A price protection program developed for Alberta cattle producers has expanded to cover calves.
The Cattle Price Insurance Program (CPIP) was launched a year and a half ago to give producers a way to ensure a minimum price for their fed cattle. Policies of varying durations can be purchased months prior to sale to lock in a forecast price, although farmers are still able to sell for more than that minimum.
A similar price insurance program for feeder cattle followed, and now calves can also be insured.
CPIP-Calf allows producers to lock in a minimum fall selling price for weaned animals weighing 550 to 650 pounds. Those prices are forecast on the basis of factors like the futures price for feeder cattle, currency exchange risks, feed prices and the difference between the United States and Canadian calf prices.
Policies can be purchased until May and can range in length from 16 to 36 weeks, depending on the anticipated selling date of the insured calves.
Agriculture Financial Services Corp., a provincial Crown corporation headquartered in Lacombe, administers CPIP.
“We’ve had strong interest in the fed and feeder programs, and producers tell us there’s a real need for this third program because most cow-calf producers are ‘price takers’ who sell their calves at auction marts in the fall, leaving them at the mercy of prices being offered on any given day,” said Jennifer Wood, co-ordinator of CPIP programs for AFSC.
“The average cow-calf producer has very few options when it comes to managing price risk.”
Cattle prices have strengthened considerably, but many producers are painfully aware of how quickly such a trend can reverse — the result of uncontrollable factors like a jump in feed costs or the rising loonie.
AFSC is currently working with the pork industry to develop a hog price insurance program.
Additional information about the Cattle Price Insurance Program can be obtained by calling AFSC at 1-877-899-2372 or going to its website at www.afsc.ca.