Latest news with #FarmCreditCanada
Globe and Mail
6 days ago
- Business
- Globe and Mail
FCC to invest $2-billion in agri-food startups
Ottawa has loaned money to Canadian farmers for nearly a century. Now Crown agency Farm Credit Canada is looking to use some of its vast resources to back innovative startups that serve the agri-food business. FCC said Friday it would invest $2-billion through to 2030 to advance agtech innovation in the country's agri-food industry. It will invest through an array of vehicles that includes funds, direct investments and other investment structures, providing equity, convertible equity and mezzanine loans to companies ranging from pre-seed startups to later-stage enterprises that serve the sector. 'There is an opportunity to increase the adoption and access to innovation of the primary producers,' said FCC executive vice-president Darren Baccus, who will oversee the program. 'There is a need in this industry for meaningful capital. Canada is so uniquely positioned to be able to do this.' Despite Canada's status as a global breadbasket, the sector attracts little risk capital. Total venture capital invested in Canadian agribusinesses totalled just $881-million over the past four years combined, according to the Canadian Venture Capital and Private Equity Association (CVCA). That is less than 4 per cent of what Canada's information and communication technology sector raised over the same period. 'It's always surprising, the lack of money that goes into agribusiness venture capital given the predominance we have in food production,' said CVCA president Kim Furlong. 'The market need is there, food security is a real thing and the technologies are there.' Canada's crop of agtech companies is modest. One of the biggest names, Farmer's Edge Inc., went public in 2021 and its stock crashed after it reported mounting losses. Majority owner Fairfax Financial Holdings Ltd. took the company private at 35 cents a share in 2024. This tech is helping Canadian farmers grow smarter, not harder Agtech startups are challenged by high capital expenditures and long timelines, said Marcus Mitchell, chief executive officer of Shire Capital Management. 'There's definitely a funding gap and I see this as an effort to de-risk deals in the sector so more conventional capital allocators have a reason to engage,' he said. Sean O'Connor, CEO of 4AG Robotics Inc., a B.C. company that is developing mushroom-picking robots, added that varying crops, soil and weather conditions in different markets make it 'challenging to find agtech that has the ability to scale in a similar way everywhere in the world.' FCC was established in 1959 to replace the Canadian Farm Loan Board as a lender to farmers. It has dabbled in venture capital on the side for years, but VC accounted for just $246-million of its $53.5-billion in total assets in its fiscal year ended March 31, 2024. Mr. Baccus said FCC's increased shift into VC came after Justine Hendricks joined as CEO in 2023 and began speaking with industry stakeholders. 'We started to hear from industry: You can do more.' he said. 'They said, 'We value what you bring to industry, that your core business is primary production, but there are opportunities for you to provide more capital solutions to this industry.'' How vertical farming can help Canada create a self-reliant food chain in an era of tariffs and climate change FCC responded by establishing a new arm called FCC Capital in 2024, and it has made nine direct investment deals that total $170-million, investing in three new funds and establishing a new business accelerator. Mr. Baccus said FCC will not lead deals but look to 'crowd in' private sector investors into domestic agtech companies. 'I think government investment for the time being is essential as we create these success stories and technologies that will help more folks say yes,' said Dana McCauley, CEO of the Canadian Food Innovation Network. FCC joins Crown agencies Business Development Bank of Canada and Export Development Canada in expanding support recently for domestic startups. Prime Minister Mark Carney has pledged to commit $1-billion in new money to a venture capital funding program begun by Stephen Harper's Conservative government.
CBC
13-05-2025
- Business
- CBC
London, Ont. cricket plant ordered into receivership amid $41M debt bill to creditor
Social Sharing Months after it announced layoffs impacting two-thirds of its workforce, Aspire Food Group, the London-based insect agriculture firm specializing in farming crickets for use as protein, has been ordered into receivership by an Ontario court. Last week, a Superior Court of Ontario justice ordered that FTI Consulting be appointed receiver of Aspire and its related entities, and all "assets, undertakings, and properties" acquired or used by the firm at its Innovation Drive facility, along with its proceeds. The order followed an application filed by Farm Credit Canada (FCC) in February to appoint FTI Consulting as receiver and manager, saying Aspire owed it nearly $41.5 million under an amended credit agreement reached the previous year. Aspire opened the plant in 2022 with the goal of producing up to 13 million kilograms of the insect annually for use as an alternative consumable protein source, it's co-founder told CBC News at the time. A vast majority of the plant's production was for the pet food industry. The 14,000-square-metre plant was opened with the help of roughly $35 million in federal funding through Sustainable Development Technology Canada, Agriculture and Agri-Food Canada, and NGen under Ottawa's Global Innovation Clusters initiative. In November, Aspire announced it would lay off 100 of its 150 workers at the plant to renovate its production system, with plans to rehire workers this July. In its application, FCC says Aspire built the London facility based on "proprietary cricket growth and harvesting methodology" developed in a research and development facility in Austin, Texas. Since opening in London, the company had been unsuccessful in replicating the methodology and had failed in commercializing and scaling its operations, FCC's application says. "As a result of the fundamental operational issues plaguing the Facility, the Aspire Group has not been able to produce positive cash flow/earnings, and production has come to a complete halt in order for the Aspire Group to focus on research and development." It adds FTI was brought on as a consultant to monitor Aspire's monthly statements and operating metrics. Aspire was also required by FCC to sustain a minimum cash balance of $1 million. "Notwithstanding these amendments, the Aspire Group has failed to recommence production, and its working capital is rapidly depleting," FCC's application reads, adding Aspire was in default of the agreement after failing to maintain the required cash balance. CBC News has reached out to Aspire CEO David Rosenberg, co-founder Mohammed Ashour, and legal counsel for Farm Credit Canada and FTI Consulting for comment. This story will be updated when they respond. Ongoing money trouble While the plan was to be at full capacity by 2023, the London plant has been operating at half capacity since May 2024, Dale Snider, a senior corporate and commercial account manager at FCC, said in an affidavit filed in court in February. "At certain points, production has completely shut down in order for the Aspire Group to focus on research and development," the affidavit says. Snider notes farming and processing crickets as requiring specialized equipment and a "precisely timed, automated production line." Differences in geography and environment, as well as in the design and build of cricket habitats between the Austin R&D facility and the London plant, have led to "operational and scalability issues," the affidavit says. Adding to the strain, Aspire, which owns the London plant through another company, owed roughly $1 million in back property taxes to the City of London as of late January. "The proposed receiver is deeply familiar with the Aspire Group's business and operations and is prepared to oversee an orderly wind-down of operations at the facility and an eventual sale of the Aspire Group's property through a transparent and court-approved process," Snider says in his affidavit. As security under the loan agreement, FCC was provided a first charge/mortgage against the London facility in the principal amount of $60 million. A factum filed by FCC in court that same month highlights additional causes of Aspire's financial troubles. Among them, the drying up of government grants and cost reimbursement programs it previously relied on, and "economic uncertainty and market volatility" from threatened U.S. tariffs on goods imported from Canada. Fight climate change: eat some bugs | Curb Your Carbon 3 years ago Duration 1:46 The livestock sector emit over 7 billion tonnes of CO2 every year. But producing the same weight in bugs generates about 1400 times less CO2 than beef. Nearly all of its production is exported to the U.S., the company said in a LinkedIn post in February. "We remain committed to Aspire's mission and our leadership in sustainable protein. But we cannot ignore the scale of these disruptions," Rosenberg is quoted in the post as saying. On May 1, FCC told the court it had given Aspire many chances to resolve its issues, including opportunities to secure emergency liquidity to meet payroll, and additional time to finalize repayment. "Despite these accommodations, the Aspire Group has not been successful in formalizing any repayment transaction that will see the indebtedness repaid in the short or long-term," a supplementary factum filed by FCC states. "At this juncture, it has become clear to FCC that the possibility of the Aspire Borrowers finalizing a repayment transaction in the near term and on terms satisfactory to FCC is negligible." Since opening, the London plant has been dogged by bizarre conspiracy theories that it's part of a shadowy government plot to force people to eat insects.
CBC
13-05-2025
- Business
- CBC
London, Ont. cricket plant ordered into receivership amid $41M debt obligation
Months after it announced layoffs impacting two-thirds of its workforce, Aspire Food Group, the London-based insect agriculture firm specializing in farming crickets for use as protein, has been ordered into receivership by an Ontario court. Last week, a Superior Court of Ontario justice ordered that FTI Consulting be appointed receiver of Aspire and its related entities, and all "assets, undertakings, and properties" acquired or used by the firm at its Innovation Drive facility, along with its proceeds. The order followed an application filed by Farm Credit Canada (FCC) in February to appoint FTI Consulting as receiver and manager, saying Aspire owed it nearly $41.5 million under an amended credit agreement reached the previous year. Aspire opened the plant in 2022 with the goal of producing up to 13 million kilograms of the insect annually for use as an alternative consumable protein source, it's co-founder told CBC News at the time. A vast majority of the plant's production was for the pet-food industry. The plant was opened with the help of roughly $25 million in federal funding through NGen under Ottawa's Innovation Supercluster Initiative, and Agriculture and Agri-Food Canada. In November, Aspire announced it would lay off 100 of its 150 workers at the plant to renovate its production system, with plans to rehire workers this summer. In its application, FCC says Aspire built the London facility based on "proprietary cricket growth and harvesting methodology" developed in a research and development facility in Austin, Texas. Since opening in London, the company had been unsuccessful in replicating the methodology, and had failed in commercializing and scaling its operations, FCC's application says. "As a result of the fundamental operational issues plaguing the Facility, the Aspire Group has not been able to produce positive cash flow/earnings and production has come to a complete halt in order for the Aspire Group to focus on research and development." It adds FTI was brought on as a consultant to monitor Aspire's monthly statements and operating metrics. Aspire was also required by FCC to sustain a minimum cash balance of $1 million. "Notwithstanding these amendments, the Aspire Group has failed to recommence production, and its working capital is rapidly depleting," FCC's application reads, adding Aspire was in default of the agreement after failing to maintain the required cash balance. CBC News has reached out to Aspire CEO Mark Rosenberg, co-founder Mohammed Ashour, and legal counsel for Farm Credit Canada and FTI Consulting for comment. This story will be updated when they respond. Ongoing money trouble A factum filed by FCC in late February highlights some causes of Aspire's ongoing financial difficulties. Among them, the drying up of government grants and cost reimbursement programs it had previously relied on, and "current economic uncertainty and market volatility" from threatened U.S. tariffs on goods imported from Canada. In a supplementary factum filed on May 1, FCC said that it had given Aspire many opportunities to resolve its issues, including opportunities to secure emergency liquidity to meet payroll obligations, and additional time to finalize repayment. "Despite these accommodations, the Aspire Group has not been successful in formalizing any repayment transaction that will see the indebtedness repaid in the short or long-term," the document says. "At this juncture, it has become clear to FCC that the possibility of the Aspire Borrowers finalizing a repayment transaction in the near term and on terms satisfactory to FCC is negligible." Since opening, the London plant has been dogged by bizarre conspiracy theories that it's part of a shadowy government plot to force people to eat insects. In 2022, Aspire signed a memorandum of understanding with a Korea-based food distribution company to identify markets in Asia and Europe for its product.
CBC
19-03-2025
- Business
- CBC
Ontario farmland prices cool down after years of double-digit jumps
Social Sharing Though the recent year-over-year increases in farm prices are levelling off in southwestern Ontario, good land remains too pricey for many people with dreams of owning their own land. "Anything like 100 acres, you're just not going to find it for under $5 million," said Crispin Colvin, a farmer and area director of the Ontario Federation of Agriculture for Lambton and Middlesex counties. "There isn't really any cheap location to get into farming." A report released this week by Farm Credit Canada, a Crown corporation that provides financing to the agriculture industry, said the average price of a farm in the southwestern Ontario region rose by 3.2 per cent in 2024, reaching an average per-acre price of $33,700. That rate of increase is down considerably from recent years, which have seen double-digit increases in average farm prices: 2021: 22.2 per cent. 2022: 19.4 per cent. 2023: 10.7 per cent. Colvin said he's seen prices well above what's laid out in the Farm Credit Canada report. He said the high prices remain a significant barrier to young people interested in getting started in agriculture. "Prices have maybe tapered off or levelled a little bit but it's still really hard, especially for young people who want to get in," he said. "It's at the stage where you can either buy the equipment or buy the land, but you can't buy both." Ryan Parker, an agricultural real estate appraiser with Valco Consultants, said slightly lower interest rates and commodity prices are the two biggest factors that have led to the slight cooling in farm prices last year. "It's not really a decrease in land values, it's a decrease in the increase of land values," he said. Parker said it's too early to tell how the Canada-U.S. trade war will affect farm prices. However he said anything that reduces the price farmers can get for their meat and crops will show up in farm values. "Right now, what we're seeing is a lot of uncertainty," he said. "Some farmers are buying another farm, but others are putting the brakes on and saying, 'You know what, let's just hang back and not overspend on anything until we have more clarity on what's going to go on here.'" Colvin said another factor keeping prices high is the pressure created by urban expansion. As farms get sold, some are turned into subdivisions. "Because we're on the Highway 401 corridor, it's still a sought-after area from a development point of view," said Colvin. "And we're losing the land so as you lose it, that pushes up the price."
CBC
19-03-2025
- Business
- CBC
Canadian farmland values up 9%, but growth rate slowing
Average Canadian farmland values continued their more than 30-year streak of increases last year, but Farm Credit Canada says the rate of growth is slowing and trade disruptions could further dent them. The Crown corporation, which provides financing and other services to the agriculture industry, said in a report Tuesday that the average value of Canadian farmland rose last year by 9.3 per cent. In 2023 it saw an increase of 11.5 per cent, and in 2022 farmland appreciated by 12.8 per cent. The last time farm values shrunk was in 1992. "There's a little bit of evidence that the increase in farmland values are slowing down, but it still remains a very large increase," said FCC chief economist J.P. Gervais. He said the main reason for the change in pace is the revenue decline farmers are seeing. "We faced in 2024 a major reset of commodity prices," he said, pointing to the COVID-19 pandemic and Russia's invasion of Ukraine as reasons for an earlier spike in commodities. Lower prices for grains, oilseeds and pulses led to an 11.8 per cent drop in main field crop receipts in 2024. Gervais said FCC had an optimistic outlook for farmer revenues at the beginning of 2025 but now is calling for another year of decline as the U.S. makes tariffs on imported goods a centrepiece of its economic policy. "The demand long-term is still very strong. It doesn't change the story that we have for Canadian agriculture, which is the world needs more of what we grow," he said. In 2024, Saskatchewan led with the biggest increase in farmland values at 13.1 per cent, followed by British Columbia at 11.3 per cent. All other provinces had growth in the single digits, the report showed. But trade disruptions — not only the tariff war the U.S. launched against Canada this month, but spats with other trading partners like China — are causing major challenges in the agriculture space and could weaken demand for farmland. One is the inability to predict what's coming, given that farming comes with high capital costs and thin margins. "Uncertainty, instability — those are big impediments to investment," said Gervais. Declining interest rates might provide a bit of a cushion for those wanting to expand their farming operations, but revenues are in for a steep decline as key commodities get caught up in the tariff storm. "The longer it lasts, the more impactful it would be," said Gervais. "If it stops tomorrow, it's going to be a blip."
