Insuring against low prices may become an option for hog farmers, similar to a new program recently developed for beef producers.
Swine producers attending an Alberta Pork meeting in Red Deer on Tuesday learned details of an insurance plan that would help cover losses when prices crash.
Agriculture Financial Services Corp. would be the most likely carrier, since it is government backed and operates to break even rather than show a profit, said consultant Ron Gibson, who worked on the beef plan.
“At his moment, it’s nothing more than a concept,” Gibson told about 100 producers.
From what has been learned so far, it appears that it would actually be easier to work out the figures because pork markets do not carry as many variables as beef, he said.
Numbers are now being worked out on slaughter animals only, with the possibility of adding in weaners and growers later on.
Premiums and payouts would be adjusted daily, according to markets, with rates set represent the level of protection and the length of time for which the producer wants to be insured, said Gibson.
Once registered for the program, producers would be able to buy their insurance in person or online, he said.
Red Deer-based industry consultant Marvin Salomons, who led the Alberta Pork team that has been investigating the concept, said that while AFSC is the most logical agency to run the program, the Crown corporation is still tied up with further development of the beef program.
“We’re talking months down the road before you see this thing come to fruition,” said Salomons.
“In the meantime we’re going to pursue it. A steering group is being set up to push this thing forward.”
Running the program isn’t as much of an issue as getting it developed, said Emmet Hanrahan, project manager for AFSC.
“Obviously, we’re here, so we’re interested. But it does need to (fit in) with what we as a corporation are doing in the next year.”