The Western Livestock Price Insurance Program, announced by Saskatchewan agriculture minister Lyle Stewart in January, is modelled after a long running Alberta program under which the producer pays a premium up front to set a floor price and a payment is triggered if the selling price falls below that insured price.

Mark Ferguson, the manager of industry and policy analysis with Sask Pork, explains.

Mark Ferguson-Saskatchewan Pork Development Board:

The programme protects you from fluctuations in hog prices, the Canadian dollar and the basis, which is an important one.

It's simple to understand, you don't need a broker, there's no minimum number of hogs so if you're only producing a few hogs it's a programme that you can use and the other thing is that if for some reason you can't deliver your hogs you're not penalised under this programme.Those are some of the advantages of the programme.

The disadvantages are that there's a premium paid up front whether or not you trigger a payment so that's going to be a consideration.

You need to have access to some capital to even make the decision to buy the price insurance.

The other thing is, when you take into account the premium, the price you're going to lock in is about 10 to 20 dollars per CKG lower than other opportunities so you have to take that into account when weighing the advantages and disadvantages of the programme.

But one important advantage is that, if the market goes up after you've set your floor, you get that upside so, especially in a market like we've experienced over the past month, that's a big advantage so you have to look at that for sure.

Ferguson acknowledges we don't yet have a firm date but the new program is expected to become available sometime this spring.