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Farm cash receipts
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Market cash receipts for farmers climbed to a record high during the first nine months of 2007 in the wake of strong gains in revenue from the sale of crops. Livestock receipts also rose, but higher prices for grains and oilseeds translated into higher costs for feed, a major input for producers.
Farmers received a record $26.7 billion in market revenue between January and September, up 13.7% from the same period last year. This total was 16.1% above the previous five-year average between 2002 and 2006, a period which included the bovine spongiform encephalopathy (BSE) situation and low commodity prices.
Grain and oilseed prices, up sharply from recent lows, along with strong grain deliveries, pushed crop receipts to a record $12.9 billion. This was up 25.6% over the same nine months last year, and 28.7% higher than the previous five-year average.
Livestock receipts rose 4.4% to $13.8 billion, mainly due to higher exports of cattle and hogs into the United States and increased dairy and chicken prices. Livestock revenues were 6.3% above the previous five-year average.
Farmers received $3.0 billion in program payments during the first nine months of 2007, down 15.4% from the previous year and 6.6% below the previous five-year average.
Note to readersStatistics 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 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. However, the series does not attempt to cover all payments made to farmers, nor does it represent total government expenditures under all assistance programs. For example, the Canadian Farm Families Options Program announced in July 2006 is not included because it has been determined not to be business income for statistical purposes. As a result of the release of data from the 2006 Census of Agriculture on May 16, 2007, estimates of farm cash receipts, operating expenses, net income, capital value and other data contained in the Agriculture Economic Statistics series are being revised, where necessary. The complete set of revisions will be released in The Daily on November 24, 2008. |
Total farm cash receipts—crop and livestock revenues plus program payments—hit a record high $29.6 billion through the first nine months of 2007. This was 9.9% above the same period for the previous year and 13.3% higher than the five-year average.
Provincially, farm cash receipts fell in Prince Edward Island and New Brunswick, where potato receipts declined from the high levels observed in the first nine months of 2006. Overall revenues remained flat in Nova Scotia and British Columbia. Increases ranged from 6.2% in Quebec to 23.3% in Manitoba. Manitoba had a good harvest in 2006 after a disastrous year in 2005.
Farm cash receipts are the first economic indicator available from Statistics Canada for the agriculture sector. They measure gross revenue for farm businesses only. They do not represent farmers' bottom line, as farmers have to pay their expenses and loans. Statistics Canada will publish preliminary estimates of net farm income for 2007 on May 26, 2008.
While prices for grain and oilseed producers rose substantially in 2007 from low levels, inputs also increased. For example, the Industrial Product Price Index indicated that Canadian fertilizer prices rose 20% during the first nine months of 2007 compared with the same period in 2006. In addition, livestock producers faced much higher feed costs. For instance, feed barley prices were 73.6% higher during the January to September period in 2007 than in the same period in 2006.
Both farm cash receipts and operating expenses can vary widely from farm to farm because of several factors, including commodities, prices, weather and economies of scale. In addition, a rapidly appreciating Canadian dollar against the US dollar reduces returns to Canadian producers who depend heavily on international sales. From January to September 2007, the value of the Canadian dollar increased by more than 15% against its American counterpart.
Higher grain and oilseed prices boost crop receipts
With an expanding biofuel sector and production issues in many of the world's grain and oilseed production areas, prices have surged from very low levels in the 2005/2006 crop year. Large stocks of grains at the end of 2006 also contributed to strong deliveries by Canadian farmers during the first nine months of 2007.
Revenues from wheat (excluding durum) rose 59.2% as a result of higher marketings, prices and Canadian Wheat Board payments. Receipts from barley jumped 49.7%, while corn receipts rose 46.3%, bolstered in both cases by higher prices.
Canola receipts hit $2.4 billion during the first nine months of 2007, while soybean receipts reached $610 million, both record highs. These records were driven by a 40.6% increase in price for canola and gains in both marketing (+32.0%) and price (+22.0%) for soybeans. Although canola deliveries were slightly below the previous year level, they were almost 50% above the previous five-year average.
Potato receipts fell 9.5% to $603 million, as a drop in prices more than offset a 5.0% increase in marketings. Very good growing conditions in 2006 had resulted in record yields. High supplies put pressure on prices, which fell 6.0% below the previous five-year average for a January-to-September period.
Farm cash receipts for the floriculture, sod and nursery industries rose 1.9%, continuing a long-established upward trend.
Increases in dairy and poultry along with modest gains in cattle and hogs improve livestock receipts
Despite lower prices this fall, the average prices for cattle and hogs from January to September were slightly above the corresponding prices in 2006. However, producers also faced dramatically higher feed grain prices, fueled by the growing ethanol market and tighter world supplies.
Cash receipts from cattle and calves rose 2.9% to $4.8 billion in the first nine months of 2007 as revenue from exports increased 23.2%. During this period, cattle and calf exports reached over 900,000 head, but they remained below the 1.2 million head exported for the same period in 2002, prior to the BSE situation.
Hog revenues were 2.6% higher compared with the first nine months of 2006, boosted by higher exports. Export-generated revenues increased 13.8% over the same period in 2006, while receipts from slaughter were virtually unchanged. Despite showing a higher level for this period, the overall hog price was 7.0% below the previous five-year average.
Revenue from most supply-managed commodities rose during the first nine months of 2007. Dairy receipts were up 6.8%, as were those for chickens (+10.5%), turkeys (+13.5%) and eggs (+1.2%).
Program payments down from record levels
The large decrease in program payments can be primarily attributed to a decline in payments under the Grains and Oilseeds Payment Program. As a new program in 2006, it delivered $730 million in the first nine months of that year. However, during the same period in 2007, it delivered only $6 million as it wound down.
With better growing conditions in 2006, particularly in Manitoba, crop insurance payments were down 28.1% to $330 million.
Payments under the Canadian Agricultural Income Stabilization (CAIS) program and CAIS-related programs remained relatively stable, totaling $1.3 billion during the first nine months of 2007. The new Cost of Production Payment program, which was designed to help address high production costs over the last four years, delivered $311 million.
Available on CANSIM: tables 002-0001 and 002-0002.
Definitions, data sources and methods: survey numbers, including related surveys, 3437 and 3473.
Data tables are also available from the Summary tables module of our website.
To order data, contact Client Services (toll-free 1-800-465-1991; fax: 613-951-3868; agriculture@statcan.gc.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Estelle Perrault (613-951-2448; estelle.perrault@statcan.gc.ca) or Bernie Rosien (613-951-2639; bernie.rosien@statcan.gc.ca), Agriculture Division.
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