Farm Product Price Index, December 2022

Released: 2023-03-06

The Farm Product Price Index (FPPI) rose 9.4% in December 2022 compared with December 2021, the first FPPI monthly year-over-year single digit increase in close to two years.

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

High feed costs, drought, and a shrinking cattle herd define 2022 for the livestock industry

In December, the livestock and animal product index increased 11.5% compared with December 2021, with all livestock commodities continuing to experience year-over-year price gains. On a month-over-month basis for the last month in 2022, however, the cattle and calves index posted its third consecutive decline, while the hogs index posted its fourth consecutive decline, all of which was mainly due to liquidations resulting from high feed costs, drought conditions, and poor profitability in the Canadian and US livestock herd.

The cattle and calves index rose by 14.2% in December compared with the same month a year earlier. In the fourth quarter, the quantity of heifers (+11.2%) and bulls (+33.7%) exported for immediate slaughter increased compared with the fourth quarter of 2021. In 2022, slaughter heifers made up 30.4% of the total slaughter cattle in Canada and the United States, a decade high, according to Farm Credit Canada. Furthermore, the value of heifers exported for immediate slaughter in the United States increased 32.2% in the fourth quarter compared with the fourth quarter of 2021.

In December, the hogs index increased by 10.4% compared with December 2021, however on a month-over-month basis the index reported a decline of 6.9%, largely due to the liquidations experienced in the livestock industry.

A good quality crop and a strong demand contribute to the year-over-year increase in the overall crop index

The crop index in December was 8.2% higher than the crop index in December 2021, with the oilseeds index (+13.3%) being the largest contributor to the year-over-year increase. A steady global demand for Canadian canola and soybean coupled with an increased domestic crush in the first few months of the 2022/2023 crop year supported oilseeds prices and offset the decline in prices and demand for flaxseeds.

In December, the grains index rose by 8.1% on a year-over-year basis. Strong international demand for most grains as well as a good quality crop on the market in the 2022/2023 crop year supported grain prices. In the fourth quarter of 2022, the exported volume of Canadian wheat excluding durum more than doubled compared with the same period in 2021.

The specialty crops index (-6.8%) moderated the year-over-year increase in the crops index in December. The decrease of the specialty crops index was primarily attributed to the decline of lentil and dry peas prices.

The potatoes index increased by 18.1% in December relative to the same month in 2021, which was the eighth consecutive year-over-year price gain. Some potatoes produced in the 2021/2022 crop year were infected by potato wart fungus, which resulted in Canada restricting its Prince Edward Island potato exports to the United States in November 2021. The restrictions were dropped in April 2022. Also supporting the potato year-over-year upward price trend since April 2022 was the better potato quality in the new 2022/2023 crop year.

Contact information

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