Canada's Farmers Squeezed in 2005

OTTAWA - Jun 2/06 - SNS -- The cost of farming rose 4% in 2005 in Canada, but average prices received during 2005 were down 6.2% from those obtained in 2004, according to index data available from Statistics Canada.

The Farm Input Price Index (1992=100) for Canada was 134.8 in 2005, up 4.0% from 2004. The total index was led by the jump in prices for animal production (+8.5%) and for machinery and motor vehicles (+5.3%) as well as for crop production (+3.3%). Lower prices for farm rent (-4.7%) and building and fencing (-1.1%) partly offset the annual increase.

The rise in prices of farm inputs in Western Canada (+5.5%) was much stronger than in Eastern Canada (+2.9%). Prices for animal production jumped 14.3% in the West, while the increase was only 2.4% in the East.

This disparity in prices is the result of the stronger impact that animal disease had on livestock in Western Canada than in the Eastern Canada in 2004. In addition, compared to 2004, all of the other components of the Farm Input Price Index advanced in the East, while in the West, prices for farm rent and building and fencing were down 7.0% and 3.3%, respectively.

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