The “phantom” federal farm income forecasts appeared last week, predicting a significant turnaround in Saskatchewan from earlier estimates.
Provincial agriculture minister Dwain Lingenfelter immediately denounced the figures as “bogus” and “seriously flawed.”
The preliminary numbers suggest realized net farm income in the province will be $362 million this year, up from negative $48 million predicted in July.
In Manitoba, the number has risen from $64 million to $197 million.
“I can’t find one thing (that) would lead me to believe that I’m going to have a better income on the farm now than I did in July,” said Lingenfelter. “I don’t know where the numbers came from.”
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Agriculture Canada, in co-operation with the provinces and industry groups, produced the forecast, said an official.
The numbers were dubbed phantom by premiers Roy Romanow and Gary Doer during their trip to Ottawa late last month to ask for $1.3 billion in farm aid. There, they were told new forecasts showed a turnaround, but the premiers claimed they hadn’t seen the figures. Romanow, however, later said he had been warned there could be more positive numbers.
Last week federal officials released the numbers and said the provinces received them Oct. 21, a full week before the delegation went to the capital.
“Our analysts talk to one another on an ongoing basis,” said Saskatchewan assistant deputy minister Hal Cushon. “We had never seen anything they represented to us as a new income forecast.”
The new forecast suggests four factors will improve Saskatchewan’s income outlook.
Doug Hedley, senior executive director of Agriculture Canada’s policy branch, said operating costs are expected to drop by $60 million because sales of chemical and fertilizer are down that much. He said officials obtained that figure from the Canadian Fertilizer Institute and Crop Protection Institute of Canada.
He said Saskatchewan queried the number, so officials went back to the two organizations.
“That was confirmed in spades,” Hedley said in an interview. “They assured us that those numbers have come down.”
Livestock income is expected to rise by $125 million, based on Statistics Canada slaughter numbers from September. Durum earnings should be up $15 million, based on information from the Canadian Wheat Board.
Federal farm aid payments were not included in the July forecast, but are expected to add $125 million to farmers’ incomes.
Hedley said Net Income Stabilization Account (NISA) payments weren’t included in July because changes in the triggers were announced in late June and couldn’t be incorporated, and because of the $84 million top-up by the province.
“The third element is that withdrawals from NISA accounts are running about two to 2.5 times higher than any previous year,” Hedley said.
“They’re running substantially above what was estimated in the earlier forecasts.”
Manitoba’s income is expected to improve due to higher returns for wheat, canola and hog exports. Unseeded acreage benefit payments and NISA withdrawals also boost the total. Manitoba agriculture minister Rosann Wowchuk said the situation is still serious, with the new projection sitting below the five-year average.
“We know that the crop value of production in Manitoba will drop significantly this year,” she said in a release. “We have a serious situation on our farms. No amount of playing with numbers will change this.”
Alberta’s numbers were also revised upwards to $641 million for October from $579 million in July.
Hedley added the numbers for Saskatchewan and Manitoba, despite the improvement, are still well below the five-year average.
“There’s no diminishing the kind of problem that is out there in Saskatchewan and Manitoba quite specifically,” he said. “No question of that whatever.”
