SPE

[lnjr]

Been going over my crop insurance and debating if I should take the spring price endorsment. Looking to get a few opinions on it.

[charliep]

The coverage prices to help with the discussion.

[URL="http://www.afsc.ca/doc.aspx?id=5426"]Alberta spring coverage prices[/URL]

I would look at CWRW, CPS, feed barley, durum and some of the pulses. Canola?

I would look at all crops if I don't intend to price any new crop production.

You need to think of as insurance with the hope you never use.

[charliep]

Options strategies will be cheaper and provide better
coverage that the SPE on canola. Would have to work
the numbers on wheat although currency and as yet
unknown basis make it more challenging. Crops
without active futures markets (barley and durum) or
no futures markets make SPE the only alternative to
set a minimum price on most crops.

Others thoughts?

[Ronski]

SPE on Canola and wheat are over a
dollar/bu under new crop prices. I am
comfortable pricing about a third of my
production at these prices which are
profitable to me and putting the saved
SPE premium against risk in remaining
production. I looked at the $/bu cost
of insurance on remaining production and
it's to high. This requires no cash
outlay and generates my harvest
cashflow.
The SPE premium is to high vs the
trigger price for all my crops with the
possible exception of feed barley.

[Ronski]

Is the SPE price adjusted for freight?
That could make the prices look a lot
better for other people than they do for
me.

[charliep]

One price for the province. Price were established 2
and 1/2 months ago so reflected conditions at that
time. An area I would follow is the pricing process
next fall. Wheat and barley will present the biggest
challenges. Will know a lot more about which wheat
futures markets are used for pricing a year from now
and from there, the appropriate basis.