Agricorp changes spring wheat production insurance terms

Thursday, April 9, 2009

© AgMedia Inc.

by SUSAN MANN

Farmers who have quality problems with their spring wheat this year should get better compensation from Agricorp’s production insurance program.

Agricorp account lead Michael Smyth says the provincial agency is changing the spring wheat quality adjustment factor.

When an insured peril causes downgrades in spring wheat quality, the factor reduces yields “to help compensate for the loss in value,” Smyth says. Agricorp’s production insurance programs use lower-than-normal yields to trigger claims.

Previously, Agricorp would reduce downgraded spring wheat crops yields by 15 per cent. Now it will reduce them by 30 per cent starting with this crop year.

“It has been updated to help better reflect current market conditions,” Smyth says.

Larry Shapton, general manager of the Ontario Wheat Producers’ Marketing Board, says widespread problems with last year’s crop prompted the change.

Fifty per cent or more of last year’s spring wheat crop was downgraded to feed or worse grades. The excessive rain created a lot of fusarium infection in the crop so it couldn’t be used in the top milling grade. Spring wheat in the milling grade is used to make bread.

“That put the value of the crop from what a milling price would be down to a feed price, which quite often was discounted $90 to $100 a tonne,” Shapton says.

Farmers with quality problems still had satisfactory yields and the former 15 per cent reduction wasn’t enough to trigger a claim.

About 175,000 acres of spring wheat were grown in Ontario last year. Shapton says the board doesn’t know how much will be grown this year but planting starts next week and will continue for the next four weeks. BF