Canada's Farm Product Prices Ease

OTTAWA - Sep 7/04 - SNS -- Prices received by farmers for their agricultural commodities fell 1.0% in June compared with the same period a year earlier, according to Statistics Canada's latest Farm Product Price Index (FPPI) calculations.

The crop index was down 7.0% compared with the June 2003 level of 107.0, continuing the monthly year-over-year declines which began last July. The livestock and animal products index was 4.7% above year-earlier levels, marking the first year-over-year increase in the last 13 months. The only crop indexes that advanced compared with June 2003 were oilseeds and special crops. Poultry was the only index to post a decline in the livestock and animal products index.

The FPPI (1997=100) stood at 101.2 in June, down 1.2% from the revised May index. The total index had peaked in February 2003 at 111.3, and then slid to the recent low of 93.8 in September.

The livestock and animal products index dropped to 102.7 in June, down 1.1% from the revised May index. On a month-to-month basis, only the dairy and poultry indexes recorded increases. The eggs index was unchanged, the cattle and calves index fell 6.9%, and after strong growth for the first five months of 2004, the hog index dipped slightly (-0.6%).

The June 2004 cattle and calves index dropped to 91.2. The index has been very volatile since May 2003, when one cow in northern Alberta tested positive for bovine spongiform encephalopathy (BSE) and the subsequent ban on Canadian ruminants and all associated products by many countries. The month-to-month changes have ranged from a decline of 30.1% in July 2003 to a gain of 35.4% in September 2003, when the border opened to exports of select cuts of beef. Prolonged closure to live cattle exports and speculation on when the border will re-open continues to generate strong price fluctuations.

The hog index dipped slightly from 103.6 in May to 103.0 in June. The index started the year at 66.1 in January and has climbed steadily on strengthening prices. Hog prices have been supported by robust exports and strong consumer demand.

On a month-to-month basis, the crop index dropped 1.1% in June. The indexes for grains, specialty crops and fruits all fell—ranging from a 1.2% drop for grains to an 8.6% decline for fruits.

The oilseed index inched up 0.4% to 109.6. This continues the month-to-month increase which began last December. Canadian oilseed prices have been buoyed by increased world oilseed consumption, tight United States soybean supplies and very strong soybean prices. However, with expectations of an abundant crop, prices US producers received for their soybeans slipped in June.

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