A “modelling inconsistency” in heavy weight cattle pricing means some Alberta producers will have to pay back benefits received through an income stabilization program.
In a March 30 news release, crop insurer Agriculture Financial Services Corporation (AFSC) reported it was republishing AgriStability cattle prices for animals over 900 pounds for the 2024 and 2025 program years.
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WHY IT MATTERS: Producers who received AgriStability benefits for heavy weight cattle in 2024 may now face unexpected repayment demands due to a pricing model error outside their control.
AFSC adopted a new model in 2024 to determine cattle prices for the AgriStability program due to “increasing difficulty” accessing cattle pricing data.
As a result, it priced heavy weight cattle based on a different weight assumption than the one used to establish historical prices.
“Inventory valuations did not accurately reflect market realities, leading to inappropriate AgriStability program benefits being issued to clients for the 2024 program year,” read the release.
Once AFSC discovered the inconsistency, it recalculated heavy weight cattle prices for 2024, including a reassessment of files featuring heavy weight cattle.
“The recalculation determined that certain clients had received benefits to which they were not entitled.”
The insurer says it has contacted affected clients to discuss the reassessment of their files.
“We are committed to supporting these producers by offering flexible repayment arrangements, including interest relief where appropriate, to help manage any impact.”
A review of all market prices found the pricing disparity was limited to animal weights over 900 pounds.
“Going forward, AFSC has added additional oversight to the cattle pricing process to monitor and review unusual price movements and ensure greater accuracy.”
AFSC is asking clients with questions or concerns to contact their preferred branch offices, call its client care centre at 1-877-899-2372 or use live chat on AFSC Connect or afsc.ca.
