Canadian Farm Product Price Index declines 4.7% year-over-year in December, mainly the result of lower grains and oilseeds price indexes, which outweighed the gains for livestock and animal products, Statistics Canada says

OTTAWA , March 5, 2024 (press release) –

The Farm Product Price Index (FPPI) declined 4.7% in December compared with the same month a year earlier, after recording year-over-year increases in December 2022 (+9.4%) as well as December 2021 (+26.4%). The decrease was mainly the result of lower grains and oilseeds price indexes, which outweighed the gains for livestock and animal products.

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

The decline in the crops index is driven by decreases in the price of grains and oilseeds

The crops index was down 11.1% in December 2023 compared with December 2022. Crop prices began posting year-over-year drops in January 2023, after reaching record levels in the second quarter of 2022.

The declines in the grains and oilseeds indexes were the main contributor to the decrease in the crops index. The oilseeds index dropped 17.7% in December 2023 compared with the same month a year earlier, due to lower prices for canola (-18.7%), soybeans (-12.8%) and flaxseed (-29.7%). Prices for oilseeds, particularly canola, were under pressure, as Canadian exports of canola fell 41.6% in December compared with the same month a year earlier.

The grains index decreased 17.7% in December compared with the same month in 2022. The decline was driven by lower prices for corn (-24.8%), wheat (excluding durum) (-20.8%) and barley (-19.0%). Despite lower production, especially in Western Canada where growing conditions were generally drier than in 2022, grain prices were under pressure as a result of improving global wheat supplies and a larger global corn harvested in 2023.

Mitigating the year-over-year decline in the total crops index in December were increases in the price indexes for fresh fruits (+8.8%), specialty crops (+8.4%), vegetables (+4.8%) as well as fresh potatoes (+3.1%).

The specialty crops index recorded year-over-year growth in December 2023, mainly due to an increase in lentil prices (+16.7%). Restricted supply supported lentil price gains.

Shrinking cattle herd contributes to higher cattle and calves index

In December, the livestock and animal products index increased 6.3% compared with December 2022, the third consecutive year-over-year gain.

The cattle and calves index recorded the largest year-over-year increase among all FPPI components, up 24.7% in December 2023. Elevated feed costs and feed availability issues were the primary contributors to the continued shrinking of the cattle herd. The cattle and calves inventory as of January 1, 2024, was the smallest since January 1, 1989. The value of cattle exported for immediate slaughter rose 27.9% in the fourth quarter of 2023 compared with the fourth quarter of 2022, while the quantity of cattle exported for immediate slaughter increased 5.0%. In addition, prices for domestic slaughter cattle (+24.5%) and calves (+8.1%) rose year over year in December 2023.

Meanwhile, the hogs index fell 9.9% year over year in December 2023. Elevated feed costs and processing capacity issues contributed to the price declines.

The eggs (-2.1%) and the poultry (-3.8%) indexes both reported declines, while the dairy index increased 0.9%.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.