About WCPIP - Fed
Premiums
The premium for a WCPIP policy is reflective of the
WCPIP – Fed offers price insurance to insure
probability of a payment or indemnity being paid. The
finished cattle that are intended for slaughter and
longer the life of the policy, the more chance there will
expected to grade A or better. WCPIP-Fed has three
main components: U.S. prices (Chicago Mercantile
WCPIP - Fed Features
basis. WCPIP-Fed is based on the Western Canadian
market and bundles all three of these risks into one
convenient and easy to use risk management tool.
By offering policies continuously throughout the year,
producers will be able to match coverage in relation
to their own cattle feeding operations and anticipated
marketings.
• Policy lengths range from 12 to 36 weeks.
• For each policy length, a range of coverage levels
WCPIP-Fed is a market driven program as coverage
offered directly reflects the fed cattle market.
Producers have the flexibility to insure all or just a
portion of anticipated marketings as well as hold
more than one policy at a time to match coverage
to different lots of cattle. Coverage offered through
WCPIP-Fed price insurance is calculated each
Tuesday, Wednesday and Thursday using market
data from each given day. After forecasting the price,
the coverage offered begins at 95 per cent of that
forecasted price. Coverage factors include:
•
Chicago Mercantile Exchange live cattle futures
•
Canadian dollar
•
Basis
By taking into account each of these factors,
producers have a market driven forward price
coverage they can evaluate and use to help manage
the risk of finishing cattle.
result in a payment, so all else being equal, the higher
the coverage level, the higher the premium.
are offered that correspond to a premium. Coverage
One of the most important factors influencing premium
levels are available up to 95 per cent of the expected
is volatility of the market. If cattle prices are highly
forward price for each policy length. These coverage
volatile, then WCPIP premiums will be more expensive
levels and premiums change on a daily basis in
than when the market is quiet and prices are relatively
relation to various market factors.
stable. If cattle prices are highly volatile, traditionally
• Policies will be purchased based on expected sale
Coverage
WCPIP policy length, the higher the premium. Similarly,
the higher the coverage, the more likely the policy will
Exchange (CME) live cattle futures), the Canadian/
US currency exchange rate and the cash to futures
be a payment, so all else being equal, the greater the
weight of the cattle, in terms of hundredweight (cwt).
One hundredweight is equal to 100 pounds. There
there is a greater interest in purchasing price protection.
As a result, the premium is higher to compensate for the
increased risk of a payment.
are no weight minimums required to complete a
Premium Factors:
purchase.
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•
•
•
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• The claim window is the last four weeks of the policy.
In each of these four weeks, a producer can compare
their purchased coverage to the settlement index.
There are no weight minimums to file a claim, so a
producer has the flexibility to claim a portion of the
insured weight in any of the four weeks of the claim
Forward fed cattle price
Volatility
Coverage level
Policy length
Interest
Settlement
window. There is no obligation to sell the cattle to
The WCPIP - Fed program creates a settlement
make an insurance claim, although the intention of
index based on weekly data collected from CanFax.
the program is to match policy length and claims to
Settlement prices are based on data gathered from the
actual cattle sales.
previous week. The settlement values are made public
• If the producer sees a settlement index which is
below the insured price of their policy, they can
choose to make a claim for all or some of their
insured weight on that policy. If for any reason all of
the insured weight is not specifically claimed by the
producer, the policy will automatically expire at the
end of the last week of the policy and the settlement
index relevant to that week will be used. Indemnities
are paid if the settlement index settled against is less
than the coverage purchased.
each Monday afternoon.
The WCPIP-Fed program is not designed to insure quality
or intra-provincial variations in price levels. While WCPIP
is designed to reflect the actual markets of producers
the insurance policies are not directly tied to the
individual’s actual marketings or prices received.
The WCPIP - Fed settlement represented an average
weekly Western Canadian price for finished cattle sold
during the week.
Why use Western Livestock
Price Insurance?
Western Cattle Price
Insurance Program
 Protect against volatility in the
marketplace.
WCPIP - FED
 Manage risk of falling prices.
 Use a simple and easy to understand risk
management tool
• Market driven product
• Coverage based on current market
conditions
• Provides a “floor” price on livestock
Tailored products for every aspect of the beef
production chain, and for hog price protection.
For more information, visit the Western
Livestock Price Insurance website:
of the upside
and get control of your
livestock price concerns.
help western producers manage
www.WLPIP.ca
the price risks of finishing cattle.
Or call our toll free number to speak with
someone about WLPIP:
AB: 1-877-899-2372
Take advantage
A western designed approach to
BC and MB: 1-844-782-5747
SK:
1-888-935-0000
*Ce livret est aussi disponible en francais.
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