Mar. 20/25 Articles Print Page

The escalating trade war between Canada and the United States, along with China’s targeted levies on Canadian canola oil and meal, is causing uncertainty for Alberta’s agribusinesses and farmers and ranchers.  

With tariffs and retaliatory measures threatening to disrupt supply chains, lower commodity prices and increase input costs, it’s crucial for producers to adopt strategies to protect their businesses.

“As primary producers, Alberta’s farmers and ranchers can’t do much to prevent a trade war,” said Darryl Kay, Agriculture Financial Services (AFSC) chief executive officer. “However, they can take steps to mitigate the impacts of tariffs as much as possible.

“AFSC’s risk management programs are designed to support producers when they face challenges and help them grow their businesses.”

With crop insurance, income stabilization, Livestock Price Insurance and Lending options, AFSC offers risk management tools that help Alberta’s producers handle various situations, from production loss due to weather conditions to margin decline caused by market conditions beyond their control.

While each of these programs support farmers, three programs – AgriStability, Livestock Price Insurance and Lending – are best suited to help producers through the uncertainty and challenges ahead.

AgriStability 

AgriStability is a key risk management program that helps producers manage financial losses, including those caused by tariffs. It factors in any impact to margins, whether from reduced income and inventory value or increased input costs. 

AgriStability supports producers facing trade-related challenges by: 

  • Stabilizing farm incomes during market disruptions: Tariffs can reduce farm revenues by limiting export opportunities and increasing input costs. AgriStability provides financial support when a farm’s margin (allowable income minus allowable expenses) drops below 70 per cent of its historical average (reference margin). This ensures farmers have a buffer when tariffs disrupt their income. 
  • Addressing price volatility and trade uncertainty: When tariffs cause commodity prices to fluctuate, producers may experience unexpected revenue declines. AgriStability helps offset the financial impact on affected producers. 
  • Supporting farmers facing higher input costs: If tariffs increase costs for farm inputs like fertilizer, fuel, or feed, profit margins can shrink. AgriStability considers these cost increases, helping to cover part of the financial shortfall when margins decline by 30 per cent or more. 
  • Providing flexibility for diverse farming operations: AgriStability applies across different types of farms, making it a versatile tool in managing tariff-related risks. 

AgriStability can help Alberta’s farmers and ranchers manage income losses caused by tariffs as it can provide needed support to maintain cash flow and keep farms operational during tough times. 

Enrolling in AgriStability is easy. Producers simply need to complete an AgriStability Application for Fee Notice by April 30 to enrol for the 2025 program year 

Livestock Price Insurance 

Livestock Price Insurance (LPI) helps cattle and hog producers manage financial risks associated with tariffs by providing a buffer against market volatility.  

It supports producers facing trade-related challenges by: 

  • Allowing them to set a floor price: If market prices fall below the insured level due to tariffs or other factors, producers receive a payout to cover the difference. 
  • Providing stability: Producers can plan their operations with more certainty, knowing they have a guaranteed minimum revenue. 
  • Insuring flexibility: Producers can choose different coverage options and policy lengths based on futures markets, with varying premium levels. This flexibility helps them tailor the insurance to their specific needs and market conditions. 
  • Affording peace of mind: With the uncertainty of tariffs, LPI offers peace of mind by mitigating the financial impact of sudden market changes. 

Livestock Price Insurance can help producers protect themselves from the unpredictable effects of international trade policies. 

Lending 

If tariffs do come into full and lasting effect, Alberta’s producers may need assistance to manage their cashflow during uncertain times.    

On a case-by-case basis, AFSC will work with clients to discuss options best suited to their individual needs, including:  

  • Interest-only payments
  • payment deferrals (principal + interest)
  • restructure/reamortization

Producers are encouraged to contact AFSC and speak to a Lending relationship manager to find the best solution to their situation. 

If you are interested in learning more about how AFSC can help you mitigate the risks of market uncertainty, you can learn more at AFSC.ca, contact your preferred AFSC branch office, call the Call Centre at 1.877.899.2372 or email info@AFSC.ca