Record-setting cattle prices might prompt producers to consider livestock price insurance.
That was the message from Manitoba Agricultural Services Corporation business development specialist and cattle producer Jeff Legaarden during a provincial StockTalk webinar Feb. 15.
“We’re looking at a value of $390 for an insured index on a 600-weight animal,” said Legaarden. “And that premium goes out to be $12.62 (per hundredweight). So it’s a high premium, but that’s the highest level we’ve ever seen an insured index for a calf in the whole 10 years of the program.”
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Why it matters: The insured index for cattle is higher than it’s ever been, and could provide protection for producers who choose to use it.
Cattle prices have been rising steadily since 2020, bolstered by a shrinking North American herd. The insured index for LPI has been following suit, as have associated premiums.
Lofty premiums, not cost-shared by government, are a big deterrent for many. Legaarden said it works out to roughly $75 per head to get the top value.
But if that high premium is a bit tough to swallow, LPI has cheaper options, which he said still offer a decent deal.
The next level premium for a $380 indexed value is $7.20 (cwt), or $43 per head. If that’s still too high, the premium drops to $22 per head at $370.
“If I told anybody last year or the year before, ‘I can guarantee you that the cattle futures are going to average $370 in the fall,’ everybody would have signed up for $22 a head,” said Legaarden.
Last year, Manitoba Agriculture farm management specialist Ben Hamm was beating the same drum. There was no better time to purchase LPI, he told producers. At the time, the insured index was $280 with a premium of $42 a head.
Legaarden said last October he sold his calves at just over $380.
“It was one of the best years I’ve ever had selling cattle. And now I can get a policy to represent what I did last year,” he said.
The MASC website is live with calf insurance policy numbers, which are updated every Tuesday, Wednesday and Thursday.
“I recommend that you go to our livestock price insurance website and sign up for the daily email premiums and settlement tables,” he said.
MASC’s YouTube channel recently posted a video that helps users find and use the LPI tables, and shows how to sign up for emails.
Forage insurance
Low soil moisture levels in many parts of the province also raised the question of forage insurance uptake.
Legaarden ran attendees through the MASC forage insurance calculator, which allows growers to select the type of forage they grow, broken into categories of alfalfa, alfalfa/grass mixtures, tame grasses, sweet clover and coarse hay.
“We’ve split each one of them into four years and younger and four years and older,” said Legaarden. “We understand that in the early years, some of these forages produce more than they do later.”
He used the example of a producer new to the insurance program living in risk area 2, which encompasses much of southwestern Manitoba.
“You would be looking at a dollar coverage for an alfalfa stand field of $362.20 and a premium of $21.69,” he said.
That $362 per acre is at the top end for alfalfa grown for less than four years, said Legaarden. At the bottom of the list is coarse hay,with coverage just shy of $100 an acre. Producers can also buy basic hay coverage.
“For basic hay coverage, we take all the different types,” said Legaarden. “You give us your acres, and you blend them into one total coverage, where you don’t have to worry about keeping each field separate.”
Basic hay coverage sits at roughly $139 per acre on a $5.57 premium.
MASC’s deadline for forage insurance is March 31.
