Alberta Crop Insurance-Help!

[crusher]

I haven't spent much time looking at the 2015 crop insurance proposal. I note that the Spring Insurance Price for wheat, barley and canola are pretty close to market values. So SPE is a crap shoot. Anybody have it figured out?

[charliep]

Hopefully others throw in their comments. With the exception of durum and maybe flaxseed, nothing really stands out. My reasons for looking at these 2 is bigger acres/potential to over produce demand base/limited other price risk management tools.

My thoughts. If you already have a reasonable amount of new crop priced, would be less likely to use SPE. If you have no new crop priced, more likely. For crops with underlying futures, options strategies (i.e. puts) have more opportunity to provide price insurance for lower cost with patience/discipline. Finally, your business individual risk taking ability/strategy. Run the scenarios and determine the impact of lower prices on businesseses survival.

[riders2010]

You guys seed a month before we do and get to pick crop insurance a month after we do????? wake up Sask Party you complained about this issue just like the roads just like power rates phone service etc. and its all the same or worse premiums through the roof. but hey there is more people right!!! what a crock of crap

[freewheat]

Yeah riders. Albertans speak a different language when it comes to crop insurance, huh?

[fjlip]

March 31st deadline is just plain ridiculous, wake the hell up Sk gov. Should be June 30, then you would know if crop has potential.

[blackpowder]

You cant buy car insurance half way into the wreck.
SPE likely not to pay this year. Last i looked the premium on canola was about the cost of puts on the whole crop.
Price risk management always expensive. If disciplined can certainly do yourself.
Cant think of anything id change about crop insurance. Not easy getting that dollar coverage on crop loss elsewhere any cheaper.

[errolanderson]

crusher . . . November canola $450 put option may trade for $24/MT.

Strike price $450 - premium $24/MT = $426/MT or 9.66/bu before fall basis is deducted.

Want a higher fall floor price ?

A Nov canola $460 put may trade for $30/MT
Strike $460 - $30 = $430 or $9.75/bu before basis.

Advantage . . . no government program. You control the shots of your market price protection plan , not the how the gov't program is designed.

You can enter and exit as you choose.

Check out out your floor price alternatives. Compare puts only versus government floor.

[crusher]

Thanks for your responses.