Highlights

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1. Average total income of Canadian farm families increased 7.5% from 2006 to $93,703 in 2007, according to data from personal income tax returns. Once adjusted for capital cost allowance (CCA), their average total income rose 8.2% to $79,967.
2. The overall growth in farm families’ average total income in 2007 reflects increases in both average income from off-farm sources and average net farm operating income. As in 2006, off-farm income made up 80% of their total income.
3. Average off-farm income rose 7.5% from 2006 to $75,223 in 2007, reflecting growth in all of its major components. Investment income rose the most from 2006, up 16.7%, trailed by off-farm employment income, up 7.6%, and government social transfers, up 6.1%. Average net farm operating income went up 7.2% as average net market income continued to recover in 2007.

1. Average net market income grew 106.5% to settle at $8,744 in 2007. The rise in average revenues from grain and oilseed sales was the main factor driving the increase. Higher average revenues from supply-managed commodities (dairy products, poultry and eggs) and net cash advances (including any Canadian Wheat Board payments reported on statement) also supported the increase in average net market income. Higher average operating expenses and lower average hog revenues tempered the increase in average net market income. Average operating expenses rose in the wake of higher fertilizer and lime expenses, feed, supplement, straw and bedding expenses, and general expenses, mainly miscellaneous farm expenses, custom work and machine rental, and net interest expenses.
2. Average net program payments to all farm families went down 25.1% in 2007 to $9,736. The phasing-out of the Grains and Oilseeds Payment Program, which was implemented in 2006, largely contributed to the decrease. Lower payments under the Canadian Agricultural Income Stabilization (CAIS) and CAIS-related programs also contributed to the decrease. Cushioning the decrease were payments made under the Cost of Production Payment. Provincial stabilization and crop insurance payments both increased. Stabilization payments rose largely due to higher payouts made to hog producers in Quebec.
3. Average total income of families specialized in oilseed and grain farming grew 10.0% to $102,719 in 2007. Average net farm operating income of these families increased 22.0% as the gain in average net market income offset the decline in average net program payments. Driven by higher average revenues from all major grains and oilseeds, particularly canola, wheat, barley and grain corn, average net market income of families operating oilseed and grain farms increased from $959 in 2006 to $13,713 in 2007. Although grain and oilseed prices were the driving force behind the rise in grain and oilseed revenues, deliveries were strong as producers drew down farm stocks to meet demand and capitalize on stronger prices.
4. Grain and oilseed revenues rose as prices benefited from rising food demand in emerging nations, an expanding bio-fuel sector and a string of poor crops in some major exporting countries. Drought in several large grain-producing areas such as Australia and Ukraine drove grain inventories to record lows. In Canada, dry and hot growing conditions also reduced crop production. Wheat yields in part of the United States were also affected by frost, followed by excessive rainfall.
5. The increase in grain and oilseed prices was a relief for crop producers and their families but a serious challenge for livestock producers and their families, notably those in the beef cattle and hog sectors, who faced rises in feed costs. Declines in hog and cattle prices in the second half of 2007 added to the though going faced by these families, who were squeezed by the combination of the rising loonie and increased production costs.
6. Average total income of families primarily engaged in beef cattle farming rose 6.4% from 2006 to $83,645 in 2007, as the gain in average off-farm income offset the decline in average net farm operating income. Struggled with a strong dollar and increasing feed costs, these families experienced a net market income loss for a fifth consecutive year. This loss, which increased from $3,403 on average in 2006 to $4,459 in 2007, combined with lower average net program payments, resulted in a 25.8% decline in average net farm operating income.
7. Families running hog and pig farms saw their average total income increase 2.4% from 2006 to $78,196 in 2007, thanks to a strong gain in average net program payments. Hit by falling prices and increased production costs, in particular feed costs, these families saw their average net market income decline to a deficit of $11,581 in 2007. Average net program payments were up 53.8% from 2006 to $40,881, offsetting the loss in average net market income.
8. Farm families in dairy sector and in poultry and egg sector saw their average total income rise respectively 11.4% and 4.6% due to increases in both average net farm operating income and average off-farm income. Average net farm operating income advanced as prices in supply-managed commodities increased to help cover mounting production costs.
9. Only farm families primarily engaged in other animal production or in fruit and tree nut farming saw their average total income decrease in 2007. Average total income of families in the first group fell 7.1% due to lower average off-farm income and higher deficit in average net market income. Declines in both average off-farm income and average net program payments left average total income of families in the second group 2.8% below the 2006 level.
10. Farm families operating business focused-farms (i.e., small, medium, large and very large farms) averaged $114,843 in total income, up 10.8% from 2006, while farm families on pension, lifestyle and low-income farms earned $78,913 on average, up 3.8%.

1. Farm families in all farm typology groups saw their average total income increase in 2007, with the exception of families with low-income farms who posted a 9.9% decline, attributable almost entirely to lower net program payments. These families reported an average net market income deficit for a fifth consecutive year, but this deficit remained almost unchanged from 2006.
2. Families whose focus is lifestyle-driven also posted an average net market income deficit, but this situation is typical of families in this group. Their average net market income went from -$7,601 in 2006 to -$7,723 in 2007, down 1.6%. Farm families in this category earned $114,550 in average total income in 2007, up 2.2% from 2006. This was the lowest growth rate among the various typology groups.
3. In contrast, average total income of families operating very large farms grew the most in 2007, up 18.8% from 2006 to $189,681. Increases in both average net market income (+65.9%) and average off-farm income (+13.6%) compensated for the 12.8% decline in average net program payments.
4. Families operating large farms and small farms also saw their average total income grow at a pace above the national average. Increases in both average net market income and average off-farm income pushed their average total income up 11.0% and 9.7% respectively.
5. In 2007, 40.0% of farm families operating large farms and very large farms were specialized in oilseed and grain production, 28.2% in supply-managed commodities and 16.8% in cattle production.

1. Average total income of farm families increased in all provinces in 2007, except in Prince Edward Island (-2.6%), Newfoundland and Labrador (-2.0%) and British Columbia (-2.0%). Only four provinces had rates of growth above the national average: New Brunswick and the three Prairie provinces. Manitoba’s 14.3% growth in average total income between 2006 and 2007 topped Alberta’s and Saskatchewan’s gains of respectively 10.2% and 8.5%. High grain and oilseed prices helped families in the Prairies to cope with rising input costs. Higher average off-farm income, especially in Alberta, also contributed to these rises. In New Brunswick, the 8.8% gain in average total income was largely supported by a 10.1% growth in average off-farm income.
2. Alberta ’s farm families earned the highest average total income ($115,946), followed by those in Ontario and British Columbia . However, in these two provinces, the average total income fell short below the national average.