Alberta Beef Producers to Benefit From Risk Management
CANADA - The Alberta government is offering beef producers a new form of risk management with the introduction of the Cattle Price Insurance Programme (CPIP) for feedlot operators.
15 September 2009
2 minute read
CPIP, the first of its kind in Canada, will help Alberta’s feedlot operators manage price risk on fed cattle through price insurance and basis insurance available through Alberta’s Agriculture Financial Services Corporation (AFSC).
“Our government understands the risk and price volatility the beef industry faces and identified the need for cattle price insurance in the Alberta Livestock and Meat Strategy,” said George Groeneveld, Minister of Agriculture and Rural Development. “This programme is a made-in-Alberta solution that reflects industry needs and allows producers to customise coverage levels and policy length to suit their operation.”
The coverage sets a guaranteed price for fed cattle intended for sale 12 to 36 weeks from the policy purchase date. Programme coverage levels and premiums react to market factors on a daily basis, with policies settled against an Alberta average index.
CPIP reflects industry needs and effectively fills an area of risk management that did not previously exist. The programme was developed in consultation with industry, including the Alberta Beef Producers (ABP) and the Feeder Associations of Alberta who were key in its development.
“ABP supported the initial work on development of CPIP because we thought that price and basis insurance could be valuable risk management tools for cattle producers,” said Rich Smith, General Manager of ABP. “This is a new option for risk management which could provide significant benefits to our industry.”
“CPIP was designed to be flexible, and it has absolutely delivered with a voluntary, market-driven programme that’s easy to understand,” confirmed Reg Schmidt, Chair of the Feeder Associations of Alberta. “It fills the gap in price risk management, and we will be encouraging our members to take advantage of this unique risk management tool.”
An outcome of the Alberta Livestock and Meat Strategy (ALMS), CPIP complements the work led by the Alberta Livestock and Meat Agency (ALMA). “The project is an excellent example of cooperation that furthers the goals of ALMS,” said Joe Makowecki, ALMA board chair. "Industry developed the programme, AFSC is delivering it and ALMA is helping finance it. That's how true progress is made."
CPIP is now available for purchase. For more information or to enroll call AFSC at 1-888-786-7475 or visit www.afsc.ca.
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