ALERT

Premium tables will not be published, and no policies will be sold, on June 19 due to the Juneteenth U.S. federal holiday.

Feed grain prices moderated throughout 2023, supporting feeder prices. On a deflated basis (1992=100) most classes of feeder and fed cattle in Alberta and Ontario approached previous all-time high prices. Domestic beef production declined 5 per cent, as drought across North America over the last three years moved heifers into feedlots. Beef export volumes declined slightly; but values were record high. Cattle inventories are expected to be smaller in 2024, providing fundamental support to cattle prices. Larger beef imports are anticipated to fill the void with shrinking North American beef production.

The Canadian economy appears to have stabilized by the end of 2023 with current numbers (1.5 per cent GDP growth) outpacing original expectations (1 per cent). Inflation is moderating and economists are expecting interest rate cuts to begin mid-year. The Canadian Dollar averaged near US$0.74 in 2023.

North American cattle inventories are driven by the U.S. herd. The U.S. cattle herd on January 1st, 2024 was down 1.9 per cent from 2023, to 87.2 million head, beef cows were down 2.5 per cent to 28.2 million head, and beef breeding heifers were down 1.4 per cent to 4.9 million head. Smaller numbers have been offset by larger carcass weights. The Canadian cattle herd was down 2.1 per cent to 11.1 million head as of January 1st, 2024, beef cows were down 2.4 per cent to 3.46 million head and beef breeding heifers were down 5.6 per cent to 519,600 head. North American heifer retention, thought to begin in 2023, will be delayed until at least the fall of 2024, subject to adequate moisture.

Chart showing deflated cattle and beef pricesCanada vs US beef cow numbers January 1

 

Bottom line: Ongoing drought conditions continue to delay the expansion phase of the cattle cycle. A smaller North American beef herd in 2024 will reduce beef production, supporting prices throughout the supply chain. It remains to be seen how consumer demand holds up in 2024.

2023 MACROECONOMIC OVERVIEW

  • The inflation rate declined from 5.9 per cent in January 2023 to 3.4 per cent by December 2023, though the ride has been bumpy
  • The prime interest rate rose from 6.7 per cent in January to 7.2 per cent by December to combat higher inflation. The interest rate has been steady since July 2023
  • The unemployment rate was 5 per cent in January, but slowly and inconsistently increased to 5.8 per cent by December 2023
  • The Canadian economy outpaced expectations in 2023, re-igniting the possibility of a ‘soft landing’ in 2024

2023/24P BARLEY SUPPLY AND DISPOSITION

  • Canadian barley production totaled 8.9 million metric tonnes, 11 per cent lower than 2022, and steady with the 10-year average
  • Barley exports in 2023/24 are projected at 2.78 million metric tonnes, down 28 per cent from 2022/23
  • Total domestic use in 2023/24 is projected at 5.91 million metric tonnes, 1 per cent lower than 2022/23
  • Ending stocks in 2023/24 are projected at one million metric tonnes, 41 per cent higher than 2022/23
  • The stocks-to-use ratio in 2023/24 is projected at 17 per cent, compared to the five-year average of 12 per cent

2023/24P CORN SUPPLY AND DISPOSITION

  • Canadian corn production totaled 15.08 million metric tonnes, the largest on record and 4 per cent higher than 2022
  • Exports in 2023/24 are projected at 2.85 million metric tonnes down 35 per cent from 2022/23
  • Total domestic use in 2023/24 is projected at 15.45 million metric tonnes, 4 per cent higher than 2022/23
  • Ending stocks in 2023/24 are projected at 1.9 million metric tonnes, 17 per cent higher than 2022/23
  • The stocks-to-use ratio in 2023/24 is projected at 12 per cent, lower than the 10-year average of 15 per cent

FEED GRAIN PRICES

  • Feed grain prices steadily declined in 2023. Between January and December 2023, barley prices dropped 26 per cent, Ontario corn prices dropped 32 per cent
  • China’s trade action against Australia was lifted in August 2023, reducing demand for Canadian barley
  • New crop (2023/24) barley and corn prices were considerably lower compared to old crop (2022/23) prices
  • Lethbridge barley averaged just shy of $400/tonne, a 9 per cent reduction from 2022, but was still priced at a premium to all feed grain substitutes
  • Ontario corn averaged $281/tonne, down 18 per cent from 2022
  • Omaha corn averaged C$312/tonne, down 16 per cent from 2022

HAY PRICES

  • Drought conditions in Western Canada pushed hay prices higher in 2023. Second half 2023 Alberta hay prices were priced at a premium compared to the first half.
  • Alberta hay prices averaged $228/ton ($251/tonne) in 2023, down 3 per cent from 2022
  • Montana hay prices averaged US$212/ton (C$315/tonne), down 13 per cent from 2022. In the second half of 2023, Montana hay prices moved lower to a discount compared to Alberta
A chart depicting Canadian barley productionA chart depicting Canadian corn productionA chart depicting feed grain pricesA chart depicting Alberta hay prices

 

Bottom line: Barley production in 2024/25 is forecast to increase 4 per cent from 2023/24. Corn production is forecast to decrease 5 per cent but will still be the fourth highest on record. Feed input prices are expected to moderate in 2024.

SLAUGHTER

  • Canadian slaughter (FI only) totaled 3.14 million head in 2023, down 4 per cent, supported by non-fed animals
  • Fed slaughter totaled 2.62 million head in 2023, down 6 per cent. Non-fed slaughter totaled 523,144 head in 2023, up 8 per cent (cows +7 per cent; bulls +28 per cent)
  • Total slaughter was down 6 per cent in the west and down 8 per cent in the east. Non-fed slaughter was up 9 per cent in the west; and up 5 per cent in the east

CARCASS WEIGHTS

  • Steer carcass weights averaged 926 lbs in 2023, three pounds lighter than 2022
  • Western Canadian steer carcasses averaged 917 lbs in 2023, seven pounds lighter than 2022. Steer carcass weights moved to be record heavy in the fourth quarter
  • Eastern Canadian steer carcasses averaged 958 lbs in 2023, seven pounds heavier than 2022

BEEF PRODUCTION

  • Total domestic beef production in 2023 totaled 2.7 billion pounds, down 5 per cent from 2022. Fed production totaled 2.3 billion pounds, down 7 per cent from 2022. Non-fed production totaled almost 390 million pounds, up 9 per cent from 2022

BEEF/CATTLE EXPORTS

  • Beef export volumes for 2023 were down 2 per cent from 2022 to 499 million metric tonnes; values were 7 per cent higher at $5.02 billion to be the highest on record
  • The top five destinations for Canadian beef by market share are the U.S. (75 per cent), Japan (9 per cent) Mexico (7 per cent), South Korea (3 per cent), and Southeast Asia (3 per cent)
  • Live cattle exports totaled 670,000 head in 2023, down 6 per cent from 2022.
  • Slaughter export volumes were steady with 2022. Fed steers and heifer exports were 10-13 per cent higher; non-fed exports were 15-16 per cent lower. Feeder export volumes were down 26 per cent in 2023 to just under 130,000 head

BEEF/CATTLE IMPORTS

  • Beef import volumes in 2023 were up 11 per cent from 2022 to 186.6 million metric tonnes; import values were up 12 per cent to $1.84 billion
  • Canada’s top five suppliers of beef by market share are the U.S. (53 per cent), Australia (11 per cent), New Zealand (10 per cent), the EU and U.K. (9 per cent). Uruguay and Mexico (6 per cent) share fifth place
  • In 2023, feeder import volumes were 2 per cent lower than 2022; leaving Canada a net importer of feeder cattle by almost 160,000 head
A chart depicting Canadian slaughterA chart depicting Canadian annual steer carcass weightA chart depicting Canadian beef export valueA chart depicting Canadian beef export volume

 

Bottom line: Domestic beef production is projected to have a smaller decline in 2024, compared with what was seen in 2023.

DEMAND

  • Domestic demand declined slightly in 2023, driven by reduced supplies but remained historically high, at levels comparable to the late 1980s
  • The international beef demand index increased in 2023 to be the highest on record
  • Beef market share as a percent of total protein consumption in 2022 was steady with 2021 at 29 per cent

RETAIL PRICES/CONSUMPTION

  • Nominal retail beef prices in 2023, were on average 7 per cent higher than 2022; deflated prices were 3 per cent higher
  • Deflated retail prices for pork and chicken were 8 per cent and 0.4 per cent lower respectively
  • The beef-to-pork price ratio averaged 2.2:1 in 2023, the beef-to-chicken price ratio averaged 2.14:1
  • Per capita meat consumption (including seafish) increased 4 per cent in 2022 to 80 kg/person
  • Per capita beef consumption in 2022 averaged 17.5 kg/person, up 3 per cent from 2021

FED PRICES

  • Fed cattle prices in both Alberta and Ontario peaked in June 2023, as feedlots moved to be very current
  • Alberta fed cattle were 29-31 per cent stronger in 2023 compared to 2022; Ontario fed cattle were 24-27 per cent stronger (nominal prices)
  • Deflated Alberta fed steer prices matched their previous all-time highs set in 2015
  • The Alberta-to-Nebraska cash basis averaged -$14/cwt in 2023, the third weakest on record
  • Feedlot margins were estimated to be positive on average for 2023, but dipped negative in December

FEEDER PRICES

  • Alberta and Ontario feeder steer prices continuously strengthened from January to September, setting new all-time highs (nominal) as the fall run began
  • Alberta steers under 700 lbs were 41-47 per cent stronger than 2022; steers 700 lbs and over were 34-39 per cent stronger
  • Ontario steers under 700 lbs were 35-36 per cent stronger than 2022; steers 700 lbs and over were 32-35 per cent stronger
  • Alberta 550 lb steers were consistently at a premium to Ontario, averaging a $26/cwt premium in 2023
  • Alberta 850 lb steers were inconsistent against the Ontario market, but averaged a $2/cwt premium in 2023
  • Deflated Alberta 550 lb and 850 lb steer prices were 6 per cent and 5 per cent respectively below their all-time highs set in 2015; Ontario steers were 10 per cent and 3 per cent below 2015
A chart depicting Canadian retail beef demand indexA chart depicting Canadian retail beef priceA chart depicting annual Alberta fed steer priceA chart depicting annual Alberta 5600 lb feeder steer price

 

Bottom line: Prices continue to have fundamental supply support. Given volatility sone the fourth quarter of 2023, producers should remember that Livestock Price Insurance protects against downside risk while leaving the upside open.

As of April 1, the LPI-Fed settlement index will not include any cash prices that are outside +/- 5% of the average weekly mean. Previously, the LPI-Fed settlement index did not include any cash prices that were $4/CWT above or below the average weekly mean.

Producers will continue to settle policies as usual. The data collected for calculating the settlement index is not affected by this change, only the analysis of data to include in our index.

In rare cases, the $4/cwt rule caused settlement blackout weeks. For example, in late 2022, the LPI-Fed settlement index excluded a larger-than-usual number of outliers (31 per cent within four out of five weeks) and the $4/cwt rule resulted in a blackout week. If the +/-5% rule had been in place, a blackout week would not have been necessary.

The rule modification accommodates current and future changes to the Livestock Price Insurance (LPI) settlement index, ensures price data producers reasonably consider part of the cash market is incorporated into the index, and maintains producer confidence in the Fed product.

LPI–Cattle settlement indexes are calculated on a weekly basis and outlier rules are incorporated into the calculation to automatically exclude data outside of LPI’s parameters. These outlier rules exist to ensure that correct data is included in the settlement indexes and eliminate human error.

The LPI-Fed product relies on cash data reported to Canfax weekly. Without cash data, the program does not exist. With ongoing issues sourcing weekly cash data, this change will help mitigate the risk of not having enough data to publish an index.

If you have questions or would like more information, please contact your provincial Livestock Price Insurance office.

LPI-calf insurance can help protect producers’ investment in their calf crop and give them peace of mind even as markets fluctuate. This easy-to-use risk management program is offered in the spring and covers the price risk cow-calf producers face when selling calves in the market. Producers can tailor coverage to their operation by purchasing price insurance for anticipated calf sales.

This market-driven program uses several factors to forecast future calf prices. During the policy purchasing period, the coverage offered is calculated three days a week using market data from each given day. Policies are available for purchase Tuesday, Wednesday and Thursday from 2 to 11 p.m. MT.

Calf policies are available for purchase until June 8, 2023 with expiry dates into February 2024.


We put so much planning into our operation, but markets can be so unpredictable. Farming in Canada has its challenges; it’s always good to have a plan to fall back on. Having protection to give peace of mind in the midst of uncertainty is crucial.


 

Making it easier

LPI has several features and resources for producers on its website LPI.ca

Understanding Premiums & Settlements: This new section explains the ins and outs of the premium tables and settlements. Look here for information on how to read a premium table and when to access your claim window.

Need Help: This section has valuable help resources, including How to Create an online LPI Account, How to Purchase an LPI Policy online, and How to Claim on an LPI Policy online.

LPI Workpad: This useful tool aids producers when making purchasing decisions. The workpad provides producers with the option to calculate up to three example purchases prior to making any purchasing decisions. It clearly communicates policy details for best decision-making practices.

Producers can purchase Livestock Price Insurance every Tuesday, Wednesday or Thursday from 2 to 11 p.m. MT. Claims can be made on Mondays between 2 and 11 p.m. MT. If you require assistance, please contact your provincial LPI office.

The myLPI online transaction system currently supports the following web browsers:

  • Google Chrome – New!
  • Microsoft Edge – New!
  • Mozilla Firefox
  • Internet Explorer (being retired by Microsoft in June 2022)

 

What does this mean for you?

Previously, myLPI did not accommodate internet browsers beyond Internet Explorer or Mozilla Firefox.

Producers can now also access the myLPI online system using Google Chrome and Microsoft Edge.

 

Internet Explorer Retirement – What does this mean?

Microsoft will be retiring the Internet Explorer 11 web browser in June 2022 for certain versions of Microsoft 10.  A growing number of websites no longer support Internet Explorer as Microsoft Edge offers a faster, more secure, and modern browsing experience than Internet Explorer.

It is recommended that all LPI clients currently using Internet Explorer upgrade their web browser to Microsoft Edge or download Google Chrome or Mozilla Firefox to continue doing their LPI online business.

 

What happens if I continue to use my outdated Internet Explorer 11 browser?

Users will be automatically re-directed to the Microsoft Edge web browser.

 

If you have questions about the Internet Explorer retirement please visit Microsoft’s FAQ page here.

Livestock Price Insurance (LPI) for Calf sales opened February 1.

This easy-to-use risk management program is offered in the spring and covers the price risk cow-calf producers face when selling calves in the market. Producers can tailor coverage to their operation by purchasing price insurance for anticipated calf sales.

This market-driven program uses several factors to forecast future calf prices. During the policy purchasing period, the coverage offered is calculated three days a week using market data from each given day. Policies are available for purchase Tuesday, Wednesday and Thursday from 2 to 11 p.m. MT.

Calf policies are available for purchase until June 9, 2022 with expiry dates into February 2023.

Making it easier

LPI has added several new features and resources to its website.

Understanding Premiums & Settlements: This new section explains the ins and outs of the premium tables and settlements. Look here for information on how to read a premium table and when to access your claim window.

Need Help? A number of new resources were added to the site, including: How to Create an online LPI Account, How to Purchase an LPI Policy online, and How to Claim on an LPI Policy online.

LPI Workpad: This useful tool aids producers when making purchasing decisions. The workpad provides producers with the option to calculate up to three example purchases prior to making any purchasing decisions. It clearly communicates policy details for best decision-making practices. This is a great place to start if this is your first time purchasing or it has been a while since you participated in the program.

Producers can purchase Livestock Price Insurance every Tuesday, Wednesday or Thursday from 2 to 11 p.m. MT. Claims can be made on Mondays between 2 and 11 p.m. MT. If you require assistance, please contact your provincial LPI office.

As dry conditions persist across the western provinces, Livestock Price Insurance (LPI) would like to remind producers of their marketing options with cattle currently insured.

Producers facing water or pasture shortages and have an active insurance policy in the Feeder and Calf insurance programs are able to sell cattle outside of the normal settlement window.

Reminders

  • The LPI Contract of Insurance states producers are required to retain ownership of the livestock for a minimum of 60 days throughout the life span of the policy before they are eligible to sell.
  • For producers with a Fed policy, the finished cattle must be owned for a minimum of four weeks prior to policy expiration.

Frequently Asked Questions

Q: I expected my calves to weigh 600 lbs at the expiry of my policy. Due to dry conditions and limited grass, my calves will likely wean lighter. How does this affect my policy?

LPI takes into account the current weather conditions. In the event your policy is selected for audit, please contact your LPI office for further discussion.

Q: Due to grass and feed availability, I have to sell a number of calves on the cow before the 60-day ownership minimum, how does this impact my policy?

Contact your LPI office to discuss your situation and it will be reviewed on a case-by-case basis.

Q: As a result of dry conditions I need to sell my cattle earlier than expected. Can I move the settlement window to match when I sell the cattle?

You can sell your cattle outside the settlement window, so long as you have continuous ownership of 60 days. Your policy remains valid but the settlement date cannot be changed as this would affect the coverage offered and the associated premium cost.

Q: I have to sell my calves before my policy window is due, is my policy cancelled?

No, the policy is in effect for the full settlement window. If there is a claim, it will still apply.

If you have additional questions or need more information, please contact your provincial Livestock Price Insurance office.

As a result of industry feedback, producers will now have additional time to make policy purchases and claim settlements on all Livestock Price Insurance (LPI) programs.

Going forward, purchase hours on Tuesday, Wednesday and Thursdays are available from 2 p.m. to 11 p.m. MT. Settlement hours on Mondays are now offered from 2 p.m. to 11 p.m. MT. Producers can visit lpi.ca during these extended hours to conduct their LPI business.

In addition, the LPI – Calf program has permanently extended its deadline to purchase insurance into June and is now offering settlements in January and February. Purchase dates in 2021 are now available until June 10, 2021 and expiry dates will be available until February 21, 2022.

This change will fulfill a risk management gap that was experienced by producers and provide producers who calve in late spring, summer or fall with additional opportunities to participate in the program that better suits their operational needs.

To register a claim or purchase a policy, producers can contact their provincial LPI office.

The Western Livestock Price Insurance Program, a risk management program available in British Columbia, Alberta, Saskatchewan and Manitoba, announced a major rebrand today. The Western Livestock Price Insurance Program (WLPIP) is now known as Livestock Price Insurance (LPI). This change does not change the details or delivery of the program.

The name change is part of the program’s strategy to strengthen its capabilities to promote Livestock Price Insurance, while adhering to the latest Canadian Agriculture Partnership guidelines. Moving forward, Livestock Price Insurance, remains true to its services offered and customer service experience.

Federal and provincial partners continue to collaborate on raising program awareness amongst its producers. This brand revitalization incorporates the three core values of the Program: a collaborative approach, producer-driven initiative, and effective risk management. The Livestock Price Insurance program continues to grow and evolve alongside industry; the Program is focused on continuing to expand awareness and enrolment.

The launch of this rebrand is accompanied by an updated logo and a fresh look that will help communicate a clear and effective Program to producers

Along with a new look, the program website has undergone a redesign. Following producer feedback, the Livestock Price Insurance program saw an opportunity to enhance the current website. Changes include simplified navigation and a fresh review on program information. This website acts as a hub for Livestock Price Insurance information and a gateway into customer’s portal access to conduct their business.

In times of uncertainty, producers continue to access coverage against market volatility. In 2020, approximately 360,000 calves, 209,000 Feeder cattle, 232,000 Fed cattle and 9,300 hogs were insured through Livestock Price Insurance across all four provinces. Overall, producers received over $122 million in payouts.

Accessible year-round, producers can purchase livestock price insurance for their feeder cattle, fed cattle or hogs. By offering policies continuously throughout the year, producers can select from a variety of price insurance coverage options, every Tuesday, Wednesday and Thursday, to find the best fit for their livestock operation. Enrolment into Livestock Price Insurance is free and producers are encouraged to explore how it could benefit their own operations. Calf price insurance is available to purchase beginning February 2, 2021.

Producers can purchase Livestock Price Insurance on Tuesday, Wednesday and Thursdays from 2:00 p.m. to 5:30 p.m. MT. Claims can be made on Mondays between 1:30 p.m. and 7 p.m. MT. If you require assistance, please contact your provincial LPI office.

Livestock Price Insurance (LPI) for Calf sales opened February 2. This easy-to-use risk management tool is offered in the spring and covers the price risk cow-calf producers face when selling calves in the market. Producers can tailor coverage to their operation by purchasing price insurance for anticipated calf sales.

Following last spring’s pandemic-related uncertainty, market volatility has stabilized and premiums have returned to more normal levels. Last year, market uncertainty, compounded by delays in the slaughter industry driven by COVID-19 related slowdowns, closures and changes in consumer and food service demand, drove premium rates to unprecedented highs in early spring before they stabilized in May and June.

LPI – Calf participants received $6.039 million in indemnities in 2020, demonstrating how price insurance helps protect producers their investment.

We are updating our email database to ensure continued compliance with Canada’s anti-spam legislation (CASL). In order for the Livestock Price Insurance program to continue to send you premium and settlement emails, we need you to confirm your consent to receive email.

Subscribers to the Livestock Price Insurance (LPI), formerly WLPIP, premium and settlement emails need to confirm their consent to receive email by January 25 to ensure uninterrupted delivery of up-to-date LPI information. An email outlining the one-step consent process will be sent to all current subscribers on January 22.

If you are a subscriber and haven’t received the consent email by January 23, please check your Junk Email folder. If you need assistance, call the LPI Client Service Centre at 1.844.792.5747.