by SUSAN MANN
Higher feed grain costs and lower North American on-farm cattle and hog inventories drove the livestock and animal products price index up by 14.1 per cent in December 2011 compared to the same month in the previous year, according Statistics Canada’s Farm Product Price Index report released Monday.
There were increases in all livestock commodities ranging from 3.3 per cent for dairy to 21.5 per cent for cattle and calves. Year-over-year increases for all of the livestock commodities were recorded in every month last year except for a 2.8 per cent decline in May in the hogs index.
Overall the prices farmers received for their commodities in December 2011 was up by 9.5 per cent compared to December 2010 as livestock and crop prices continued to increase. But there are signs the increases, particularly for grain and oilseed crops, may be slowing down.
Prof. Alfons Weersink, of the University of Guelph’s department of food, agriculture and resource economics, says the projections for the future aren’t quite as rosy as they were a year ago. In December 2010 the outlook was fairly bullish. This year the United States Department is still projecting strong crop prices “but not as strong as they have been.”
He also notes the price variability within the year is quite significant. There’s much more variability in prices now that there was 10 years ago.
Weersink says that variability is caused by a relatively tight stock-to-use ratio in crops. The markets are edgy and can shoot up or down depending on if there’s good or bad news.
The crops index was up 4.9 per cent in December 2011 compared to December 2010. But for crops, the year-over-year increase in December 2011 compared to December 2010 was the smallest increase since September 2010 and that was mainly due to a 2.8 per cent decline in the grain index. The decline in the grain index ended a year-over-year growth trend that started in September 2010. All other crop commodities were up in December 2011 compared to the December a year earlier with increases ranging from 2.9 per cent for vegetables to 21.6 per cent for fruit.
The oilseed index was up 3.7 per cent in December 2011 compared to the same month in the previous year. Similar to the grains index, the oilseed index began its year-over-year growth trend in September 2010. But since June 2011, its rate of increases has been slowing. BF
Comments
The other side of this general price increase, is the worrisome extent to which farm incomes are being enhanced by things, which like supply management, ethanol, and solar/wind energy, are dependent on tariffs, subsidies, and mandates, and which therefore, by definition, are both bad economic policy, and bad public policy.
In addition to these increased level of economic distortions caused by the increased levels of the use of mandates, subsidies, and tarrifs to support farm income, it is even more worrisome to see farmers, and farm organizations, not only seeming to be not-at-all concerned about the always-disastrous consequences of veering away from sound economic principles, but actually applauding these short-sighted policies as being fair, sound, and reasonable.
In the same vein as the old Vaudeville routine of asking "is there a Doctor in the house?" when things bomb on stage, agricultural policies have gone for far-too-long without anybody asking, and in all seriousness, "Is there an economist in the house?"
Stephen Thompson, Clinton ON
Insofar as RMP is supposed to be "stable, bankable, and predictable", it too, is by definition, bad economic policy because the benefits of any program which will do any and/or all of these things will always get immediately capitalized back into asset values - thereby always defeating the purpose of the program.
It does agriculture no good to be of the mindset that the sooner we forget everything we learned in economics class, the better, and/or the belief that basic economic principles simply don't apply in agriculture.
Stephen Thompson, Clinton, ON
I read where there is a good market in selling land to china. The china syndrone is hiting Canada by storm,buying lots of land at great prices leaseing back till later and they want to set up dairy farms so they can ship the produce back home without quota. Thats a great way to get rid of quota in Canada. We buy all the junk made in China and they thanks us by buying the land and what little companies we have left. Its about time people quit complaining about the things that works here to keep people working here and the jobs and start helping get the jobs that we lost in Canada. Canada will be owned by everyone else in the world but Canadians.
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