The province will not subsidize price insurance premiums for beef producers ag minister Blaine Pedersen has said.
Western Livestock Price Insurance (WLPIP) premiums have come down since Manitoba Beef Producers asked the province for help, Pedersen added.
“Premiums change every week, and that’s something that producers need to keep on,” Pedersen told the Co-operator on June 9. “But we extended the deadline… for producers to lock in some insurance price on their calf production for this fall and that would really help them take a lot of variability out of the fall market.”
WLPIP has participating producers pay a premium to receive forward price coverage in a select time frame. If in that time frame that market price falls below the coverage level, the producer is paid out.
MASC extended the program deadline to June 18 from May 28, said WLPIP coordinator Jason Dobbin. He explained that market volatility increased WLPIP calf premiums to more than five times what they were pre-COVID, making the cost prohibitive to producers.
Premiums have since come down, though not to pre-COVID levels. MASC is keeping the program open to allow producers a few more weeks to monitor prices.
Manitoba Beef Producers is concerned that for some, this may not be enough.
“While MBP understands that the WLPIP premium costs have come down somewhat, they are still a barrier for some operations to utilize the program,” Manitoba Beef Producers said in a statement emailed to the Co-operator on June 9.
“Some producers who had purchased their policies at a high premium cost would also benefit from a rebate, similar to what had been announced in Saskatchewan,” the statement continued.
The province of Saskatchewan announced it would subsidize 40 per cent of producers’ premiums through rebates.
“At a time of uncertainty such as this it is important that producers have access to affordable business risk management tools,” Manitoba Beef Producers said. “We will continue to make this ask of the provincial government to help ensure our producers are on a level playing field with those in other provinces.”
Birtle-area producer Tyler Fulton told the Co-operator that he has purchased price insurance this year.
Fulton, who is director of risk management at Hams Marketing, said he expects prices to be poor this fall for several reasons, including the current backlog of cattle due to abattoir closures in Alberta and Quebec earlier this spring.
“I think this is exactly the best opportunity to be using price insurance, and price insurance likely at the highest coverage level,” said Fulton.
Fulton said insurance premiums are the second-highest single cost he incurs on his calves.
“The cost of the program is a very real, legitimate concern,” he said.
Producers have options at their disposal if cash is an issue, said Dobbin. They’re able to choose from several levels of coverage priced accordingly. They also have the option to put WLPIP premiums on account and pay thirty days after the policy expires, he said. Deferred payments are subject to interest, which he said is two per cent about CIBC prime.