Not every farmer would have felt it, but Agriculture Canada economists say last year was a boom year in Canadian agriculture and nowhere more so than in Saskatchewan and Manitoba.
But fasten your seat-belts for this year’s ride.
In projections prepared by the department, 1998 will be a tough one across the Prairies.
“It certainly doesn’t look as if it will be a good year in the West,” Agriculture Canada economist Lambert Gauthier said March 19. “Partly, it is because last year was a good one to compare against. But also, grain and hog prices are declining.”
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In 1997, income figures were inflated by strong hog prices and high grain marketings to create a five percent growth in net cash income on the Prairies to $3.68 billion, and a 12 percent increase nation-wide to a record $7 billion.
This year presents a different story.
Net cash farm income in Manitoba is projected to decline 35 percent to $544 million this year. In Saskatchewan, the decline is projected to be 15 percent to $1.24 billion and in Alberta, there will be an 11 percent decline to $1.23 billion.
Part of the gloom comes from the assumption of weak grain markets this year.
Declining hog sector fortunes also factor into the forecast.
“In 1998, the six percent increase in total hog marketings, which reflects the continued expansion of the hog industry in Western Canada, will not be enough to offset the 17 percent decline expected in hog prices,” said a departmental analysis included in the 1988 farm finance data book published by Agriculture Canada.
Behind the overall numbers lie some dramatic assumptions about individual farm income.
On a “representative” 1,400-acre Saskatchewan grain farm, the department projects a 33 percent decline in net cash income this year to $41,000 because of lower wheat and barley prices.
On a representative Alberta farrow-to-finish hog farm with 150 sows, departmental economists are projecting a 34 percent decline in cash income to $29,850. The culprit will be lower hog prices, even though feed prices also are expected to fall.
One positive development expected by the department is that the cost of farming should increase by no more than an average one percent this year, the lowest hike in the decade. Interest costs, fertilizer costs and feed costs are expected to decline.
Meanwhile, program payments to farmers could fall by an expected six percent to close to $1 billion, in part because an expected decline in withdrawals from Net Income Stabilization Accounts and in part because of the declining dairy subsidy.
