Agriculture value added account

The value of agricultural production rose only slightly in 2005 as a strong decline in the value of inventory change offset rising sales of agricultural products and higher program payments.

Sales of agricultural products edged up 3.1% to $38.5 billion. This level was slightly below the previous five-year average for the period between 2000 and 2004.

The average was dragged down by back-to-back droughts in 2001 and 2002 as well as the closure of the US border to live cattle exports.

The increase in sales of agricultural products between 2004 and 2005 was influenced by higher revenues from cattle and calves, which more than offset a decline in revenues from crops and hogs. For cattle, the surge was due, in large part, to the resumption on July 18, 2005, of trade in live cattle (under 30 months of age) with the United States.

The reopening of the border also helped bolster prices for cattle and calves marketed domestically. Crop receipts fell in 2005, pushed down by abundant world grain supplies, including lower quality domestic grains from the 2004 harvest, as well as by a strong Canadian dollar. Revenues for hogs fell, driven by lower prices.

Program payments reached a record $5.0 billion in 2005. Payments remained well above the previous five-year average of $3.9 billion. Canadian farmers received large payments through Canadian Agricultural Income Stabilization program and the Farm Income Payment program.

The value of inventory change reached $0.5 billion in 2005, a smaller increase than the $1.8 billion registered in 2004. Lower grain and oilseed prices in 2005 reduced the increase in the value of crop inventories compared to 2004. As well, a drop in cattle and calf inventories moderated the rise in inventory value.

As a result, the total value of agricultural production edged up to $46.4 billion. All provinces recorded increases in the total value of production, except in Prince Edward Island, Manitoba and Alberta.

Net value added, which is the value of production minus expenses on input, business taxes and depreciation, fell 11.1% to $10.3 billion in 2005.

Interest charges and non-family wages each accounted for roughly 23% of net value added, while corporation profits accounted for just under 16%.

Available on CANSIM: table 002-0004.

Definitions, data sources and methods: survey number 5030.

The publication Agriculture Value Added Account - Agriculture Economic Statistics, June 2006, Vol. 5, no. 1 (21-017-XIE, free) is now available online. From the Our products and services page, under Browse our free internet publications, choose Agriculture.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Annette Laurent (613-951-5025; annette.laurent@statcan.gc.ca), Agriculture Division.