Expected Fall in 2024 Farm Cash Receipts Would be First in 15 Years

Canadian farm cash receipts are on track to decline in 2024, potentially the first such downturn in 15 years.

In a farm income report last month, Statistics Canada reported that national farm cash receipts totalled $70.6 billion through the first three quarters of 2024, down $2.2 billion or 3% from the same period in 2023. Livestock receipts in the January-September period were up 6.3% to $29 billion, but that was more than offset by a 9.2% fall in crop returns to $37.6 billion and a 1.3% decline in program payments to $4 billion.

The final and full farm income numbers for 2024 will not be in until early in 2025, but Farm Credit Canada (FCC) is projecting total farm cash receipts will indeed be down on the year. If accurate, FCC’s forecasted decline in 2023 farm cash receipts would be the first since 2009, when they dropped 3.2% to $44.5 billion.

In that year, lower program payments were the primary culprit, falling almost $1 billion or 20.3% from a year earlier. Livestock receipts also declined, down 4.5% to $18.05 billion, but crop receipts managed a fractional increase to $23.2 billion. Total farm cash receipts were marginally lower again in 2010, easing 0.2%, but rebounded in 2011 with a 12.2% increase to $49.8 billion – led by a 16.3% jump in crop returns to just over $26 billion.

Since 2011, farm cash receipts have continued to trend higher, culminating in increases of 15.7% and 14.5% in 2021 and 2022.  In fact, in farm income records dating back to 1971, there have only been two periods when farm cash receipts have slumped for two consecutive years – 2009 and 2010, as well as 2002 and 2003. In no case have farm cash receipts ever declined for three straight years.

Canadian farmers are not banking profits every single time farm cash receipts post a year-over-year increase. Operating expenses have risen sharply, particularly during the pandemic, and remain at elevated levels today. Weakening crop prices, extreme weather and drought have also badly dented returns.

Indeed, realized net farm income, which is a more accurate measure of the bottom line, has been more variable over the years and tumbled to a historic low as recently as 2003, following back-to-back Prairie droughts and the closure of the US border to live cattle exports in the wake of Canada’s first identified case of BSE.