It’s never a good idea to start counting either your pennies or your losses before the year is in the bag. That said, with harvesting already underway in many areas and livestock price insurance programs reaching fall settlement time, Agriculture Financial Services Corporation (AFSC) is getting closer to final insurance claim tallies.
“The big push is on right now, trying to get as many acres inspected and claims processed as quickly as possible before harvesting completes,” said Brian Tainsh, AFSC’s manager of on-farm inspections.
Tainsh said 2013 has been a particularly rough year for hail, though not quite as many claims have been submitted as the record year of 2012. As of early last week, AFSC had received 7,500 hail damage claims, up from the approximately 6,000 received by now in an average year, but down from the 9,000 received at this time last year.
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As of the last week of August, AFSC’s 140 inspectors completed inspections on 5,500 of the 7,500 claims, or approximately 2.456 million acres.
Approximately 77 per cent of Alberta producers opted for AFSC insurance in 2012, up slightly from last year. While AFSC insures against any peril (“Anything Mother Nature can throw at them,” says Tainsh), most claims are due to hail. AFSC offers two forms of hail insurance: basic production insurance which includes a hail endorsement, and specific hail-only insurance which many producers use as an additional top-up to their production insurance.
While claim amounts have not yet been calculated for this year, last year’s numbers are staggering. Last year, AFSC distributed $386.9 million in production insurance, and an additional $58.5 million in hail insurance.
Province-wide
This year’s claims are fairly evenly spread across the province, from the Peace region in the north right through to Foremost in the south. Though whopper storms have contributed large numbers of claims all at once — 276 claims were submitted from hail on Aug. 17 alone — most claims come from more localized storms that affect between a handful and a few dozen producers.
Producers who have escaped without hail damage so far should not assume they are in the clear yet, says Tainsh. “I’m hoping the hail is done. But, we had a hailstorm last year on the 10th of September that saw our claim number jump by 1,000. We’re not done just yet.”
Though this year’s June floods caused catastrophic damage to cities and towns, they did not affect wide swaths of farmland. And, average to above-average growing conditions have offset limited flooding losses for most producers. Land planted to forage has done especially well this year due to the early-season rainfall, so claims should be fairly low.
“The early rainfall this year means the majority of hay land did very, very well. Some of the fields that are usually dry have phenomenal number of bales in the field this year. I’m not expecting large claims on forages.”
Livestock
On the livestock insurance side, AFSC is currently working to settle price insurance policies purchased earlier in the year. In total, more than 318,000 head of cattle were insured under the feeder program, with the majority of those settling this fall.
The number of insured feeder animals grew significantly year over year, which AFSC attributes to the fact that producers had to weather market fluctuations in the fall of 2012 and are realizing the ongoing volatility in this sector of cattle marketing.
Calf price insurance sales for calves born in 2013 increased 300 per cent over last year to more than 85,000 head.
“AFSC is very pleased with the increased use in both the Feeder and Calf programs over the past year,” says Brenda Campbell, AFSC’s livestock price insurance field analyst. “We expect the program to continue to grow as the industry has an ever-present volatility to the markets at any time. We believe the program is a risk management tool that is as valuable as other inputs into every cattle operation in Alberta.”
AFSC also offers fed cattle and hog livestock price insurance programs, but uptake has been slower to build on those offerings.
“Although they haven’t seen the same jump in uptake, the Fed and Hog programs continue to be offered and utilized by producers. Coverage levels have remained attractive and AFSC is pleased that producers continue to incorporate the program in their risk management strategies,” says Campbell.
