Farm Income, Financial Conditions and Government Assistance Data Book, 2012

Abstract

The purpose of this Data Book is to provide easy access to key economic and financial indicators for the farm sector and information on government assistance to the agriculture and agri-food industry. The information is prepared in consultation with the provincial ministries responsible for agriculture. Assistance is also provided by other members of Agriculture and Agri-Food Canada as well as by officials in other federal and provincial departments.

Executive Summary

The Farm Income, Financial Conditions and Government Assistance Data Book is a compendium of historical data series from several sources compiled into a single, convenient resource for users of data on key economic and financial indicators of the agriculture sector. The information provides a comprehensive view of the situation in primary agriculture and the expenditures that governments are making to ensure a strong and competitive sector. The Data Book also provides valuable information on government assistance to the agriculture and agri-food sector not easily available from other sources.

Information is provided by several organizations within Agriculture and Agri-Food Canada as well as by other federal departments. Information in the Data Book is also prepared in consultation with the provincial ministries responsible for agriculture.

The Data Book is divided into four sections. Section A presents information related to farm income while Section B contains information on farm financial conditions. Section C provides data on government expenditures for the agri-food sector and Section D provides information on estimates of support to agriculture. Notes on the methodology are provided at the end of each section. Each edition of the Data Book provides the most up-to-date key economic and financial indicators.

Highlights

Section A - Farm Income

  • In 2011 total market receipts from both crop and livestock sources reached $46.3 billion, the highest level over the 10- year period 2002-2011. The increase in market receipts in 2011 was due to the combination of strong crop receipts of $25.9 billion and strong livestock receipts of $20.3 billion, both highs over the previous 10 years.
  • Net cash income in 2011 at $11.5 billion was the highest level reported over 2002-2011, surpassing the previous record of $9.2 billion achieved in 2010. In comparison, the lowest net cash income level over the reference period was $5.0 billion in 2003, the year that BSE was discovered in the Canadian cattle herd.
  • Program payments increased to $3.5 billion in 2011 from the 10-year low of $3.1 billion a year earlier. In general though, high income years between 2008 and 2011 due to strong market conditions have reduced the need for program payments.
  • Preliminary estimates for 2011 show that on average, the largest farms are in Newfoundland and Labrador, which reported average operating revenues of $592,168. The smallest farms are in Saskatchewan, where the average farm reported $282,567 in total operating revenues. Nationally, the average farm reported $355,550 in operating revenues and $292,002 in operating expenses in 2011 for an average net operating income of $63,549. This was a 26% increase from $50,534 in net operating income reported a year earlier.
  • Net operating income by farm type shows considerable variation. Potato farms had the highest average net operating income in 2011 at $233,808, while grains and oilseeds farms were at $85,810, other vegetable and melon farms at $68,475, fruit and tree nut farms at $28,846 and cattle farms at $12,955. Hog farms had an average net operating income of $88,834, which represented an increase of 17% from a year earlier.

Section B - Farm Financial Conditions

  • Farmers take on debt to meet short-term financial obligations and to make investments in their farming operations to take advantage of emerging marketing opportunities. In 2011, total farm debt in Canada stood at $69.7 billion.
  • There were only 66 farm bankruptcies in 2011, up from 61 a year earlier. Ontari (18 bankruptcies), Quebec (17 bankruptcies) and Saskatchewan (12 bankruptcies) reporting the highest number. The number of farm bankruptcies had followed a declining trend between 1996 and 2010.
  • Farm Credit Canada approved 45,578 new loans in 2011-12. The average size of loan approved by Farm Credit Canada has been declining in recent years, but jumped back up to $156,150 in 2011-12.
  • There were 2,311 new loans registered under the Canadian Agricultural Loans Act (CALA, formerly Farm Improvement and Marketing Cooperatives Loans Act) in 2011-12. Approximately 4 out of 5 new loans went to Saskatchewan.
  • Farmers in general had healthy balance sheets in 2011. The average Canadian farm reported $2.0 million in assets and $0.4 million in debt, for an overall net worth of $1.7 million. There was considerable variation by farm type, with net worth of poultry farms averaging $4.3 million, potato farms $3.1 million, dairy farms $2.8 million, grain farms $1.9 million, hog farms $1.9 million, and beef farms $1.1 million. Farms in British Columbia had the highest level of farm assets among provinces at $2.6 million, followed by Alberta at $2.4 million. Farms in Alberta and British Columbia also had the highest average net worth at $2.1 million in each province.
  • In the fall of 2012, urea cost an average of $705 per tonne in Ontario, $626 per tonne in Manitoba and $618 per tonne in Saskatchewan. Farmers in Ontario and Manitoba paid more for urea than farmers in neighbouring US states while farmers in Saskatchewan paid less than their neighbours in Montana. Farmers in Ontario paid higher prices for diesel and gasoline than their US neighbours. Farmers in Manitoba and Saskatchewan faced lower diesel prices, but paid more for gasoline than farmers in neighbouring US states.
  • Total expenses for farming increased to $44.1 billion in 2011, up 8% after declining for two consecutive years. Higher fertilizers, commercial feed and machinery fuel costs were responsible for just over half of the increase from the previous year.

Section C - Government Expenditures in Support of the Agri-Food Sector

  • Total government expenditures in support of the agriculture and agri-food sector increased by 3.7% in 2011-12 to $6.69 billion. Federal expenditures increased by less than 1% to reach $3.37 billion while the provincial expenditures increased by 7.6% to reach $3.32 billion.
  • Expectations are that federal expenditures will increase in 2012-13, reaching $3.47 billion, while provincial expenditures will decrease to $3.29 billion. Total expenditures are expected to increase by 1.1% to reach $6.76 billion.
  • In 2011-12, federal program payments, which include primarily payments made directly to producers, are expected to decrease compared to the previous year, reaching $1.36 billion. These payments are also expected to decrease in 2012-13 to $1.28 billion. During the same 2- year period, provincial program payments are expected to increase in 2011-12 to reach $1.71 and then to decrease to $1.65 billion in 2012-13.
  • In 2011-12, categories with the highest expenditures are program payments, and research and inspection. These two categories represented 73% and 58% of federal and provincial expenditures, respectively. However, the share of only research and inspection expenditures represented 34% at the federal level compared to 11% at the provincial level.

Section D - Estimates of Support to Agriculture

  • Expressed as a percentage of gross farm receipts, the producer support estimates (PSE) for Canada decreased from 17% in 2010 to 14% in 2011.
  • From 2010 to 2011, the level of support, expressed as a percentage of gross farm receipts, also decreased in the EU (from 20% to 18%) while it stayed the same in the US (8%), Australia (3%), Mexico (12%) and New Zealand (1%).
  • In 2011, single commodity transfers (SCT) represented 73% of total PSE, which is high when compared to the EU (17%) and the US (36%). The Canadian result can be explained by the high level of support to milk through market price support.

Publication: 11646E - ISSN: 1494-5223
Catalogue:  A31-1/2011E-PDF

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