Farm Product Price Index, June 2019

Released: 2019-08-29

The Farm Product Price Index (FPPI) fell 0.7% in June compared with the same month a year earlier, as lower prices for oilseeds offset higher grain and livestock commodity prices.

Chart 1 
Twelve-month change in the Farm Product Price Index

Decreasing oilseed prices continued to weigh on the total crops index (-3.2%), more than offsetting increases in the grains, specialty crops, fresh potatoes and fresh vegetables indexes. To a lesser extent, lower fresh fruit prices also contributed to the year-over-year decline.

The oilseeds index was down 12.6% in June compared with the same month a year earlier, the second consecutive double-digit decline as both canola and soybean prices fell. While a record amount of canola was crushed during this crop year, exports were below last year's level. Export certificate sanctions of Canadian canola imposed by China and a record world soybean crop (according to the International Grains Council) contributed to the decrease in oilseed prices.

Moderating the decline was a 3.3% increase in the grains index, which continued the year-over-year growth started in July 2017. Tighter world supplies for wheat and barley, limited domestic supplies of feed grains, and a slightly lower Canadian dollar supported prices.

Potato prices remained on an upward trend, rising 6.3% from the same month a year earlier, as poor harvest conditions in 2018 tightened supplies and depleted stocks in advance of the 2019 harvest.

The specialty crops index was up slightly (+0.7%) compared with June 2018, marking the third increase in 2019. Stronger export demand this crop year and concerns for the upcoming growing season supported prices.

The livestock and animal products index rose 3.2%, as most livestock commodities reported gains compared with the same month a year earlier.

For the most part, supply-managed commodities continued to record price increases on a year-over-year basis in the wake of higher production costs. Prices for milk (+8.1%) and eggs (+4.0%) were up, while prices for poultry were unchanged.

Both cattle and hog prices rose in June compared with the previous year. After declining in the first quarter of 2019, prices began year-over-year increases in April. Slaughter in Canada and the United States in the first half of 2019 for both cattle and hogs has been above last year's pace. Canadian exports of live cattle, pork and beef also grew in the first half of 2019, with most of the increase in pork exports going to China where an outbreak of African swine fever reduced production.

The June FPPI declined from a month earlier as a decrease in the livestock and animal products index more than offset a slight rise in the crops index.

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