Question: What is the ratio between producer payouts and producer fees? How many producers have benefited from this program?
Answer: In 2016 the average calf policy cost producers approximately $24.00 per head to insure. The payouts for last year averaged $100.00 per head. In that year, 1,004 policies were sold with 723 receiving a payment. 72 per cent of policies sold had a payment. We estimated the policies purchased by producers represented approximately 12 per cent of the marketable calves in the province.
Question: Does this program guarantee a price for cattle?
Answer: No. This program measures and makes payment on the overall cash market for a specific region. A producer purchases a policy that guarantees that if the overall cash market in that region falls below the coverage purchased, the producer will receive an indemnity (payout).
Question: Do cattle have to weigh 600lbs
Answer: No. The coverage and settlement price on the calf program are based on an average 600lb steer; however, cattle being insured on the program do not need to have an exact weight of 600 pounds. A producer selects the amount of insurance based on an estimate of the cattle’s market weight.
Question: Is the settlement price averaged over the 4 week claim window?
Answer: No. The Settlement price is offered on Mondays to reflect the previous week’s cash market. This price is only available within the claim hours of that day. If a producer does not trigger a claim during those hours, the price offered is lifted and a new price will be available the following Monday.
If a producer chooses not to trigger a claim in the first three weeks of the four week claim window or has weight remaining on the policy in the fourth and final week of the policy, the system will automatically settle the policy using the final Monday’s settlement price.
Question: How much time does it take to get set up on this program? How much time does it take to put in a claim?
Answer: The application process only occurs once. Applications are fillable online and can be faxed or brought into your closest Saskatchewan Crop Insurance office. Once the application is processed, the producer will be able to go to the WLPIP website and create a web account. Once the web account is created, the producer will be able to login, purchase coverage and make claims online. If you do not have access to a computer or experience technical difficulties you can come to any SCIC office to complete it on paper.
Question: Are there any differences between the calf, fed, feeder, and grass fed programs that you offer?
Answer: Yes there are differences in all programs as they represent the different cattle production cycles. The coverage offered and settlement methodology are different reflecting the unique aspects of each part of the production cycle.
Question: What information should a producer have to make the most of this insurance? Cost of production is important, is there any other information they should have under their belt?
Answer: As stated above, cost of production is imperative when making any risk management decisions such as purchasing price insurance. Having a general idea as to what level of coverage you need will assist you in making this decision.
Understanding the market will also assist in the decision making process. Talking with your local auction markets, order buyers and anyone else you value for cattle market information will help give you a “feel of where things are at”.
Set a reminder for yourself. Coverage is available for purchase Tuesday, Wednesday and Thursday from 2 p.m. to 5:30 p.m. MST. Set a reminder through your email, an alarm on your phone, or even write on a sticky note to help you to remember to look at the premium tables. The quickest way to see the day’s premium tables is to go to www.wlpip.ca at 2 p.m. MST as they are posted as soon as the numbers are released.
Logon to your web account beforehand – As a producer that might only purchase once a year or maybe not even every year, logging in to your web account before the purchase hours is a good idea to make sure your username and password work and that you can access your account when needed.
Question: Have you heard of financial institutions valuing this type of farm business management to secure loans or get better interest rates?
Yes we have heard of financial institutions valuing this risk management tool. Not only does it give “peace of mind” to the producer that buys the coverage but it also extends that “peace of mind” to his/her financial partners. The program is designed to protect against unforeseen downwards price risk and is an advantage to all stake holders.
WLPIP has also been approved for use with the Advance Payments Program. Producers who have coverage through WLPIP can utilize that coverage as security for accessing a cash advance from the Advance Payments Program.