Statistics Canada’s latest farm product price index is a stark reminder of the kind of commodity price whiplash that producers often experience.
Released Thursday, the overall index – which measures the changes in prices that farmers receive for the agriculture commodities they produce and sell – was down 10.7% in June compared with June 2022. It marked the fifth consecutive month of year-over-year declines, following over two and a half years of increases.
June witnessed a significant fall in crop prices, with the crops index dropping 19.8% amid better Prairie growing conditions and improved yields, which boosted supply and lowered prices. A spike in crop prices in the prior year, due to drought-induced supply shortages, added to this year's index drop
Grains didn't fare well either, with the grains index plummeting 25.3% from last June's figure. Prices for various grains like oats, durum, and non-durum wheat fell by 55.2%, 31.9%, and 24.3%, respectively, StatsCan said.
The oilseeds index also declined in June, falling 29.9% in comparison to the previous year. Price reductions were seen in canola, soybean, and flaxseed by 31.6%, 5.3%, and 56.5%, respectively. The Western provinces' favourable growing season in 2022 contributed to a surge in oilseed supply.
June also saw the specialty crops index fall by 21.4% compared to June 2022. Major contributors to the decline were dry peas and lentils.
However, it wasn't all gloomy for agriculture. Prices for potatoes surged 15.9%, while fresh fruits and vegetables saw increases of 2.5% and 4.8%, slightly offsetting the declines in the crop index.
On the other hand, the livestock and animal products index rose by 9.9% from June 2022. A whopping 37.8% surge in the cattle and calves index was the key driver behind the rise. Cattle prices benefitted from limited supplies, as, Canada's cattle inventory at the beginning of July 2023 was the lowest since 1988.
Conversely, the hogs index fell 15.5% in June 2023, marking its fifth consecutive annual drop as an increase in hog slaughter and waning pork demand negatively impacted prices.
