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Farm income
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Realized net farm income (the difference between a farmer's cash receipts and operating expenses minus depreciation, plus income in kind) amounted to $2.2 billion in 2007, up $1.2 billion from 2006. The rebound in 2007 followed sharp declines in 2005 and 2006.
Higher grain and oilseed prices more than offset increases in operating costs. Meanwhile, many livestock producers were adversely affected by reduced prices, resulting from the appreciation of the Canadian dollar and higher feed costs.
Realized net farm income declined in several provinces as producers faced large increases in operating costs and declines in potato, hog and calf receipts.
Market cash receipts
Market cash receipts (revenues from the sale of crops and livestock) increased 12.9% in 2007. Crop receipts increased 25.3%, while livestock receipts rose 2.7%.
Grains and oilseed prices started to gain strength in 2006 with the expansion of the bio-fuel sector. As well, weather related production issues in many of the major grain exporting countries and increased international consumption resulted in tight worldwide supplies in 2007. Grains and oilseed producers benefited from marked improvement in prices in 2007, which rose to levels not seen in several years.
Cattle and hog prices fell 2.4% and 4.2% respectively, resulting in a 0.6% drop in farm cash receipts for cattle and a 2.4% drop for hogs. Helping to offset the decline in livestock receipts were gains in the supply-managed sector. Much of the growth for these commodities was driven by price increases, as production costs, including feed, continued to rise.
Overall, producers saw their operating costs rise, as feed and fertilizer expenses climbed 20.1% and 21.8 respectively, while machinery fuel costs rose 5.6%.
Total net income
Total net income adjusts realized net income for changes in the value of farmer-owned inventories of crops and livestock. It represents the return to owner's equity, unpaid labour, management and risk.
Note to readersThis release contains revised data on farm income for estimates first released in The Daily on May 26, 2008. Realized net income can vary widely from farm to farm because of several factors, including commodities, prices, weather and economies of scale. This and other aggregate measures of farm income are calculated on a provincial basis employing the same concepts used in measuring the performance of the overall Canadian economy. They are a measure of farm business income, not farm household income. For details on farm cash receipts for the first three quarters of 2008, see today's "Farm cash receipts" release. Financial data collected at the individual farm business level using surveys and other administrative sources, will soon be tabulated and made available for 2007. These data will help explain differences in performance of various types and sizes of farms. Coherence with the Census of Agriculture Every five years, following the Census of Agriculture, the methods and concepts used to estimate the farm income series are reviewed. Estimates for farm income integrate a wide variety of administrative and survey data from many diverse sources. Consequently, this review is used to improve our data sources, coverage and estimation methods. As a result of this review, revisions back to 1997 are now available and are reflected in the data in this release. Estimates of receipts, income in kind, expenses, depreciation and value of inventory change have been revised, where necessary, resulting in changes to net cash, realized and total net income and value added for the sector. |
Total net income amounted to $1.2 billion in 2007, up $1.1 billion from 2006, despite declines in six provinces. Net income improved in Quebec, Saskatchewan, Alberta and British Columbia.
The value of livestock inventories fell in all provinces, except Nova Scotia and Quebec, as livestock numbers declined with more animals shipped to the United States for cheaper feeding.
Crop inventories also decreased as lower yields reduced crop production in the Prairie provinces, and producers drew down farm stocks to meet demand and capitalize on stronger prices. The only major grain showing an increase in the value of farm inventory in 2007 was corn, as Quebec and Ontario harvested a record crop.
Agriculture's net value added
Agriculture's net value added rose 19.4% to $9.7 billion in 2007. The main contributors to the increase were higher grain and oilseed prices and stronger receipts in the supply-managed sectors of dairy, poultry and eggs.
Net value added measures agriculture's contribution to the national economy's production of goods and services. It is derived by calculating the total value of the agricultural sector's production, including program payments, and subtracting the related costs of production (expenses on inputs, business taxes and depreciation).
Available on CANSIM: tables 002-0001, 002-0003 to 002-0005, 002-0007 to 002-0009, 002-0012 and 003-0025.
Definitions, data sources and methods: survey numbers, including related surveys, 3436, 3437, 3439, 3471, 3472, 3473, 3474 and 5030.
Data tables are available from the Summary tables module of our website.
The publications Farm Operating Expenses and Depreciation Charges: Agriculture Economic Statistics, Vol. 7, no. 2 (21-012-XWE, free), Value of Farm Capital: Agriculture Economic Statistics, Vol. 7, no. 2 (21-013-XWE, free), Farm Debt Outstanding: Agriculture Economic Statistics, Vol. 7, no. 2 (21-014-XWE, free) and Agriculture Value Added Account: Agriculture Economic Statistics, Vol. 7, no. 2 (21-017-XWE, free) are now available online. From the Publications module of our website, under Free Internet publications, choose Agriculture.
The following publications Farm Cash Receipts: Agriculture Economic Statistics, Vol. 7, no. 2 (21-011-XWE, free), Net Farm Income: Agriculture Economic Statistics, Vol. 7, no. 2 (21-010-XWE, free), Direct Payments to Agriculture Producers: Agriculture Economic Statistics, Vol. 7, no. 1 (21-015-XWE, free) will soon be available.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Bernie Rosien (613-951-1875; bernie.rosien@statcan.gc.ca), or Gail-Ann Breese (204-983-3445; gail-ann.breese@statcan.gc.ca), Agriculture Division.
