Statistics Canada’s Farm Product Price Index (FPPI) jumped almost 26% in December 2021 compared to the same month a year earlier – the biggest gain in over 40 years.
The crops index led the growth in the FPPI, recording a 37% increase in December as prices reacted to significantly lower yields and supply in some parts of western Canada as a result of the 2021 drought, as well as continued strong global demand. In comparison, the livestock and animal products index increased a much more modest 9.4% in December.
The Farm Product Price Index measures the changes in prices that farmers receive for the agriculture commodities they produce and sell. The price index has separate crop and livestock indexes, a variety of commodity-group indexes such as cereals, oilseeds, specialty crops, cattle and hogs and an overall index.
In terms of the crops index, the grains index was the main contributor to the increase, up 52.3% in December 2021 compared with December 2020, due to high prices for wheat and barley. The oilseed index, which recorded its 20th consecutive year-over-year increase in December, grew by 46.1% based on stronger prices for major oilseed commodities, such as flaxseed (+69.2%), canola (+55.3%) and soybeans (+16.7%).
Also contributing to the year-over-year gain in the crops index were higher prices for specialty crops (+40.2%), reflecting tighter supplies and a continued strong demand from Europe and Asia, StatsCan said.
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