Canadian Field Crop Returns Improve in January

OTTAWA - Mar 31/08 - SNS -- Prices received by Canadian field crop producers maintained their upward momentum in January, while the situation facing livestock producers continued to erode, according to Statistics Canada.

The Farm Product Price Index (FPPI) (1997=100) stood at 105.8 in January 2008, down from the revised December 2007 index of 106.3. Prices that producers received for crops in January 2008 were 15.9% higher compared with January 2007. This continues the upward trend in year-over-year price changes since the early fall of 2006 and double-digit increases since November 2006. Farmers received higher prices for all crops except potatoes, vegetables and fruits.

However, prices for livestock and animal products were 5.3% below their January 2007 level, the fifth consecutive year-to-year decline as cattle and hog prices continue to slip. With the exception of the period January to May 2007, hog prices have fallen since May 2005. Similarly, cattle and calf prices have been sliding since October 2006, except for the period March to May 2007.

On a monthly basis, prices farmers received for their commodities were down 0.5% in January 2008 from December 2007, as the decrease in the livestock and animal products index slightly offset the increase in the crops index.

The overall livestock and animal products index was down 1.7% in January compared with the revised December index, as all commodities except poultry recorded decreases.

Despite a slight reprieve in December, cattle and hog prices trended down for most of 2007. Surging feed grain prices and a strong Canadian dollar have put downward pressure on cattle, calf and hog prices. Cattle and hog inventories, at the national level, were lower by the end of 2007, while exports into the United States had accelerated.

On the other hand, the total crops index was up as grain, oilseed, specialty crop and fruit prices continued to climb. Underpinning grain and oilseed price movements are strong demand, tight supplies and uncertainty over new crop production.

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