The Potential of Satellite Technology for Forage Insurance in the Cattle Sector

Efforts are underway to explore the use of satellite technology in providing forage insurance for the cattle sector, similar to how multi-peril insurance works for grain farmers. Collaboration is taking place between Agriculture and Agri-Food Canada, the three prairie crop insurance agencies, Canadian Cattle Association, Saskatchewan Stock Growers Association, and Global Ag Risk Solutions (GARS) to develop a satellite-based forage insurance product.

GARS, known for its margin-based insurance for grain producers, is leveraging its expertise in data science and analytics to refine satellite imagery into a usable insurance solution. The current forage rainfall insurance program in Saskatchewan has faced criticism due to its reliance on weather station data that may be located far from the insured forage areas.

Satellite technology, in this case, aims to measure the vegetative index of the forage rather than rainfall alone. This index is compared to historical norms and takes various factors into account, such as late spring frosts, snowmelt infiltration, timely rainfall amounts, and temperatures. By considering vegetative growth, the insurance can provide more relevant coverage.

The goal is to develop a user interface and application where producers can obtain quotes, subscribe, and transact with the insurance product. Localization is a critical aspect, with the satellite imagery capturing small areas that correspond to the actual land of the insured.

Accuracy is paramount, and GARS has reported approximately 90% accuracy through extensive ground truthing to match the vegetative index information with what producers observe on their land. The success of the project is attributed to the cooperation of the provinces involved.

The final report from GARS is expected in January, with plans for a pilot project launch in 2024 and a potential insurance offering rollout in 2025. The development of satellite-based forage insurance could provide greater reliability and accuracy in protecting the interests of cattle producers in Canada.