Canadian farmers have several options for insurance to protect the price of new crop canola. The Spring Price Endorsement is a price risk management tool, purchased as an endorsement on a crop specific basis. It will pay out if market prices decline below a determined level on actual production on a crop specific basis, according to a ‘within year’ price decline up to the coverage purchased.
Earlier this spring, Agriculture and Rural Development Alberta issued a press release reminding Canadian canola farmers of this option.
“The 2014 canola spring price under the AFSC Spring Price Endorsement (SPE) is $9.75/bushel,” says Neil Blue, market specialist, Alberta Agriculture and Rural Development, Vermilion. “A payout under the SPE would be triggered if the fall price drops by more than 10 per cent (i.e., 97 ½ cents/bushel) from this spring price. If the calculated fall price is below $8.77 ½ /bushel, there will be a payout under the Spring Price Endorsement.”
Blue continued to explain that the overall payout would equal spring price for Canadian canola of $9.75/bushel minus the fall price X crop insurance coverage in bushels. The Spring Price Endorsement (SPE) is limited to 50% of the price drop from the spring price ($9.75) or $4.88/bushel for 2014. The fall price for canola in 2014 is calculated by finding the average of the daily closing prices for ICE Futures Canada November canola during the month of October, then subtracting $20/tonne from that number. Prices less than $406.90/tonne in October would trigger a payout under the SPE.
It’s important for Canadian canola farmers to obtain all the information from the different pricing options, considering their costs of production, estimated crop carry-over, storage capacity, potential production and other financial needs. Keeping an eye on the current marketing environment and using different pricing alternatives will help farmers ‘spread out’ the pricing risks on this year’s crop.
“It may be prudent in the current crop marketing environment to use several different pricing alternatives to distribute the pricing risks of your upcoming crop,” Blue adds.
Looking for a Buyer for Your Canola and Other Crops?
Barr-AG Hay and Grain Exporters will buy your Canadian canola, oats, barley, wheat, flax, and pulse crops as well as Alfalfa and Timothy Hays. We specialize in containerizing, loading & shipping Canadian grains and hays and we’re major wholesale purchaser of Canadian Farm Crops.
We offer Canadian grain growers the opportunity to sell their crops locally. We have a good reputation and wide customer base in the international market, with years of experience producing and selling Canadian grains and hays overseas. We have a huge database of reliable international purchasers who are in the market for Canadian canola and other oil seeds as well as grains and hay forages.
If you have a crop coming in and are looking for a market to sell your crop – Call Barr-AG today to get a market price on your crop.