By Dori Modney with files from Agriculture Canada

Canada’s over all farm income forecast to see record growth in 2021

Feb 25, 2022 | 12:13 PM

LETHBRIDGE, AB. — Even in the face of many challenges in 2021, Canada’s agriculture sector contributed nearly $140 billion to the national economy, and was responsible for more than 2 million jobs across the country.

Agriculture and Agri-Food Canada completed its farm income forecast for 2021 and 2022, and the results show Canadian farm income reached record levels in 2021.

Overall, the agriculture sector continues to prove its resilience with growth in 2021 and similar performance is expected well in 2022.

Net Cash Income (NCI) for 2021 is forecast to have grown by 49 per cent, from $17.8 billion in 2020 to $26.6 billion in 2021, mainly due to higher commodity prices.

That’s a new record, which exceeds the mark set in 2020.

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While the drought in Western Canada caused significant production losses, there was a substantial jump in grain and oilseed prices, with overall crop receipts are forecast to have increased by 17 per cent.

In the livestock sector, hog prices have been very strong, contributing to a 15 per cent increase in livestock receipts. Program payments are also forecast to have increased due to higher crop insurance payments. While input prices in 2021 are also forecast to have increased, the growth in receipts is expected to have exceeded the growth in expenses.

Despite COVID-19, the drought in Western Canada, the floods in British Columbia and other trade disruptions, agriculture remains a resilient engine of growth and plays a key role in the Canadian economy.

The average net operating income (NOI) per farm is forecast to have increased by 59 per cent in 2021, from $91,500 in 2020 to $145,000 in 2021, while the average farm family income is forecast to have increased by 27 per cent to $229,000 in 2021.

When looking ahead to 2022 numbers, Net Cash Income is forecast to decline 25.8 per cent to $19.7 billion due to the impact of the 2021 Western Canada drought on supply going to market in the first half of the year. That may seem to be a substantial decrease, but it’s relative to the record levels of 2021. The forecast for 2022 would still be the second-strongest year on record.

Average net worth of farms in Canada is also forecast to remain strong for 2022.

Final actual 2021 numbers are expected from Statistics Canada in late spring. Statistics Canada will be releasing fourth quarter receipts for 2021 on February 28, and its estimates of farm income for 2021 on May 25.