Cash receipts fell almost $800 million last year because of a sharp decrease in crop returns from the market, says Statistics Canada.
Farm program payments also fell, while livestock sector gross income rebounded, said the agency’s preliminary 2010 farm receipts report published Feb. 23.
Still, $43. 8 billion in gross income was higher than the five-year average.
Statistics Canada is expected to release its first estimate of realized net farm income, which deducts production costs and depreciation from gross receipts, in late May. That report will also include figures on whether Canada’s record $63 billion farm debt grew again last year for the 18th straight year.
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The news of the decline in farm revenue landed in the middle of the annual meeting of the Canadian Federation of Agriculture in Ottawa, but it did little to dent the optimistic mood that infused the convention.
“I’m optimistic about the industry,” re-elected president Ron Bonnett said in an interview.
“The horticulture sector is having challenges and the livestock industry is having a feeble recovery, but I think we are headed in the right direction.”
Agriculture minister Gerry Ritz told reporters after a Feb. 23 speech to the convention that cash receipts are down in grain and oilseeds because the global recession reduced demand.
“We also saw our dollar going up in comparison to other dollars and that shows up in trade distortions,” he said.
“Overall, though, the farming sector is very optimistic. I point to the survey that Farm Credit Canada did that shows two-thirds of farmers saying they are better off than they were five years ago and 76 percent saying that the next five years are going to be great.”
Statistics Canada said crop receipts fell almost $1.5 billion to their lowest level since 2007. Prices rose in the last quarter of the year but the overall result was a decline because of lower prices and lower marketings, particularly in wheat.
The biggest hit was in Alberta, where year-over-year receipts were down almost six percent, more than $550 million.
However, cash receipts were higher in the last quarter than in the comparable 2009 period.
Livestock receipts increased $850 million on the strength of higher cattle prices. The higher dollar and trade implications of country-of-origin-labelling in the United States reduced exports, which led to more finishing in Canada with higher returns.
The biggest rebound came in the hog sector, where receipts increased 15.7 percent because of higher prices.
However, the number of hogs marketed fell three percent to their lowest level since 2002.
Statistics Canada blamed the lower marketings on the smaller herd, a 5.6 percent decline in the number of hog farms and a federal program that encouraged producers to cull breeding sow herds.
Meanwhile, a sharp drop in Quebec program payments was the main reason program payments fell $150 million to $3.1 billion.
Crop insurance payouts in Saskatchewan helpedtemper the decline in program payments.
