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Better safe than sorry: why getting price protection is important, even as cattle prices are strong

The price you can lock in is far higher than last year at this time.

With strong cattle prices, the Livestock Price Insurance Program is offering the highest floor prices in the program’s history. Cow-calf producers can lock in a profitable floor price for the calves that will be hitting the ground this spring.

With calf prices strong and the market looking favourable, some producers may wonder why they should be interested in price insurance. Jodi Griffin, Program Coordinator for Livestock Price Insurance in Saskatchewan says the program offers price protection in a world filled with uncertainties.

“For everything that goes up, it has the potential to go down. The U.S. has had an avian flu scare. There was a detection in dairy cows and that really rattled markets and took $14 a hundredweight off price insurance and off the market. Too many factors we can’t control and that’s the whole point of this being here. Foot and Mouth disease is being talked about at every level. Price insurance only defense against an event like that which could potentially shut our borders. So better to be safe than sorry.” said Griffin.

The price you can lock in is far higher than last year at this time. Griffin urges producers to examine the various coverage levels. Locking in a somewhat lower floor price greatly reduces the premium.

“Top coverage right now is trending in that 3 per cent range,” Griffin said. “But that bottom level that we always try to get our producers to take a look at as well, that’s running at 1.4 percent.”

Currently, the top coverage on a 600-pound steer calf comes to $2268 with a $73 premium. Bottom coverage guarantees $2,100 for a 600-pound steer at a cost of $24. June 13 is the deadline for producers to insure their calves. Coverage levels and premiums are posted on Tuesdays, Wednesdays and Thursdays. The website has all the information. You can enroll through the website or call your Sask Crop Insurance office. There’s no obligation to buy insurance once you enroll.