34

THE FARM BUSINESS FOR THE YEAR OF STUDY

PRICES OF FARM PRODUCTS!

Farm prices for the years of the study were somewhat higher than the long-
time average. The very familiar picture of the movement of farm product
prices from 1913 to 1945 is shown in Figure 1. Using 1926 as the base year the
indices for the 33-year period averaged 88-4. During the years to which the
farm business records pertained the average price index of all farm products was
102-5 for 1943-44 and 103-6 for 1944-45; for animal products, the most important
output of the farms of the study, the index averaged 98-3 for the 33-year period
122-2 and 121-5 for the two respective years with which the study was concerned.
In short, the prices of things produced on the farms were high and the outlook
for gross farm income in the year of the study was favourable.

Fic. 1.—Inprex or Farm Prices 1913-45

1926 = 100
PRICE -—+—+—}+—_+—_+_+_} ++ +++ ++
INDEX ie
: ay um=ume ANIMAL PRODUCTS INDEX AVERAGE 170
SESS COMMODITIES & SERVICES FOR EACH
150+ USED BY FARMERS 50
INDEX :
ALL FARM PRODUCTS INDEX
130
110
1 90
i}
1
'
'
i 70
t
'
i)
1
He 50
a hn

The price index of commodities and services used by farmers is also shown
in Figure 1. It appeared that increases in the prices of these cost items partly
but not completely had offset the favourable price situation. The 24-year aver-
age price index (1926 = 100) of 8 commodities and services used by farmers
was 91-4; the index for the years with which the study was concerned was 103-2.
The farm price-cost relationships as they applied to the products produced on the
farms of the study, therefore, were more favourable than the average situation;
prices of animal products were 25 per cent above average and prices of commodi-
ties used in production were about 12 per cent above average.

THE CROP SEASON

Crop yield is also an important determinant of farm income. In interpreting
the farm business analysis which follows, it must be borne in mind that while the
crop for the year studied may be considered normal in the Prince George and
Vanderhoof districts, it was definitely sub-normal at Smithers and Francois Lake.

1 Data from Prices and Price Indexes, 1913-37, and Monthly Mimeographs 1938-45. Dominion
Bureau of Statistics, Ottawa.