It’s taken a little time, but the new livestock price insurance program is catching on with cattle and hog producers, says the head of the program.
“We went to a lot of auction markets and bought a lot of coffee to have people listen to us,” said Bill Hoar, AFSC co-ordinator for the Western Livestock Price Insurance Program.
In 2009, Alberta producers bought 505 policies for fed cattle or cattle being finished for slaughter.
In 2013-14, which is the last 12 month period for complete numbers, Alberta producers bought 5,862 policies for all four types of livestock insurance: calves, fed, feeder and hogs.
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“Year-over-year, we’re blowing through our estimates,” said Hoar.
As well, interest has been strong in the eight months since the insurance program was made available to hog and cattle producers across Western Canada.
Producers have insured 815,440 cattle and hogs worth $1.2 billion under the expanded Western Livestock Price Insurance program:
* In British Columbia, 288 calf and feeder cattle policies have been sold to cover 33,583 head of cattle.
* In Alberta, 3,668 policies covering 570,479 calf, fed and feeder head were sold.
* In Saskatchewan 1,442 policies covering 168,698 calf, fed and feeder cattle were sold.
* In Manitoba, 451 policies covering 42,680 head of calf, fed, feeder and hogs were sold.
Only one hog policy — in Manitoba — was sold this year covering six head valued at $1,212.
Hoar said volatile prices have hit hog producers over the years, but producers have other risk management tools, such as contracting hogs to packing plants.
He called hogs a “work in progress.”
Feeder cattle were added in 2010 and calves and hogs later.
Twenty percent of all calves and feeder cattle and five to 10 percent of all fed cattle are now covered under the program.
The risk management tool was developed at the request of cattle and hog producers, who have shared a series of volatile prices. Prices dropped dramatically in 2003 when BSE closed borders to Canadian livestock.
Under the program, producers can pay a premium to receive a specific price in a specific time. They receive a payment if the price falls below the set price in the set time.
“The industry wanted to look at something better post-BSE,” Hoar said.
The program has evolved to become more attractive to producers since 2009, but it is still financially viable. Producers have paid $17.4 million in premiums this year to insure their livestock.
“We have been building the system from the ground up.”
Hoar doesn’t believe increased interest in the program is connected solely to higher priced cattle. It is also part of a greater awareness of the program.
“We learned very early that we had to get out and explain the program for producers and make producers aware that the program even existed,” he said.
“We keep slugging along, building up awareness and trust.”
Timely payments are one of the biggest attractions for producers. Cheques are written the same week as the claim.
“The timeliness is a real strong component to the program,” said Hoar.
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