While yields may be better than expected in many areas, this season’s drought and hail still hit producers hard.
Agricultural Financial Services Corporation expects to pay out between $700 million and $900 million in crop insurance payments — a huge increase from the 2014 tally of $370 million.
“The payouts are expected to be higher than a typical year,” said corporation spokesperson Nikki Booth. “It’s been a real mixed year. We’ve had hail, lack of moisture, a whole lot of moisture and then the wildlife issue as well. It’s been a real mixed bag.”
Not all of the claims are in, and while about $300 million in payments had gone out by mid-October, the total won’t be known until later this month. The claims that have come in so far are a mix of pre-harvest losses due to drought and hail. The highest number of claims came from the Parkland region (Camrose to Drumheller) and the southern part of the province (Calgary to Foremost).
The eastern part of the province was especially hard hit by drought, said Gary Stanford, president of the Grain Growers of Canada and an Alberta Wheat Commission director.
“I heard that through the Wainwright area and over by Viking, there was a lot of land that was quite dry,” said Stanford.
Late rains kept farmers in his area from having to resort to using drought insurance, said the Magrath-area producer.
“As dry as it was in May and June, most farmers were pleasantly surprised by how good their yields were,” he said. “Certain areas were worse than others (but) the drought wasn’t nearly as big as I would have thought.”
And those filing drought claims should see decent payments, he added.
“When I farmed in the 1980s, coverage didn’t even cover all our expenses, because it was a drought year after a drought year,” said Stanford.
Since this year’s drought was preceded by two or three years of good yield, most producers have more coverage on their land.
“When your yield is higher, you can take more money for drought insurance to help cover it when there is a drought — it’s way better than it used to be back in the 1980s,” said Stanford.
Many of this year’s claims were related to hail.
“We can see where there have been big hailstorms, and how this has affected the claim numbers this year,” said Booth. “Once the rains came, we did see a significant amount of hail claims.”
About 6,400 of the 11,000 processed claims were for hail.
Some areas, such as Cardston and Strathmore, were especially hard hit.
There have also been a significant number of claims for wildlife damage. Because of the rain and wet conditions around harvest time, many producers were unable to get their crop off before wildlife could get to it.
Booth is anticipating sales of insurance will go up over the next couple of years as producers see the benefit of having insurance.
“For the next year or two after a situation like this occurs, we do see an increase in the number of producers purchasing insurance,” she said. “That’s something we might see, but it’s a bit of speculation on our part.”
More producers are buying more hail insurance because there’s so much money on the line.
“It costs so much money to put crops in, and people have high machinery payments and expenses, so people are buying as much coverage as they can for hail,” he said.
“I used to just buy enough so I could make land or rent payments, but those days are gone. We have so many expenses that you want to make sure you have everything covered when you’re buying hail insurance,” he said.