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Cattle Price Insurance Program (CPIP)

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    Cattle Price Insurance Program (CPIP)

    Alberta started offering a price insurance program for finished cattle yesterday. a similar product for feeders is being developed.

    [URL="http://alberta.ca/acn/200909/268469FB3F2C4-A66F-55E6-D73762A4C118F04F.html"]CPIP[/URL]

    An interesting concept that could be extended to crops.

    #2
    Also an interesting concept that should have been brought in by the Feds and applied to all provinces. Ya gotta love that old level playing field, eh?

    The Manitoba government has brought in a price insurance program that consists of a kick in the bum, and the good wishes not to let the door hit us on that same bum as we walk out the door.

    End of rant.

    On the bright side, if the Alberta feedlots can manage risk better, maybe they'll be more willing to buy feeders from us poor slobs in Manitoba. ;-)

    Comment


      #3
      Personally I'm underwhelmed by this development - never have been a big fan of insurance preferring to take my chances with the robber wearing a mask than the one wearing an insurance brokers pin-stripe suit. What does this really amount to anyway? the chance to lock in the currently prevailing crappy commodity prices? I'll be interested to see how it is expanded to feeder cattle - my guess is that it will not be workable on quantities smaller than load lots of same weight, same sex animals and how many producers in AB can fill those criteria?
      I would much rather see the Provincial and Federal Governments tackle the underlying problems of the sector and then there wouldn't be the need for this kind of program. A bonus would be this could be done with the use of political will very little, if any, financial resources. Surely that alone should be making politicians think given current budgetary concerns?
      One question I have on this Charlie - is this Government subsidised insurance or is it offered on a "for profit" basis?
      I'm also not overly happy that AFSC are involved - in my experience that dooms the program to be poorly run, behind schedule and riddled with mistakes.

      Comment


        #4
        A guaranteed price on "finished" cattle......how many grass roots producers finish cattle? Who contols (owns/contracts) most of the fed animals in Alberta?
        Who gets the premium for 'age verified" beef?
        Am I missing someting?

        Comment


          #5
          After visiting the website:
          The "spin" meant for consumers from the AB goverment website......
          "The Cattle Price Insurance Program is designed to provide Alberta cattle producers..... " (sounds wonderful)

          The reality from the AFSC website.....
          "Heifers and steers that are at least 500 lbs. when the policy is purchased, are intended for slaughter by the Insured, and must reasonably be expected to yield Grade A or better at the time of slaughter." (Counts me out...but the voting public doesn't know most producers don't slaughter their own cattle)
          Could someone enlighten me as to the percentage of cattle that will be "slaughtered" by anyone other than Cargill and Nilsson's? 90%?
          So, lets say Cargill's feedlot division buys inusrance, but takes a loss when selling to Cargill's processing..........
          Someone please tell me what I am missing here?

          Comment


            #6
            My understanding is that a product is
            coming for the cow/calf level but that
            it is quite complicated and will take
            much more development time. In the
            meantime CAIS will protect us.
            I think improving feedlot risk
            management could be beneficial, but this
            is a sector that already has hedging
            tools and contracts available to it to
            some degree.
            I suspect price insurance for the
            cow/calf level will have some hefty
            premiums and complex paperwork, but I
            hope I am proven wrong. I wonder if a
            derivative of the futures could be made
            to work, although the time frame could
            be too long on the C/C side.

            Comment


              #7
              Ahhh yes......... I forgot about the fact that CAIS will protect us! Silly me!

              Comment


                #8
                If the govt can insure I get 1200 dollars for my 9 wt grass yearlings...I'm in

                Comment


                  #9
                  even if it costs you $1300?

                  Comment


                    #10
                    I see I'm not the only cynical one, lol. Get the terminology right though - its AgriStability that is to be our savior - not CAIS!

                    Comment

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