STATSCAN: Farm product price index fell 10.7% in June

The Farm Product Price Index declined 10.7% in June compared with June 2022. This was the fifth consecutive month of year-over-year declines, following over two and a half years of increases. The monthly decrease in June 2023 was the result of lower prices for most crop commodities, which outweighed the price gains for some livestock and animal products.

Increased supply contributes to decline in crops index

In June, the crops index fell 19.8% after recording three consecutive year-over-year increases for the month of June. Improved yields and better growing conditions in the 2022/2023 crop year compared with the previous crop year led to higher supplies, exerting downward pressure on crop prices. Also contributing to the lower crops index was a sharp increase in crop prices in June the previous year, caused by tightened supplies due to drought conditions in the Western provinces during the 2021/2022 crop year.

The grains index also declined in June 2023, down 25.3%, despite robust global demand. Prices for oats (-55.2%), durum (-31.9%) and non-durum wheat (-24.3%) were all down in June compared with the same period one year earlier.

Meanwhile, the oilseeds index recorded a 29.9% decrease in June compared with the same month the previous year, with lower prices for canola (-31.6%), soybean (-5.3%) and flaxseed (-56.5%) contributing to the drop. More favourable growing conditions in the Western provinces in the 2022/2023 crop year led to the increased supply of oilseeds.

The specialty crops index (-21.4%) also declined in June compared with June 2022. Dry peas and lentils, mainly grown in the Prairie provinces, saw a return to more normal production in the 2022/2023 crop year, contributing to the June 2023 price declines.

Gains in the potato (+15.9%), fresh fruit (+2.5%) and fresh vegetable (+4.8%) indexes mitigated the declines in the crops index in June.

Strong cattle and calves prices drive gain in the livestock index

In June, the livestock and animal products index rose 9.9% compared with June 2022.

The cattle and calves index, up 37.8% in June 2023 compared with June 2022, was the primary reason for the increase in the livestock and animal products index. This marked the 27th monthly year-over-year gain in a row. Tight supplies—mainly the result of the shrinking cattle herd—have helped support the prices of cattle and calves. The inventory of total cattle in Canada at July 1st 2023 was at its lowest since 1988.

Meanwhile, the hogs index decreased 15.5% in June 2023 compared with June the previous year, marking the fifth consecutive year-over-year monthly decline. The number of hogs slaughtered was up 1.5% in the second quarter of 2023 compared with the same quarter in 2022, while declining demand for pork impacted slaughter hog prices, leading to the decrease in the hog index.

The eggs index fell 4.8% year over year in June 2023, the first decline after more than three and a half years of consecutive year-over-year monthly increases. The poultry index increased 4.9%, and the milk index rose 1.6% over June 2022.