Farm Product Price Index, September 2017
The Farm Product Price Index (FPPI) increased 2.1% in September compared with the same month a year earlier, primarily due to higher grain and oilseed prices. This was the third consecutive year-over-year increase in the FPPI, following a downward trend that began in December 2015.
The crops index rose 3.2% in September compared with the same month a year earlier, largely attributable to higher prices for grains and oilseeds. The grains index (+12.7%) began the year-over-year increase in July 2017 as weather-related production concerns began to emerge for the 2017 North American crop.
The oilseeds index rose 3.8% from September 2016, continuing its year-over-year growth that began in October 2016. Canola and soybean prices were supported by strong demand from the domestic crush and export markets.
The year-over-year increase in the crops index was moderated by lower specialty crop (-11.1%), potato (-2.0%) and fruit (-0.2%) prices. Specialty crop prices were down from the highs reached last year, primarily due to lower lentil and dry pea prices as world production began to return to normal. Also, the pace of lentil and dry pea exports in the late summer of 2017 was slower than a year earlier.
To a lesser extent, the livestock and animal products index also contributed to the overall increase, up 1.0% over September 2016. This was the fifth consecutive year-over-year gain, following a downward trend that started in October 2015. The increase was mainly attributable to higher prices for cattle, hogs and eggs.
The cattle and calf index rose 1.8%, the third year-over-year increase since April 2017. The hog index edged up 0.2% following two months of double-digit percentage increases. Robust export markets for beef and pork have held up prices despite growth in North American inventories.
Moderating the increase in the livestock and animal products index were lower prices for poultry (-2.7%) and dairy (-1.8%).
The September FPPI was down 3.1% from a month earlier, the third consecutive monthly decrease. Both the livestock and animal products index and the crops index contributed to the decline.
Note to readers
The growth rate of the total Farm Product Price Index (FPPI) is derived from a weighted average of the component indices using a different set of weights in consecutive months; it is not a weighted average of the growth rates of its crop and livestock components. Given this, the growth rate of the composite FPPI can lie outside the growth rate of these components
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