Farm Product Price Index, September 2018
The Farm Product Price Index (FPPI) edged down 0.6% in September compared with the same month a year earlier, as both the overall crops and the livestock and animal products index were down slightly. This was the smallest year-over-year decline since the downward trend began in February 2018.
The total crops index was down 1.0% compared with September 2017, as higher grain and horticulture crop prices moderated the continued decline in specialty crop prices.
Specialty crop prices continued to decline on a year-over-year basis along with exports, as India, traditionally Canada's largest market for peas and lentils, continued to impose import duties on these crops.
The grains index was up 1.8%, a growth trend that began in July 2017. The increase was due to the demand for high quality Canadian wheat and the more recent decline in global supplies. The fresh fruit index increased 10.8% compared with September 2017 on rising blueberry and grape prices.
The oilseeds index has remained relatively flat, with year-over-year changes in the first nine months of 2018, ranging from a 1.1% decline to a 0.8% increase. Both canola and soybeans, Canada's two major oilseeds, had record supplies heading into the 2018 crop year. It was a similar situation for soybeans in the United States. However, continued strong demand for exports and domestic crush and the lower value of the Canadian dollar relative to the US dollar, helped sustain prices.
The livestock and animal products index edged down 0.2% compared with September 2017, as lower prices for hogs just offset higher prices for cattle and calves and the supply-managed commodities (eggs, dairy and poultry).
Hog prices began declining in February 2018 on a year-over-year basis as North American inventories reached an all-time high. In addition, pork tariffs imposed by China and Mexico on the United States this summer have affected prices.
The cattle and calves index rose 3.4% in September compared with the same time last year, largely attributable to higher slaughter prices. Slaughter in Canada and the United States in the first three quarters of 2018 has been above last year's pace, fueled by robust export demand for beef.
Moderating the decrease in the livestock and animal products index were increases in eggs in shell (+6.4%), chickens, turkeys, chicks, poults (+2.9%) and unprocessed milk (+1.2%) prices in the wake of higher feed costs.
The September FPPI was down 1.7% from a month earlier as both the crops (-2.4%) and the livestock and animal products (-1.0%) indexes decreased.
Note to readers
The growth rate of the total Farm Product Price Index (FPPI) is derived from a weighted average of the component indices using a different set of weights in consecutive months; it is not a weighted average of the growth rates of its crop and livestock components. Given this, the growth rate of the composite FPPI can lie outside the growth rate of these components.
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