Alberta pork producers have another tool to help them manage their risk when it comes to the price they get for their market animals.
The Hog Price Insurance Program (HPIP), delivered by Alberta’s Agriculture Financial Services Corporation (AFSC) as part of a larger suite of livestock price insurance programs, may help provide farmers with protection against a decline in prices over a defined time period.
“It is really great of AFSC to put out the program and for the minister and cabinet to approve it, because it is something we are lacking in Alberta is risk management tools,” said Darcy Fitzgerald, executive director of Alberta Pork.
The program was created with consultation from industry experts, including Alberta Pork, the Western Hog Exchange and the Alberta Livestock and Meat Agency. It is voluntary and available year round. Farmers will be responsible for the cost of the premiums and settlements will reflect the monthly average Alberta hog price.
“The Hog Price Insurance Program is another example of government’s support for producers who have been impacted by volatile market prices. We have seen good success with the Cattle Price Insurance Programs and wanted to bring those benefits to hog producers as well,” said Jack Hayden, minister of agriculture and rural development. “This program reflects the needs of our hog producers and provides them with a simple and bankable way to manage risk. In purchasing an HPIP policy, the producer has a known floor price for those hogs without limiting the ability to sell them at a higher price, which is important in creating a sustainable industry.”
Fitzgerald agreed that the HPIP program may provide much needed stability for producers, but cautioned that the cost of the premiums may not be feasible for all farmers.
Alberta hog producers, who have suffered losses over the past three years due to high feed costs and volatile prices, also gain stability through contracts with guaranteed prices.
“I think it has gotten a little better, but for three-and-a-half years, producers in Alberta haven’t made any money,” said Fitzgerald. “The whole industry is suffering, it does bleed into other industries and other sectors as well, whether it be the processing of feed industries, and that translates into a lot of jobs and really affects the economy.”
Fitzgerald said Canadian producers still get some of the lowest prices per animal in the world, despite the high quality of their meat.
Those low prices, coupled with high feed and other input costs, have led to an unprecedented decrease in producers – from 1,000 several years ago to 380 today.
It could mean shortages for domestic markets, he added, as foreign markets, such as China, buy up Canada’s premium products.
The solution, Fitzgerald said, is for producers to receive the equivalent price per animal as American producers and for domestic consumers to realize the value of ensuring a healthy supply.
“It is probably time that the producer, packer and retailer… work together in this country,” he said. “Many countries have faced food shortages in the past, they do pay more that domestic product. This country has never known that.”
For more information or to enroll in the HPIP program, call AFSC at 1-877-899-AFSC (2372) or visit www.AFSC.ca
