Farm Product Price Index, September 2022
The Farm Product Price Index (FPPI) increased 13.3% in September 2022 compared with the same month in 2021, mainly as a result of strong prices for most agricultural commodities. This marked the FPPI's 27th consecutive monthly increase on a year-over-year basis.
Strong demand drives the gain in the crops index
The crops index was the primary contributor to the FPPI increase in September 2022, up 14.2% compared with the same month in 2021. High production costs and continued strong domestic and global demand for most grains and oilseeds contributed to supporting prices, leading to the increase in the crops index.
The oilseeds index led the year-over-year increase in the crops index, up 26.0% in September 2022. The resumption of palm oil exports from Indonesia offered some relief to the global vegetable oil markets by putting downward pressure on palm oil prices, making it a favourable substitute. Strong global demand for protein meals and vegetable oils supported Canadian canola, soybean, and flaxseed prices in September 2022 compared with September 2021, which led to the gain in the oilseeds index.
In September 2022, the grains index (+12.7%) also contributed to the rise in the crops index. Wheat exports were strong, as they rose 3.7% in the first two months of the new 2022/2023 crop year compared with the same period in the previous crop year. Grain prices, specifically wheat and barley, continued to benefit from the high demand from Asia, Europe and North Africa.
The specialty crops index declined (-2.0%) in September 2022 compared with the same in 2021. This was the first recorded decline in the specialty crops index after three years of consecutive monthly year-over-year gains. The relatively high global supply put downward pressure on lentil prices (-18.2%), resulting in the decline of the specialty crops index. Meanwhile, there was strong demand for some specialty crops in the first two months of the 2022/2023 crop year, for example, canary seed exports more than doubled (+105.7%).
The vegetables index (+6.1%) and potatoes index (+9.6%) also contributed to the rise, while the fruit index (-8.4%) moderated the gain of the crops index.
Livestock prices rise in the face of increasing demand and shrinking herd size
In September 2022, the livestock and animal products index rose 12.1% from the same month the previous year, as all livestock commodity indexes posted gains on a year-over-year basis. The primary contributors to the increase in price in the third quarter of 2022 were the higher input prices (particularly the costs of feed and fertilizer), tight feed availability and a decreasing herd size, mainly as a result of poor profitability and drought conditions in the Western provinces and the United States.
The cattle and calves index rose for an eighth consecutive month in September 2022, up 19.7% compared with September 2021. A contributing factor to the gain was the strong global demand for beef during the third quarter of 2022. Furthermore, the value of Canadian cattle exports for immediate slaughter increased 19.2% in the third quarter of 2022 compared with the third quarter of 2021. In contrast, the quantity of cattle exported from Canada decreased by 5.2% during the same period, reflecting the higher demand for Canadian cattle and calves.
Meanwhile, the hogs index fell 13.4% month over month, largely as the result of decreased prices in September 2022 in comparison with August 2022. United States processors were facing an increased supply, as producers accelerated the liquidation of their herds in light of dry conditions in the United States. However, the hogs index faced a modest gain (+1.3%) in September 2022 compared with September 2021, a month which was already experiencing higher prices for hogs due to the competitive exports to the United States as a result of their lower inventories.
All supply managed commodities posted increases in September 2022 compared with the same month the previous year, including the poultry index (+13.7%), eggs index (+15.5%) and the dairy index (+11.0%). Increased production costs were the primary contributor.
Note to readers
As a result of the release of data from the 2021 Census of Agriculture on May 11, 2022, data on farm cash receipts, operating expenses, net income, capital value and other data are being revised, where necessary. The complete set of revisions will be released in the next 12 to 18 months.
For the latest information on the Census of Agriculture, visit the Census of Agriculture portal.
For more information on agriculture and food, visit the Agriculture and food statistics portal.
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