The Satellite Yield Insurance program is an area-based program that uses satellite measurements of light absorbed and reflected by pasture vegetation to estimate pasture growth. Losses are paid when the determined annual pasture growth in the township falls below the normal pasture growth in the area. Given the extreme heat and dry conditions clients who have purchased satellite insurance may have questions as to how the program works.

Q: The Satellite Yield Insurance program does not reflect what happened on my farm. How does the program work?

The program is not based on actual pasture production. It is based on the satellite measurements in the township for native pasture and may not reflect the conditions on your insured fields.

Losses you receive will vary by location (township), and the time period you selected.

Q: Why did I receive a different payment than my neighbour?

The payments a client receives are based on the selections made in February when the insurance was purchased. The payments can vary due to:

  • Season option
  • Pasture type (improved, native, bush)
  • Price option
  • Location (risk area and township)
  • Insured acres

Q: Where does AFSC get the data used for the Satellite Yield Insurance program?

Statistics Canada provides the Normalized Difference Vegetation Index (NDVI) data on a township basis for a 21-week period beginning in the later part of April and ending in mid-September.

Statistics Canada acquires, quality controls, and compiles data from satellites that are owned by the National Oceanic and Atmosphere Administration.

Q: How does the Satellite Yield Insurance program work?

The satellite insurance program uses measurements of light absorbed and reflected by native pasture to estimate pasture growth. The cumulative average of the weekly values for the insurance period are compared to the long-term average NDVI values. Clients are compensated when the township growth estimate falls below the normal pasture growth estimate.

Perils that would be reflected in that satellite measurement include:

  • Precipitation occurring before and during the elected time frame
  • Soil moisture reserves available to support the crop
  • High temperatures that evaporate moisture from the air, soil and plant matter
  • Winds that dry out soil and plants
  • Pest invasions that develop due to the weather conditions (e.g. grasshoppers)
  • Hail events damaging plant matter

Q: There has been a lot of smoke in the province this summer. Does the smoke impact the satellite readings?

There can be times when the satellite may not be able to determine an Normalized Difference Vegetation Index reading for a week. This can be due to smoke or cloud cover. When this occurs, Statistics Canada has a process to estimate the missing weekly value by averaging the NDVI values for the week prior and week after the missing value. When missing NDVI values occur, the process to fill in the missing values takes place at a pixel (1-km2 blocks) level.

Q: There is a lot of irrigation in southern Alberta. Does this impact the Satellite Yield Insurance program?

A ‘pasture mask’ is applied to each township to exclude acres that are not native pasture (e.g. annual crop, hay).

Q: Why is the Satellite Yield Insurance program not offered in all regions of Alberta?

The satellite program uses remote sensing readings (Normalized Difference Vegetation Index) for native pasture broken down to 1 km2 blocks (pixels) within each township. The SAT insurable area has large tracts of native pasture. Therefore, the NDVI readings will accurately reflect the growth of the native pasture and will not be influenced by other land types such as crop land, hay land, irrigation pivots or trees.

Q: What changes have been made to the Satellite Yield Insurance programs in the last few years to make them more relevant?

  • The pasture mask was updated has been updated to reflect the current land use and ensure land is identified as native pasture.
  • The Variable Price Benefit for perennial crops is based on Alberta Agriculture and Forestry’s hay price from the Farm Input Survey for the month of October.
  • A $13/ton benefit is added to the hay price to account for the added cost of transporting purchased feed when the client suffers a loss.
  • Pasture yield normal were updated to be more reflective of the productive capabilities.

Q: Why does AFSC use pasture clips to determine payments?

There are situations when the satellite readings used in the program may not reflect what is occurring on the ground. Because of this, AFSC will review pasture clips that are taken during the growing season (June and August) and will augment the satellite program payments if necessary.

Q: How does AFSC use the pasture clips to augment payments?

AFSC has a network of over 100 locations throughout the satellite insurable area where clips on native and improved pasture are taken in June and August each year.

AFSC reviews and compare the pasture clips to the long-term yield normal for the pasture type (native, improved) in the area. This comparison is done to validate the SAT results.  If the results are not deemed reasonable the payments are increased by the amount of the “yield shortfall” between the yield from the clip and the long term normal.

Just because AFSC reviews the pasture clips, does not mean that the program payments will be augmented (increased).  It is considered on a year-by-year basis.

The review of the pasture clips can only result in payments increasing. AFSC will not reduce payments as a result of reviewing the clips.

Q: When will I be receiving my Satellite Yield Insurance indemnity payments?

The indemnity payments are based on remote sensing readings from the National Oceanographic and Atmospheric Administration’s satellite. This information is collected weekly and is quality controlled by Remote Sensing and Geospatial Analysis Section within Statistics Canada.

When the insurable period (month) is over, the weekly Normalized Difference Vegetation Index data is reviewed for completeness, accuracy, and usefulness. These processes take time. Therefore, the program payments are typically made within one month of the end of the insurance period.

Program Payment – Timing of Payments

  1. Short & Long early splits – late July
  2. Short, late split – late August
  3. Long, late split – late September
  4. Pasture clips – early January

Q: How is the hay price established?

The hay price options are established in January and estimate the probable price that hay will be for the upcoming year. The variable price benefit (VPB) is automatically included and will increase the dollar coverage if there is a significant price increase with in the year.

The VPB for forage is based on the Alberta Agriculture and Foresty’s hay price from the Fam Input Survey for the month of October.

If you have additional questions or need assistance, please use Live Chat on our website or AFSC Connect, call our Client Service Centre at 1-877-899-2372 or contact your branch office.