Production Insurance Feasibility

Production Insurance Feasibility Study

Earlier this summer, the Ontario Sheep Farmers (OSF), received the final report on the Production Insurance project that they had been engaged in. The project was designed to evaluate the feasibility of the development of an insurance program for sheep and considered several designated feasibility criteria including requirements for a potential program: • Be ratable and operable in an actuarially sound manner; • Moral hazards must be avoidable or controllable; • Customers must not be able to select insurance only when conditions are adverse; • There must be enough interest for the risk to be spread over an acceptable pool of insureds; • There must be no potential for beneficial gain; and • The perils affecting production must be identified and categorized as insurable and non-insurable.

OSF partnered with Watts & Associates (W&A) to conduct three on-site listening sessions throughout Southern Ontario sheep production regions in September of 2019. In the several months that followed, W&A made strenuous attempts to collect and obtain data to support evaluation of insurable risks. In addition to two separate OSF surveys, data were collected from OSF, Stats Canada, GenOvis, the U.S. Department of Agriculture, and even individual sheep farmers in Ontario. When these data were found to be insufficient to support robust statistical analysis, additional inquiries and data requests were provided to all the afford referenced data sources. In addition to quantitative analysis, a thorough literature review was conducted to assist in the development of risk profiles and to differentiate potentially insurable and uninsurable risks.

Based on stakeholder feedback, W&A worked to determine what types of production insurance garnered both producer interest and were potentially feasible. Ultimately, two primary classifications of potential sheep insurance programs were considered in detail; Production (average daily gain) Insurance and Mortality Insurance. Based on the simple consideration of the feasibility criteria, neither option meets the standard for feasibility at the present time based on several independent and confounding issues fundamental to the offer a viable insurance product. These issues are not unique to Ontario and indeed are present in livestock industries worldwide; no model for a successfully deployed insurance program for sheep production was identified anywhere.

W&A does not believe a blanket infeasibility finding provides much value to the Ontario sheep industry. As a result, considerable additional effort was expended to attempt to offer a pathway that could ultimately support a program for the benefit of Ontario Sheep producers. Based on many fundamental challenges to feasibility, production insurance for sheep is deemed impractical. The study found that mortality insurance could eventually become feasible if the following conditions could be met: 1) Substantially greater volumes of mortality data were collected support ratemaking; 2) Participating sheep farmers commit to provide detailed production and mortality data on an ongoing basis to support future experiential ratemaking; 3) Program deductibles could be set to compensate only unusual losses; 4) Coverage cannot attach to lambs until they are 50 days of age; 5) Compensation levels for lost lambs be set below their actual market value; and 6) Farmers commitment to best management practices.

Based on the findings of this project, the OSF has gone back to the producers who participated in the listening sessions to see if they would be willing to collect and provide data to the BRUSSELS OSF. Participants came back and LIVESTOCK said yes, only if it DIVISION OF GAMBLE & ROGERS LTD. did not take too much time, and did not cost them UPCOMING SALES money. Given this TUESDAYS feedback, the OSF 9:00 A.M. will be investigating affordable and Fed Cattle, Bulls & Cows efficient ways to THURSDAYS collect data from 8:00 A.M. producers. Drop Calves, Veal, Pigs, Lambs, Goats & Sheep

Funding for this project was secured FRIDAYS from the AgriRisk 10:00 A.M. Initiative Program Stockers under the Canadian Agricultural Partnership. OSN CONFIDENCE, TRUST & SERVICE

519-887-6461

www.brusselslivestock.ca

Campaign for Wool

Matthew J. Rowe, CEO of The Campaign for Wool in Canada

Wool is one of the most enduring fibres in human Ten years ago, HRH The Prince of Wales (Prince Charles) history. Since the stone age, wool has provided saw farmers around the world suffering from a prolonged a natural and sustainable resource to shield us depression in the price of wool and the rise of fast fashion from the elements and bring warmth to our homes. It boasts with its reliance on cheap, synthetic fabrics. an endless array of technical properties. Wool regulates temperature, inhibits the growth of bacteria, it resists flame, While synthetics made from petroleum products have protects from UV rays, and is resilient and elastic. If wool been with us for a few decades, it’s only now that we are was invented today it would be hailed as a miracle of modern appreciating the dangers that they pose to us and our planet. science. “Together we looked at whether it might be possible toBeyond practicality, it’s also beautiful. Wool can be start a Campaign to remind people of the absolute essential spun, woven and felted into importance of wool - one of Nature’s great gifts.” an unlimited range of forms. It holds dye better than ~ HRH The Prince of Wales other fibres meaning richer, deeper colours while providing structure and durability. It’s For example, synthetic carpets and upholstery release no wonder that the finest suits, the choicest rugs, the coziest noxious gases that have been shown to make people sick and blankets are all made of wool. Yet despite all these strengths, synthetic clothing is often treated with chemicals that disrupt wool has been struggling. hormones. However, the biggest impact is turning out to be laundry. When we wash synthetic clothes, they shed tiny micro-fibres which pass through treatment filters and end up in our watersheds. It is estimated that over a third of all the microplastics in the oceans come from laundering synthetic garments. Wool also sheds fibres when washed, but those break down naturally and safely into the environment.

The time was right for The Campaign for Wool, with the leadership of its Royal patron, to educate consumers once more on the benefits of wool and encourage them to choose natural fibres in all aspects of their lives. The Campaign was launched in Canada a few years later in May 2014 during The Prince and The Duchess of Cornwall’s visit to Pictou, Nova Scotia. Canada’s first wool week followed that Fall with events hosted by our founding retail partners Holt Renfrew, Pink Tartan & Joe Fresh.

Since its debut, the Campaign has reached millions of Canadians with its message promoting the wonders of wool. Our partnerships have showcased Canadian fashion, art and design, educated through activations at the Royal Ontario Museum and the Royal Winter Fair and provided opportunities for Canadian sheep farmers to show-off their farms and flocks. The Campaign has worked with major fashion designers, woolgrowers, retailers, manufacturers,

Ovis+aries is a work by Toronto Photographer Sage Szkabarnicki-Stuart and was shot with the support of The Campaign for Wool at Chassagne Farm in Puslinch, Ontario. Prints available from the Henderson Lee Gallery (https://hendersonleegallery.com)

artisans and interior designers from across Canada and around the globe to celebrate wool’s endless myriad of uses.

Our mission has become even more pronounced in the age of Coronavirus as we all re-evaluate the ways that we’ve been living and strive for a life more in harmony with the world around us. In response, we’ve expanded our activities claiming all of October as Global Wool Month. Our projects include:

• A renewed Holt Renfrew and Ogilvy designer capsule collection with garments created by Canadian labels

Smythe and LINE, using fabric from iconic British mills

Harris Tweed and Abraham Moon

• Showcasing the beauty of Canadian wool with a collection of 100% Canadian wool, hand-knotted, fair-trade certified carpets designed by HGTV’s Sarah Richardson and the team at Creative Matters of Toronto. The wool used comes from one of Canada’s last woolen mills, Briggs & Little of New Brunswick

• In honour of the global Campaign’s 10th anniversary, we’ve commissioned Manitoba fibre artist Rosemarie Péloquin to create a sculpture bust of The Prince of Wales completely out of Canadian wool

For the future we are looking to grow beyond media events and retail projects and develop a strategic plan focused on supporting Canadian woolgrowers while nurturing opportunities for adding value to Canada’s clip. We want your help to shape that future and welcome your ideas and enthusiasm. We are grateful to Ontario Sheep for being a partner of ours from the very beginning and hope to build a deeper and more engaged relationship as we build a woollier future for all. OSN

NEW: GenOvis: moving to a rolling base - what are the advantages?

By Amélie St-Pierre, AHT, GenOvis users support and development, CEPOQ

The basis of a genetic evaluation program is to compare the performance of animals against each other to determine which ones have the best genetic potential. To do this, a genetic program must utilize a reference population. This population will be the starting point (value 0) of the breeding values. This value can either be fixed in time or on a rolling base. Each of these types has its advantages and disadvantages.

A genetic program that always refers to the same animals to publish breeding values is called the fixed base. The reference base is usually set for a particular year (e.g. all animals born in 2010) and updated periodically (e.g. every 10 years). On the other hand, a genetic program that adds new or removes old animals at each evaluation or each year, is called the rolling base.

Fixed Base

The fixed base shows the genetic progress made over a fixed period. The reference base is updated approximately every 10 years. The breeding values tend to increase over time since new animals, with better genetic potential, obtain better breeding values compared to the older animals in the database. Breeders and buyers can see the genetic progress made year after year by the increase in breeding values. When genetic selection is performed well, breeders can progress by about 1 index point per year. Over 10 years, this represents 10 index points.

The problem with a fixed base is that every 10 years, when the base is updated, large variations in breeding values of animals are observed due to the significant change in the reference population. If breeders increased 10 points in an index over 10 years, all animals would experience an average drop of about 10 points in their index value when the reference population is updated. These significant variations are difficult to understand for both breeders and buyers. The variations do not mean that the animals are less efficient. It is only that the index value decreases due to the fact that the animals are now compared to younger and better performing animals.

The genetic gain trends show good improvement over 10 years, but the indexes and EPD values will be much lower when the reference population is updated. The decreases only happen at the time of the new reference population integration.

Rolling Base

The rolling base allows comparison with more recent animals. The breeding values will increase slower, compared to the fixed base, as the reference population changes year after year to keep only the most recent animals. Although genetic gains are more difficult to observe on new animals when compared to a fixed base, the animals are compared to better performers since new animals are added and older animals are removed from the reference population each year.

Graph 1: Significant variations in breeding values due to fixed base updated over a 10-year period. Graph 2: Variations in breeding values under rolling base