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Livestock, animal products and crop index on the rise


August 31, 2012
By Statistics Canada

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Aug. 31, 2012 – The Farm Product Price Index (FPPI) rose 4.7% in June compared with June 2011, continuing the year-over-year increases observed since August 2010. Both the overall livestock and animal products index and crops index rose.

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

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

The livestock and animal products index continued its year-over-year growth that had started in May 2010. Most of this growth has been double digit; however, it slowed to 1.9% in April 2012, but has continually accelerated since then to reach 7.7% in June.

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The FPPI was pushed upward mainly by higher prices for cattle and calves (+16.4%) and hogs (+8.6%). Lower supplies of cattle and hogs in North America have supported the year-over-year growth trends.

Eggs (+3.1%) and poultry (+1.6%) made more modest contributions to the advance. Meanwhile, dairy (-0.7%) moderated the increase, continuing a decline that started in March 2012.

Oilseed prices (+4.3%) and potatoes (+16.5%) were responsible for most of the increase in the crops index.

The increase was tempered by a drop in the grains index (-3.3%). This was the fifth consecutive decline for the grains index, following a 17 month year-over-year growth trend.

Despite revising total grain production down at the beginning of July, the International Grains Council continued to forecast a record global 2012/2013 grain crop. Total world corn production was revised upwards, as higher production projections for other countries more than offset the lowered US production, as a result of concerns over dry conditions in the US Midwest.

The FPPI increased 1.3% in June compared with May. Higher livestock and animal product prices (+2.8%) more than offset lower crop prices (-0.4%).

NOTE: 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.

Table 1 – Farm Product Prince Index

 June 2011rMay 2012rJune 2012pMay to June 2012June 2011 to June 2012
(1997=100)% change
Farm Product Price Index130.5134.9136.61.34.7
Crops142.8145.4144.8-0.41.4
Grains148.2145.1143.3-1.2-3.3
Oilseeds150.7154.3157.21.94.3
Specialty crops160.9163.9165.20.82.7
Fruit122.3126.0129.32.65.7
Vegetables128.2130.0130.40.31.7
Potatoes174.6200.4203.41.516.5
Livestock and animal products121.6127.4131.02.87.7
Cattle and calves119.6137.2139.21.516.4
Hogs92.889.7100.812.48.6
Poultry126.9127.6128.91.01.6
Eggs124.2127.9128.00.13.1
Dairy146.4146.3145.4-0.6-0.7
r
revised