# Farm and Farm Operator Data Farmers are adapting to evolving markets

Release date: June 14, 2017

## Farm profitability remains constant between Censuses

In 2015, Canadian agricultural operations incurred an average of 83 cents in operating expenses per dollar in gross farm receipts. This amount remained unchanged in comparison to 2010.

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The expense-to-receipt ratio is the average amount incurred in operating expenses for a dollar in gross farm receipts. The ratio is calculated using current dollars while the rest is in constant dollars.

The Census of Agriculture defines an agricultural operation as one that produces agricultural products intended for sale.

Price indices were used to obtain constant dollar estimates of receipts, expenditures and capital values in order to eliminate the impact of price change in year-to-year comparison.

Census Day was May 10th, 2016. Farmers were asked to report their receipts and expenses for the last complete fiscal or calendar year (2015). The reference year for all other variables mentioned in this article is 2016.

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When eliminating the impact of price change, gross farm receipts totalled $69.4 billion in 2015, an increase of 4.7% since 2010, with larger revenue farms responsible for most of the rise. Oilseed and grain type farms continued to grow in importance, accounting for the largest share (37.8%) of total receipts in 2015. Total operating expenses were$57.5 billion in 2015, up 6.6% since 2010.

Canada 0.83 0.83

## Farms with receipts in the millions are on the rise

Larger farms were responsible for a growing proportion of national receipts. While farms that reported $1 million or more in gross farm receipts accounted for 7.6% of all farms in 2016, their share of gross farm receipts increased to 60.3% in 2015. In turn, the 1.5% of farms that had gross farm receipts in excess of$3 million accounted for more than one-third of receipts in 2015.

In Prince Edward Island, 12.1% of farms reported $1 million or more in gross farm receipts, the largest proportion among provinces. By contrast, British Columbia had the highest share of farms reporting less than$10,000 in receipts at 41.6%. This compared with 17.7% nationally.

## Land and buildings value drives increase in farm capital values

The value of farm capital owned or rented by farmers totalled $509.7 billion in 2016, up 36.8% from 2011 (Table 5). This represented a median capital value of$1.1 million in 2016, an increase of 23.3% from 2011. This increase was largely driven by the total value of land and buildings as this category represented the biggest share of the capital at 84.0%.

Table 5
Value of farm capital (in 2016 constant dollars) by category and percent of total, Canada, 2011 and 2016
Table summary
This table displays the results of Value of farm capital (in 2016 constant dollars) by category and percent of total. The information is grouped by Category (appearing as row headers), Value of farm capital, 2011 and 2016, calculated using dollars (billions), % change and Percent of total units of measure (appearing as column headers).
Category Value of farm capital 2011 2016
2011 2016 % change
dollars (billions) percent of totalTable 5 Note 1
Land and buildings 311.2 427.9 37.5 83.5 83.9
Machinery 46.7 53.9 15.4 12.5 10.6
Livestock 14.7 27.9 89.4 4.0 5.5
Total 372.6 509.7 36.8 100.0 100.0

The value of capital owned or rented by farms with $1 million or more in gross farm receipts totalled$171.4 billion in 2016, up 61.4% from 2011. Meanwhile, the value of capital owned or rented by farms that had less than $1 million in gross receipts was$338.3 billion in 2016, up 27.0% since 2011. While these smaller farms accounted for less than half of all receipts at 39.7%, they comprised almost two-thirds of the total capital.

## Farm type has a large impact on the value of land and buildings

Farmers continually invest in their land and buildings to aid gains in efficiency and productivity, which positively impact their values. Some examples of these investments are increasing grain storage facilities, installing tile drainage systems and land clearing.

The Census of Agriculture reported a 6.9% increase in cropland between 2011 and 2016 while areas not in production, including woodlands and wetlands decreased. Tile drainage systems, while an expensive investment, aid growth in yield and are a way farmers can insure themselves against adverse conditions. Investments in grain storage facilities reflects increasingly large harvests, resulting from increasing farm size and efficiency gains, and are a way to adapt to the challenges arising from transportation. These grain storage facilities also enable farmers to maximize their receipts by waiting for favourable market prices to sell their harvest.

The total value of land and buildings was $427.9 billion in 2016, yielding a median value of land and buildings of$916,000, which increased 25.1% since 2011. The average value per acre of agricultural land and buildings in Canada was $2,696, up 38.8% since 2011. There is a correlation between the value of land and buildings on a per acre basis and the type of commodities produced. The farm types with the highest requirement for physical infrastructure, such as greenhouses or poultry operations, also have the highest value of land and buildings on a per acre basis (Chart 4). By comparison, farm types with a lower value per acre are those where the production is mostly crop-based or pasture land, therefore the value of the physical infrastructure is distributed over a larger quantity of land. Data table for Chart 4 Data table for Chart 4 Table summary This table displays the results of Data table for Chart 4. The information is grouped by Operation type (appearing as row headers), Acres (dollars) (appearing as column headers). Operation type Dollars per acre Greenhouse, nursery and floriculture 17,912 Poultry and egg 15,298 Fruit and tree nut 14,171 Hog and pig 8,902 Vegetable and melon 8,062 Dairy and milk 7,162 Sheep and goat 6,173 Other animal 4,312 Other crop farming 2,729 Oilseed and grain 2,508 Beef and feedlot 1,406 The regions where the average value of land and buildings reported were the highest, were for regions that are located near an urban centre (Map 1). In Canada, the highest average values of land and buildings were reported by regions that are located near the Lower Mainland of British Columbia, as well as Southern Ontario. Map 1 Description for Map 1 This is a map showing the average value of land and buildings per acre in 2016, by census consolidated subdivision, Canada, 2016 Map 1 Data (CSV) Legend This table shows the category associated with the average value of land and buildings per acre in 2016 for each census consolidated subdivision. Average value per acre category classifications are represented by different colours. Map 1 Legend Table summary This table displays the results of Map 1 Legend. The information is grouped by Category (appearing as row headers), Dollars per acre and Colour (appearing as column headers). Category Dollars per acre Colour 1$1,000 and less Light yellow
2 $1,001 to$2,500 Light yellow-orange
3 $2,501 to$5,000 Medium yellow-orange
4 $5,001 to$7,500 Dark yellow-orange
5 $7,501 to$10,000 Light orange
6 $10,001 to$15,000 Medium orange
7 $15,001 to$25,000 Dark orange
8 $25,001 to$50,000 Medium red
9 $50,001 to$75,000 Dark red
10 over $75,000 Very dark red 11 no data Light grey 12 confidential hatched Regions outside the agricultural ecumene are displayed in white. Provinces are outlined in a grey line. An inset map has been provided to permit greater visibility for southern Ontario and Quebec. Source Statistics Canada, Agriculture, Census of Agriculture, 2016. Map produced by Remote Sensing and Geospatial Analysis, Agriculture Division, Statistics Canada, 2017. ## Larger tractors aid efficiency gains While most farms own or lease equipment, some operators choose different ways to access machinery. Using custom or contract work allows farmers to access equipment and manage workloads. Other strategies include sharing equipment or separating the ownership of the machinery from the farm operation. The average total value of machinery per farm was$278,405 in 2016, an increase of 22.7% since 2011. Oilseed and grain type farms had 58.4% of the total value of machinery in Canada in 2016.

The value of machinery per farm is highly dependent on the type of production. The Prairie Provinces, which are predominately crop-based operations, had the highest value of machinery per farm (Map 2). Some of the regions with the highest average value of machinery per farm were located in New Brunswick and Prince Edward Island, as a result of the concentration of farms growing crops, such as potatoes.

Map 2

Description for Map 2

This is a map showing the average value of land and buildings per acre in 2016, by census consolidated subdivision, Canada, 2016

Map 2 Data (CSV)

Legend

This table shows the category associated with the average value of land and buildings per acre in 2016 for each census consolidated subdivision.

Average value per acre category classifications are represented by different colours.

Map 2 Legend
Table summary
This table displays the results of Map 2 Legend. The information is grouped by Category (appearing as row headers), Dollars per agricultural operation and Colour (appearing as column headers).
Category Dollars per agricultural operation Colour
1 $75,000 and less Light yellow 2$75,001 to $124,999 Light yellow-orange 3$125,000 to $174,999 Medium yellow-orange 4$175,000 to $224,999 Dark yellow-orange 5$225,001 to $299,999 Light orange 6$300,000 to $399,999 Medium orange 7$400,000 to $499,999 Dark orange 8$500,000 to $599,999 Medium red 9$600,000 to $799,999 Dark red 10$800,000 and more Very dark red
11 no data Light grey
12 confidential hatched

Regions outside the agricultural ecumene are displayed in white.

Provinces are outlined in a grey line.

An inset map has been provided to permit greater visibility for southern Ontario and Quebec.

Source

Statistics Canada, Agriculture, Census of Agriculture, 2016.

Map produced by Remote Sensing and Geospatial Analysis, Agriculture Division, Statistics Canada, 2017.

One way that farmers can invest in their operations to help increase productivity is by investing in their machinery. Tractors are now becoming more efficient through technological and mechanical advancements. These newer and larger tractors enable farmers to do more with less. An indication of this is that in 2011 there were 7.9 tractors reported per 1,000 acres of cropland. In 2016, this ratio had decreased to 7.0. The total value of tractors over 149 power take-off horsepower (p.t.o. hp) grew 50.0% between 2011 and 2016, accounting for more than half of the total value of tractors (Table 6).

Table 6
Value of tractors (in 2016 constant dollars) by category and percent of total , Canada, 2011 and 2016
Table summary
This table displays the results of Value of tractors (in 2016 constant dollars) by category and percent of total. The information is grouped by Category (appearing as row headers), Value of tractors, 2011 and 2016, calculated using dollars (billions), % change and Percent of total units of measure (appearing as column headers).
Category Value of tractors 2011 2016
2011 2016 % change
dollars (billions) percent of totalTable 6 Note 1
Under 60 p.t.o. hp 2.1 2.1 2.3 13.3 11.5
60 to 149 p.t.o. hp 7.5 7.1 -4.6 47.3 38.2
Over 149 p.t.o. hp 6.2 9.4 50.0 39.5 50.3
Total 15.8 18.6 17.9 100.0 100.0

## Value of livestock per acre is production dependant

The estimated value of livestock per acre is influenced by the type of production. The operations where the livestock is housed in buildings, such as dairy, hog and poultry operations, often have the highest value of livestock per acre as their total land area is often smaller.

For example, along the London Québec corridor, there is a prevalence of hog, dairy and poultry operations, which require elaborate infrastructure to house livestock (Map 3).

By comparison, in the Prairie Provinces the predominant livestock type farm is beef, which is often distributed over a large quantity of land, resulting in a lower value per acre. The areas portrayed as darker in southern Alberta represent a predominance of beef feedlot type farms, as is the case with hog and dairy operations in southern Manitoba. In southern British Columbia, in turn, the darker areas represent a concentration of dairy and poultry operations.

Map 3

Description for Map 3

This is a map showing the average value of livestock per acre of agricultural land in 2016, by census consolidated subdivision, Canada, 2016

Map 3 Data (CSV)

Legend

This table shows the category associated with the average value of livestock per acre of agricultural land in 2016 for each census consolidated subdivision.

Average value per acre category classifications are represented by different colours.

Map 3 Legend
Table summary
This table displays the results of Map 3 Legend. The information is grouped by Category (appearing as row headers), Dollars per acre and Colour (appearing as column headers).
Category Dollars per acre Colour
1 $75 and less Light yellow 2$76 to $124 Light yellow-orange 3$125 to $224 Medium yellow-orange 4$225 to $299 Dark yellow-orange 5$300 to $399 Light orange 6$400 to $499 Medium orange 7$500 to $699 Dark orange 8$700 to $999 Medium red 9$1,000 to $1,499 Dark red 10$1,500 and more Very dark red
11 no data Light grey
12 confidential hatched

Regions outside the agricultural ecumene are displayed in white.

Provinces are outlined in a grey line.

An inset map has been provided to permit greater visibility for southern Ontario and Quebec.

Source

Statistics Canada, Agriculture, Census of Agriculture, 2016.

Map produced by Remote Sensing and Geospatial Analysis, Agriculture Division, Statistics Canada, 2017.

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## Note to readers

Census Day was May 10th, 2016. Farmers were asked to report their receipts and expenses for the last complete fiscal or calendar year (2015). The reference year for all other variables mentioned in this article is 2016.

The expense-to-receipt ratio is the average amount incurred in operating expenses for a dollar in farm receipts. The ratio is calculated in current dollars. It uses operating expenses, which exclude capital expenses such as repayment of long term loans and amortization of tangible and intangible assets. A more favourable expense-to-receipt ratio indicates that farmers are now spending less in operating expenses per dollar in gross farm receipt (lower ratio). By comparison, a less favourable expense-to-receipt ratio indicates that farmers are now spending more in operating expenses for every dollar in gross farm receipts earned (higher ratio).

Price indices were used to obtain constant dollar estimates of receipts, expenditures and capital values in order to eliminate the impact of price change in year-to-year comparison.

Gross farm receipts and operating expenses in this article are in constant 2015 dollars calculated using the annual average for 2010 and 2015. The Farm Product Price Index (CANSIM table 002-0069) is used for the gross farm receipts for 2010, and the Farm Input Price Index (CANSIM table 328-0015) is used for the operating expenses for 2010.

Value of land, buildings and machinery in this article are in constant 2016 dollars calculated using the second quarter value for 2011 and 2016 from the Farm Input Price Index (CANSIM table 328-0015) for 2011 values. Livestock values from 2011 are in 2016 prices using the second quarter average for 2011 and 2016 from the Farm Product Price Index (CANSIM table 002-0068).

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## References

CDC (Canadian Dairy Commission). November 2011. Cost of production – Final results based on 2010 survey data. Ottawa, Ontario.

CDC (Canadian Dairy Commission). July 2016. Cost of production – Draft results based on 2015 survey data. Ottawa, Ontario.

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