Farm income, 2014
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The realized net income of Canadian farm producers rose 23.0% to $7.7 billion in 2014, marking the fourth increase in five years. This follows a 0.7% decline in 2013. Gains in receipts outpaced higher operating expenses.
Realized net income is the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind.
Realized net income increased in every province except Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick. Strong gains in Saskatchewan and Alberta accounted for much of the national increase.
Farm cash receipts
Farm cash receipts, which include market receipts from crop and livestock sales as well as program payments, rose 4.7% to $57.8 billion in 2014. This was the fourth consecutive annual increase. Receipts rose in every province outside of Atlantic Canada.
Market receipts increased 6.0% to $55.7 billion, as rising livestock receipts more than offset declining crop receipts.
Revenue for livestock producers rose 19.3% to $25.7 billion in 2014, marking a fifth consecutive annual increase. Lower North American supplies pushed cattle and calf prices higher, contributing to a 44.4% increase in receipts. Also boosted by stronger prices, hog revenues rose 25.2%.
Receipts for supply-managed commodities (dairy, poultry and eggs) rose 1.1%, as a 3.1% gain in dairy receipts more than compensated for a price-related decrease in poultry revenues.
Ample supplies of grains and oilseeds contributed to downward pressures on prices, pushing crop receipts down 3.2% to $30.0 billion. With the exception of canola and flaxseed, receipts decreased for all the major grains and oilseeds as price declines offset generally higher marketings. Canola revenues were up 0.6% despite a 20.8% drop in the average price.
A 19.9% reduction in deferred grain receipts and a 26.2% increase in lentil receipts also tempered the drop in crop revenues.
Program payments fell 21.8% to $2.1 billion in 2014, with decreases in crop insurance and provincial stabilization payments accounting for the bulk of the decline.
Total operating expenses (after rebates) increased 2.1% to $43.6 billion in 2014. Much of the increase can be traced to a 47.8% gain in livestock purchases as cattle and calf prices rose sharply. Higher debt levels pushed interest expenses up 6.6%.
Moderating the increase was a 15.4% decrease in crop and hail insurance premiums that reflected large decreases in Ontario and the Prairie provinces. There was also a 2.5% decrease in feed expenses that was triggered by lower grain prices.
Total farm expenses, which comprise operating expenses and depreciation, increased 2.3% to $50.1 billion in 2014, as depreciation charges rose 3.9%.
Total farm expenses increased in every province except New Brunswick, Quebec and Manitoba, where there were marginal declines. The largest increase was in Alberta (+5.7%).
Total net income
In 2014, total net income decreased $7.6 billion to $4.8 billion. New Brunswick was the lone province to record a gain.
Total net income is realized net income adjusted for changes in farmer-owned inventories of crops and livestock. It represents the return to owner's equity, unpaid farm labour, management and risk.
As was the case with the $6.1 billion increase in total net income in 2013, the 2014 decline was driven by inventory changes. On-farm stocks of most of the major grains and oilseeds fell sharply when production in 2014 returned to more normal levels after the bumper crop of 2013.
Note to readers
Realized net income can vary widely from farm to farm because of several factors, including the type of 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.
Financial data for 2014 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 the performance of various types and sizes of farms.
Preliminary farm income data for the previous calendar year are first released in May of each year (five months after the reference period), providing timely information on the performance of the agriculture sector. Revised data are then released in November of each year, incorporating data received too late to be included in the first release. Data for the year prior to the reference period are also subject to revision.
For details on farm cash receipts for the first three quarters of 2015, see the "Farm cash receipts" release in today's Daily.
The publication Net Farm Income – Agriculture Economic Statistics (21-010-X) has been discontinued. Data previously contained in this publication are available in CANSIM table 002-0009.
Summary tables are available from the Browse by key resource module of our website, under Summary tables.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).