Farm Product Price Index, June 2021

Released: 2021-09-03

The Farm Product Price Index (FPPI) was up by almost one-quarter (+24.4%) in June compared with the same month a year earlier, as a result of higher prices for crops and livestock commodities.

Chart 1 
12-month change in the Farm Product Price Index

This was the tenth consecutive year-over-year increase in the FPPI and the largest since March 1979. The index has been rising at a faster pace since February 2021.

Demand and tightening supplies drive increase in the crops index

In June 2021, bullish prices for oilseeds, grains and specialty crops were primarily responsible for the 27.9% increase in the crops index compared with the same month a year earlier, in the wake of high domestic and international demand, tightening supplies, and concerns over growing conditions in 2021.

The oilseed index was the largest contributor to the increase in the crops index, which rose 62.2% year over year in June. This gain was led by higher exports of canola (+10.6%) and soybeans (+32.7%), tightening supplies and increased domestic crush. Domestic canola crush was 2.9% higher in the first 11 months of the 2020/2021 crop year compared to the same period of the 2019/2020 crop year. Flaxseed prices also increased on strong demand from Europe, contributing to the increase in the oilseed index.

The grains index was up 26.7% year over year in June, on higher wheat (+17.9%) and barley (+74.4%) exports. Canadian exports of wheat and barley to China more than doubled from August 1, 2020 to June 30, 2021. According to the United States Department of Agriculture, imported wheat is used as a substitute for corn in feed, particularly in southern China.

The specialty crops index rose 17.0% in June compared with the same month a year prior. Strong export demand from Europe and Asia supported higher lentil and dry pea prices. Higher prices for vegetables (+1.0%), fruits (+1.3%) and potatoes (+3.0%) also contributed to the gain in the crops index, but to a lesser extent.

Livestock and animal products index rises

The livestock and animal products index was up 19.3% year over year in June on higher prices for all livestock index components.

Higher prices for hogs were the main contributor to the increase in the livestock and animal products index, up 62.7% compared with June 2020, when hog prices were negatively impacted by COVID-19 outbreaks at processing plants.

Despite a 1.2% decline in the number of hogs slaughtered in the first half of the year, due in part to processing plant labour disruptions, slaughter levels were 2.1% above the average of the previous five years. Hog prices were buoyed by higher exports to the United States (+28.5%), where hog inventories are currently low.

The cattle and calves index was up 10.5% in June compared with the same month a year earlier. This was the third straight increase in the index following 13 consecutive months of decline, which began in March 2020.

Total slaughter of cattle and calves was up 9.9% year over year in the first half of 2021. Cattle and calf prices were buoyed by strong export demand for beef and veal (+26.6%) in the first half of 2021, led by higher exports to the United States (+16.4%), Canada's largest export market.

Prices for supply-managed commodities continued to rise in the wake of higher production costs. Increases of the index ranged from 5.5% for dairy to 14.1% for poultry.

Contact information

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