, advertising, group purchasing, customer recognition, branding and a whole range of other business realities which have made chains successful.

But even chains end up owned by even larger entities. A Sports Check can trace its ownership to Canadian Tire as an example.

Such a dominant business trend of course translates to the farm sector itself.

Farms have grown ever larger since the end of the first great war.

It is a decades long trend which has no signs of altering course.

Farms today, more than ever, are big business, and economies of scale, the ability to assume debt and weather commodity price downturns are crucial to success. Farm size can often be a buffer in such situations.

The risks are larger, but so too is the upside.

Which of course is simply a reflection of business in general.

Ever larger farms, ever large store chains, bigger and bigger business, it is the way of the last 50 years, and almost assuredly the next 50 as well.

Calvin Daniels is Assistant Editor with Yorkton This Week.


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