Marketing Thoughts

WLPIP (price insurance) became available in B C, Sask. & Manitoba on April 8th this year. A similar program has been available in Alta. for the past 4 years.

Price Insurance appears to be a worthwhile beneficial program. Here are some points that may help you evaluate the benefits of price insurance.
Points to Consider
1. Do you understand price insurance? The details of the program are available at WLPIP.ca
2. Do you feel price insurance will benefit you?
3. Have you purchased price insurance?
4. Do you realize that you can re insure by cancelling your original policy & purchasing a second one? When you do this you forfeit your original premium.
5. Will price insurance have any influence on how you market your cattle?

Price insurance is a new program. It takes time to understand & use the program. I am going to share our use of price insurance. I invite you to post your views or ideas on price insurance. Sharing can help all of us make wise decisions.

We bought price insurance as soon as it became available in April. The support price was $1.76 at 850#. The premium was under $2.00 per cwt. At this point we wanted the protection of a floor price. We were happy to purchase the coverage at $1.76 as we knew this would allow us to have a profitable year. We were not concerned about trying to achieve a higher floor price.

As the summer progressed we monitored the program daily. When the support price rose to $1.95 & higher we considered re insuring. We decided that it was a wise business decision to re insure. We cancelled our original policy & re purchased a new policy in July. The support price was $2.04 at 850#. The premium was under $3.00 per cwt.

At this point we have a strong floor price. We are now monitoring the market & contracts that are available to help us decide when to price our yearlings & what price to accept. Our current thinking is that we will not contract at a price lower than our price insurance ($2.04). If a higher price is available we may contract. If the contract price is less than $2.04 we will wait & price or sell our yearlings in the four weeks prior to the price insurance expiring.

We feel comfortable with our marketing decisions. We have a strong floor price. We have a good idea of the target price we will sell at. We feel price insurance has benefited us. We have used the program wisely.
I invite you to share any ideas you may have. How do you view the price insurance program? How have you used price insurance?

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