Alberta offers new hog price insurance program

Alberta’s Agriculture Financial Services Corporation (AFSC) is offering a new Hog Price Insurance Program (HPIP) designed to protect hog producers against an unpredicted decline in Alberta hog prices over a defined time period.
Delivered by AFSC, HPIP is part of a larger suite of livestock price insurance programs that includes three programs for cattle.
“The Hog Price Insurance Program is another example of government’s support for producers who have been impacted by volatile market prices,” said Jack Hayden, minister of agriculture and rural development. “We have seen good success with the Cattle Price Insurance Programs and wanted to bring those benefits to hog producers as well.
“This program reflects the needs of our hog producers and provides them with a simple and bankable way to manage risk.”
Under the voluntary HPIP program, producers will have an option to purchase an insurance policy based on a forecasted hog price into the future.
When the policy expires, the coverage purchased is compared to a settlement price that reflects the monthly average price of market hogs in Alberta. If the settlement price is below the insured price, a payment of the difference is made.
Coverage levels are calculated using market driven data such as the Chicago Mercantile Exchange lean hog futures and Canadian currency. The settlement price will be based on available market information that reflects an average Alberta market hog price.
Coverage can be purchased at different insured prices and for different policy lengths (monthly, or two to 10 months out). Policies will be purchased in 100-kilogram units based on the weight of hogs the producer expects to market at the time the policy expires.