Outlook bright for Canadian farmers
Tuesday, February 26, 2013
by BETTER FARMING STAFF
With 2012 farm income levels at record highs and the prospects for 2013 almost as good, the future of agriculture in Canada is bright according to Agriculture and Agri-Food Canada’s (AAFC) Medium Term Outlook for international and domestic markets. The projections extend from 2012 to 2022 and assume a Canadian dollar at or slightly above par with the U.S. dollar, along with higher oil and gas prices.
The outlook, as well as farm income forecasts for 2012 and 2013, was released Wednesday by AAFC along with the Farm Income, Financial Conditions and Government Assistance Data Book, 2012. A senior AAFC official told reporters listening in on a teleconference technical briefing that Canadian farmers are experiencing financial returns close to those experienced in the mid-1970s, when adjusted for inflation.
Farm income forecasts show total farm cash receipts for 2012 are expected to be $53.4 billion, up seven per cent from 2011 and 18 per cent above the 2007-2011 average. Net cash income – the money available to farmers for debt repayments, or withdrawal for personal use – is expected to reach a record $13.1 billion for 2012 and drop only slightly in 2013 to about $12.9 billion.
“An increase in livestock receipts and stable crop receipts,” the farm income report says, “will together nearly offset modest growth in expenses (in 2013).” The report also notes there will be a reduction in program payments and that farm-level average net operating income will decline marginally to $73,855 in 2013, down from $74,190 in 2012.
Total assets for the average farm – up seven per cent in 2012 to $2.2 million driven primarily by higher land prices – are expected to increase another five per cent in 2013 to $2.3 million.
Farmer net worth – the difference between total assets and liabilities – represents the amount a producer would receive if the farming operation were sold and all its business debts paid. It is expected to go up by six per cent in 2013 to $1.9 million.
Total family income – profits from farming and income from all other sources – is expected to reach $131,947 in 2013, up from $127,106 in 2012.
The outlook predicts 2013 grain and oilseed prices will be slightly lower. However, cattle producers should see slightly higher prices, “mainly due to constrained supplies of slaughter animals.” Hog prices are also expected to increase in 2013.
Domestic consumption of poultry meats, which has increased 66 per cent over the last 20 years, is expected to slow to just 1.5 per cent a year “due to market maturity.” BF