Province provides $10 million to support livestock producers dealing with market disruptions

Saskatchewan livestock producers will be benefiting from $10 million in additional provincial government funding directed to a pair of programs helping producers manage the impacts of COVID-19 market disruptions.

A full $5 million will fund the Saskatchewan government’s 40 per cent contribution to the national Agrirecovery set-aside program. The other half of the money will partially offset higher premium costs under the Western Livestock Price Insurance Program.

The federal government announced their 60 per cent contribution to the Agrirecovery program back on May 5. Saskatchewan livestock producers will now be able to access a total of $12.5 million in joint federal/provincial funding under the set-aside program.

“We know our livestock sector is under tremendous pressure, and today’s funding will help to make sure our producers have the support they require during this unprecedented period,” Agriculture Minister David Marit said during a press conference last Thursday.

“The set aside program will help compensate producers for the cost of holding market ready cattle back until supply more evenly matches reduced demand and processing capacity,” he added.

Merit noted that at this time of year usually about 3,500 head of steers and heifers are ready to go to market, and that during a recent week less than 400 fed cattle from Saskatchewan were processed in Alberta.

“Obviously we see that starting to back up. I think as of last week we were estimating about 15,000 head of market ready fed cattle have already been impacted by the slowdown in processing.”

“The fat cattle that are being held up is going to obviously cause a backlog in the industry, and we’re concerned about that. The numbers could get quite high. We’re hoping the (processing) plants are going to be up and running at full capacity soon. And obviously that would have an effect on the calf crop in the fall.”

He also said the province feels it is important to help offset higher premium costs producers are facing under the Western Livestock Price Insurance Program (WLPIP). The province is now covering 40 per cent of increased premium costs retroactive to February 25, 2020.

“We felt it was important to help the cow-calf producers on the premium side, and that’s why we announced a 40 per cent on the premiums differential to help them out,” Marit said.

Producers also have a longer time period to sign up for WLPIP, with the deadline to obtain calf price insurance extended from May 28 to June 18.

Jeff Morrow, Crop Insurance, Vice President of Operations, noted that calf price insurance is currently only at about six per cent of the marketable calf crop.

“That’s lower than historic for sure for this time of year. The highest we’ve seen in the program is about 17 per cent of the calves insured,” Morrow noted.

Marit said this additional WLPIP support provides a benefit for cattle producers wishing to participate in the program.

“I think it is important. Obviously I’ll always leave it up to the individual producer to make that business decision on their own,”

“We heard it from the cattle industry over the last month of the concerns under the Western

Livestock Price Insurance Program, and the impact that would have on the industry as a whole, and with the backlog on the feeder cattle on the fats going to market, to get rid of the backlog we could be looking at three-four months we’re not sure. It just depends when the plants get back up and running at full capacity.”

“There’s a lot of what if ’s in here and challenges, so that’s why we just felt it was important for us to at least offer some pressure relief on the premium side to the cow-calf producers, and then they will make the decisions on whether they want to take the insurance. We’re not impacting the market price that is set by the industry, we’re just helping on the premium side.”