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) fell 11.2% to $3.3 billion in 2009.

It was the first decrease since 2006 and was the result of declining program payments, grain, cattle and hog receipts, and increases in depreciation charges.

Provincially, realized net income fell in Nova Scotia, Quebec, Ontario and Alberta. In all four, a drop in farm cash receipts exceeded declines in expenses.

Market receipts (revenues from the sale of crops and livestock) declined by 1.2% to $41.3 billion in 2009. A small increase in crop receipts was not sufficient to offset declines in livestock receipts.

Livestock receipts fell 4.7% to $18.0 billion, as the number of both cattle and hogs exported in 2009 declined by over 30% from 2008 levels.

Crop receipts edged up 1.7% to $23.3 billion. The receipt by producers of $1.4 billion in deferred 2008 grain revenue, together with increased receipts from the greenhouse and nursery sector and lentil production, helped offset the impact of lower grain and oilseed prices.

In total, farm cash receipts, including both market receipts and program payments, fell by 3.0% to $44.6 billion in 2009. A 20.6% decline in program payments accounted for over one-half of this decrease.

Total farm expenses, which include total operating expenses and depreciation, fell 2.3% in 2009 to $41.3 billion, the first decrease since 1986. It followed increases of 9.1% in 2008 and 7.6% in 2007.

Declines in fuel and interest expenses more than offset a 5.3% increase in depreciation charges. Both building and machinery depreciation increased at similar rates.

Total farm expenses were down in all provinces in 2009 except Newfoundland and Labrador, Prince Edward Island and New Brunswick.

Total net income amounted to $2.9 billion in 2009, down from $6.9 billion in 2008.

Total net income adjusts realized net income for changes in farmer-owned inventories of crops and livestock. It represents the return to owner's equity, unpaid labour, management and risk.

Reductions in the stocks of most major grains, together with declining livestock inventories, resulted in a $351 million drop in the value of inventories in 2009. This decrease followed a $3.2 billion increase in 2008, when record yields for many crops boosted production, leading to above-average, year-end stocks.

Agriculture's net value added fell by $4.5 billion to $11.3 billion in 2009, after increasing by $6.0 billion in 2008. The decline in 2009 was due primarily to a drop in the total value of production. Newfoundland and Labrador, Prince Edward Island, New Brunswick and British Columbia were the only provinces to record increases in net value added in 2009.

Note: 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.

Preliminary farm income data for the previous calendar year are first released in May each year, five months after the reference period. Revised data are released the following November, incorporating data received too late to be included in the first release.

Financial data for 2009 collected at the individual farm business level using surveys and other administrative sources, will soon be tabulated and made available. These data will help explain differences in performance of various types and sizes of farms.

For details on farm cash receipts for the first three quarters of 2010, see today's "Farm cash receipts" release.

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, 3471, 3472, 3473 and 5030.

Additional data tables are available free from the Summary tables module of our website.

The November 2010 issues of Net Farm Income: Agriculture Economic Statistics, Vol. 9, no. 2 (21-010-X, free), Farm Cash Receipts: Agriculture Economic Statistics, Vol. 9, no. 2 (21-011-X, free), Farm Operating Expenses and Depreciation Charges: Agriculture Economic Statistics, Vol. 9, no. 2 (21-012-X, free), Value of Farm Capital: Agriculture Economic Statistics, Vol. 9, no. 2 (21-013-X, free), Farm Debt Outstanding: Agriculture Economic Statistics, Vol. 9, no. 2 (21-014-X, free), Direct Payments to Agriculture Producers: Agriculture Economic Statistics, Vol. 9, no. 1 (21-015-X, free) and Agriculture Value Added Account: Agriculture Economic Statistics, Vol. 9, no. 2 (21-017-X, free), are now available online. From the Key resource module of our website under Publications, choose All subjects then Agriculture.

Farm income data for 2010 will be released on May 25, 2011.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Stephen Boyd (613-951-1875; stephen.boyd@statcan.gc.ca) or Gail-Ann Breese (204-983-3445; gail-ann.breese@statcan.gc.ca), Agriculture Division.