Tuesday, March 2, 2021

Farm incomes, farm values set records

Despite lots of complaining during the year, Canadian farm income and the value of farms is expected to be at an all-time high, according to a new report prepared by Agriculture and Agri-Food Canada.

And it predicts another set of good results this year.

Canadian farmers were jealous of tens of billions of subsidies the U.S. government provided farmers as compensation for trade disputes with China and COVID-19.

Federal Agriculture Minister Marie-Claude Bibeau revealed the report’s results to the annual meeting of the Canadian Federation of Agriculture.

“Despite all the challenges they have faced because of COVID-19, the men and women in the agriculture sector have stepped up to keep our grocery store shelves stocked,” she said.

The farm income forecast and our strong export performance last year are welcome signs that Canadian farmers are finding success during these unprecedented times,” she said.

Net cash income (NCI) is forecast to have grown by 21.8 per cent last year, up  from $13.5 billion in 2019 to $16.5 billion in 2020. 

In addition, farm-level income is also forecast to have increased in 2020, with average net operating income (NOI) per farm increasing by 25.4 per cent from just under $76,000 in 2019 to approximately $95,000 in 2020. 

Average farm family income is forecast to have increased by 8.6 per cent to just over $194,000 in 2020, driven by increases in net operating income from farming.

The grains sector had an 11.9 per cent increase in overall crop receipts. However, disruptions to the workforce, shifting international trade patterns, and fluctuating commodity prices have caused challenges, including for some parts of the crop sector, such as horticulture. 

Livestock receipts were forecast to have declined by1.9 per cent, largely due to COVID-19 disruptions in the red meats sector.

There continues to be uncertainty surrounding COVID-19 this year, the report said, however, based on the expectation that the current situation continues to return to normal market conditions, net cash income is forecast to further increase by 6.8 per cent to $17.6 billion.

Average farm-level net operating income is forecast to increase by 8.5 per cent to approximately $103,000 per farm, and average farm family income is forecast to grow by 7.2 per cent to just under $208,000. Net worth is forecast to reach $3.5 million per farm, up by 2.9 per cent from 2020 levels.

Building on this income forecast, the sector also had a strong export showing in 2020, reaching nearly $74 billion up from $67 billion in 2019. 

The government has set a goal of reaching $75 billion by 2025.