Owner says priority is to ‘keep farming’ as Monette Farms Ltd. files for creditor protection

Monette Farms Ltd. (MFL), one of Saskatchewan’s largest farming operations with land and ranch holdings across Canada and into the United States, has filed for creditor protection under the Companies’ Creditors Arrangement Act.

Company president Darrel Monette notified landowners and leasing partners of the filing on Tuesday, saying MFL will continue to operate while working with court-appointed monitors to develop a restructuring plan.

“CCAA is not bankruptcy or a shutdown,” Monette wrote in a letter to landowners and leasing partners.

“This is a court-supervised restructuring process that allows us to continue operating while we stabilize finances and restructure debt,” he said.

It’s the latest in a string of controversies and setbacks.

In January, a British Columbia Court of Appeal ordered Monette to pay a land consultant $2.7 million for a handshake deal gone bad.

It centered around Monette’s $63-million purchase of a B.C. cattle operation.

While down from the $12 million original order, Monette still took it as a hard loss.

Most recently, the company has been battling with homeowners near Lac Pelletier, Sask., about 45 kilometers south of Swift Current.

People living near the lake were angered when Monette Farms purchased land uphill from Lac Pelletier with plans to operate a 2,000-head feedlot there.

Several town hall meetings and a lot of bad blood later, the company was granted a winter-only permit.

In the statement announcing the CCAA filing, Monette cited volatile commodity markets, cost pressures and higher interest rates as factors contributing to the decision to file for creditor protection.

“In reality those are the kind of pressures every farming enterprise is facing, including family farms,” said André Magnan, a professor of sociology and social studies at the University of Regina.

“So I have to wonder if other operations weren’t just a bit more resilient and adaptable in the face of those pressures.”

Magnan, who studies the transition of family farms to corporate mega-farms, said history shows mega-farms tend to fail.

“It raises some serious questions about the viability of some of these really large mega-farms, especially when they start to get into vertical integration or different sectors of agriculture.”

In addition to massive land holdings in Canada and the United States, Monette had expanded into cattle ranching and feedlots.

In 2023 he purchased a vegetable farm near Outlook, Sask., about 96 km southwest of Saskatoon.

Magnan said Monette’s expansion seemed “extremely ambitious.”

“When they complicate the business model I think that is risky,” Magnan said.

Monette, famously reticent to discuss his business, has declined repeated requests for an interview and has never publicly revealed how much land he owns and leases.

In recent months, MFL has been looking to divest itself of some of that land, offering it for sale in private listings.

Robert Andjelic, one of Canada’s largest landowners with 250,000 acres of farmland, primarily in Saskatchewan, leases land to Monette near Outlook Sask.. He said Monette is “right up to date as far as payments are concerned to us.” 

Robert Andjelic is one of Canada’s largest owners of farmland. He owns 250,000 acres, primarily in Saskatchewan. (Robert Andjelic)

Andjelic said Monette faces the same pressures as many farmers: high input costs, low commodity prices and a spike in interest rates on any loans up for renewal.

“The problem isn’t necessarily his business acumen or his actions. The problem is that the rules of the game changed midstream,” Andjelic said.

Banks aren’t as eager to lend money as they once were, and those loans cost more, he said.

“The lending to agricultural space are tightening up and things have changed.”

Eric Micheels, an agricultural economist at the University of Saskatchewan, said large farms like Monette’s rely heavily on debt for land and equipment purchases, and any change to interest rates squeezes cashflow.

“It’s a sign for all producers large and small to stress test their operation and see where are the risks in their own financial statements,” Micheels said.

Despite the CCAA filing, Monette assured landowners MFL will continue farming, planting a crop this spring and planning for harvest.

“Our priority is to keep farming our land, keep our teams working, and position the business for long-term strength,” Monette said in the statement.

“We fully expect to emerge from this process as a stronger company, ready to operate for decades to come.”