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Local farmers bank on hay, pasture insurance

The end of February was the deadline for area farmers to decide whether to insure their pasture and hay land
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David Maddox of Agriculture Financial Services Corporation (AFSC) said the organization has added 21 new weather stations like this one to its provincial network

The end of February was the deadline for area farmers to decide whether to insure their pasture and hay land for the coming growing season.

“Never knowing from one year to the next whether they’ll get enough moisture to grow productive forage crops continues to be the main reason farmers insure nearly 7.5 million acres of pasture and hay across Alberta,” said David Maddox, manager of insurance operations with Agriculture Financial Services Corporation (AFSC).

AFSC is the Crown corporation that provides crop insurance to Alberta farmers on behalf of the provincial and federal governments.

More than $3.7 million was paid out through AFSC Perennial Crop Insurance on hay and pasture claims across the province in 2012 — mostly due to lack of moisture, says Maddox, noting some of those claims were in the counties of Stettler, Paintearth and Camrose.

Other perils that triggered claims last year include summer hailstorms that blanketed the province, January pasture fires sparked by dry winter conditions in southern Alberta, as well as frost, flooding, heat stress, wind and winterkill.

“Hay and pasture claims have been much lower than average these last few years compared to drought years like 2009 and 2002 when about $56 million and $89 million were paid out, respectively,” Maddox said.

Blain Chapman, who runs a cow-calf operation near Stettler, insures all of his hay land under Perennial Insurance every year. “It’s a necessary tool,” he said, explaining his hay insurance claims during the big droughts of 2000 and 2002 allowed him to truck in feed from Saskatchewan rather than cull his cow herd. “We had no feed at all back then. It made a big difference.”

As more farmers tear up hay land in favor of seeding high-priced cereal and oilseed crops, Chapman says he’s concerned it will be harder to find extra feed to buy during the next drought.

While he keeps almost a full year of carryover hay as backup, he worries nearby farmers with large herds who buy all their feed could end up in trouble.

“I don’t know where the heck you’d find feed if we ran into a problem,” Chapman said.

With so much snow this winter, he’s optimistic he’ll have decent moisture for his hay land this spring, but says it’s always rainfall that makes or breaks his operation.

“If we don’t get decent rain in May and the first part of June, we won’t get a hay crop.”

Snowpacks in the counties of Stettler, Paintearth and Camrose as of early February were generally near normal to moderately high and soil moisture is generally moderately low to very low.

But moisture conditions in February are often not an accurate reflection of what the growing season will be like, says Ralph Wright, a soil moisture specialist with ARD.

“Anything can happen between now and the spring when the rains start falling. We often see dry times end abruptly with wet periods and vice-versa. We won’t know the real story for a few more months.”

New to Perennial Insurance this year is the addition of 21 new weather stations to AFSC’s provincial network, including one southeast of Castor at Fleet — for a total of 227 stations across Alberta.

“We’ve more than doubled the number of weather stations in our network since 2005,” Maddox said. “It’s an ongoing effort to ensure we have stations as close as possible to each producer’s farm, making our programs more representative of conditions on their land.”

AFSC uses precipitation and other weather data collected at the weather stations for Perennial Crop Insurance programs.

“For example, with Moisture Deficiency Insurance (MDI) for pasture, producers select up to three weather stations that best reflect conditions on their farm,” Maddox said. “A claim is triggered when precipitation at those stations — and Spring Soil Moisture (SSM), if producers choose that option — fall below normal over the growing season. Normal moisture is based on 25 years of historical data.”

He explains SSM is scientifically modelled based on precipitation and temperature at each weather station. Producers can track hourly, daily, and historical precipitation at their insured weather stations online at http://agriculture.alberta.ca/acis/.

Farmers like Chapman, who take Perennial Insurance every year, benefit from the Continuous Participation Discount — a substantial premium discount that gradually builds to 20 per cent after five years, says Maddox.

“If you opt out one year, the discount returns to zero and takes five years to rebuild.”

Like other AFSC crop insurance programs, Perennial Insurance premiums are subsidized by the provincial and federal governments.

For more information about Perennial Insurance, farmers can contact their local AFSC District Office or the AFSC Call Centre at 1-877-899-AFSC (2372).