July’s devastating heatwave has destroyed crops and pastures across Alberta, leaving producers in all corners of the province wondering what their options are at this point of the growing season.
“It’s been pretty hard,” said Valerie Ehrenholz, who runs a mixed operation near Barrhead with her father. “I haven’t been farming that long — the year I started farming was the year it started being really wet — so I don’t even know what a good year looks like aside from what I remember as a kid.
“It’s discouraging, but I know this is just what farming is.”
An extended period of extreme heat in mid-July — marked by heat warnings and +35 C days with little to no moisture — caused crops to wither in fields across the province. The most recent provincial crop report available at press time said the percentage of crops rated in good to excellent condition has dropped from 68 per cent on June 28 to just 37 per cent on July 13.
The problems are most pronounced in the south, but producers in northern Alberta are feeling the effects as well.
“We’ve had droughts before, but if you’d asked me two weeks ago whether we were in a serious situation, I would have said that things will get better if it rains. But really what’s happened is that the crop is deteriorating,” Tom Steve, general manager of Alberta Wheat and Barley, said on July 19.
“The exceedingly hot weather accelerated the development of those crops, so in some cases, rain even now is going to be not as useful as it would have been in other years, just simply because of that mid-30s weather during the time of flowering for the majority of the crops.
“Looking at the crop report, they’re all struggling, so we need to come up with some solutions. That’s what we’ll be working on in the coming weeks.”
Team Alberta (the wheat, barley, canola, and pulse commissions) was among many asking for the federal-provincial emergency farm program — which is called AgriRecovery — to be triggered. It is generally only used for disasters not covered by other business risk management programs, including crop insurance, AgriStability, and AgriInvest. However, all three Prairie governments said it’s needed to cope with the scale of the crisis and federal Agriculture Minister Marie-Claude Bibeau agreed. (Ottawa pays 60 per cent of the costs and the provinces the remainder.)
Details need to be worked out between the ag sector and governments but “we are doing everything we can to ensure you receive the support you need,” Agriculture and Forestry Minister Devin Dreeshen said in a release.
“It’s early days, and it’s not going to happen overnight, but certainly if farmers can get some comfort that there’s support coming, that’s always appreciated,” added Steve.
And that reassurance is desperately needed for the farmers facing the loss of their crops.
“We didn’t get much rain — we got a half-inch the other day, which wasn’t enough. So the crops are pretty bad,” said Ehrenholz, who grows canola, oats and hay and has a market garden and cattle herd.
The crops are “really short” with the oats heading out and the canola pods not filling normally, she said on July 19.
“We figure we’ll get less than half of the usual canola yield and maybe only half of the oats,” she said. “Sure, prices may go up, but that doesn’t help when you have half of what you’d normally be selling.”
It’s the same story for their hay, which only yielded about half of what they expected off the first cut, and the market garden, a new venture for Ehrenholz this year.
“The market garden was really slow to get going, and now with the heat, stuff either didn’t grow or it bolted really quickly and shrivelled up,” she said.
“It’s not great. I’ve had at least one customer complain about the lack of produce in the vegetable boxes compared to another farm that she saw closer to Edmonton.”
John Guelly, who farms at Westlock, knows he is luckier than most. His farm received an inch of rain over the weekend of July 17-18, and that helped carry his crop over.
“In some ways, the smoke (from wildfires) is a good thing,” he said. “It’s stopping the water from evaporating. On the other hand, we’re going to need the crops to keep moving along.”
Having lots of soil moisture to start the year was a help this year, he said, but that came at a big cost — last year about two-thirds of his crop was written off because of excessive moisture.
Moving forward will require a joint effort from farmers, the industry, governments and other players, said Steve.
“In times like these, you need a lot of flexibility from the industry, including lenders and grain buyers, because these are extraordinary circumstances,” said Steve.
“This has really evolved over the last few weeks, so we’re trying to get together and come up with some collaborative solutions.”
A likely one is following Saskatchewan’s lead in lowering the threshold for feeding stunted grain crops to livestock. That province’s crop insurer said any crops expected to produce 14 bushels or fewer per acre can be grazed, baled for greenfeed or cut for silage with no penalty on future coverage. (Normally, the threshold is seven bushels per acre.)
“If they’ve been insured as milling or malting quality, they would be able to convert them to feed without penalty,” said Steve.
Officials from the crop sector want to meet with Agriculture Financial Services Corporation (AFSC) to discuss how quickly crops and hay land will be assessed.
“We’ve certainly had concerns about the timeliness of AFSC inspections when we’ve had exceedingly wet harvests, but I think this situation has evolved a lot quicker than we ever imagined,” said Steve.
“I don’t think that anyone could have anticipated the volume of requests at this point in time.”
But aside from crop insurance, operating loans, and yet-to-be-determined AgriRecovery payouts, farmers may not have many other options.
“AgriStability has not been well-received by farmers in recent years, so that’s probably not going to be all that helpful in the short term,” said Steve. “But I think some sort of program that provides some financial offset would help.”
Steve is also hoping for flexibility from lenders for farmers repaying operating loans, as well as from grain buyers for farmers who forward contracted their grain when prices were strong.
“If they’ve signed contracts with their grain companies, what is the flexibility of the grain company going to be in terms of them being able to buy their way out of those contracts? If it’s onerous, that will be a source of frustration.”
Without that flexibility and a joint effort from the industry to help producers weather this storm, some farmers may not make it through to see the other side of the drought, he said.
“The risk is that there will be a certain percentage of producers that won’t be able to absorb that type of a hit,” said Steve. “But producers are accustomed to the ups and downs of the markets, so I think right now, most farmers are just trying to deal with the situation at hand.”
But many are facing a wall of worry.
“There’s a new added stress this year because of the high commodity prices,” said Guelly.
“A lot of people have forward contracted at least as much as they always have, but maybe more.
“With the prices today, a lot of people with $12 canola thought that was great, and contracted a whole bunch, and now they don’t have a crop. The current price is north of $20 and maybe will go further if the drought continues.”
Farmers would normally have to pay the difference on the contract, if they can’t fill it.
“It’s not like your neighbour can fill it, because he doesn’t have it either,” said Guelly. “It’s bad enough that we’re not going to get the income. The money that they get for crop insurance could go straight to the elevators paying out contracts.”
And the numbers involved are not small.
“It’s not going to be pretty,” he said. “Say it’s $22 canola, and they contracted at $12 and don’t have it. That’s $10 a bushel, they have to pay out to the elevator. That’s going to be a hell of a hit.
“I’ve already heard about people mortgaging land, or putting land up for sale tentatively, if things don’t turn around.”
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