Moisture being received by a large portion of the Prairies is a bright spot in agriculture as I write this. At this point it looks like totals will be enough to get crops and pastures off to a good start, particularly if this snow and rain is followed by some warm weather and sunshine.
But all is not well in the agriculture sector, as we know, and a sobering news release yesterday from the Canadian Federation of Agriculture illustrates it clearly.
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
1. Net operating income for the average cattle farm is forecast to be $10,889 in 2009. But net operating income declines to -$5,195 in 2010…” Yes, you read that correctly. That’s a negative number. And last year’s positive number was nothing to write home about either.
2. Net operating income for the average hog farm is forecast to be $45,558 in 2009, but will decline to $1,719 in 2010, below the 2004-08 average of $72,842.
As the CFA explains, “net operating income measures cash flow (revenues minus expenses) of farm operations. This is the amount of money the farm operation has available for debt repayment, investment or withdrawal by the owner.”
Coverage in the May 6 Western Producer will provide further details on the income report. That same issue will feature coverage by Barry Wilson of the federal agriculture committee tour across Canada to determine the impediments to young farmer entry into the agriculture business. Reports like the one quoted above are a huge part of those impediments.
