From Statistics Canada-The Daily
The Farm Product Price Index (FPPI) declined 4.8% in June compared with June 2013, mainly because of lower crop prices. This was the 10th consecutive year-over-year decrease as the decline in the crops index continued to exceed the gains in the overall livestock and animal products index.
The crops index was down 19.9% in June compared with June 2013. The year-over-year decline in crop prices began in August 2013, with the index posting double-digit decreases since November 2013. In June 2014, the largest year-over-year declines were recorded in grains (-28.7%), oilseeds (-24.5%), specialty crops (-16.7%) and fruit (-15.9%).
Grain and oilseed prices came under pressure last year when world production recovered and Canada harvested record breaking crops for many of the major grains and oilseeds in the fall of 2013. Positive production forecasts for the upcoming 2014/2015 crop year are also pressuring prices. At the end of June, the International Grains Council increased its total grains production forecast for the upcoming 2014/2015 crop year to stand 2% below the record set in the 2013/2014 crop year. The council also increased its ending stock estimate to the highest level since the 1999/2000 crop year.
The livestock and animal products index continued to increase, rising 16.8% in June compared with June 2013. Higher prices for cattle and hogs were the main drivers behind the increase. On a year-over-year basis, this index has been rising since April 2013; however, since May, the growth has been slowing.
Compared with June 2013, the cattle and calves index was up 30.7% and the hogs index increased 26.2%. Low inventories continued to contribute to higher prices. As of July 1, 2014, Canada’s beef cow herd remained at its lowest level since 1992, while the United State’s beef cow herd was at its lowest level since the July 1 series began in 1971.
Despite a slight increase in Canadian hog inventories at July 1, 2014, total North American supplies fell to their lowest level for this period since July 2003. The outbreak of porcine epidemic diarrhea virus, particularly in the United States, continued to affect inventories. In its last quarterly release (March to May 2014), the United States Department of Agriculture reported that the number of pigs saved per litter was 5.1% below the previous year.