Analysis – September 2009

Prices farmers received for their commodities fell 15.7% in September from the same month a year earlier, as both the crops index and the livestock and animal products index fell.

The prices producers received for crops in September were 17.2% lower compared with September 2008. The decline in the crops index was due to decreases recorded by all commodities except fruit and potatoes. This marks the eleventh year-to-year decrease for the crops index. Before the slide, crop prices had recorded year to year increases from September 2006 until October 2008, when world grain and oilseed supplies were replenished by record harvests.

Potato prices in September were 4.5% above those of September 2008. North American potato production this fall was 2.4% above last year, however this crop remains the third smallest since 2001.

The prices producers received for livestock and animal products in September were down 10.0% compared with September 2008. Decreases were recorded for all commodities. The hog and cattle prices have been affected by the US Country of Origin Labeling legislation, concerns about the H1N1 flu virus and lower demand driven by the economic situation.

On a month-to-month basis, the total index (1997=100) decreased from 110.8 in August to 104.0 in September.

The total crops index dropped 8.8% in September compared with the August index, as prices for all commodities except fruit and vegetables were lower. The potato index (-17.1%) and the grains index (-14.3%) recorded the largest drops.

After the challenging 2009 summer growing season, the much needed dry and mild weather in September boosted crop development and helped the harvest progress. At the beginning of September, Canadian producers reported higher yields for most crops than those reported in the preliminary production survey taken at the end of July. Canadian and international production reports continue to increase expected production and subsequent supply of grains and oilseeds for this new crop year.

The overall livestock and animal products index remained unchanged from August at 99.4.