New insurance will protect N.B. cattle producers from price fluctuations

For eight years, New Brunswick farmer Trevor Welchpushed for a change that would give cattle producers in the province more financial stability in the beef market.

Now, his efforts are paying off.

A beef-cattle marketprice insurance program started in New Brunswick in June as a two-year trial. It initially covers younger beef cattlebut by fall, it will be available for older animals as well.

Under the pilot program, producersare assured their cattle will have the same value they had when the insurance was purchased.

"It's certainly been a long time coming," said Welch, whose farmin the Carleton County community of Glassville has 60 head of Angus beef.

Welch, the chair of the New Brunswick Cattle Producers,said the Maritime insurance program will providestabilityamid often-fluctuatingbeef prices.

"For me as a cow-calf producer, it's going to provide a little bit of stability for me knowing that I can purchase an insurance policy that will tell me whether it's 12 weeks or 36 weeks awayI'll know what the price I'm going to get for my calves," Welch said.

Farmers across the Maritimes, who can already get insurance coverage for other livestock, have been asking provincial governments to help manage the risk amid fluctuating market prices for beef.

New Brunswick has about 500 beef producers, with about 11,000 cattle in total.

Amy Higgins, whoruns a small herd of Angus cattle, said she has already signed up for the insurance. Along with more financial stability, shesaid, the program willallow beef producersto finance other needed farm projects.

"If we aren't making a lot of money, we typically aren't spending a lot of money," said Higgins, who is aproject co-ordinator with theAgri-Commodity Management Association, an organization that provides administrative support for small farm groups.

Shesaid the program is flexible and can adapt to theneeds of individualfarms.

"It does give a lot of flexibility into the producers' hands, which from a risk-management perspective, all producers are going to have different levels of risk exposure," Higgins said.

The pilot program started in Prince Edward Island this year as well. Nova Scotia is working on a similar program, but there is no startup date yet.

How the insurance works

Welch said one of the benefits of the program is that farmers aren't locked into a set payout if the market is doing better than what they paid for.

"If the market goes up, well, then my insurance policy will just time out, and I would sell them for more than it was worth," Welch said.

"But if the market goes down, then I'm guaranteed the price of those animals that I'm selling, which up until now, the farmers in the Maritimes never had before."

Welch said beef prices can fluctuate daily. In 2003, for example, a national outbreak of BSE, also known asmad cow disease, brought prices down overnight by 75 per cent.

He said the insuranceprogram will ensure that producers know the price they will get as soon as they purchase the insurance.

The farmer pays 100 per cent of the premium they choose, while the administration costs of the program are covered by the provincial and federal governments.

The future plan

Kara Chisholm, the managing director of the Maritime Beef Council, said the Maritimes were the only part of the country to not have a program like this.

"That's the goal, to fill in that last gap," she said.

And while beef farmers will get some stability from the program, hamburger lovers won't see a price difference when buying meat.

"It's not affecting the market price at all," she said."So the consumer shouldn't see a difference at all."

Agriculture adviser Cedric MacLeod was one of the farmers pushing for the insurance.

MacLeod, who with his wife Alana, has 45 head of cattle at Local Valley Beef in Carleton County, said the programwas "sorely needed" because without it, cattle producers were left at the whim of the market.

The federal and provincial governments are covering the administrative costs of the pilot program, which will run until June 2026. The provincial Agriculture Department would not say if the program will be extended beyond then.

Department spokesperson Mark Taylor said officials will assess the program to see ifit creates financial stability for cattle producers. He said the goal is to help further the growth of beef production in the province, and the department is"quite confident that we can achieve that."

Like any insurance policy, Taylor said, premiums can change based on market conditions.

Welch said he hopes the financial stability offered by the program willhelp younger or newer farmers plan for the future.

He said his own 120-year-old family farm is going strong, but having peace of mind about finances is a big deal.

"This is going to add some confidence and hopefully allow beef producers to sleep a little better at night," he said.