Prices Received by Canadian Farmers Continue Advance

OTTAWA - Dec 5/07 - SNS -- Average prices received by Canadian farmers continued to advance in September, according to Statistics Canada, in the wake of a sharp year over year rise in prices for most crops. Prices for the supply-managed commodities of poultry, dairy and eggs also recorded increases.

Prices for crops were up 14.0% in September compared with September 2006, according to the Farm Product Price Index (FPPI), continuing the upward trend in year-over-year price changes that began in September 2006. Farmers received higher prices for grains, oilseeds, special crops and potatoes. The FPPI (1997=100) stood at 105.5 in September, up from a revised August index of 104.7.

Overall, prices for livestock and animal products were 2.0% below the September 2006 level, as hog, cattle and calf prices were lower. This is the first overall decrease in seven months despite lower hog and cattle and calf prices for the last three months. While stronger supply-managed commodity (poultry, eggs and milk) prices had been supporting the overall livestock and animal products index, in September they cushioned the decrease.

The prices that farmers received for their commodities edged up 0.8% in September from August, as an increase in the overall crops index slightly outpaced the decrease in the livestock and animal products index.

Generally, field crop prices remained strong, as many Canadian producers were nearing the completion of their harvest. However, pockets of poor weather continued to hamper some harvest progress. Prices continued to be supported by concerns over tight world stocks due to strong demand and weather-related production issues affecting many major producing countries.

Prices for livestock and animal products were down slightly in September from the revised August index, as lower prices for hogs, cattle and calves outstripped any gains made in the supply-managed sector.

Hog prices took the largest tumble, marking the third decrease in the last four months. The hog index stood at 67.1 in September, the lowest level since the spring of 2006, when it was 66.4. Despite record exports in the first half of 2007, producers have been plagued by rapidly rising feed grain prices and a stronger Canadian dollar.

Subscribers can read the full text of the article by Clicking here