In farming there are the things you can control – your crop and commodity choices, management decisions, risk management choices – and then there are the things you can’t control.

Like the weather and growing conditions.

Farmers and ranchers have always been subject to the whims of weather. From late springs to early falls and too little rain to too much, Alberta’s producers have had to find ways to manage their risks to survive and thrive.

Over the past few years, Alberta has experienced a more unsettled weather pattern, one which has led to drier than normal conditions in many areas of the province. These dry conditions left livestock producers scrambling for pasture and winter feed and resulted in two AgriRecovery initiatives – the 2021 Canada-Alberta Livestock Feed Assistance Initiative and the 2023 Canada-Alberta Drought Livestock Assistance initiative.

“My wife and I joke all the time that every ranch should be called The Next Year Ranch, cuz, you know, it’s always in conversation, ‘Well, next year this will be better, next year that will be better,’” says Trevor Liboiron, who runs a 250 head cow-calf operation in the Jenner area.

“You have to have that hope for next year, that it’s going to be better, you just keep carrying on.”

But without risk management, getting to that next year can be challenging. Agriculture Financial Services (AFSC) offers a variety of insurance and income stabilization options to help producers navigate risks and give them peace of mind.

This year, for Liboiron, that peace of mind came from AFSC’s Moisture Deficiency Insurance (MDI).

“We’ve used the Moisture Deficiency program, I believe, for three years now,” explained Liboiron. “This year was, well, basically immeasurable rain – we didn’t have any rain this year.

“With the Moisture Deficiency program, it was able to pay us out some money to, you know, get feed for the cattle and be able to basically survive another year.”

It’s a similar story for Curt Hale of Maverick Livestock Company Ltd. Hale, along with his wife, sons, and grandsons, runs between 1,200 to 1,400 cows in the Fairview area.

“This is our first year for the MDI program,” explained Hale. “It’s helped us tremendously to get through this time of tough feed prices, shortage of feed. Without it, we would have been a lot worse shape than we’re in, so we’re really thankful that we had it this year.”

Insuring with MDI

Moisture Deficiency Insurance, in its current form, was introduced in 2005. Kalen Paulson, a product coordinator with AFSC, said that the program was well received by producers and more and more producers are choosing to add it to their insurance mix.

With MDI, producers can insure native, improved, bush or community pasture. As an area-based program, MDI uses precipitation and temperature information from a network of weather stations throughout the province to reflect moisture conditions. This information is then compared to long-term normals and when precipitation falls below certain thresholds, payments are triggered.

Producers select up to three weather stations near their farm that they feel reflect their pasture locations. At the same time, they choose either short or long season, which allows them to divide the growing season and coverage into different months. Finally, producers choose how to weigh the precipitation, picking the option that best reflects their area, pasture type, and management practices.

Moisture Deficiency Insurance, with all its options, can seem somewhat overwhelming. However, AFSC insurance relationship managers can help producers personalize the program to their operation.

“To work with a team that understands agriculture is huge,” said Liboiron. “It just makes the whole process easier.

“I know we hadn’t used Moisture Deficiency in the past because it was kind of daunting and then we sat down with a rep and it was done in minutes. It just kind of clears things up and makes it easier to understand.”

Changes make MDI more responsive

Over the past few years, AFSC has made significant changes to Moisture Deficiency Insurance, including moving to monthly payments, introduction of an extreme temperature adjustment, as well as changes to minimum daily moisture amounts.

“We listened to our clients’ feedback, and they were telling us that these were places where we could improve the program,” explained Paulson. “By introducing extreme temperature adjustments, we’ve made sure the program can account for the impacts of hot weather and how it can exacerbate dry conditions. By increasing daily moisture minimums to 1.0 mm, we ensured that only moisture that can help support pasture growth is counted.

“And, finally, the move to monthly payments means that we can get money into producers’ hands more quickly – when they need it.”

Changes to Moisture Deficiency Insurance make it more responsive

Those changes have made a big difference to the program. Liboiron said that increasing the minimal rainfall, adding a temperature factor, and moving to monthly payments helped immensely. Monthly payments means that if he receives a big rainfall in one month, but no additional rain after that, the program will still pay out.

“The changes they made to (MDI) this year made a huge difference,” said Liboiron. “It pays when it needs to pay, so the changes they made to the program made it substantially better.”

While Hale is new to the program, he can also see how the recent changes have improved MDI.

“It appears to me that AFSC is looking at the whole situation and making some great changes, realizing that these meet the needs of the farmer in a better way.”

If things go sideways

Many parts of Alberta experienced significant drought conditions during the 2023 growing season, drying out pastures and leaving producers looking for options. AFSC’s Moisture Deficiency Insurance paid out $326.5 million in claims for the 2023 growing season, allowing producers to source additional summer forage, water, and winter feed to support their herds.

“We don’t buy insurance to make money,” said Hale. “It’s just to get us through when we have these kinds of things. It just worked out for us this year that we had one of the worst years we’ve ever had. I know that’s not going to happen every year, but in those when it does happen, you’ve got it.

“So I’m saying to anyone else, if you’re considering any type of insurance or anything like that, I’m not aware of any that is more suited and tailored to our needs than MDI.”

Liboiron feels it just makes sense for producers to protect themselves with MDI. He said it provides a backstop for the disasters that can happen and gives him a bit of peace of mind.

“I definitely would recommend the Moisture Deficiency program to others,” said Liboiron. “It supplies you with a with a background – I know sometimes the premium is a little hard to swallow every spring – but it’s on years like this that it makes it seem like it was very well worth it, so I definitely would recommend it.”

The premium can seem like a lot in springtime, agrees Hale.

“We have a fairly large land base – it’s cheap enough coverage per acre – but when you got a lot of acres it’s a bunch of money you got to put out up front.”

“It’s one of those things you got to make the call but it’s kind of like a fire extinguisher – you buy one hoping you never need it, but when you do need it, you’ve got it.”

To learn more about Moisture Deficiency Insurance, please visit our Perennial Crop Insurance page. To learn about common misconceptions about MDI, please watch the video Clearing up Moisture Deficiency Insurance misconceptions.

If you still have questions or would like to sign up for Moisture Deficiency Insurance, please contact us using Live Chat on our website or AFSC Connect, by calling the Client Care Centre at 1.877.899.2372 or contacting your preferred AFSC branch office.