Livestock Price Insurance Program
Canada
Protection against decreases in livestock prices in western Canada
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateJuly 09, 2024
- grant_single|closingDateJuly 09, 2024
grant_single|financingType
Grant and Funding
grant_single|eligibleIndustries
- Agriculture, forestry, fishing and hunting
grant_single|grantors
- Livestock Price Insurance Program (LPI)
grant_single|status
grant_card_status|closed
grant_single_labels|preview
Protection for farmers against decreases in cattle and hog prices in Manitoba, Saskatchewan, Alberta and British Columbia.
grant_single_labels|projects
The following projects or activities are eligible for this grant:
- Cattle Price Insurance
- Hog Price Insurance
- Calf Program
- Feeder Program
- Fed Program
grant_single|admissibleProjectsExample
$30,000
Calgary
Implementing a Cattle Price Insurance program for a cooperative farm
$50,000
Edmonton
Launching a comprehensive Hog Price Insurance program for a farm cooperative
$25,000
Saskatoon
Launching a Hog Price Insurance program for a family-owned farm
$30,000
Fort St. John
Introduction of a Fed Program for fed cattle price insurance at a ranch in Fort St John
$40,000
Vancouver
Implementing a Feeder Program to protect against feeder cattle price decreases
$35,000
Regina
Developing a Calf Program to stabilize calf prices for a cooperative
grant_single_labels|admissibility
Eligibility for the Livestock Price Insurance (LPI) program requires producers to meet general and product-specific criteria.
- File farm income taxes in British Columbia, Alberta, Saskatchewan, or Manitoba; or if one of these provinces is the province for which the greatest amount of income would be reportable under the Income Tax Act (Canada) for Eligible Livestock.
- Be the owner of the livestock.
- Be the age of majority.
- Calf: Be able to provide proof of calf ownership for 60 continuous days throughout the policy.
- Feeder: Be able to provide proof of cattle ownership for 60 continuous days throughout the policy.
- Fed: Producers need to finish the fed cattle in western Canada for the final four-week period immediately prior to the claim window.
- Fed Cattle Price Reporting: Participation is voluntary and available to all beef producers finishing cattle in British Columbia, Alberta, Saskatchewan or Manitoba. Producers do not need to be current LPI program subscribers.
- Hog: Be able to provide proof hog ownership for 20 continuous days throughout the length of the purchased policy.
grant_eligibility_criteria|who_can_apply
While specific types of companies are not explicitly outlined for the Livestock Price Insurance (LPI) program, the program is available to all cattle and hog producers in British Columbia, Alberta, Saskatchewan, and Manitoba.
- Producers must file farm income taxes in British Columbia, Alberta, Saskatchewan, or Manitoba.
- Producers must be the owner of the livestock.
- Producers must be the age of majority.
grant_eligibility_criteria|who_cannot_apply
The grant context does not explicitly mention any types of companies that are not eligible for this grant.
- nothing
grant_eligibility_criteria|zone
The eligible geographic zones for the Livestock Price Insurance Program (LPI) are specified provinces in Western Canada.
- British Columbia
- Alberta
- Saskatchewan
- Manitoba
grant_single_labels|register
- Step 1: Enrol in LPI with no obligation to purchase a policy.
- Step 2: Register for weekly premium and settlement emails to be responsive in making risk management decisions.
- Step 3: Create an online account on LPI.ca to conduct LPI business online.
- Step 4: Review the weekly premium table and settlements to learn how premium tables are calculated and data is collected for settlement values.
- Step 5: Purchase a Livestock Price Insurance policy according to the specified time window.
- Step 6: Enter the claim window during the final four weeks of the policy.
- Step 7: Review the policy during the first three weeks of the claim window and settle if in a claim position.
- Step 8: The LPI system will automatically settle against remaining hundredweight during the last week of the claim window.
grant_single_labels|otherInfo
The Livestock Price Insurance (LPI) Program is a business risk management initiative designed to provide livestock producers in Western Canada with protection against unexpected price drops in cattle and hogs. Participation is voluntary, and coverage details for calf, feeder, and fed cattle, as well as hogs, are provided with specific eligibility requirements and settlement indices influenced by market data.
- LPI policies can be purchased every Tuesday, Wednesday, and Thursday from 2:00 p.m. to 11:00 p.m. MT
- There are specific product offerings related to calfs, feeders, fed cattle, and hogs
- The LPI program includes weekly premium and settlement indices updates
- Additional protection includes advance payment programs, with options to borrow interest-free money on livestock already owned
- Fed Cattle Price Reporting allows producers to voluntarily report cash prices to benefit settlement indices
- Eligibility requires producers to file farm income taxes in the western provinces (BC, AB, SK, MB) and be the owner of the livestock
- Producers must manually manage claims within the first three weeks of the claim window
- Data sources include auction markets, electronic sales, and Canfax reported data to reflect market conditions
grant_single_labels|contact
1.844.782.5747
Apply to this program
Livestock Price Insurance Program (LPI)
The Livestock Price Insurance Program (LPI) offers Canadian producers in British Columbia, Alberta, Saskatchewan, and Manitoba a way to manage the risk associated with declining livestock prices. This grant provides comprehensive price protection for cattle and hogs, ensuring financial stability despite volatile market conditions.
Understanding the Livestock Price Insurance Program (LPI)
The Livestock Price Insurance Program (LPI) is a business risk management initiative designed to offer livestock producers in Western Canada a safeguard against unexpected drops in market prices. Available in British Columbia, Alberta, Saskatchewan, and Manitoba, LPI covers both cattle and hog producers, enabling them to maintain a predictable income stream even amidst fluctuating market conditions. Here’s an in-depth look at the offerings and workings of the LPI.
What LPI Has to Offer
LPI is not individualized production insurance, but a regional market protection tool. It establishes a floor price in the regional market (Alberta or Sask/Man) which serves as the insured index or coverage level of the LPI insurance purchased. If the market price falls below this coverage level during the claim window, the producer is compensated for the difference. This mechanism allows producers to manage their risk effectively without limiting their potential to benefit from upward price movements.
Why Use LPI?
LPI provides a unique comprehensive protection package for livestock producers, covering the primary price risks faced in Western Canada’s volatile markets. Here are key advantages of using LPI:
- Reduction of severe losses to the policyholder.
- Insures regional market price fluctuations over a specific time frame.
- Helps eliminate severe losses without forcing producers to sell on a specific date.
- Does not serve as a contract or marketing tool, thereby allowing marketing flexibility.
Available Products
The LPI offers tailored products to cater to different segments within the livestock industry:
- LPI - Calf: Offered seasonally in the spring, this product covers cow-calf producers selling calves in the September to February markets. The settlement index is based on the average price of a 600-pound steer.
- LPI - Feeder: This year-round product covers price risks faced by cattle feeders. The settlement index is based on the average price of an 850-pound steer.
- LPI - Fed: Also available year-round, this product is targeted at cattle finishing in Western Canada. The settlement index is based on weekly Alberta fed cattle prices derived from Canfax data.
- LPI - Hog: Available year-round, this product offers hog producers protection against price declines over varying policy lengths with flexible coverage options.
Program Participation
Participation in LPI is voluntary and accessible to cattle and hog producers in the designated provinces. Participants must meet certain general eligibility requirements which include filling farm income taxes in the designated provinces, proving livestock ownership, and being of legal age. There are additional requirements specific to each product type.
Product Specific Eligibility Requirements
- LPI – Calf: Must provide proof of calf ownership for 60 continuous days throughout the policy.
- LPI – Feeder: Must provide proof of ownership for 60 continuous days throughout the policy.
- LPI – Fed: Cattle must be finished in Western Canada for the final four-week period immediately prior to the claim window.
- LPI – Hog: Must provide proof of hog ownership for 20 continuous days throughout the policy.
Product Deadlines
The insurance products have specific purchasing and settlement periods. The calf program operates from February to June with settlements from September to February. Other products, such as Feeder, Fed, and Hog, are available for purchase and settlement year-round, though some blackout dates apply.
How LPI Works
Participation in LPI entails several steps:
- Enrollment: Producers enroll in LPI with no obligation to purchase a policy. Enrollment can be done online at LPI.ca.
- Register for Updates: Producers can subscribe to weekly premium and settlement emails to stay informed about market conditions and make timely risk management decisions.
- Create an Online Account: Facilitates online transactions and management of LPI business.
- Review Premium Tables and Settlements: Understanding how premium tables are calculated is crucial for making informed coverage decisions.
Purchasing a Policy
Policies can be purchased every Tuesday, Wednesday, and Thursday between 2:00 p.m. and 11:00 p.m. MT. Given the program’s responsiveness to market conditions, this specific time window helps manage the high volatility in livestock prices.
Understanding Premium Tables
Premium tables are region-specific and reflect real-time market conditions. Producers select the region that best reflects their marketing risk, choose a policy length that aligns with their expected marketing period, and opt for a coverage level that suits their operational needs.
When purchasing coverage, premiums are calculated using the estimated market weight of the livestock. For instance, insuring 100 head of feeder cattle each weighing an estimated 700 lbs at time of policy expiration would involve calculating premiums based on the total hundred weight (cwt).
Claim Window
All cattle policies have a claim window, typically the three consecutive weeks leading up to the policy expiry date. Producers can claim settlement prices published on Mondays during this window. The last week is automatically settled, ensuring producers receive compensation should the market price fall below the insured index.
First Three Weeks of the Claim Window:
Producers must manually claim during the first three weeks if they are in a claim position. They can set a portion or all of their insured weight each Monday. If no action is taken, the price for that week is forfeited, and the next week's price must be considered.
Settlement Process
The settlement process involves collecting auction market data to reflect the average market prices for relative cattle sold in a week. For calves and feeders, settlement indices are based on steer data, while fed cattle use combined steer and heifer data reported to Canfax. Settlement indices are published weekly, and a comprehensive system ensures that data is representative of current market conditions.
Contact Information
Producers can reach out to LPI representatives for support:
- British Columbia: 1.844.782.5747
- Alberta: AFSC toll-free: 1.877.899.2372
- Saskatchewan: SCIC toll-free: 1.888.935.0000
- Manitoba: 1.844.782.5747
LPI provides a crucial financial safety net for livestock producers in Western Canada. By understanding and utilizing this program, producers can better manage their risk and ensure the stability of their operations in the face of unpredictable market prices.
