The most recent farm income statistics paint a positive picture with record Canadian farm income last year and a strong outlook for this year.
Drilling down, the numbers tell interesting stories at the individual farm level.
The average net operating income of Canadian farms is forecast at slightly more than $74,000 for 2012, more than 50 percent higher than the average of the previous five years. Net operating income is the amount of cash producers can withdraw from their operations for business use or other purposes.
The average grain and oilseed farm is at $106,000 for 2012, while the average cattle farm is at only $17,333. The cattle industry can rejoice that net operating income for 2012 is expected to be 34 percent higher than the previous year, but there’s still a huge financial gap between cattle operations and all other types of farms.
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Many farms have both grain and cattle, but for this classification, grain farms are operations where more than 50 percent of the income comes from grain while cattle farms, dominated by cow-calf operations, have more than 50 percent of their income from cattle.
Net operating income for the average hog farm declined by 39 percent in 2012, but it’s still more than $54,000, well above what cattle producers are earning.
Potato farms are doing well at $249,000, as are poultry and egg operations at $198,000. The average dairy farm is at $145,000.
Another way of looking at the numbers is net operating income per family, since more than one family is often involved in a farm. For this, provincial comparisons have been calculated.
Across the Prairies, the average net operating income per family ranges from $36,000 in Alberta to nearly $41,000 in Saskatchewan. Ontario and Quebec are in a similar range. However, the number is dismal in British Columbia, where many farm sectors are struggling. There, the average net operating income per family is a mere $8,500.
Off-farm income plays a huge role in financial viability. Other family income is $74,000 in Manitoba, $95,000 in Saskatchewan, $124,000 in Alberta and $100,000 in B.C.
So, even though farm income has hit record highs, the majority of farm family income continues to come from off-farm sources.
Breaking it down by farm type, grain and oilseed farms earn the most off-farm income at an average of more than $96,000. Cattle producing families earn an average of $94,000 in other family income and dairy farms are the lowest at $43,000.
The statistics for assets, liabilities and net worth are from 2011, and they show that the average grain farmer in Canada has assets of nearly $2.2 million, farm debt of just $307,000 and a net worth of $1.87 million. Beef producers are at the bottom with an average net worth of slightly more than $1.1 million.
The highest average net worth is enjoyed by the sectors that have the highest farm incomes: poultry at $4.2 million per farm, potatoes at $3.1 million and dairy at $2.7 million.
Breaking it down by province, Sask-atchewan farms have a surprisingly low net worth, considering that the province has been leading the nation in farm income. The average net worth in Saskatchewan is $1.4 million, compared to $1.6 million in Manitoba and $2.1 million in Alberta and B.C.
This would seem to indicate that Saskatchewan farmland is still relatively inexpensive compared to other regions.
