A new feeder cattle insurance program has been introduced in Alberta.
The program offers market protection to producers of 700 to 1,000 pound feeder cattle, said co-ordinator Jennifer Wood of Alberta Financial Services Corp., which administers the program.
It is similar to a fed cattle program introduced last year in the province.
The Cattle Price Insurance Program (CPIP)-Feeder is voluntary and open to anyone who has paid farm income taxes in Alberta and is older than 18.
Producer meetings are planned early next year to explain how the program can provide protection against volatile market prices, basis and uncertainty around the Canadian dollar as feeder animals are prepared for market.
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“When it is a new risk management program, it is a new concept for producers,” Wood said.
The program is available for purchase now.
Wood said 60 percent of Alberta feedlots signed on to the fed cattle program last year and about a quarter used it and collected.
The settlement index represents the final price for an 850 lb. steer.
Settlement data will be gathered from auction markets across the province. Policy lengths are available from 12 to 36 weeks.
Matching policy length to the expected time of sale provides producers with a known floor price without limiting their ability to sell them at a higher price.
The producer is paid on the difference if the cash market at policy expiration is below the coverage level, even in the case of a major market disruption such as a border closure.
Producers will not have to market cattle to claim on their CPIP policy. They will be able to claim in the four weeks before policy expiration.
When a claim is filed, the coverage purchased is compared to a settlement index to determine if an indemnity is owed.
For more information, contact 877- 899-2372 or visit www.AFSC.ca.
