Farm income, 2012
The realized net income of Canadian farmers totalled $7.3 billion in 2012, up 31.7% from 2011, as farm cash receipts rose more than operating costs. This follows gains of 56.3% in 2011 and 16.9% in 2010.
Realized net income is the difference between a farmer’s cash receipts and operating expenses, minus depreciation, plus income in kind.
Realized net income increased in Newfoundland and Labrador, Nova Scotia, Quebec, Ontario, Saskatchewan, Alberta and British Columbia.
Farm cash receipts
Farm cash receipts, which include market receipts from crop and livestock sales as well as program payments, rose 9.2% to $54.2 billion in 2012, following an 11.9% gain in 2011.
Market receipts increased 10.0% to $50.7 billion in 2012. Crop receipts, which rose 15.6% to $29.9 billion, were the largest contributor to the gain. Receipts from livestock products increased 2.8% to $20.9 billion. Livestock receipts accounted for 41.1% of market receipts in 2012, compared with 55.7% 10 years earlier.
Stronger prices for grains and oilseeds played a major role in boosting crop receipts. For example, wheat receipts, excluding durum, rose 18.4% in 2012, mostly because of a 19.4% gain in prices. Canola receipts were up 7.3% to $8.2 billion, on the strength of a 6.3% price increase. The 56.2% rise in soybean receipts and the 28.0% gain in corn receipts were both the result of increased marketings and prices.
World grain prices began rising during the second half of 2012, as drought in the United States and other countries reduced world grain stocks.
Crop receipts rose in every province except Prince Edward Island (-0.2%) and New Brunswick (-6.5%). A drop in potato marketings contributed to the lack of growth in crop receipts in the two provinces.
Crop receipts rose 24.9% in Alberta in 2012. Increased prices and marketings for both canola and wheat helped push crop receipts higher.
Overall livestock receipts increased in all provinces. Cattle receipts rose 4.2%, as a reduced supply of market animals boosted cattle prices. Conversely, hog receipts decreased 2.3% to $3.8 billion, as prices fell 3.4%.
Receipts for producers in the three supply-managed sectors (dairy, poultry and eggs) increased 3.4%. A 9.2% rise in egg receipts exceeded gains for chickens (+5.2%) and dairy products (+1.7%).
Program payments fell 1.0% to $3.4 billion in 2012. Better growing conditions led to a 22.1% decline in Saskatchewan that more than offset payment increases of 17.4% in Quebec and 12.9% in Alberta.
Farm operating expenses (after rebates) were up 6.7% to $40.8 billion in 2012, following an 8.3% increase in 2011 and a 2.1% decline in 2010.
Sharp increases in seeded acres on the eastern prairies, together with moderate price gains, pushed fertilizer expenses up 20.2%. Producers in Saskatchewan and Manitoba had seeded notably fewer acres in 2011 as a result of flooding. Feed expenses were up 9.9% as feed prices rose throughout 2012.
Depreciation charges rose 4.3% in 2012, resulting in total farm expenses of $47.0 billion, up 6.4% from 2011.
Total farm expenses grew in every province in 2012. The largest percentage increases occurred in Saskatchewan (+9.0%), Manitoba (+8.5%), and Alberta (+8.0%).
Total net income
Total net income reached $7.1 billion in 2012, a $1.1 billion gain over the previous year. The largest increases were in Manitoba (+$1.0 billion), Ontario (+$232 million) and Quebec (+$172 million), while Saskatchewan and Alberta saw declines.
Total net income adjusts realized net income for changes in farmer-owned inventories of crops and livestock. It represents the return to owner’s equity, unpaid labour, and management and risk.