Relief for Ranchers: AgriStability Expands to Cover Pasture Costs

OTTAWA, ON – February 25, 2026 – The Government of Canada has announced a significant update to its key agricultural support program, AgriStability, providing a new financial lifeline for livestock producers across the country. Starting with the 2026 program year, expenses related to grazing animals on rented pastureland will now be included as an allowable expense, a move designed to level the playing field for farmers who do not own the land their animals graze on.

The amendment, announced today by the Honourable Heath MacDonald, Minister of Agriculture and Agri-Food, directly targets a long-standing disparity in the program. It is expected to provide substantial relief for cow-calf, sheep, and goat farmers, many of whom rely heavily on renting pasture to sustain their operations. This policy shift acknowledges the significant and often volatile costs associated with feeding livestock, aiming to make the federal safety net more reflective of the economic realities facing modern producers.

"Canadian livestock producers deserve risk management programs that reflect the realities of their operations," Minister MacDonald stated in the announcement. "Adding pasture-related feed costs as an allowable expense ensures fairer support for those who rely on rented pastureland. Our government is committed to supporting producers with effective, responsive programs to protect farming operations."

Addressing a Critical Cost Disparity

For many in Canada's livestock sector, feed is the single largest and most unpredictable operational expense. Recent years have seen this challenge intensify due to persistent drought conditions, particularly in Western Canada, which have driven up the price of hay and feed grains. Research indicates that for some cow-calf producers, winter feed costs have accounted for over 60% of their total cash costs, a sharp increase over the past five years.

Until now, AgriStability's structure created an inequity. While producers who owned their land could count many associated costs towards their production margin, those who paid to graze their animals on rented land could not claim these "pasture-related feed costs." This meant that in a year of high feed prices or poor grazing conditions, two producers with identical herds could face vastly different levels of support from the program simply based on land tenure.

The new amendment closes this gap. By recognizing rented pasture costs as a legitimate and allowable expense, the program's calculations will now provide a more accurate picture of a producer's financial situation. This ensures that when a farm's income margin drops significantly, the support they receive is based on a truer reflection of their operating costs, regardless of whether they own or rent their grazing land.

How the AgriStability Safety Net Evolves

AgriStability is one of the foundational Business Risk Management (BRM) programs offered to Canadian farmers. It is not a subsidy but a margin-based insurance program designed to protect producers from large, unexpected drops in income caused by factors like production loss, increased costs, or adverse market conditions.

The program works by comparing a farm’s "production margin" for the current year against its "reference margin," which is typically an Olympic average of its margins from the past five years. If the current year's margin falls more than 30% below this historical reference, an AgriStability payment is triggered to cover a portion of the loss. For most years, the program covers 80% of the decline beyond that 30% threshold.

However, the program has faced criticism for its complexity and the timeliness of payments, which has been a barrier to participation for some, especially smaller operations. In response, federal, provincial, and territorial governments have been working to make the program more effective and responsive. This latest change is part of a series of recent enhancements. For the 2025 program year, for instance, the compensation rate was temporarily boosted to 90% and the maximum payment limit doubled to $6 million to help producers navigate ongoing climate and trade-related uncertainties. The inclusion of pasture costs for 2026 is another deliberate step in this evolution, making the safety net more robust and equitable.

A Ripple Effect for Food Security and Rural Economies

The decision to expand AgriStability’s allowable expenses is more than a technical policy adjustment; it is a strategic investment in the stability of Canada's food supply and the health of its rural economies. A resilient livestock sector is a cornerstone of national food security. By providing more predictable financial footing for producers, the government aims to mitigate the risk of herd liquidations, a serious concern in recent years as producers have been squeezed by high costs and drought.

When farmers are forced to sell off their breeding stock due to financial strain, it can take years for the national herd to recover, impacting the availability and price of meat for consumers. This policy change provides a buffer that can help producers weather difficult years without having to make such drastic decisions.

Furthermore, thriving farms are the economic engines of many rural communities. The financial stability offered through a more responsive AgriStability program helps keep farming operations viable, which in turn supports local jobs, ancillary businesses, and the overall economic fabric of rural Canada. By strengthening the agricultural backbone, the government is also reinforcing the communities that depend on it.

Industry Reaction and Future Advocacy

The announcement has been met with positive feedback from key industry stakeholders, who see it as a long-overdue correction. The Canadian Cattle Association (CCA) publicly welcomed the change, noting that it had been a key advocacy point for producers for some time. The organization stated the move will make AgriStability "more responsive" to the real-world challenges faced by cattle producers.

This policy victory is the direct result of a commitment made by federal, provincial, and territorial Ministers of Agriculture during a meeting in July 2025. At that time, they agreed to a package of enhancements to the BRM suite, including a review of allowable expenses, to better support producers through a period of significant volatility.

While the inclusion of pasture costs is seen as a major step forward, industry groups have indicated that their advocacy work is not finished. The CCA, for example, has highlighted that it will continue to push for further improvements to the program, including making the temporary $3 million payment cap increase a permanent feature. This signals an ongoing dialogue between producers and policymakers aimed at continuously adapting Canada's agricultural support systems to ensure they remain effective and relevant in an ever-changing global landscape. The change, effective for the 2026 program year, represents a critical adjustment in that continuing effort.