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RMP Hog – What you Need to Know

by 5m Editor
12 August 2011, at 9:39am

CANADA - Information of the Risk Management Programme (RMP) developed to help Ontario farmers is provided in the latest Pork News and Views from Ontario's Ministry of Agriculture.

The Risk Management Programme (RMP) helps Ontario farmers deal with risks that are beyond their control. With RMP in place, farmers can focus on what they do best — growing good things in Ontario.

The Hogs RMP was designed in consultation with farmers. RMP joins AgriStability as one more component of an effective risk management package.

Ontario will fund the RMP at the full amount of its traditional 40 per cent share. Agricorp will administer the programme on behalf of the Ministry of Agriculture, Food and Rural Affairs.

What hogs are eligible?

The Hogs RMP is divided into three categories:

Category Weight Range
Early Wean Birth to 7 kg
Feeder 7.1 kg to 25 kg
Grower/Finisher 25.1 kg to slaughter weight*
* Minimum 87.5 kg live weight before eligible for a payment

All hogs covered under each category must have been owned by the participants for a minimum period of time (Early Wean - 15 days; Feeder - 35 days; Grower/Finisher - 70 days), and have spent this amount of time in Ontario.

What do farmers have to do?

In order to participate in any weight category of the Hogs RMP, farmers are required to:

  • Enroll all of their production in the hog program category selected. For example, a farmer who feeds more than one category may choose to enrol all of their Early Wean production and none of their Feeders, but they cannot enrol a portion of each.
  • Sign up for AgriStability. For 2011, this step is voluntary as the deadline has passed.
  • Have a Premises Identification Number.

How much are premiums?

Premiums are waived for 2011. For 2012, premiums will be calculated by comparing support levels and market prices using historic, current and future data. This figure is multiplied by 30 per cent, to represent the portion to be paid by the farmers, then multiplied by 40 per cent to represent Ontario’s share.

The minimum premium charged to a participant is $25 under each of the hog programme categories.

Farmers may choose to pay their premiums in quarterly installments.

How are payments calculated?

Payment calculations will be based on the following:

(A) Support level minus market price for the production period for each category
(B) Production: measured per head in the Early Wean and Feeder categories or the total weight gained and sold within the range of the Grower/Finisher category
(C) Ontario’s 40 per cent share
(A) x (B) x (C) = payment for each category.

The support level is based on the cost of production multiplied by a farmer’s chosen coverage level. Coverage level options are 100 per cent, 90 per cent or 80 per cent.

Cost of production is the estimated cost of producing a hog within the weight category. It is based on an average drawn from financial information from a sample of Ontario hog farms. The cost of production includes animal purchase costs (if applicable), feed costs and yardage costs. Cost of production is calculated when animals are sold. It is based on recent average costs during the growth phase, working backwards from the sale date.

Calculations will be completed weekly, and will be based on actual sales volume for a farmer in each week.

When are payments made?

Any triggered payments for hogs transferred to another category will be calculated when hogs are sold.

Any triggered payments for hogs transferred to another category will be calculated when hogs are sold.

Triggered payments will be paid quarterly and will be the sum of the weekly calculations for the completed quarter.

Programme for 2011

The 2011 transition payment will be based on historic market prices and cost of production data.

Farmers must apply in the fall and report the following:

  • Actual sales to date by category from 1 January to 30 September 2011, and
  • Projected sales by category from 1 October to 31 December 2011.

A payment will be made in December 2011 using actual plus projected sales information at 75 per cent of the estimated payment rate.

A final payment will be made using actual sales data for October to December 2011 and the payment rate adjusted based on final participation rates.

When are applications available?

Applications will be available from Agricorp in September 2011. Please check Agricorp’s website closer to that time for more information.

Information sessions are being planned for mid-August to mid-September.

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