The fall in Canadian farm income in 2022 was not as steep as originally expected although it was still a dramatic turn for the worse compared to the previous two years.
In a farm income report Tuesday, Statistics Canada estimated 2022 realized net farm income for Canadian producers at $11.8 billion, down 7.6% on the year. That is a more modest decline than the 9.5% drop StatsCan was projecting back in May but stands in sharp contrast to the nearly 70% increase posted in 2021 and the 101.6% jump recorded in 2020.
Excluding down trending cannabis returns, last year’s farm income picture looks a bit better, with 2022 realized net farm income - the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind - down a more modest 5.9%.
According to StatsCan, total farm cash receipts, which include crop and livestock returns as well as government payments, actually increased year-over-year in 2022, rising 14.6% to $95.1 billion. However, the bottom line was undone by an 18.6% increase in total farm expenses (operating expenses and depreciation) to $83.4 billion.
Alone, farm operating expenses (after rebates) increased by 19.9% to $73.3 billion in 2022 — the largest gain since 1979 (+21.1%) — and easily surpassing the 9.5% rise in 2021.
“Farmers faced higher costs for key agricultural inputs, including fertilizer, feed and fuel,” StatsCan said.
Saskatchewan had the highest realized net farm income in 2022 at $3.84 billion, although that was down a steep 24.4% from a year earlier. Alberta realized net farm income, at $3.03 billion, was up almost 19% on the year, while Manitoba was down 2.1% at $1.55 billion. Ontario realized net farm income came in at $2.53 billion, an increase of just over 2%.
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