Most crop producers will see lower crop insurance premium rates this year, says the Agriculture Financial Services Corporation. And cow-calf producers will see reduced premiums for the Western Livestock Price Insurance Program, too.
On average, 2019 crop insurance premium rates are nine per cent lower than last year, AFSC said in a news release. It noted premium rates also dropped eight per cent in 2018. However, premiums vary according to the actual loss experience for the type of crop and claims experience in the risk area.
The provincial crop insurer also urged producers to think about “changing risks” as they consider their insurance coverage, particularly moisture conditions.
“Conditions have been drier than normal for most lands south of the Yellowhead Highway, down to the U.S. border, and across the north half of the Peace Region,” Ralph Wright, head of the provincial agrometeorology unit said in the release. “The driest areas extend from about Red Deer south with most areas experiencing at least one-in-12-year lows, with several areas within this zone dipping below one-in-25-year lows.
“Across the northern Peace Region, two-year precipitation deficits range from less than one-in-six-year lows to less than one-in-12-year lows. It’s important to note that historically, wet and dry spells begin and end abruptly. Both long- and short-term trend reversals can be sudden and are very difficult to predict.”
However, AFSC said, average premiums are being reduced because “growing conditions have generally been good for the past several years.”
This year’s Spring Price Endorsement will again include the 10 per cent deductible introduced last year.
“The incorporation of the deductible led to a 25 per cent decline in premium rates for protection on within-year commodity price declines of more than 10 per cent,” the news release stated. “Hail insurance premiums are also decreasing in many areas in 2019, due to lower claims experience in the past two years.”
The calf portion of the Western Livestock Price Insurance Program, which is available until May 30, also has “significantly lower premiums” this year. For example, premium rates on the last day of February this year (depending on the length of coverage desired) were between 20 and 40 per cent lower than the same day a year earlier.
“These rates are subject to change responding to market variability as the sales season continues,” the news release stated.