Farmers can’t prevent canola flowers from aborting in hot weather resulting in lower yields, but one seed company is providing some insurance against it — as part of the price of the seed.
Brevant’s Nexera canola seed comes with a “a first-of-its-kind” insurance policy worth up to $100 an acre to offset yield losses due to heat blasting, but only on seed purchased before October 29, 2021 and grown in Manitoba, Saskatchewan and Alberta in 2022.
The new ‘Heat Advantage’ program is another innovation Corteva developed to help boost profits farmers growing Nexera canola, which earns growers a premium over conventional canola varieties because it’s high in Omega-9 fatty acids, Tyler Groeneveld, Corteva’s North American commercial leader for grains and oils, said in an interview Wednesday.
“Our intent is to give growers peace of mind,” Groeneveld said. “When you’re growing canola there are a lot of investments made and a lot of decisions. We’re trying to basically help growers protect their investment in the event of excess heat hitting that critical flowering period when basically your canola crop is establishing yield.”
The program is insurance underwritten by Northbridge General Insurance Corp., and arranged for by Global Ag Risk Solutions using a parametric temperature model backed by 40 years of climate and canola yield information, Corteva said in a release.
The data-driven claims process uses third-party temperature data from more than 7,500 measurement points recorded daily during the critical flowering growth stage, which means farmers can expect to be paid for covered claims quickly.
In the event of excessive day or night temperatures, growers will accumulate ‘heat blast units’ (HBUs). If the HBUs recorded during the policy coverage period exceeds the index minimum, Global Ag Risk Solutions pays directly to the farmers who grew Nexera canola purchased before Oct. 29.
“To the grower it’s automatic,” Groeneveld said. “There’s no sign-up required. It’s included with the purchase of the Brevant Seeds Nexera canola seed… There’s no adjuster. It’s a simple process for the grower.”
Groeneveld emphasized the Heat Advantage program is not meant to replace traditional crop or hail insurance.
“Global Ag Risk Solutions, with over 41 years of weather data in their model, will basically provide incremental coverage against excessive heat in $5 increments (an acre up to a maximum of $100),” he said.
The model assesses temperatures on a township level from southeastern Manitoba to northwestern Alberta, he added.
Heat blast affected 90 per cent of Canadian townships in 2020, cutting canola yields by 50 million bushels, resulting in $525 million in combined revenue losses, according to 2020 data from Global Ag Risk Solutions.
“Numerous studies on the impact of climate change suggest that most regions of Canada are projected to increase average temperatures during the next 60 years,” Corteva said in its release. “In fact, the southern and central Prairies are projected to see more warming than most other regions.”
Most of Western Canada has been hotter and drier than last year. In its July crop production estimate released Aug. 30 Statistic Canada estimated average Prairie canola yields will plunge 30 per cent to 29 bushels an acre — the lowest in a decade.
Average yields in Manitoba, Saskatchewan and Alberta were estimated to be 34, 27 and 30 bushels an acre, respectively.
With growing conditions generally not improving in August, harvested canola yields could be even lower.
The Heat Advantage program will not affect Nexera seed prices, which will remain competitive, Groeneveld said.
When asked how the company can afford the insurance, Groeneveld replied, “We look at the investment that a canola grower makes in a highly valuable crop. As a seed developer we want to share in that investment. We want to provide our growers with some peace of mind coverage…
“Excessive heat doesn’t happen all the time but when it does it can be significant. Obviously we know that from 2021. So when that comes up we want to be able to help the grower with the investment.
“All of our seed is priced for value. This is the most profitable canola… across the value chain. This represents the importance of the program and Corteva views it as something that can really provide peace of mind and confidence that the grower has a partner in a seed developer that is going to stand in the program with them.”
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