Alberta cattle price insurance program launched

Alberta’s beleaguered cattle producers have gained a small measure of support with the launch this week of the Alberta Cattle Price Insurance Program (CPIP).

Jennifer Wood

Jennifer Wood

Alberta’s beleaguered cattle producers have gained a small measure of support with the launch this week of the Alberta Cattle Price Insurance Program (CPIP).

Announced last December by Alberta Agriculture and Rural Development, the program enables producers to ensure a minimum price for their fed cattle. They can buy insurance for protection against futures price risk, currency exchange risk and basis risk (the difference between the local cash market and futures contract prices), or they can choose basis-only insurance.

“It gives Alberta cattle producers a minimum price for fed cattle, so they know in advance the minimum they’ll receive once those animals reach market weight,” said Jennifer Wood, CPIP co-ordinator with Agriculture Financial Services Corp., the provincial Crown corporation administering the program.

Premiums and coverage levels are calculated and sold each Tuesday, Wednesday and Thursday afternoon. Producers can monitor this information and purchase coverage online.

CPIP premiums are producer-funded and based on a forecast of where Alberta fed cattle prices will be when the policy expires, said Wood. Live cattle futures prices, currency exchange rates and a forecast of the Canada-U.S. basis are used

Producers can choose policies from 12 to 36 weeks in length, with the duration matching the time it will take for their cattle to reach market weight, said Wood.

In recent years, Alberta cattle producers have been hurt by the global economic downturn, an oversupply of red meat due to the H1N1 outbreak, mandatory country of origin labelling (COOL) requirements in the U.S. and exchange rate changes.

Many existing risk management tools are based on U.S. futures markets and reflect American cattle prices. So when Canadian cattle prices drop relative to American prices, as happened in the case of BSE and COOL, Alberta producers can be left exposed, said Wood.

“The last seven years have taught us that we don’t know what kind of risk might be coming tomorrow,” said Tom Lesher, who finishes about 4,500 cattle near Lacombe each year. “It’s too volatile to be out in the market place with no protection.”

He said CPIP is a good program to cover basis risk.

The Alberta Beef Producers sponsored the initial research into a cattle insurance program about five years ago. The Alberta Feeder Associations, Alberta Agriculture and Rural Development, and AFSC became involved later.

Wood said a similar insurance product for feeder cattle could be introduced next year.

Producers wishing to participate in CPIP can obtain a user name and password for online access from an AFSC office. Additional information about the program can be found on the AFSC website at www.afsc.ca.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer Regional Hospital Centre can accommodate up to 20 patients requiring a ventilator, says Alberta Health Services. Photo by Paul Cowley/Advocate staff
Alberta’s government reaffirms $100-million commitment for the first phase of Red Deer hospital’s expansion

Alberta Infrastructure did not provide a timeline for the money’s distribution

Guy Pelletier, RDC’s board of governors chair, said the post secondary is still on the path to becoming a polytechnic institution. (File photo by Advocate staff)
RDC is confident it is still on a polytechnic path

Maintaining spectrum of programs is key

NDP leader Rachel Notley is calling on the UCP to make a public inquiry into the COVID-19 outbreak at Olymel. (Facebook screenshot)
Notley calls for Olymel inquiry as plant reopens

Union also asks for further consideration to delay opening

Britanney Povey, Jeffery Kraft’s cousin, was among many friends and family who turned up outside the Red Deer courthouse on Thursday to call for a long sentence for Tyler John Campbell, who killed Kraft in December 2019. Photo by PAUL COWLEY/Advocate staff
With video: Judge rejects seven-year sentence for killer of Ponoka man

Tyler John Campbell pleaded guilty to manslaughter in December 2019 shooting

(Contributed image).
Deadline extended for arts scholarship applications for Red Deer-area students

Red Deer Arts Council will accept applications until March 15

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

Dr. Supriya Sharma, chief medical adviser at Health Canada, holds a press conference in Ottawa on Friday, Feb. 26, 2021. Canada’s chief medical adviser says her department is constantly receiving and reviewing any data on vaccines and COVID-19 variants and will be quickly ready to authorize needed boosters when they’re ready. THE CANADIAN PRESS/Sean Kilpatrick
Health Canada says vaccine boosters will be approved more easily

OTTAWA — Health Canada says it won’t require new clinical trial data… Continue reading

Unifor national president Jerry Dias speaks during a press conference in Toronto on Thursday, Oct. 15, 2020. Dias says Air Canada is pledging passenger refunds as negotiations over federal aid for airlines drag on. THE CANADIAN PRESS/Tijana Martin
Unifor’s Dias says Air Canada holding to refund pledge as aid negotiations drag on

OTTAWA — Unifor president Jerry Dias says Air Canada continues to promise… Continue reading

Lionel Desmond (front row, far right) was part of the 2nd battalion, of the Royal Canadian Regiment, based at CFB Gagetown and shown in this 2007 handout photo taken in Panjwai district in between patrol base Wilson and Masum Ghar in Afghanistan. THE CANADIAN PRESS/HO-Facebook-Trev Bungay MANDATORY CREDIT
Desmond inquiry: social worker reveals details about former soldier’s family life

PORT HAWKESBURY, N.S. — An inquiry in Nova Scotia is hearing testimony… Continue reading

Seniors arrive for their COVID-19 vaccination at a clinic in Olympic Stadium in Montreal on March 3, 2021. THE CANADIAN PRESS/Paul Chiasson
Nova Scotia eases COVID-19 restrictions; cases creep up in Ontario

Nova Scotia is easing public-health restrictions in and around Halifax, while new… Continue reading

Infrastructure and Communities Minister Catherine McKenna stands near a bus as she waits to start an announcement at a public transit garage in Ottawa, Thursday March 4, 2021. THE CANADIAN PRESS/Adrian Wyld
Liberals tap $2.5B of promised transit dollars for zero-emission buses

OTTAWA — The federal Liberals are setting aside some of the billions… Continue reading

Canada’s Eliot Grondin looks on after competing in a men’s snowboard cross heat at the Phoenix Snow Park at the 2018 Winter Olympic Games in Pyeongchang, South Korea, Thursday, Feb. 15, 2018. Grondin continued his strong season with his first career World Cup snowboard cross victory on Thursday. THE CANADIAN PRESS/Jonathan Hayward
Canadian Eliot Grondin captures gold at World Cup snowboard cross event

BAKURIANI, Georgia — Canada’s Eliot Grondin continued his strong season with his… Continue reading

Most Read