Canadian Farm Income Squeeze Tightens

OTTAWA - Mar 27/06 - SNS -- The cost price squeeze continued to worsen in Canada in January, with Statistics Canada reporting a 4.5% decline from last year in average prices farmers received for their commodities.

Overall, producers received prices for crops that were 4.8% below levels in January 2005, the federal agency said, continuing the downward trend in year-over-year price changes since the summer of 2003, according to the Farm Product Price Index (FPPI). The index finished January at a preliminary estimate of 91.8 points.

The overall crops index was up 1.9% in January compared to the revised December index, mainly because of higher grain prices. On the other hand, the January 2005 index was 96.1 points, down from 98.3 in January of 2004, which was down from 1-9.7 in January of 2003 and 104.7 in January of 2002.

Prices for livestock and animal products dropped 3.2% from the January 2005 level, only the third decline since June 2005. Hog and poultry prices continued their year-over-year slide, pulling down the overall livestock and animal product index, despite persistent strength in cattle, calf and dairy prices.

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