Prices Canadian farmers received for their commodities fell 10.9 per cent in August from the same month a year earlier, as both the crops index and the livestock and animal products index fell.
The prices producers received for crops in August were 10.2 per cent lower compared with August 2008, Statistics Canada reported Thursday with the release of its Farm Product Price Index (FPPI) for August.
The decline in the crops index was due to decreases recorded by all commodities except potatoes and fruit, the federal statistics agency said.
Despite the decline, the crops index (124.1) remained well above the 115.1 from two years ago, when crop prices started their ascent to reach a peak in June 2008. Potato prices in August were 16 per cent above those of August 2008, as North American production was down last fall.
The prices producers received for livestock and animal products in August fell 11.5 per cent compared with August 2008. Decreases were recorded for all commodities except poultry.
On a month-to-month basis, the total index (1997=100) decreased from 112.6 in July to 110.7 in August.
The overall livestock and animal products index stood at 100.1 in August, down from the July level of 103.8. Decreases were recorded for hog and cattle prices, which more than offset the slight increases in the supply-managed commodities of poultry, eggs and dairy.
The hogs index fell 16.3 per cent in August, the fifth consecutive month-to-month decrease this year. Hog producers continue to be faced with the US country-of-origin labeling (COOL) legislation, concerns about the H1N1 flu virus and lower demand driven by the economic situation. By the end of August, exports to the U.S. were down by a third compared with the same time last year.
The total crops index edged down in August compared with the July index, as lower prices for grains, specialty crops and vegetables more than offset higher potato, fruit and oilseed prices. Potato prices are generally higher in August, as the new crop table potatoes reach the market.
The grains index (-22.5 per cent) recorded the largest drop. This was a challenging growing season in Canada, marred with drought-like conditions in some areas and cool, wet weather in others. Despite reports of a drop in world wheat production, the world production is forecast to remain at its second-highest level. This, coupled with larger carry-in stocks, is supporting expectations of ample supplies for this new crop year.
Note: The growth rate of the total Farm Product Price Index (FPPI) is not a weighted average of the growth rates of its crop and livestock components. The growth rate of the total FPPI is derived from a weighted average of the component indices using a different set of weights in consecutive months. Given this, the growth rate of the composite FPPI can lie outside the growth rate of the components.