Saskatchewan producers have access to a new risk management tool to help withstand volatility in the market. Western Livestock Price Insurance Program (WLPIP) enables livestock producers to protect themselves against unexpected price declines, by allowing them to purchase insurance coverage while still being able to take advantage of favourable market conditions, if livestock prices should rise.
• How to Apply
Webinar - Western Livestock Price Insurance Program: Purchasing Policies in Saskatchewan Click to view the presentation delivered on May 13, 2014.
What is livestock price insurance?
Livestock price insurance is a simple risk management tool that allows producers to purchase price protection on cattle and hogs, in the form of an insurance policy. It provides producers with protection against an unexpected drop in prices over a defined period of time. The programs are market-driven and take into account price risk, currency risk and basis risk. Coverage is based on a number of market driven factors and reflect a forecasted price (including currency and basis) over the length of the policy. Settlement of the insurance is based directly on Western Canadian cattle/hog markets, not on an individual producer’s actual sales. Settlement indices are calculated weekly for the cattle products and monthly for the hog product. The settlement prices are designed to reflect current Western Canadian prices.
Producers can purchase price insurance options for their calves,fed cattle, feeder cattle and hogs.
The calf product is offered in the spring (February - end of May)and covers the price risk a cow-calf producer faces selling calves in the fall market. The settlement index is based on the average price of a 600 pound steer.
The feeder product covers the price risk a cattle feeder faces when marketing. The settlement index is based on the average price of an 850 pound steer.
The fed product is offered year-round for cattle being finished in Western Canada. Producers can also purchase a fed-basis option to protect against basis risk.
The hog product offers hog producers protection against a decline in prices over a defined period of time. Hog producers choose from a range of policy lengths and price coverage.
Western Livestock Price Insurance is available through SCIC. Producers will be able to learn about the program, how to sign up and how to purchase price insurance policies by contacting their local Crop Insurance office.
The program will also be accessible through the WLPIP website at www.wlpip.ca.
WLPIP is a Western Canadian program involving the federal government, Alberta, British Columbia, Manitoba and Saskatchewan. Alberta’ Agriculture Financial Services Corporation (AFSC) is the central administering agency of the program providing premium calculations, establishing forward prices, collecting market data to settle claims and providing technological support for the operating system.