Farm cash receipts

Farm cash receipts reached a record high for the first quarter of 2005, as growth in revenues for cattle and hogs and record program payments offset a decline in crop receipts.

Total receipts from crops, livestock and payments rose 3.4% to a record $9.4 billion, about $310 million higher from the first quarter of 2004. Receipts were 6.5% higher than the first-quarter average for the previous five-year period between 2000 and 2004.

Livestock farmers saw their revenues rebound 6.8% from a low in 2004 to $4.5 billion. This increase was mainly due to gains in receipts for slaughter cattle and hogs.

In contrast, receipts from crop sales fell 10.3% to $3.3 billion, about a $380-million decline. Producers of many major grains and oilseeds saw their revenues slashed from the same period in the previous year.

Farmers received $1.6 billion from programs in the first three months of 2005, up one-third from the same period a year earlier. This was more than $690 million over the previous five-year average. Most of this increase may be attributed to larger payments delivered through the Canadian Agricultural Income Stabilization program.

Farm cash receipts provide a measure of gross revenue for farm businesses. They do not account for expenses incurred by farmers. Cash receipts can vary widely from farm to farm because of several factors, including commodities, price and weather. In addition, the impact of the closure of the US border to Canadian cattle and beef on May 20, 2003 will continue to be reflected in farm financial statistics. For the most recent information about net farm income in 2004, consult today's "Net farm income" release in the Daily.

The largest provincial percentage increase in cash receipts occurred in Prince Edward Island (+13.6%) due largely to a rebound from low potato prices in 2004. Despite this increase, revenues remained marginally above the previous five-year average.

The only provinces recording lower receipts were Alberta (-3.9%) and Nova Scotia (-0.8%).

Cattle and hogs drive growth in livestock revenues

Livestock receipts of $4.5 billion in the first quarter were $288 million above the first quarter of 2004. This was mainly due to higher prices for both slaughter cattle and hogs.

First-quarter cattle and calf receipts hit $1.4 billion, a 7.8% gain from the same quarter last year, but 16.7% below the five-year average. A 10.7% rise in average cattle and calf prices compensated for a 2.6% drop in marketings.

Slaughter cattle receipts rose 6.3% to $1.2 billion, although 2.1% fewer animals were sold for domestic slaughter. First-quarter slaughter cattle prices continued to languish well below historic averages, despite an 8.8% increase. The US border continues to be closed to Canadian live cattle exports.

Hog receipts advanced 12.3% to a record $1.1 billion, largely due to an 11.4% improvement in average price. Prices continue to strengthen as a result of robust exports and strong domestic demand. Even though the number of animals marketed increased only marginally from the first quarter of 2004, since 1994 there has been continuous growth in the number of head sold.

Slaughter hog receipts rose 12.9% to $870 million on the strength of increases in both prices and marketings. Slaughter hog receipts represent more than 80% of total hog receipts.

Although the number of hogs sold internationally declined 6.3%, receipts from international exports improved 9.2% to almost $180 million as export prices rose a significant 17.2%.

As for supply-managed commodities, revenues from dairy products, chicken and turkey registered increases, while egg receipts declined. Supply managed livestock commodities account for 40% of total livestock receipts.

Crop receipts hit by weather, prices and payment timing

Crop receipts of $3.3 billion were 6.2% below the previous five-year average.

In addition to a strong Canadian dollar, and the abnormally cold growing season last year that resulted in higher supplies of lower quality grains in the Prairies, there were several factors behind the decrease in revenues.

Prices for most grains and oilseeds decreased sharply, mainly due to increased supply from bumper crops in the United States and the prospect of another large crop in South America.

Deliveries of corn and canola were lower in the first quarter of 2005. Farm stocks of corn and canola were above their ten-year averages at March 31. Finally, lower CWB payments contributed to the overall slide in crop revenues.

Canola recorded the most notable decrease in crop receipts, falling almost one-third in 2005 to $422 million from the 2004 peak of $612 million. Both prices and deliveries were lower than the previous year.

Revenues from wheat (excluding durum) dropped 24.2% to $400 million, mainly as a result of decreased Canadian Wheat Board payments. Corn receipts fell 38.9% to almost $150 million due to both falling prices and lower deliveries.

Revenue from horticultural crops, which include fruits, vegetables, and the floriculture, nursery and sod industries, was up 12.1% to register almost $630 million.

Program payments return to record levels

Program payments climbed 14.6% in the first quarter of 2005 from the record level set in 2003 and were one-third above the 2004 level.

The Canadian Agricultural Income Stabilization (CAIS) program delivered $570 million in the first quarter of 2005, up more than $545 million from the same period in 2004. The CAIS program was designed to provide assistance to producers who have experienced a loss of income as a result of BSE or other factors.

Crop insurance payments increased 14.5% from the first quarter of 2004 to $378 million. Even so, these payments still remained 8.0% below the previous five-year average.

Withdrawals from the government portion of the Net Income Stabilization Account (NISA) fell from the record levels of 2004. Farmers withdrew $319 million from their government accounts, a 13.6% decrease from last year's withdrawals. However, these were still almost double the previous five-year average of $164 million.

Available on CANSIM: table 002-0002.

Definitions, data sources and methods: survey number 3473.

The publication Farm Cash Receipts: Agriculture Economic Statistics, May 2005, Vol. 4, no. 1 (21-011-XIE, free) is now available online. From the Our products and services page, under Browse our Internet publications, choose Free, then Agriculture.

For more information or to enquire about the concepts, methods or data quality of this release, contact Rita Athwal (613-951-5022; rita.athwal@statcan.gc.ca) or Jesus Dominguez (613-951-1747; jesus.dominguez@statcan.gc.ca), Agriculture Division.