By Dori Modney

Receipts outpace expenses as farm income saw double digit jump in 2019

Nov 27, 2020 | 5:21 PM

OTTAWA, ON. — Canadian farmers saw a significant 14.9% increase in realized net income from 2018 to $5.5 billion in 2019.

The increase followed a 34.2% decline in 2018, brought on by sharply higher input costs and lower canola receipts. While increases were seen across a broad range of agricultural products, one element was of particular note — higher cannabis receipts.

Realized net income, which is the difference between an operation’s cash receipts and operating expenses, minus depreciation, plus income in kind, was up in six provinces.

Alberta was up $576 million and Quebec saw a $370 million jump, posting the two largest provincial increases. Lower oilseed receipts contributed to Saskatchewan’s $307 million drop and Manitoba was down $180 million, for the largest declines.

Farm cash receipts for Canadian farmers increased 6.2% to $66.4 billion in 2019. This was the ninth consecutive annual increase and the largest percentage gain since 2012. Excluding cannabis, however, the increase becomes 3.4%, just above the average annual gain over the previous five years (+2.2%).

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Cash receipts, which include crop and livestock revenues as well as program payments, rose in every province except Manitoba, where receipts were essentially unchanged. In dollars, Alberta posted the largest increase (+$1.5 billion).

As previously noted, an increase in cannabis sales had a positive impact on overall crop receipts, which rose 4.1% from a year earlier, to $36.7 billion in 2019. The gain was attribute to a $1.7 billion increase in licensed cannabis receipts during the fist full year of legalized use. If cannabis is excluded from the tally, national crop revenue would be down 0.8%.

Cannabis receipts cover direct legal sales to consumers for medical and recreational use, as well as sales to processors of cannabis products. Higher cannabis receipts in Alberta, Ontario and B.C. accounted for almost three-quarters of the national increase.

Among the standard crops, durum wheat sales rose +22.5% as production shortfalls among Canada’s export competitors increased demand for high quality Canadian durum.

However, canola revenue fell for the second consecutive year, down 7.4% following a 6.5% decline in 2018. Prices were 9.8% lower in 2019, in the wake of Chinese import restrictions on Canadian canola seed, which began in March 2019.

Soybean receipts decreased 17.5% on lower marketings and the US-China trade dispute, lowered prices. As Canada’s largest soybean export market, soybeans fell sharply after a record year in 2018, amid strained relations between the two countries and lower feed demand from Asia.

There was also a bright spot for livestock receipts, which were bolstered by increased cattle markets, as well as rising hog and dairy prices.

Livestock receipts rose 6.1% to $26.6 billion in 2019, following a 0.1% decline in 2018. Export marketings of cattle and calves were up 20.5% on strong global demand for beef and lower cattle inventories in the United States. Rising beef exports contributed to a 4.9% increase in slaughter marketings.

Hog receipts were up 12.0% thanks to a price hike, which reflected increased demand for North American pork exports in the wake of African swine fever reducing herd sizes in China and elsewhere in the Far East. Dairy receipts rose 5.1% as higher production costs pushed prices up 5.2%.

This is the abbreviated rundown, with detailed information posted to the Statistics Canada web site.