Canadian farmers’ realized net income dropped in 2017, marking the first decline since 2013.
The 2.5-percent drop to $8.3 billion marks only the second decrease in the last 10 years, according to Statistics Canada.
Realized net income is the difference between cash receipts and operating expenses, less depreciation, plus income in kind.
Farm cash receipts rose for the seventh consecutive year and farm expenses were also up. Total net income, which is realized net income plus the value of inventory changes, remained even at $9.8 billion.
Stats Canada said rising depreciation charges along with the slightly higher operating expenses offset the increase in farm cash receipts.
University of Saskatchewan agricultural economist Peter Slade said the numbers aren’t surprising.
“For grain farms, the bottom fell out of the lentil market,” he said. “Wheat and canola, while having a solid year, weren’t enough to make up for that.”
Income was down in five provinces: Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia.
Saskatchewan realized net income dropped from $3.41 billion to $3.09 billion year over year, while Ontario declined from $1.42 billion to $1.06 billion.
In Manitoba, realized net income rose from $581 million to $972 million, while in Alberta it rose from $1.66 billion to $1.82 billion.
“Nationwide, it wasn’t too bad of a year,” Slade added. “A small decline was probably expected after a few years of increasing incomes.”
Farm cash receipts were up 1.8 percent to $61.6 billion in 2017.
Crop receipts didn’t change, coming in at $34.1 billion.
By commodity, revenue for lentil producers fell a whopping 45.7 percent. This was the second year of decline after revenue more than doubled in 2015.
Dry pea receipts dropped by 30 percent, compared to a 68 percent increase in 2016.
And, export markets for both crops weakened significantly last year, which drove down the price and the amount sold.
Wheat receipts, excluding durum, were up 13.2 percent after an 11 percent drop the previous year. Canola receipts were up 7.3 percent, and soybean revenue dropped 6.5 percent.
On the livestock side, revenue from cattle and calves was up just slightly, 2.3 percent, while hogs were up 9.8 percent mainly due to higher prices after two years of decline.
Overall, livestock receipts totaled $25 billion, or 4.5 percent higher than 2016.
Program payments, which are also included in cash receipts, were down 0.3 percent to $2.4 billion.
On the expense side, operating costs were up 2.4 percent to $46.2 billion.
“The increase in expenses are in line with inflation,” Slade noted.
Fuel costs were up, but fertilizer costs were down.
The agency pegged total farm expenses, including total operating expenses and depreciation, at $53.4 billion.
It also said farm debt is up to $102,322,210, compared to $96 million the previous year.
Most of that is owed to chartered banks, followed by federal lenders and credit unions.