It’s only been available for 2-1/2 months, but already the Western Livestock Price Insurance Program is picking up steam among Manitoba’s cattle producers.
Since being introduced on April 8, approximately 550 ranchers have signed up for the long-awaited program, including cow-calf producers like Jason McKelvy of MacGregor, who said the process was a simple one.
“It seems to be very friendly to both large and small producers, having no minimum poundage that you have to buy, and then of course having a fairly large top end,” he said. “So a very wide range of producers can take part in it.”
“We’re receiving applications every day,” said Jason Dobbin, livestock price insurance co-ordinator with Manitoba Agricultural Services Corporation, which administers the program in the province.
Producers insured a total of 21,982 head of calves by the May 29 deadline for calf policies. As of June 5, 13,634 head of feeder cattle and 131 head of fed cattle had also been insured in Manitoba.
Dobbin stressed that producers are able to buy feeder and fed cattle policies year round, unlike the calf policies, which are only available in the spring.
“Our focus is now on selling the rest of these policies, feeder cattle, fed cattle and hogs can be purchased year round, so we’ll be targeting feeder and fed policies next,” he said. “So producers who have purchased calf policies can now be looking at our feeder policies and looking at what kind of marketing decision they want to make with those calves coming into the fall run.”
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Heinz Reimer, president of the Manitoba Beef Producers, hasn’t purchased insurance yet, but plans to in the near future.
“I’ve talked to a number of producers who say, yes we’re going to do it, we just haven’t done it yet… we all procrastinate a little bit,” said Reimer. “So I think we’ll see quite a few more people purchasing.”
The program has been promoted through print and radio ads, in addition to in-person presentations at producers’ meetings in an effort to explain how the policies function.
However, some misconceptions about the livestock price insurance program have been making the rounds in local coffee shops, said Dobbin, adding that anyone with questions can contact MASC for more information.
“Once they find out, oh, so you don’t have to sell your animals, you don’t have to do this, you don’t have to do that, then they are like, yes, this is a good program. So it’s just getting over that hump,” he said.
McKelvy has also encountered some confusion among producers.
“The fear would be, if you said you have 100 animals to price — what happens if 20 of them died? Am I in trouble with my insurer, is it a big problem? And that’s the problem if people think in real animals, but this is really a paper thing,” he said. “You don’t know if you’re going to sell your cattle next Tuesday or five Tuesdays from now, and this program is pretty flexible that way — it doesn’t force you into selling them two weeks early or anything like that, which is what a lot of producers are worried about.”
What the insurance program does do, said McKelvy, is index settlement prices using information from local auction marts, meaning producers don’t have to hedge using American prices.
“I think it’s a very easy pricing system, it takes the complexity out of it,” he said. “There is a cost to it, and if the prices keep rising there will be an expense, but if the prices go down you’ll be lucky to have it.”
In the event of a BSE-like occurrence, having insurance means a defence against disaster, the producer added.
The program will also help bring stability to the beef industry, said Reimer.
“Right now there seems to be a fair amount of optimism in the industry,” he noted. “Guys are cashing in the money they can get and paying off some debts and hopefully next year we’ll see some growth going.”