Farmers in Western Canada are racing to salvage their failing crops for livestock feed after being sacked by a severe drought that stunted plant development, left pastures bare and has governments tweaking the agriculture industry’s safety net on the fly.
Alberta and Manitoba, alongside the federal government, adjusted their respective crop insurance programs last week to make it more attractive for grain farmers to convert struggling plants into feed now, rather than harvest the low-yielding fields later. Saskatchewan had already announced a similar change. The shifts are designed to benefit both grain growers with failing crops and livestock producers short on healthy grassland and feed.
Some cattle producers are already selling animals because they do not have enough feed to get by. But farmers – and crop insurance adjusters – will have to act fast in order to ease this pressure. Fields in the hardest-hit areas are so dry that they must be salvaged within the next week to 10 days in order to eke out any remaining nutritional value for livestock.
“The window of opportunity is closing,” said Tyler Fulton, the president of Manitoba Beef Producers. “We’ve already got circumstances where the crop is too far gone, where it doesn’t really have much salvage value.”
Crop and pasture insurance varies across provinces. Generally, farmers can buy production guarantees, based on their typical yields. They must harvest the insured fields and those bushels are used to calculate production shortfalls and subsequent payouts. Alternatively, when crops are especially poor, farmers can have a crop adjuster inspect their fields in the growing season, and if the forecasted yield falls below a certain threshold, the farmers can use the crop for feed while still collecting insurance. Because of the dramatic shortage of feed and rapidly deteriorating crops, Alberta, Saskatchewan and Manitoba all increased the threshold that allows farmers to salvage fields for feed while still collecting insurance.
Alberta’s Agriculture Financial Services Corp. has 119 adjusters and is prioritizing claims where farmers plan to turn damaged plants into feed. AFSC is also allowing farmers to salvage crops immediately while leaving strips in the field for assessment later, for the sake of speed. It is also easing its inspection processes in areas that have been clearly devastated.
“Time is short,” said Darryl Kay, AFSC’s chief executive officer. “We know that this urgent, especially in those areas where it continues to be very hot.”
AFSC expects to pay out more than $1-billion this year and has already collected $600-million in premiums, Mr. Kay said. It has completed about 400 claims so far, with another 400 to 500 in the queue, he said. AFSC, which farmers pay into, has a reserve fund of $2.7-billion, Mr. Kay said. (AFSC’s total risk clocks in at around $6-billion if all insured crops in the province were wiped out).
Crop conditions, soil moisture and hay production are all faltering in the West. Only 36.5 per cent of Alberta’s crop conditions were rated good to excellent as of July 13, the latest data available. This compares to the five-year average of 74 per cent and 10-year average of 73 per cent. In Saskatchewan, 8 per cent of topsoil moisture is rated as adequate, 39 per cent short, and 53 per cent very short, as of July 19. In Manitoba’s Interlake region, which has been especially hard-hit, hay yields are 10 to 25 per cent of normal as of July 20.
Dianne Riding usually runs a herd of about 125 cow-calf pairs near Lake Francis, Man. She has taken some animals to market because she is short on healthy pasture and feed, bringing her herd down to about 90 pairs. It is unusual to sell animals in July, but she hopes it will allow her to feed the remaining head.
“I haven’t made a bale of hay because, between the grasshoppers and the heat, I’m struggling to actually put my machinery in a field because I feel that I am going to be wasting money on fuel and repairs that maybe I should be trying to put into feed for these cattle.”
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