Farm Product Price Index

Prices farmers received for their commodities fell 8.8% in September from the same month a year earlier as crop prices continued to tumble, while prices for livestock increased slightly.

Overall, producers received prices for crops that were 17.9% below levels in September 2004, continuing the downward trend in year-over-year price changes since the summer of 2003, according to the Farm Product Price Index (FPPI). Farmers received lower prices for grains, oilseeds, special crops and vegetables.

In contrast, prices for livestock and animal products were 1.6% above the year earlier level. The overall livestock and animal products index has increased in all but one of the nine months this year. Stronger cattle and calf and dairy prices have supported the increase for the last three months, as hog, eggs and poultry prices continued their year-over-year slide.

On a monthly basis, prices farmers received for their commodities dropped 2.6% in September from August, again as the decline in the overall crops index outstripped the slight increase in the livestock and animal products index.

The FPPI (1997=100) stood at 90.9 in September, down from a revised August of 93.3. The index has fallen five times this year and was at its second lowest level of the year in September.

The overall crops index was lower in September compared to August because of lower grain and oilseed prices.

Grain and oilseed prices continued to be plagued by cumbersome supplies, anticipated large production this fall and the strengthening Canadian dollar.

The value of the Canadian dollar rose 2.3% against the US dollar between August and September, affecting export commodities. Between September 2004 and September 2005, the value of the Canadian dollar rose 9.4% against the US dollar.

Prices for livestock and animal products were up in September from the revised August index, supported by higher cattle and calf, dairy and poultry prices.

Cattle and calf prices continued their climb, rising 1.8% in September as the live cattle trade with the United States completed its second full month. However, the rising Canadian dollar tempered the gains. In 2002, the last full year of unrestricted trade, 26% of Canadian cattle sold were exported, with most going to the United States.

Hog prices dropped in September, as supplies remained strong and the Canadian dollar continued to make gains. Producers reported a record number of hogs on Canadian farms at July 1. The index stood at its lowest level since January 2004.

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

Definitions, data sources and methods: survey number 5040.

The September issue of Farm Product Price Index, Vol. 5, no. 9 (21-007-XIE, free) is now available online. From the Our products and services page, under Browse our Internet publications, choose Free, then Agriculture.

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 (204-983-3445: fax: 204-983-7543; gail-ann.breese@statcan.gc.ca), Agriculture Division.