Canadian farmers earned record net farm income last year, even as production costs soared and program payments remained static, according to figures from Statistics Canada.
Although it did not report net farm income in its May 23 report, the federal agency said total farm cash receipts in 2012 were $53.69 billion, almost seven percent higher than the 2011 total.
Expenses were up almost six percent to $46.6 billion, creating an unofficial net farm income of slightly more than $7 billion.
The increase in farm receipts was driven by a $3 billion increase in the value of cash receipts for crops, rising to $29.2 billion.
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Income in the livestock sector was relatively stable at less than $21 billion.
Farm program payments fell slightly to $3.4 billion.
“I would say there is not much surprising in that, given crop prices have been very solid in the past year,” said Canadian Federation of Agriculture president Ron Bonnett.
“Livestock prices have recovered a bit, at least in beef, but we’ll see this year what the impact of the COOL (country-of-origin labelling) rules will be. That could lead to more softening.”
The Statistics Canada report showed sharp increases in fertilizer and commercial feed costs last year.
Meanwhile, the federal agency said the trend to record farm receipts last year spilled into the first quarter of 2013.
Farm cash receipts in the first quarter of the year hit a new record of $15.4 billion, according to the agency.
It was 7.5 percent higher than last year’s record level, driven mainly by higher crop receipts and in particular wheat prices and sales, according to Statistics Canada figures.
Program payments were stable at $810 million with crop insurance payouts offsetting declines in AgriStability and AgriInvest payments.
Statistics Canada suggested that the end of the CWB sales monopoly last year was part of the story as farmers took advantage of new sales opportunities to sell stored grain on the open market at current high prices.
“The $1.1 billion increase in crop receipts was mainly the result of a rise in wheat receipts and an increase in the liquidation of deferred grain receipts,” it said.
Wheat sales revenue was 52 percent higher and durum receipts were 65 percent higher than 2012 levels.
The increases were “primarily the result of higher prices and the timing of funds received by producers,” said Statistics Canada.
“As of Aug. 1, 2012 western producers have the option to market their wheat and barley on the open market.”
