Submitted
Rimbey-area farmers have a lot on their minds as they wait for the snow to melt and prepare to seed their crops this spring.
“Uncertainty around the high grain prices we’re seeing and Mother Nature are the two biggest issues facing producers this year,” says provincial crop market analyst Charlie Pearson.
“Crop prices are up significantly over last year – roughly 25- to 50-per-cent higher, on average,” says Pearson, who tracks prices and market trends for Alberta Agriculture and Rural Development (ARD).
“Prices jumped last fall and continued climbing through the winter. It’s a demand-led price rally where the world is consuming more than we’re producing. World grain supplies are extremely tight, and that fuels prices.”
Will prices remain high?
It’s certainly looking like a year for optimism and profitability, says Pearson, but the question bothering many producers is whether crop prices will remain at these high levels between now and harvest. “Prices could climb higher, but there are several reasons why they could decline in the months ahead.”
Social instability in North Africa and the earthquake in Japan have already caused price volatility, he notes. “Weather is another major factor. If Mother Nature cooperates and we have bumper crops worldwide, prices will come down. On the other hand, lousy weather and poor crops will push prices higher.”
April 30 crop insurance deadline
Despite the risks, farmers can still feel optimistic about the potential for profit this year, says Pearson. “I think the upside potential is greater than the downside. Producers just need to sit down and carefully plan how to manage the risks in front of them – both their price risk and their weather risk,” he says, pointing out the deadline to apply for crop insurance in Alberta is April 30.
Weather risk
“Of course, weather is always the greatest risk farmers face,” says James Wright, risk analyst with Agriculture Financial Services Corporation (AFSC). “So the production guarantee that crop insurance provides will be very important again this year.”
Falling price protection
Kevin Bender farms about 4,500 acres of canola, cereals, and peas with his dad and brother south of Rimbey near Bentley. While his soil moisture looks good and he’s optimistic about the growing season ahead, Bender says unpredictable weather risks such as frost and hail are a concern every year.
Last fall, a major frost left him with poor quality crops and below average yields. “It was because of the cool summer. Our crops just didn’t mature. They stayed green far into September.”
More than $200 million paid out
About $205 million was paid out across Alberta last year for crop insurance claims – more than $72 million in the Peace Region where the dry conditions crippled crop yields, says Wright. Across the rest of the province, claims were paid for crop damage caused by hail, and for reduced yields and loss of quality due to the cool, wet summer. More than $7 million was paid for Unseeded Acreage claims last spring when about 200,000 acres of flooded cropland were left unseeded, including some in Ponoka County.
To qualify for the Unseeded Acreage Benefit this year, Wright urges farmers to declare all acres they intend to seed – whether they plan to insure them or not – when completing their crop insurance forms. “Farmers sometimes think they should only declare the acres they plan to insure, but that’s not the case.” It can be a costly mistake, he adds, because the Unseeded Acreage Benefit pays up to $70/acre for land that can’t be seeded, but undeclared acres don’t qualify.
New changes to crop insurance
New changes to crop insurance include an increase in the dollar coverage for field peas, says Wright. “It better reflects what the market is doing. It used to be very much a feed pea industry but now it’s moving more toward human consumption, so the peas are worth more.”
Producers who have questions about crop insurance should contact their nearest AFSC office or the AFSC call centre at 1-877-899-AFSC (2372) before the April 30 deadline.