Prices farmers received for their commodities rose 14.1 per cent in May 2008 from the same month a year earlier, as significant gains in crop prices offset declines in livestock prices.
Prices that producers received for crops were up 40.2 per cent in May compared with May 2007, continuing double-digit increases which began in November 2006. Farmers received higher prices for all crops except fruit.
On the other hand, prices for livestock and animal products in May were 3.6 per cent below their May 2007 level, the ninth consecutive year-over-year decline as cattle and hog prices continued to fall. Hog, cattle and calf prices have posted 12 months of year-over-year decreases. For the last nine months, those declines have been double-digit for hog prices.
On a monthly basis, prices farmers received for their commodities were up 2.7 per cent in May from April 2008, as both the livestock and animal products index and the crops index recorded increases.
The Farm Product Price Index stood at 121.3 (1997=100) in May, up from the April index of 118.1.
The overall livestock and animal products index rose 6.6 per cent in May compared with the April index, as all commodities recorded increases. The cattle and calf index increased 4.3 per cent in May and has risen over 15 per cent since January.
Rising feed grain prices and a strong Canadian dollar have pressured hog prices in recent months. However, the hog index rose 26 per cent in May from April, as export demand increased. Hog exports were up 20 per cent over last year for the first four months of 2008.
The total crops index was 143.3 in May, edging up over the April level of 142.6, as all commodities increased except potatoes.
Continued demand and uncertainty over new crop supplies helped maintain grain and oilseed prices at record levels. Crop reports put seeding in Canada as progressing well. However, cool wet weather had raised concerns over delayed spring seeding in the United States. Dry areas in Canada’s Prairies also raised concerns on the upcoming growing season and production.
Note: The month-to-month growth rate of the total FPPI is not a weighted average of the monthly growth rates of its crop and livestock components. The growth rate of the total FPPI is derived from a weighted average of the component indices using a different set of weights in consecutive months. Given this, the growth rate of the composite FPPI can lie outside the growth rate of the components.