Trying to read between the lines of Canadian farm income numbers these days is the statistical version of extreme sports.
The highs are exhilarating and sweat-inducing. The lows are debilitating and sweat-inducing.
And everywhere, there are extremes.
The disparity between livestock and grain sectors grew.
On May 28, Statistics Canada published farm income results for 2000 and the first quarter of 2001. They showed:
- Year 2000 livestock receipts, both cattle and hogs, were at record levels of a combined $10.1 billion.
- Crop receipts fell for the third straight year to a six-year low of $13.1 billion.
- Operating costs, driven by higher fuel and interest costs, soared 11.5 percent above the five-year average to $25.8 billion.
- Government program payments were up almost 45 percent from 1999 levels to $2.8 billion, the highest since 1993 when the Liberals were elected to government.
- Prince Edward Island farmers suffered the worst declines as provincial net cash income crashed almost 54 percent, dragged down by lower potato incomes. By contrast, Alberta’s livestock-driven farm economy saw net cash income soar 63 percent to its highest level in five years.
- On the Prairies, Manitoba’s overall net farm cash income declined slightly for the third straight year. Saskatchewan’s income was stable at the depressed levels reached in two earlier years of decline.
- Farm revenues in the first three months of 2001 showed more of the same – cattle and hog receipts up and grain revenues down. Ontario corn farmers were among the hardest hit early this year as last year’s poor growing conditions and harvest led to a small crop and a 26 percent decline in receipts.
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Statistics Canada put a positive spin on the numbers. It stressed the “net cash income” figures, which represents cash receipts from sale of farm produce, minus operating expenses.
“Farmers recorded net cash income of $7.1 billion, up 15.3 percent from 1999, the largest increase since 1995,” said the Statistics Canada commentary published May 28.
However, many farmers and economists consider “net farm income” a more accurate measure of farm economic health. It adjusts the net cash income by changes in the value of inventory, depreciation charges and income-in-kind.
By that measure, total net farm income increased 3.5 percent last year to $3 billion, with some provinces showing sharp declines.
However, even the overall gain was tempered by historic comparisons. Last year’s $3 billion was almost 40 percent below the record net farm income of $4.5 billion in 1996.
The farm income numbers show that these are the best of times for the livestock industry.
Last year’s hog receipts of $3.4 billion were 39 percent above year-earlier levels, driven by higher sales, but also a 34 percent increase in slaughter hog prices.
Cattle and calf receipts were up 7.7 percent to a record $6.7 billion, buoyed by higher prices even as marketings dipped.
“Demand for beef was strong, keeping prices high,” said the report.
On the program payments side, Statistics Canada said the major boost last year was $669 million sent to Alberta, Saskatchewan and Manitoba under the federal-provincial adjustment programs aimed to compensate for higher transportation costs.
Crop insurance paid out close to $600 million, almost double previous years levels.
