Canadian farm income hit a record high in 2015, and is expected to drop slightly in 2016, according to Agriculture and Agri-Food Canada. The impact of a weaker Canadian dollar supporting domestic prices is evident throughout the department’s 2016 Canadian Agricultural Outlook, which was published on Friday. Here are some highlights:
- Net cash income on Canadian farms is estimated to have reached a record level of $15 billion in 2015, six percent higher than the previous record of $14.2 billion set in 2014. In real terms, it’s the highest since the early ’70s.
- Net cash income in 2016 is expected to drop by 9 percent to $13.6 billion (the 2010-14 average: $11.9 billion).
- The average value of the Canadian dollar in 2014: 91 cents US. The average value in 2015: 77 cents US.
- For context on the currency effect, US farmers’ net cash income in 2015 is estimated to have dropped 28 percent (where Canadian NCI rose six percent).
- Average net operating income is also forecast to have hit a record of $77,287 in 2015, eight percent higher than in 2014. In 2016, it is projected to decrease to $69,989.
- Crop receipts are projected to have risen 2 percent to $30.7 billion in 2015, with weaker US prices offset by the decline in the Canadian dollar. 2016 crop receipts are forecast to hit $30.6 billion.
- The livestock situation is mixed — cattle receipts in 2015 are estimated to have increased 14 percent thanks to high cattle prices, while hog sector receipts are expected to have dropped by 20 percent in ’15. The net effect to livestock receipts in 2015 — a 2 percent increase to $26.2 billion.
- 2016 livestock receipts are expected to decline by 4 percent as the cattle herd rebuilds.
- Net worth continues to climb, largely fueled by rising land values, with the average farm in 2016 forecast to have a net worth of $2.7 million.
- Debt-to-asset ratio has been trending lower for the past decade and is expected to reach 17 percent in 2016.
- Government program payments in 2015 are estimated to have dropped by 1 percent to $2.1 billion, with a 35 percent drop in AgriStability payments offsetting a 41 percent increase in crop insurance payments. For 2016, total progarm payments are projected to increase by 18 percent, led by higher AgriStability payouts for income shortfalls on hog farms and the effects of drought in Western Canada.
AAFC prepares the report in consultation with provincial governments and Statistics Canada. The numbers are used as benchmarks for government and industry planning.
(all charts and figures from on AAFC 2016 Agricultural Outlook.)