Markets returned $23.4 billion to Canadian farmers in the first nine months of the year, slightly more than during the same period last year because of stronger wheat, canola and cattle receipts, according to government figures.
But total farm cash receipts fell almost one percent during that same period as program payments declined more than nine percent from last year’s records levels, negating the impact of higher market returns in some sectors.
The result, according to farm receipts statistics published Nov. 24 by Statistics Canada, is that total farm cash receipts to the end of September were $232 million lower than 2005 levels.
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The report does not reflect net farm income because expenses are not included.
Meanwhile, the federal agency also confirmed what many farmers have known for months. Last year’s farm income results were a disaster.
Realized net farm income in 2005, cash receipts minus operating costs and depreciation, fell 14 percent to $1.9 billion, more than 16 percent below the five-year average.
Farm income fell despite record program payments of $4.9 billion, 25 percent above the five-year average and 13.4 percent of gross farm income.
Operating expenses rose by more than half a billion dollars, led by energy costs and interest payments on a record and growing farm debt.
This year, farmer receipts from canola and wheat have been boosted by increased sales of carryover stocks from the 2005 harvest, although the federal agency noted that “the strong Canadian dollar continued to keep prices under pressure.”
By the end of the nine-month period under review, prices had started to rise.
To the end of September and despite rising barley market prices, Statistics Canada reported that barley revenues fell more than 11 percent because of low inventory carryovers and sales from 2005.
In the livestock industry, cattle receipts increased more than six percent to $4.7 billion as “the cattle sector continued to show signs of recovery from the BSE situation.”
However, the news from the hog sector was grim.
Receipts in the first nine months of the year plunged more than 15 percent to $2.6 billion and the reasons were many – disease, falling domestic sales and lower prices.
“The stronger Canadian dollar and disease in Ontario and Quebec lowered revenues for hog producers,” said the government report.
Even though sale of live hogs to the United States for slaughter or feeding increased, lower sales in Canada meant marketings have dropped this year.
The agency said program payments fell because of lower Canadian Agricultural Income Stabilization and crop insurance payments and the phasing out of some BSE recovery funding programs.
Program payments would have been much slimmer if the Conservative government had not decided to deliver the Grains and Oilseeds Payment Program funding that the Liberals promised in the days before the last election was called a year ago.
Under that program, which the Conservatives embraced as their own, grains and oilseeds producers received $730 million to the end of September, “cushioning the decline in program payments,” according to Statistics Canada.
