Just wondering if anyone has taken a good look at the new insurance programs out there. Are they any good/worthwhile? Or is it just like crop insurance? Basically useless except 1 year out of 10.
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I assume you are talking about the AFSC
programs. We are looking at the feeder
one, but am not sure if the cattle have
to be fed in AB. (We are thinking of
having our own cattle fed in SK).
The cow/calf program is out of sync with
our program, as it basically requires
early spring calving and fall marketing
as I understand it.
Premium goes up for length of coverage
as well as level. (Eg: to lock prices 6
months out is a lot more $ than to lock
prices 3 weeks out.)
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I had a look at the cow-calf option last week being that the deadline is May 31st. I don't remember the numbers at this exact moment, but have decided that the premium was more expensive than I thought worth. It seems to me the cost was about $3.00/cwt for an assurrance of $125/cwt. So I decided that I can take the chance of the markets being better than $125 and save myself the $3.00. The only factor that i can see that will dampen calf prices is the cost of feed barley or feed wheat this fall. Although fats have softened somewhat, the fundamentals are still good and the chances of 650 weights passing a $125 is reasonable.
Any other thoughts out there?
Sean, the program is neutral as to what you actually do with your calves. The payout is based on the provincial prices in the months in question not on your calf prices of weights.
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If anyone thinks that this stupid scheme is going to help producers get what they deserve from the marketplace they are dreaming.
This whole insurance BS is designed so that we will accept the near monopoly situation that exists (and has existed for years), in marketing cattle in Alberta. It will not change the current system nor will it ever work properly.
Who comes up with these schemes? For years the cattle producers said NO, we don't want support programs so now some smart-ass comes up with an insurance program that looks like it should help but is designed to fail because it doesn't get at the root of the problem.
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Ruken,
I basically agree with you, however the
cow calf program has a May 31st
deadline. We don't start calving until
May 7th or so. For us that is kind of
like buying crop insurance when we don't
know how many acres we are putting in.
It would be nice if a producer could
option based on their production
calendar.
The program does have some merit, but I
expect there will be some things to iron
out along the way.
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Wilagro, I appreciate some of your comments. Question: since when does the free enterprise market place offer the word "deserve"? Answer: it doesn't. The free market place model says, make it when you can and sink when you can't. It's ruthless and heartless and very competitive. Only the lucky or shrewd survive under it's pure form.
The governments and industry have invented these insurance programs to soften the harshness of the free enterprise model but still keep its basic structure.
I also agree with your frustration about the near monopoly part which also happens to be part of the free enterprise model. As an industry, the monopoly is working properly, however at the expense of those of us that are on the other side of the equation. So it is. Until the industry gets big enough to add more competition to the packing and processing and retailing industry, we will continue to be faced with this reality. (highly unlikely will happen)
Maybe the grain farmers with the CWB don't have it so bad. The chances of setting up some sort of organized pricing system is greater than the industry changing from what it is now.
Maybe we should look at relocating to another country where it is better for the primary producer...WAIT!...there is no other country where it's better.
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Ruken: Frustrated? Years ago I got so tired of being ripped off by one so-called Auction Mart that I switched to another one and got consistently better prices year after year. Then that son-of-a-beatle who ripped me off just turned around and bought up the one that I had switched to plus about six or eight more.
To keep ahead of that turkey and his families huge holdings of "cattle exchanges", I'd have to truck cattle to Ontario and beyond.
Well I had enough of that BS and finally pulled the plug on the whole shootin' match...too old now anyway.
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