Net incomes on Canadian farms dropped by a whopping 45 percent in 2018, the largest annual percentage decrease since 2006, according to Statistics Canada.
Realized net farm income — which is defined as the difference between farm cash receipts and operating expenses, minus depreciation plus income in kind — dropped 45.1 percent in 2018 to $3.9 billion, Statistics Canada said.
The 2018 decline follows a 2.8 percent decrease in 2017.
“Rising feed, interest and labour costs together with little change in farm cash receipts pushed realized net farm income lower,” the agency said in a May 28 report.
“Realized net income fell in every province except New Brunswick, where an increase in cannabis and potato production boosted receipts….
“More than one-third of the national decrease was attributable to a 68.1 percent decline in Alberta.”
Nationally, farm cash receipts, which include crop and livestock revenues as well as program payments, were up marginally to $62.25 billion in 2018, compared to 62.20 billion in 2017.
Receipts from wheat, excluding durum, were up by 11.6 percent, based on steady prices and strong exports, particularly to China which nearly tripled wheat imports from Canada in 2018.
However, revenues from lentils fell 35.1 percent and revenues from field peas dropped by 19.7 percent, largely because of the imposition of duties by the Indian government in late 2017 and reduced exports.
Receipts from canola also dropped by 6.5 percent with producers in Alberta taking the hardest hit, Statistics Canada said.
Growers in that province saw 2018 canola receipts drop by 16.1 percent, based on lower prices and reduced marketings.
Revenue from livestock production was down slightly by 0.2 percent to $25 billion in 2018.
Receipts from the cow-calf sector were mostly unchanged, but hog receipts fell 8.9 percent, based on lower prices as North American inventories reached record highs in 2018.
Reduced revenues in the hog sector were moderated by a 2.8 percent rise in the receipts of supply-managed commodities.
Program payments to crop and livestock producers fell 8.9 percent to $2.2 billion in 2018. Crop insurance payments were down 27.2 percent.
On a province-by-province basis, total farm cash receipts dropped in five provinces including Alberta (-4.0 percent), Saskatchewan (-1.3 percent), Manitoba (-1.1 percent) and Nova Scotia (-0.2 percent).
On the other side of the ledger, farm operating expenses increased 6.5 percent in 2018 to $50.6 billion — the largest percentage increase since 2012.
Feed costs were up 9.6 percent, interest expenses rose by 19.5 percent, cash wages increased eight percent and expenditures on fuel jumped 18.1 percent.
Total farm expenses — the sum of operating expenses and depreciation costs — rose 5.9 percent to $58.4 billion.