The federal government has announced a “turnaround” in the national net farm cash income last year and continuing improvement in the first quarter of 2000.
However, the turnaround did not wash over the prairie grain sector.
While national figures showed a 1.9 percent increase in net cash income to $6.4 billion in 1999, Statistics Canada last week showed net cash income down 9.4 percent in Alberta, 8.7 percent in Saskatchewan and one percent in Manitoba.
Farm cash receipts continued to decline sharply in two of the prairie provinces during the first three months of this year – down 10 percent in Saskatchewan and 6.5 percent in Manitoba.
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For those farmers and provinces that did well in 1999, the main reasons were livestock and government.
Program payments in the first quarter of 2000 boosted farm receipts across the country by $427 million.
“Fueled by higher production, the livestock sector has set records every year since 1992, except 1992,” the federal agency reported. “Livestock receipts reached a record high of $15.2 billion in 1999.”
Cattle producers also enjoyed their highest prices in six years along with low feed costs. However, the cost of feeder stock reduced profit margins for finishers.
Hog producers continued to struggle with prices that were 21.5 percent below the five-year average. Still, a record slaughter of 18.9 million last year raised hog receipts 8.8 percent to $2.4 billion.
Government-supported program payments were the other major part of the increased farm income in some sectors. Payments increased almost 40 percent last year as government disaster payments and withdrawals from the Net Income Stabilization Account rose sharply.
“Program payments reached a five-year high of $2 billion in 1999 in the wake of low commodity prices and poor growing conditions in some regions,” said the Statistics Canada commentary.
Nonetheless, 1999 support levels were just half the 1992 peak of $3.8 billion in support payments.
In the grains sector, the news was far less optimistic.
“Abundant world grain supplies pushed prices for most grains and oilseeds down to their lowest levels since 1994,” said the federal agency. “Receipts were down significantly for canola, soybeans and durum wheat, as prices for all three were well below their five-year average.”
Prairie farmers compensated by reducing their deferments of payments into the new year for crop sold. Payment deferments of $584 million last year were the lowest since 1993.
Ontario and Maritime farmers fared better as corn receipts increased 15 percent because of a second record production year and potato sales hit a record $720 million.
Statistics Canada noted that when the value of inventory is added to net cash receipts, total net farm income increased last year, even on the Prairies. The reason was the growth of wheat and canola on-farm inventories.
