Farm Product Price Index

Prices received by farmers for their agricultural commodities decreased 11.1% in March compared with March 2003, according to data from the Farm Product Price Index (FPPI).

The crop index was down 16.3% from its March 2003 level of 110.7, continuing the monthly year-over-year decreases which began last July. The livestock and animal products index was 6.9% below year-earlier levels, marking the 10th consecutive year-over-year decrease. The only indexes that recorded increases compared with March 2003, were those for oilseeds and hogs and the supply-managed sectors of poultry and eggs.

The FPPI (1997=100) stood at 97.4 in March, up 2.9% from the revised February index. The total index had peaked in February 2003 at 111.3, and then slid to the recent low of 92.4 in September.

The livestock and animal products index rose to 101.0 in March 2004, a 4.1% increase from February. Monthly increases were recorded in the hog index (+9.1%) and the cattle and calves index (+8.2%). The index for eggs was unchanged while dairy was down 2.4% and poultry was down 0.5%.

The hog index rose to 87.7, the highest level since last July (86.0). Hog prices have found support from increasing demand and dwindling supplies. Consumer taste for high-protein, low-carbohydrate diet is said to influence the demand increase. Also affecting the increase is the export demand growth as export bans continue on many beef products.

The March 2004 cattle and calves index increased to 99.2. Cattle and calf prices have been struggling since the discovery of bovine spongiform encephalopathy (mad cow disease) in a cow in northern Alberta on May 20, 2003. The index was 127.8 in January 2003, tumbling to 63.9 in July, and has been struggling to recover ever since. Cattle markets have fluctuated because of speculation on when the border will open to live cattle exports.

On a month-to-month basis, the crop index was up 1.1% in March. All of the crop indexes recorded increases except fruits. The increases ranged from 0.7% for special crops to 3.4% for oilseeds. With the exception of oilseeds, all of the crop indexes remained below last year's level after two consecutive droughts in Western Canada had tightened supplies.

The oilseed index reached 100.9, up 3.4% from February. After eight consecutive year-over-year decreases, this marks the first increase. Canadian oilseed prices found support from increased world oilseed consumption, tight US soybean supplies and very strong soybean prices. US soybean prices were hitting their highest levels in more than 15 years as concerns grew over tight supplies and strong demand.

Available on CANSIM: tables 002-0021 and 002-0022.

Definitions, data sources and methods: survey number 5040.

The March 2004 issue of Farm Product Price Index, Vol. 4, no. 3 (21-007-XIB, free) will soon be available online.

For general information or to order data, call 1-800-465-1991. To enquire about the concepts, methods or data quality of this release, contact Gail-Ann Breese (613-951-2701; fax: 613-951-3868; gail-ann.breese@statcan.gc.ca), Agriculture Division.