Farm cash receipts

Market cash receipts for Canadian farmers, or revenues from the sale of crops and livestock, rose 1.0% to $23.3 billion for the first three quarters of 2005. Higher livestock receipts more than offset lower crop sales. These revenues were 1.5% above the previous five-year average between 2000 and 2004, but 3.7% below the 2001 peak.

Livestock farmers saw their revenues increase by 7.0% to $13.4 billion, 3.4% above the previous five-year average. Cattle and calf receipts were the main contributor to this rise, as prices and marketings improved from their low BSE-affected levels in 2004.

In contrast, crop receipts dropped 6.2% to $9.9 billion, 1.0% below the previous five-year average. Increased production in major exporting countries in 2004 and an abundance of lower quality grains resulting from early frost and wet weather in 2004 reduced prices sharply.

Total farm cash receipts, which include program payments in addition to crop and livestock revenues, reached a record $27.4 billion through the first nine months of 2005. This was up 3.1% from the same period in 2004 and 7.0% higher than the five-year average.

However, almost 15% of farmers' revenue came from farm support programs. Producers received a record $4.0 billion in program payments, an increase of 17.8% over the same period in 2004. Most of this increase may be attributed to the large payments delivered through the Canadian Agricultural Income Stabilization (CAIS) program and the Farm Income Payment program.

Farm cash receipts provide a measure of gross revenue for farm businesses. They do not account for expenses such as wages, fuel and feed costs incurred by farmers. Cash receipts can vary widely from farm to farm because of several factors, including commodities, price and weather. Net farm income statistics for 2005, which include expenses, will be released on May 26, 2006. (For 2004 estimates consult today's "Net farm income" release in The Daily.)

The largest percentage increase in total farm cash receipts occurred in British Columbia (+9.7%) and Newfoundland and Labrador (+6.3%). Revenues declined 2.4% in Alberta and 1.9% in Manitoba.

Livestock receipts up as border opens to cattle

After a 25-month moratorium, international exports of live cattle and calves resumed on July 18, 2005, which contributed to the increase in overall livestock receipts. In the last full year of unrestricted trade (2002), exports of live cattle and calves represented 9.7% of total livestock revenues and almost one-quarter of total cattle and calf receipts. Approximately, 211,000 animals were marketed internationally between July 18^th and the end of September 2005. The price for cattle marketed internationally was still 15.3% below 2002 levels.

The reopening of the US border also helped to bolster the price for cattle and calves marketed domestically. January to September slaughter prices for cattle rose 9.4%, while the price for animals traded inter-provincially increased 21.2% over the same period in 2004.

Despite the recent improvement in prices for domestically marketed cattle and calves, prices were well below historic averages. The average price for cattle sold for slaughter in Canada was 10.5% below the previous five-year average.

Cash receipts for hog producers declined 5.3%, mainly due to lower slaughter prices. Revenues from slaughter, representing 81.5% of total hog receipts, were adversely affected by a 7.3% drop in price and a 0.4% decline in marketings. Prices for slaughter hogs continued to moderate from the relatively high levels posted in 2004.

Receipts from international trade in hogs rose 6.5% as prices improved 11.5%. Despite a 7.5% decline in the number of hogs exported, the number of animals exported hovered 30% above the previous five-year average.

On the supply-managed side, receipts for dairy products, chicken and turkeys all increased, while revenues from eggs declined. Receipts for milk and cream rose 5.0% on the strength of a 6.6% increase in price.

Supply-managed livestock commodities accounted for over 40% of total livestock revenue in the first nine months of 2005.

Lower grain and oilseed prices drag crop receipts down

Increased production in major exporting countries in 2004 continued to weigh on prices of grains and oilseeds in the first nine months of 2005. Higher domestic supplies of lower quality grains and oilseeds also contributed to lower crop revenues.

Wheat (excluding durum) revenues dropped 28.9% from the first nine months of 2004 to $1.3 billion as a result of lower prices and Canadian Wheat Board (CWB) payments, even though marketings rose 5.0%. Barley receipts fell 36.7% to $273 million amid lower prices, marketings and CWB payments.

Farmers received $1.3 billion from canola, down from the previous year's peak of $1.5 billion. Prices fell 27.4% while deliveries rose 16.9%, as canola production in 2004 had increased substantially from 2003.

Corn revenues dropped 28.9% to $415 million, as prices tumbled 25.2% and deliveries fell.

Potato receipts fell 1.9% from 2004 as marketings declined 7.9% and prices rose 6.5%. Manitoba recorded the highest receipts with $132.1 million followed by Alberta and Prince Edward Island.

Revenue from horticulture crops, which include fruits, vegetables, and the floriculture, nursery and sod industries, was up 4.1% to $3.2 billion from January to September of 2005. These crops accounted for one-third of total crop receipts.

Record program payments during first three quarters

Program payments for January to September of 2005 jumped $611 million from the same period in 2004 to a record $4.0 billion, or 56.1% above the previous five-year average.

This increase was mainly attributable to large payments delivered through both the CAIS and Farm Income Payment programs.

The CAIS program delivered $1.3 billion in the first nine months of 2005, up $981 million from the same period in 2004. The CAIS program, which was introduced in the first quarter of 2004, was designed to help producers protect their farming operations from drops in income.

The Farm Income Payment program delivered $733 million in the first nine months of 2005. This program was designed to provide immediate federal assistance to Canadian producers, as the first step in an aggressive effort to restructure the national agriculture and agri-food industry.

Crop insurance payments increased to almost $600 million in the first nine months of 2005, up 19.4% from the same period last year.

Available on CANSIM: table 002-0002.

Definitions, data sources and methods: survey number 3473.

For more information, contact Rita Athwal (613-951-5022; rita.athwal@statcan.gc.ca) or Jesus Dominguez (613-951-1747; jesus.dominguez@statcan.gc.ca), Agriculture Division.