Monette Farms: intense growth, rapid downfall
REGINA — Monette Farms and associated companies were on shifting ground for at least two years before landing in Companies’ Creditors Arrangement Act protection earlier this month.
Darrel Monette put land up for sale to generate cash. His largest creditor, a syndicate of lenders led by Scotiabank, worked with him time and again to try to keep the Saskatchewan-based mega-farm afloat.
It didn’t work.
Read Also
Sunterra loses bid to appeal in cheque kiting case
Sunterra Farms had asked to appeal a decision that meant it had to pay $35 million to an American lender
He didn’t sell enough land, and the syndicate loan, originally $950 million with $830 million outstanding, came due April 15. Monette owes about $905 million in secured debt, and the nearly 500,000-acre operation faces massive restructuring if it hopes to survive.
So far, Monette has sold an undisclosed amount of land near Regina for $41.18 million and 17,000 acres at Havre, Montana, for $47.5 million. A farm near Stewart Valley, Sask., comprised of 12,932 acres sold for $54 million, about 158 per cent over the 2025 appraised value.
A second offering resulted in two sales: 2,553 acres near Hafford, Sask., for $29 million and 485 acres at Waldeck, Sask., for $1.78 million. Other offerings, such as his ranches in British Columbia, did not receive sufficient bids.
Monette reported assets of $1.24 billion and liabilities of $1.08 billion.
Why it Matters: The Monette operation is one of the largest privately held farms in North America. He owns about 274,000 acres and leases nearly that much more in the four western provinces and four states.
Court documents tell the story.
The CCAA order granted Monette $40 million to seed this year’s crop. It came through debtor-in-possession financing, which allows the company to maintain control of its operations while it restructures.
However, in his affidavit filed along with the court application, Monette said the cash flow projection through to July shows a liquidity shortfall of about $90 million.
The first order expires May 1 and the applicants — 18 Monette-owned companies and limited partnerships — are expected to apply for an extension to get more money and more time.
The affidavit said the companies would within 45 days of the May 1 “comeback hearing” seek approval for a sale and investment solicitation process to sell all, or substantially all, of the assets.
The CCAA process also triggered another in U.S. bankruptcy court.
Monette said he expects to seed about 352,000 acres and sell feeder cattle worth $47.5 million and breeding cattle worth $16.4 million, according to the documents. The cattle proceeds would go toward paying the priority secured lender, Farm Credit Canada.
FCC provided a $30 million revolving loan in 2024, and the syndicate agreed to make the federal crown corporation the priority secured creditor. The outstanding balance is $11.8 million.
The syndicate’s initial $950 million loan was granted Dec. 5, 2018. The documents note that since October 2024, the lenders, which include FCC, Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank of Commerce, TD, Canadian Western Bank, Conexus Credit Union and Export Development Canada, forgave at least 10 breaches of the agreement while working with Monette to right-size the business.
“Notwithstanding the occurrence of multiple events of default under the senior facilities agreement, the syndicate has continued to support the group’s operations and restructuring efforts,” Monette said in this affidavit.
The secured debt includes $6 million to the Canadian Grain Commission. Monette had already decided not to buy grain this year and let the primary elevator licence at Swift Current, Sask., lapse, so the guarantee is not called upon. The CGC announced that this would happen May 1.
The companies owe $16.6 million to Soderglen Ranches through a vendor take-back mortgage. In March 2024, Monette agreed to buy from Soderglen and Jane E. Grad what the documents call the Airdrie Real Property for $18 million.
The remainder of the secured debt includes $13.2 million in rent payable for 196 farmland leases in October. The total annual lease cost is $29.4 million, and the affidavit said most of the spring payments were made.
A Scotiabank Bilateral Leased Equipment Loan from 2022 for $10 million is secured by pea protein milling equipment in Lethbridge, Alta., which Monette leases to a third party, and an aircraft. The total outstanding is nearly $6.8 million.
Monette owes about $7.7 million on a life insurance policy worth $130 million. The beneficiary is Monette Farms, and the initial premium was $12 million obtained through Scotiabank financing. A payment of $2.1 million is due May 4.
The companies also owe about $26 million in equipment leases for about 1,800 separate pieces. Most of that is to John Deere Financial through its exclusive leasing contract that provides new equipment each year. The affidavit said yearly payments to John Deere are about $17.43 million, and $5 million has been paid so far.
Other security interests are held in Saskatchewan by AgriTeam Services Inc. and Rabobank Canada, in Saskatchewan and Manitoba by Simplot AB Retail Canada Ltd. and in Manitoba by Swan Valley Consumers Co-operative Ltd., all covering crop inputs and crop proceeds from those inputs.
There are also registrations against other equipment from companies such as Brandt, Meridian Onecap Credit Corp, CNH Industrial Capital Canada and PNC Vendor Finance Corp.
Kal Tire has a garage keepers’ lien registered against Monette Farms.
Some notable unsecured creditors include other farmers such as Cypress View Land & Cattle Corp. and D&R Lingenfelter Farms Corp., both of Shaunavon, Sask., and operated by former provincial agriculture minister Dwain Lingenfelter, for more than $837,000, and businesses such as the Pioneer Co-op based in Swift Current, which is owed $3.7 million and is the largest unsecured creditor.
The documents paint a picture of intense expansion and a rapid downfall.
The family farm was established in 1912 and remained generally that until Darrel, with a degree in agricultural economics and a background selling farm equipment, returned and took over in 2013. Significant expansion occurred over the next few years.
The affidavit said success led Monette to move into the United States in 2019 and into cattle and produce in 2021. A large vegetable processing facility just outside Outlook, Sask., was built to accommodate expansion into higher-value crops.
However, sources said a significant volume of carrots were left rotting in that facility last year, and vegetable crops in B.C. were similarly left in fields.
The cattle operations in British Columbia were the subject of a court battle that initially saw Monette required to pay $12 million to a consultant who helped broker the deal. Monette appealed, and the amount was reduced to $2.7 million in January.
As well, a feedlot located uphill from Lac Pelletier in southwestern Saskatchewan drew the ire of lake residents worried about potential contamination. The rural municipality initially denied the request for an intensive livestock operation but later backtracked.
Monette told a public meeting last summer that he lived on the lake.
“I’m an open book,” he said at the time.
However, the court documents state he is from Airdrie, Alta., and runs the business from there.
Monette hired managers for each of his farms and said he preferred to hire younger people who would make the farms their careers.
The grain operations, mainly in Western Canada, produced more than half of the companies’ revenue in 2025, while produce operations, including winter production in Arizona, accounted for 15 per cent, and the cattle business another 15 per cent.
The seed operation, including the elevators in Swift Current, produced another 16 per cent. The company also had a non-operating facility in Tonopah, Arizona.
The documents indicate that from 2017 to 2023, the companies’ revenue grew from $5 million on 97,000 acres to $198 million on 269,000 acres. From 2024 to present, the revenue increased to $347 million on 440,00 acres.
“Despite higher revenue, the group’s profits have been substantially burdened by expansions into the produce and cattle herding segments,” they said.
“EBITDA (earnings before interest, taxes, depreciation and amortization) in 2024 fell to $37 million, just 68 per cent higher than the EBITDA generated in 2019, which was $22 million, which was generated upon one-third of the group’s current cultivated acres and without account for inflation.
“For this year, EBITDA projection was $72 million, or about $163 per acre, but poor crop prices, higher costs, spoilage and poor yields placed substantial drags on profits and actual EBITDA for 2025 was $31 million.”
Many rumours circulated over the last couple of years about Monette’s ability to keep the enterprises going in the face of higher interest rates and input costs and lower yields.
Monette said his expansion was based on a core vision to feed one billion people for a day through sustainable agriculture.
“Based on internal production estimates, the group is well underway toward reaching its vision, as agricultural output in 2025 was sufficient to supply the consumption of staple food products for 380 million people for the year,” he said.
He employs an average of 425 people yearly, ranging from a high of 600 at peak and 300 in the winter. About 50 of those are salaried and the remainder are paid hourly. The salaried workers are eligible for bonuses totaling $1.05 million in 2025; half of that was paid in December and the remainder is to be paid by June 15.
Monette said his property taxes are current and his crop insurance for this year has been purchased, although a $2.7 million unsecured balance shows up to the Saskatchewan Crop Insurance Corp. in the documents.
The affidavit indicates Monette has sold some land.
The initial order allows any operations to be downsized or shut down, assets sold and employees terminated.
A confidential affidavit from Monette containing more detailed information was sealed by the court and can’t be opened until one year after the proceedings end unless the court decides to release it sooner.
FTI Consulting Canada was working with Monette on its financial issues since last year and is the court-appointed monitor.
Source: producer.com