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Flat prices at the farm gate

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All Canadians are affected by price changes, but few feel it as directly as our farmers. Farmers are particularly vulnerable to Mother Nature, which can dramatically affect prices for crops and livestock and make the difference between profit and loss. Agriculture as an industry has not seen prices rise as much as have most others. In many cases, the prices that farmers receive today are lower than they were in 1997.

The Farm Product Price Index (FPPI) tracks prices for crops and livestock sold directly from the farm, and specifically excludes expenses such as transportation beyond the farm gate and storage costs. The index reflects the prices farmers actually receive when they sell their goods.

The trend in recent years has not been positive: At the end of 2006, the FPPI was at 98.9 against 1997 dollars. This means that overall prices for farm products in Canada fell by about 1% from 1997 prices. Over this period, the index peaked at 111.6 at the start of 2003. At the end of 2006, crop prices were at 98.6; livestock prices were roughly what they were in 1997, at 99.5.

Some of the hardest hit farm sectors are grains, oilseeds and hogs. The prices farmers received for grains such as corn, wheat, oats and barley at the end of 2006 fell by more than 10% from 1997. Hog prices also dropped by about one-third and oilseed prices were down 15%.

There were a few bright spots for some farmers, however. As of the end of 2006, potato farmers had seen prices increase by more than half since 1997, and dairy farmers were receiving one-third higher prices for dairy products. Vegetable farmers saw growth of about 19% in their prices.