Business risk management programs

Take steps to protect your farm

AgriStability is an important tool that can help you manage risks and financial losses due to poor yields, low commodity prices, or rising input costs.

Unpredictable weather, crop or animal disease, market volatility, high input costs: risks like these can significantly impact your farm's bottom line, and future success. The right programs and tools can help minimize the impact of losses.

Business risk management (BRM) programs help farmers manage risks that threaten the viability of the farm. They provide protection against different types of income and production losses.

  • AgriStability provides support when you experience a large margin decline.
  • AgriInvest provides cash flow to help you manage income declines.
  • AgriInsurance provides cost-shared insurance against natural hazards to reduce the financial impact of production or asset losses.

How business risk management programs can help you

Read case studies of farms that have faced different disaster situations to learn about how business risk management programs helped.

Case Study 1: Drought increases feed costs for a Manitoba cattle producer

Summary - Case 1

A drought led to a feed shortage for a Manitoba cattle operator. AgriStability and AgriInvest support helped keep his cattle fed over the winter months.

The challenge - Case 1

Jim has a spring calving operation with 200 cows. He normally backgrounds his calves, feeding over winter and selling them the following year. He pastures his animals during the summer and grows his own feed for the winter months. Jim typically buys some feed over the winter to supplement his own hay stocks. This year, due to a lack of rainfall and low soil moisture levels, Jim has been forced to draw on his winter supply of feed to supplement the summer pasture grazing. Jim now has to buy all of his feed to keep his cattle fed over winter.

Average year - Case 1

In an average year, Jim sells $220,000 worth of calves and spends $140,500 on direct costs to raise the animals and grow feed. This normally leaves him with $79,500 to spend on overhead and the rest is profit for the year.

Disaster year - Case 1

This year, Jim will need to spend an additional $66,500 on feed. This leaves him with only $13,000 to cover overhead costs.

The solution - Case 1

How AgriInvest will help - Case 1

Jim has been a regular contributor to AgriInvest and currently has an account balance of $8,000 that he can withdraw to support his operation. He is also eligible for a matching government contribution of $1,200 this year. In total, Jim has access to $9,200 through his AgriInvest account.

How AgriStability will help - Case 1

Jim's current year margin showed a significant decline in comparison to previous years. As a result, Jim was eligible for $29,855 in AgriStability benefits which provided support to help cover his additional feed costs. AgriStability increased the funds he had to spend on overhead from $13,000 to $42,855.

Figures for Case Study 1
Average year Disaster year
Calf sales $220,000 $220,000
Feed purchases $31,500 $98,000
Other input costs $109,000 $109,000
Total expenses $140,500 $207,000
Production margin $79,500 $13,000
AgriStability calculation for Case Study 1
Reference margin (average year margin) $79,500
Payment trigger level (Reference margin x 70%) $55,650
Program margin (Production margin of Disaster year) $13,000
Decline (Payment trigger level - Program margin) $42,650
AgriStability benefit (Decline x 70%) $29,855

The outcome - Case 1

Jim received a $29,855 payment through AgriStability. In addition, he withdrew $9,200 from his AgriInvest account. Together, AgriStability and AgriInvest provided Jim with $39,055 in assistance to help cover some of the additional costs to feed his cattle over winter.

Outcome for Case Study 1
AgriStability benefit $29,855
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $9,200
Total BRM Support $39,055

Questions - Case 1

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 2: Manitoba cow/calf producer faces low prices and poor sales

Summary - Case 2

A price decline in the cattle market reduced calf sales on a Manitoba cow/calf operation. AgriStability and AgriInvest assistance helped the producer offset some of the lost farm revenue and cover costs.

The challenge - Case 2

William has a 150 breeding cow operation. The calves are born in the spring and sold in the fall. He pastures his cattle during the summer and purchases all feed and supplements for the winter. Recently, international markets were closed to the sale of Canadian beef due to potential disease threats in Canadian cattle, causing the price of feeder steers and heifers to decline significantly. William's feeder stock will be ready to go to market in the fall. His feedstocks aren't sufficient to keep his herd fed until the spring in hopes the market will rebound, and is forced to sell.

Average year - Case 2

In an average year, William sells $165,000 worth of calves and spends $112,500 on direct costs to raise the animals and grow feed until they're marketed in the fall. This normally leaves him with $52,500 to spend on overhead costs and the rest is profit for the year.

Disaster year - Case 2

This year, William is going to lose $49,500 in income due to market fluctuations, leaving him with only $3,000 to cover overhead costs.

The solution - Case 2

How AgriInvest will help - Case 2

William has been a regular contributor to AgriInvest and currently has an account balance of $5,000 that he can withdraw to support his operation. He is also eligible for a matching government contribution of $700 this year. In total, William has access to $5,700 through his AgriInvest account.

How AgriStability will help - Case 2

The lost income from calf sales lowered William's production margin for the year significantly, down to $3,000 from an historical average of $52,500. As a result, William was eligible for $23,625 in AgriStability benefits to help offset the low prices he received for his calves. AgriStability increased the funds he had to spend on overhead from $3,000 to $26,625.

Figures for Case Study 2
Average year Disaster year
Calf sales $165,000 $115,500
Feed purchases $45,000 $45,000
Other input costs $67,500 $67,500
Total expenses $112,500 $112,500
Production margin $52,500 $3,000
AgriStability calculation for Case Study 2
Reference margin (average year margin) $52,500
Payment trigger level (Reference margin x 70%) $36,750
Program margin (Production margin of Disaster year) $3,000
Decline (Payment trigger level - Program margin) $33,750
AgriStability benefit (Decline x 70%) $23,625

The outcome - Case 2

William received a $23,625 payment through AgriStability, and he withdrew $5,700 from his AgriInvest account. Together, AgriStability and AgriInvest provided William with $29,325 in assistance to help offset the low prices he received for his calves.

Outcome for Case Study 2
AgriStability benefit $23,625
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $5,700
Total BRM support $29,325

Questions - Case 2

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 3: Crops damaged by spring flooding on Manitoba farm

Summary - Case 3

Excess moisture and flooding left a Manitoba farm family's crops unseeded and with poor yields at harvest. With assistance provided through AgriInsurance, AgriStability, and AgriInvest, Bob and Marcie were able to cover some of their expenses and farm losses.

The challenge - Case 3

Bob and Marcie operate a 2,500 acre grain and oilseeds operation in southern Manitoba. This year, the region where they farm experienced a severe spring flood, leaving 1,500 acres under water and unseeded. Bob and Marcie applied fertilizer in fall, and have already prepaid most of their herbicide and pesticide.

Average year - Case 3

In an average year, Bob and Marcie report grain sales of $550,000 and they spend $290,000 on direct costs to grow and harvest their crops. This normally leaves them $260,000 to spend on overhead costs and the rest is profit for the year.

Disaster year - Case 3

This year, Bob and Marcie will lose $330,000 in income from lost grain sales due to the flood and the fertilizer they applied last fall will also be lost. This will leave them unable to cover $30,400 of expenses and nothing for overhead and profit.

The solution - Case 3

How AgriInsurance will help - Case 3

Bob and Marcie received $105,000 in compensation through AgriInsurance's Excess Moisture Insurance for the crops they could not seed due to the excessively wet conditions. This amount will be reflected in the calculation of their production margin under AgriStability.

How AgriInvest will help - Case 3

Bob and Marcie have been regular contributors to AgriInvest and currently have an account balance of $22,000 they can withdraw to support their operation. They are also eligible for a matching government contribution of $3,200 this year. In total, they have access to $25,200 through their AgriInvest account.

How AgriStability will help - Case 3

Bob and Marcie's production margin dropped significantly for the year, down to negative $30,400 from an historical average of $260,000. With the AgriInsurance payment reflected in the calculation of their current production margin, Bob and Marcie were eligible for a $75,180 AgriStability payment. AgriStability increased the funds they had to spend on overhead from negative $30,400 to $44,780.

Figures for Case Study 3
Average year Disaster year
Grain sales $550,000 $220,000
Seed purchases $10,000 $4,000
Other input costs $280,000 $246,400
Total expenses $290,000 $250,400
Production margin $260,000 $(30,400)
AgriInsurance   $105,000
AgriStability calculation for Case Study 3
Reference margin (average year margin) $260,000
Payment trigger level (Reference margin x 70%) $182,000
Program margin (Production margin + AgriInsurance) $74,600
Decline (Payment trigger level - Program margin) $107,400
AgriStability benefit (Decline x 70%) $75,180

The Outcome - Case 3

Bob and Marcie received $105,000 through AgriInsurance for their production losses, withdrew $25,200 from their AgriInvest account and received $75,180 in support from AgriStability. Together, Bob and Marcie received $205,380 through BRM programs to help cover additional costs and lost income.

Outcome for Case Study 3
AgriInsurance benefit $105,000
AgriStability benefit $75,180
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $25,200
Total BRM Support $205,380

Questions - Case 3

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 4: A New Brunswick potato grower sees a drop in market demand

Summary - Case 4

Low market demand and prices for potatoes significantly reduced a New Brunswick potato grower's operating revenue. AgriStability and AgriInvest assistance helped the grower recoup some of the lost farm revenue.

The challenge - Case 4

Lindsey has a 240 acre potato operation. This year, fast food chains have decreased portion sizes in their restaurants in response to consumer demand. Lindsey noticed a lower demand for potatoes, and a significant drop in price for her new crop of potatoes.

Average year - Case 4

In an average year, Lindsey has $792,000 in potato revenues and spends $446,000 on expenses directly related to planting, growing and harvesting her crop. This normally leaves her $346,000 left to spend on overhead costs and the rest is profit.

Disaster year - Case 4

Due to the lack of market demand for Lindsey's potatoes in the fall, she will lose $300,960 in expected revenue. With her total expenses still at $446,000 she will have $45,040 left to cover overhead costs.

The solution - Case 4

How AgriInvest will help - Case 4

Lindsey has been a regular contributor to AgriInvest and currently has an account balance of $29,000 that she can withdraw to support her operation. She is also eligible for a matching government contribution of $4,300 this year. In total, Lindsey has access to $33,300 through her AgriInvest account.

How AgriStability will help - Case 4

Lindsey's potato sales dropped sharply this year, reducing her production margin down to $45,040 from an historical average of $346,000. Lindsey received a payment of $138,012 to help offset the low prices. AgriStability increased the funds she had to spend on overhead from $45,040 to $183,052.

Figures for Case Study 4
Average year Disaster year
Potato sales $792,000 $491,040
Seed purchases $62,000 $62,000
Other input costs $384,000 $384,000
Total expenses $446,000 $446,000
Production margin $346,000 $45,040
AgriStability calculation for Case Study 4
Reference margin (average year margin) $346,000
Payment trigger level (Reference margin x 70%) $242,200
Program margin (Production margin of Disaster year) $45,040
Decline (Payment trigger level - Program margin) $197,160
AgriStability benefit (Decline x 70%) $138,012

The outcome - Case 4

Lindsey received a $138,012 payment through AgriStability, and she withdrew her entire AgriInvest account balance of $33,300. Together, AgriStability and AgriInvest provided Lindsey with $171,312 to offset her drop in farm income.

Outcome for Case Study 4
AgriStability benefit $138,012
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $33,300
Total BRM Support $171,312

Questions - Case 4

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 5: Nova Scotia fruit grower fights insect infestation

Summary - Case 5

A Nova Scotia tree fruit grower is forced to spend more on insect control measures to protect her crop. Assistance provided through AgriStability and AgriInvest helps cover the extra input costs and limit her losses.

The challenge - Case 5

Jeanne has a long established 60-acre mixed fruit operation in Nova Scotia. While scouting her orchards this year, Jeanne discovered insects on some of the fruit trees. Without active monitoring and control, these insects will reduce yields and fruit quality, resulting in significant losses for her operation. To save her fruit crop, Jeanne controlled the infestation with costly pesticides.

Average year - Case 5

In an average year, Jeanne sells $350,000 worth of tree fruit and spends $260,000 on direct costs to grow and harvest the fruit. This normally leaves her with $90,000 to spend on overhead costs and profit for the year.

Disaster year - Case 5

This year, Jeanne will spend an additional $66,000 to monitor and control the pest infestation. This leaves her with only $24,000 to cover overhead costs and profit for the year.

The solution - Case 5

How AgriInvest will help - Case 5

Jeanne has been a regular contributor to AgriInvest and currently has an account balance of $13,000 that she can withdraw to support her operation. She is also eligible for a matching government contribution of $3,400 this year. In total, Jeanne has access to $16,400 through her AgriInvest account.

How AgriStability will help - Case 5

The increased costs to control the insects lowered Jeanne’s production margin for the year, down to $24,000 from an historical average of $90,000. As a result, Jeanne was eligible for $27,300 in AgriStability benefits to help offset the extra costs. AgriStability increased the funds she had to spend on overhead from $24,000 to $51,300.

Figures for Case Study 5
Average year Disaster year
Fruit sales $350,000 $350,000
Seed purchases $15,000 $15,000
Other input costs $245,000 $311,000
Total expenses $260,000 $326,000
Production margin $90,000 $24,000
AgriStability calculation for Case Study 5
Reference margin (average year margin) $90,000
Payment trigger level (Reference margin x 70%) $63,000
Program margin (Production margin of Disaster year) $24,000
Decline (Payment trigger level - Program margin) $39,000
AgriStability benefit (Decline x 70%) $27,300

The outcome - Case 5

Jeanne received a $27,300 payment through AgriStability, and she withdrew $16,400 from her AgriInvest account. Together, AgriStability and AgriInvest provided Jeanne with $43,700 in assistance to cover some of the additional costs involved in dealing with the insect infestation.

Outcome for Case Study 5
AgriStability benefit $27,300
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $16,400
Total BRM Support $43,700

Questions - Case 5

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 6: Slump in grain prices leaves Nova Scotia producer short

Summary - Case 6

A Nova Scotia grains and oilseeds farmer experiences a significant drop in farm income as a result of falling grain prices. Assistance provided through AgriStability and AgriInvest helps offset the low prices from his crops.

The challenge - Case 6

Alex runs a 340-acre grains and oilseeds operation in Nova Scotia. This past year, record harvests in South America and the United States have created an oversupply of grains and oilseeds on world markets, causing prices for Canadian grains to plummet.

Average year - Case 6

In an average year, Alex reports grain sales of $221,000 and spends $150,000 on direct costs to produce and harvest his crops. This normally leaves him with $71,000 to spend on overhead costs and profit for the year.

Disaster year - Case 6

This year, low grain prices mean Alex will lose $70,720 in revenue from grain sales. This will leave him with only $280 to cover overhead costs for the year, and nothing for profit.

The solution - Case 6

How AgriInvest will help - Case 6

Alex has been a regular contributor to AgriInvest and currently has an account balance of $7,000 that he can withdraw to support his operation. He is also eligible for a matching government contribution of $1,200 this year. In total, Alex has access to $8,200 through his AgriInvest account.

How AgriStability will help - Case 6

The drop in revenue caused by low grain prices reduced Alex’s production margin for the year to $280 from an historical average of $71,000. As a result, Alex was eligible for $34,594 in AgriStability benefits to address the income shortfall. AgriStability increased the funds he had to spend on overhead from $280 to $34,874.

Figures for Case Study 6
Average year Disaster year
Grain and oilseed sales $221,000 $150,280
Seed purchases $34,000 $34,000
Other input costs $116,000 $116,000
Total expenses $150,000 $150,000
Production margin $71,000 $280
AgriStability calculation for Case Study 6
Reference margin (average year margin) $71,000
Payment trigger level (Reference margin x 70%) $49,700
Program margin (Production margin of Disaster year) $280
Decline (Payment trigger level - Program margin) $49,420
AgriStability benefit (Decline x 70%) $34,594

The outcome - Case 6

Alex received a $34,594 payment through AgriStability, and he withdrew $8,200 from his AgriInvest account. Together, AgriStability and AgriInvest provided Alex with $42,794 in assistance to help cover overhead costs and lost income.

Outcome for Case Study 6
AgriStability benefit $34,594
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $8,200
Total BRM Support $42,794

Questions - Case 6

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

Case Study 7: Managing disease costly for New Brunswick potato grower

Summary - Case 7

A New Brunswick commercial potato producer deals with a damaging crop disease. Assistance provided through AgriStability and AgriInvest helps offset the increased costs to protect his crop.

The challenge - Case 7

Kelly runs a 300-acre commercial potato operation in New Brunswick. This growing season, Kelly spotted blight on his potato crop. To contain the spread of the disease and prevent crop losses, Kelly applied extra rounds of fungicide throughout the growing season. If successful, he may have an average production this year.

Average year - Case 7

In an average year, Kelly’s potato crop generates $990,000 in sales and he spends $558,000 on direct costs to plant, grow and harvest his potato crop. This normally leaves him with $432,000 to spend on overhead costs and profit for the year.

Disaster year - Case 7

This year, the fungicide applications will mean an additional $150,000 in input costs, increasing his total expenses to $708,000. This will leave Kelly with $282,000 to cover overhead costs and profit for the year.

The solution - Case 7

How AgriInvest will help - Case 7

Kelly has been a regular contributor to AgriInvest and currently has an account balance of $36,000 that he can withdraw to support his operation. He is also eligible for a matching government contribution of $9,100 this year. In total, Kelly has access to $45,100 through his AgriInvest account.

How AgriStability will help - Case 7

The higher input costs reduced Kelly’s production margin this year down to $282,000 from an historical average of $432,000. As a result, Kelly received a payment of $14,280 to help cover the extra input costs. AgriStability increased the funds he had to spend on overhead from $282,000 to $296,280.

Figures for Case Study 7
Average year Disaster year
Potato sales $990,000 $990,000
Seed purchases $78,000 $78,000
Other input costs $480,000 $630,000
Total expenses $558,000 $708,000
Production margin $432,000 $282,000
AgriStability calculation for Case Study 7
Reference margin (average year margin) $432,000
Payment trigger level (Reference margin x 70%) $302,400
Program margin (Production margin of Disaster year) $282,000
Decline (Payment trigger level - Program margin) $20,400
AgriStability benefit (Decline x 70%) $14,280

The outcome - Case 7

Kelly received a $14,280 payment through AgriStability, and he withdrew $45,100 from his AgriInvest account. Together, AgriStability and AgriInvest provided Kelly with $59,380 in assistance to cover some of the increased costs needed to deal with disease in his crops.

Outcome for Case Study 7
AgriStability benefit $14,280
AgriInvest benefit (withdrawal of balance plus current year matching government contribution) $45,100
Total BRM Support $59,380

Questions - Case 7

Discover how these programs can work for you. Visit AgriInvest, AgriStability, or call 1-866-367-8506.

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