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What is the best way to utilize Livestock Price Insurance?
Monitoring the premium tables is a prudent strategy to making sound business decisions. As the markets fluctuate, producers are able to capitalize on coverage advantageous to their operation. Additionally, purchasing multiple policies over a period of time distributes risk, as opposed to buying coverage for all animals at once. Insuring animals with different policy expiry dates can be a beneficial way to split marketing and price risk, particularly if producers sell animals over a few weeks of time.
How do I know which policy & expiry date is best for me?
The policy choice is tailored around the weight of calf, feeder or fed cattle the producer plans to sell.
Producers should choose an expiry date which is closest to the expected sales date.
Does my individual settlement information factor in at all?
The Feeder and Calf policies are settled based on the average price of electronic and auction mart sales, not on the specific details of the sale of the livestock covered by producer policy.
Where does the Eastern Index get built from?
The data used for the Eastern Indices are created from Ontario and Quebec data only because the Maritime Data set is not robust enough for inclusion.
The index is built using steer data – can I insure heifers?
Heifers can be insured under any of the cattle products-. However, coverage and settlement of the Feeder and Calf programs are based on average steer prices.
What happens if what I sell my cattle at a light or heavier weight than booked for?
The insurance is booked based on pounds of insurance and will be sold as pounds of insurance. If more pounds are produced than anticipated, then you have produced pounds not covered and if less pounds are produced, then the producer has invested in insurance for pounds not produced. The policy will still cover the amount of pounds booked.
What happens to my policy if I sell my cattle earlier than my eligible claim windows or decide to retain ownership?
Selling livestock outside of the claim window for the policy does not alter or void the contract. The program is not meant to change marketing decisions for the insured, only to offset risk. If it is a better business decision to retain ownership, then the policy purchased will execute as planned.
There are some further options to execute on the policy early.