The Daily. Monday, February 25, 2002

Farm cash receipts

Cash receipts for livestock producers rose in 2001 for the third straight year, driven by higher revenues from cattle and hogs. Crop receipts grew marginally, halting three straight years of decline.

Farmers received $36.2 billion from agricultural commodities and program payments last year. This was a 9.7% increase from 2000 and an 18.5% gain over the average for the previous five years from 1996 to 2000. Farm cash receipts rose in every province; the largest advance, 17.2%, was in Manitoba.

These estimates of cash income reflect to a certain extent the impact of adverse weather during the 2001 growing season. However, the impact of crop production in 2001 on marketings will continue to be felt in the first six months of this year as well.

In addition, cash receipts provide a measure of the gross revenue of farm businesses. They do not account for expenses incurred by farmers. Cash receipts can also vary widely from farm to farm because of several factors, including commodities, prices and weather. On May 28, Statistics Canada will publish preliminary estimates for 2001 net farm income; these estimates will take expenses into account.

Livestock receipts, boosted by strong cattle and hog markets, rose for the third consecutive year to $18.9 billion. This was a 10.7% increase from 2000 and a 25.4% jump over the previous five-year average.

Cash receipts from crops advanced 3.5% to $13.6 billion, the first increase in four years. However, crop receipts remained 1.3% below the previous five-year average, as lower deliveries for some major commodities offset higher prices.

Program payments reached $3.7 billion in 2001, just shy of the record $3.8 billion posted in 1992. The 2001 result was a 32.1% increase over 2000, and more than double the previous five-year average. Most of this advance is the result of higher payments from crop insurance and income disaster programs, as well as $190 million from one-time program payments in Ontario.

Note to readers Statistics Canada does not forecast farm cash receipts. These data are based on survey and administrative data from a wide variety of sources. Farm cash receipts measure the gross revenue of farm businesses in current dollars. They include sales of crops and livestock products (except sales between farms in the same province) and program payments. Receipts are recorded when the money is paid to farmers before any expenses are paid. Deferments represent sales from grains and oilseeds delivered by western producers for which payments were deferred until the next year. Because these receipts are based on physical deliveries, any deferred payments are deducted from the farm cash receipts of the current calendar year and included when they are liquidated (see "liquidations of deferments" in the farm cash receipts table). Program payments include payments tied to current agricultural production and paid directly to farmers. Examples of these payments come under the Net Income Stabilization Account (NISA), the Crop Insurance Act, provincial stabilization programs and the Canadian Dairy Commission Act. The program payments series does not attempt to cover all payments made to farmers nor does it represent total government spending under all assistance programs. The Agricultural Income Disaster Assistance (AIDA) program is provided in the form of individual payments to eligible producers and credits to the provincial governments for the programs established to assist producers. Farm cash receipts include only the amount directly paid to producers. The Net Income Stabilization Account (NISA) program is comprised of two funds. The first holds producer deposits; the second contains the matching government contributions and all accumulated interest earned on both funds. Only producer withdrawals from the second fund are included as payments in farm cash receipts.

Higher exports, strong prices push up cattle receipts

Cattle and calf receipts reached $7.8 billion in 2001, up 14.6% from 2000. Higher sales in export markets, along with strong prices, helped push receipts 36.0% above the previous five-year average.

Receipts from slaughter cattle grew to $4.5 billion; higher prices more than offset the lower number of head sold. Revenue from cattle sold abroad, primarily to the United States, rose 47.7% to $1.6 billion, the result of increased marketings and higher prices.

Hog receipts grew 13.7% to $3.8 billion, 38.1% above the previous five-year average. Most of the increase was due to revenue generated from domestic hog slaughter - prices rose and marketings reached record levels. Receipts from the sale of hogs exported, mostly to the United States, rose 24.1%.

The supply-managed sectors also saw gains in 2001. Higher chicken prices and marketings pushed revenues to $1.5 billion, up 10.7% from 2000 and well above the previous five-year average. In the dairy sector, revenues from milk and cream grew 2.8%, primarily the result of higher prices.

Crop receipts halt three years of decline with higher prices

Despite lower marketings of major grains and oilseeds during the last half of 2001, crop receipts increased for the first time in four years due to price gains. Farm stocks of major grains and oilseeds dwindled to very low levels by the end of 2001. They were 16.3% below the previous 10-year average, due primarily to the drought in the summer of 2001.

Receipts for wheat excluding durum rose to $2.7 billion in 2001. However, revenues remained 5.6% below the previous five-year average. Prices rose 14.0% and Canadian Wheat Board (CWB) payments increased 18.4%, but deliveries declined 4.2%. Both prices and deliveries rose more than 25% in the fourth quarter.

After two years of decline, canola receipts grew 11.4% to $1.7 billion in 2001. Prices rose 19.0%, but deliveries declined 6.4%. This was still short of the previous five-year average of $2.0 billion. Sales to China early in 2001 contributed greatly to the rise in deliveries for the first half of the year. However, deliveries fell in the last two quarters as production hit its lowest point in 10 years.

Durum wheat receipts were $789 million in 2001, up 23.3% from 2000. A 63.4% increase in CWB payments, along with stronger prices, more than offset declining marketings. However, durum receipts were still 3.6% short of the previous five-year average.

Barley receipts were $711 million, up 22.0% over 2000 but slightly below the previous five-year average. Prices were up 29.2%. Tight supplies of feed barley in the western provinces drove prices up.

Conversely, corn receipts fell for the second consecutive year to $588 million. Lower deliveries more than offset higher prices. Late planting, a cool summer and wet conditions at harvest led to a 25.5% decline in production in 2000, following records set in 1998 and 1999.

Farmers deferred $846 million in crop receipts to 2002, up 47.4%. A combination of higher prices for grains and oilseeds in 2001 and lower stocks at the end of that year may have caused producers to defer a larger portion of their crop receipts to 2002 in anticipation of reduced returns in the coming months.

Program payments continue to rise

Farmers received $3.7 billion in program payments in 2001, up $910 million from 2000. Most of this increase was the result of higher payments in crop insurance and income disaster programs, as well as an additional $190 million from one-time program payments implemented in Ontario.

Crop insurance payments rose to $1.0 billion, up 73.1% from 2000. This gain may be due to both poor growing conditions in 2000 and 2001 and increases in the acreage of the crops insured.

Payments for income disaster programs reached $627 million in 2001, up 48.6% from 2000. These include the Agricultural Income Disaster Assistance (AIDA) program, Canadian Farm Income Program (CFIP) and their related provincial disaster programs.

Ontario producers received $190 million through the Ontario Grain Stabilization Payment, Canada-Ontario Grain and Oilseed Payment and the Canada-Ontario Edible Horticulture Payment. These one-time programs were introduced to help offset the income losses in 2000 due to inclement weather and severely depressed commodity prices.

Farmers withdrew $442 million from the government portion of the Net Income Stabilization Account (NISA) in 2001, down 3.1% from 2000.

Available on CANSIM: table 002-0002.

The January-December 2001 issue of Farm cash receipts, Vol. 62, no. 4 (21-001-XIB, $15/$48) is now available.

For more information on farm cash receipts, or to enquire about the concepts, methods or data quality of this release, contact Paul Murray (613-951-0065; paul.murray@statcan.gc.ca) or Kim Boyuk (613-951-2510; kimberley.boyuk@statcan.gc.ca), Agriculture Division.

Farm cash receipts

Provincial farm cash receipts