By Connor Lynch
MORRISBURG — One of Eastern Ontario’s largest and most well-established organic grain dealers, Homestead Organics, is out of business.
The company, started in 1988 by his parents, is going into receivership on its 30th anniversary, president Tom Manley said. Inventory was cleared out April 13, the last day for the company’s 18 staff. Two of Homestead Organics’ three locations — at Berwick and Morrisburg — are now up for sale. The feed mill at Sebringville, in Western Ontario, has already been sold in principle, the prelude step to signing it over, and is expected to continue to operate as an organic feed mill.
Manley told Farmers Forum that he would stay on, on a volunteer basis, working with the liquidation agent to ensure the properties went for as close to retail value as possible. “We’re working hard to get as much money as we can to the farmers,” he said.
Manley is hopeful that once the principle creditors had collected, there would be money left over. But he made no promises that everyone would get paid, or that they would get everything they were owed.
Producers who sold to Homestead Organics would be at least partially covered by the Grain Financial Protection Program. But with the amount that he had outstanding, Manley was not optimistic that everyone would be recouping their losses, and the program never covers the full value of a contract anyway.
Said Manley: “A lot of people are going to lose a lot of money.”
Homestead Organics had been in trouble for years, but as recently as this past January, Manley had been at least hopeful that the ship could be set aright.
As far back as two years ago, according to a Facebook post, Manley had been quietly trying to sell the company. In the meantime, the company expanded. In 2016, it bought a feed mill in Sebringville, just west of Stratford. In 2017, Homestead Organics hit a peak of 27 employees. It was an ambitious year for Manley. The feed mill re-opened, and the Morrisburg location was renovated and expanded.
Last October, the bank gave Manley six months to pay off his line of credit. In November, Agricorp suspended Homestead Organics’ grain licence, because of slow payments to growers. The company started buying through a third-party; that meant they could still legally buy grain, and growers would be at least partially protected, but it added to the strain on margins.
Manley told Farmers Forum in January that, “our situation might appear dire. And yes, we are in distress. But we are receiving tremendous support.” The growers hadn’t abandoned Manley, he said.
It wasn’t enough. “I continued buying grains in Ontario and outside of it. We were moving orders along. But not at the volume that we needed to be. We ran out of money, ran out of time, and couldn’t hold it up anymore.”
Financial woes aside, Manley suggested that his company might be a victim of its own success. “Our strategy was to grow big enough to sustain the onslaught of competition when organic would go mainstream, which we knew it would. But after 30 years, our size, cost of production, capacity, cost of growth, and debt load could not match the larger players with infrastructure, economies of scale, and deep pockets.” Manley is well-known as an outspoken advocate for the organic industry, who strongly supported setting regulations governing use of the term organic, believing that allowing anyone to call their produce organic undermined the strength of the brand.
Homestead Organics was a big and diverse player locally, buying and selling grain, seed and other products. Its loss will leave many producers in a lurch, said Manley, especially smaller and more diversified ones.
“The dairy farmer who came to us for seed to grow feed, who buys supplements and premixes, who grew crop that he bought from us. That situation will be very difficult to replicate,” Manley said. He posted alternatives organic growers can turn to on his website, but noted that many of them are either more focused, or less local than his company was.
Local dairy producer Josh Biemond, who runs Upper Canada Creamery and a certified organic dairy farm at Iroquois, said that he’s worked with Homestead Organics for years. The loss of the company is “a huge blow to our Eastern Ontario industry. I did a lot of supplements, marketed and purchased grain and other feed additives (through Homestead Organics).”
But the biggest loss is “the work Tom Manley was doing in the organic industry. All the things he stood for and supported get lost too,” Biemond said.
He added that he’d actually been in the process of ordering seed from Manley when he heard the news. “Now I have to scramble for other sources.”
Biemond completed an expansion on his own farm recently, implementing a long-held dream of on-farm cheese production thanks to a loan from a government program. He’s sympathetic to the difficulties Manley was having with expansion. “In the last six months, we put extra effort into buying from Tom to help him get through it. He’s been an important part of the supply chain here.”
For now, the loss of the business has torn a hole in Eastern Ontario’s organic sector, and it’s not yet clear what, if anything will fill it.
It’s a period of difficult questions and tough choices for Manley. For now, he’s focused on helping the liquidator. He said he might take the summer off to catch his breath. Then he has a few phone calls to return from people in the organic sector, familiar with his expertise who may have an opportunity for him.
The loss of Homestead Organics meant the death of his retirement plan. “I’m 58, and I’ll be working for the next 20 years.”