The value in managing risk in the cattle industry

Running an agricultural business comes with a lot of uncertainty. Risks such as unexpected disease outbreaks, market volatility, and weather variations can all impact success rates year over year, with devastating outcomes if not mitigated and planned for properly. This is why there are several government business risk management programs available to agricultural enterprises across the country. And while these programs are known to provide a benefit to producers, there are a few unknowns worth looking into.

“In Canada, there’s a big gap between business risk management programs for crop producers, such as grain and oilseed farms, and cow-calf producers,” said University of Saskatchewan (USask) Agricultural Economics PhD student Rebecca Zanello, who received a national scholarship from the Social Sciences and Humanities Research Council (SSHRC) to support her research. 

It’s not that the cow-calf producers aren’t relying on the programs that are available—many of them operate mixed farms and manage cropland alongside their herds. As a result, the ability to access business-risk-management programs for crop production offers a benefit to the entire enterprise.

“A lot of respondents indicated that having cattle as part of their operation is very important to them, which makes sense. The cattle industry can be very hard work, so you’re not necessarily going to do it if you don’t think it’s important somehow,” said Zanello. “But what I would like to figure out is how can we boost the resilience of the cow-calf part of their business?”

It’s this line of inquiry that has led Zanello to launch a dissertation that focuses on how cowcalf producers make business decisions and what values, such as community involvement or financial stability, they maintain when thinking about risk and risk management. 

Using a survey-based methodological approach, Zanello looked to group responses into one of three categories based on a social identity framework that has been applied to other industries in the past but has not been used in Canadian agriculture before.

“What I’ve found so far is that cow-calf producers are always thinking about more than one element in their decision making,” she said. “More than half of our respondents seem to be motivated by missionary and communitarian values, where farming for cause or impacts on their local community is significant. Profit is also part of it, but it’s not always the largest driver.”

She says that preliminary results also indicate that cow-calf producers aren’t accessing the business risk- management programs designed for their specific needs, such as livestock price insurance, very often.

“For the producers, the programs may be too complicated, they don’t pay out enough, or they are not subsidized because of legislative parameters regarding livestock production,” said Zanello. “I’d like to think that this research could help explore policy changes that provide cattle producers with better risk-management options.”

Working alongside the Saskatchewan Cattle Association in partnership with Environment and Climate Change Canada, Zanello is also looking at how cow-calf producers make decisions about rangeland and grassland conversion.

In early 2025, Rebecca and her faculty supervisor, Dr. Eric Micheels (PhD) published a literature review outlining previously established insights and links between business-risk management programs and voluntary conservation of grasslands.

“In the literature review, we found a lot of information about what’s happening on grasslands, such as what pieces of land are being converted and where we should target conservation,” she said. “But there was less information about why people are actually converting land and what is happening in that decision-making process.”

One insight surfacing from her data is that the ability to buy crop insurance on newly converted land is important to producers. This is significant because it highlights that risk reduction is an important part of land use decision-making.

“Cattle producers are good stewards of the land. They are actively maintaining and taking care of grasslands,” said Zanello. “A lot of them sit with the choice to break native prairie and really think about what that choice would mean from many perspectives. It’s not usually a decision made lightly.”

While Zanello works towards finishing her dissertation, she says that she is not sure what her future will hold, but she will continue working in the cattle industry.

“I really enjoy research that has real-world applications. Agricultural economics has a huge potential for impact,” she said. “It really comes back to farmers and producer organizations. Hopefully producers and industry groups will read about our work and find value in what we’ve done.”