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By Alice McFarlane

Farm Income Forecast

Livestock receipts expected to push Canadian farm income higher

Feb 20, 2024 | 4:31 PM

Agriculture and Agri-Food Canada (AAFC) said overall Canadian farm income is expected to reach a new record for 2023.

AAFC said while every farm is unique and will have experienced the last year differently, the continued growth of overall farm income shows that despite the uncertainty and volatility of the past year, the sector remains resilient.

The largest driver of this expected increase is a forecasted increase in livestock receipts of almost 10 per cent, to $37.3 billion. Cattle receipts saw impressive price-driven growth that, combined with moderate growth in receipts from the supply-managed sector, more than offset an expected decline in hog receipts.

Crop receipts are also forecast to have grown 4 per cent to $56.0 billion, as improved grain marketings have largely mitigated the impact of declining prices. Operating expenses are forecast to have increased only 2 per cent to $74.9 billion, well below the 20 per cent increase seen in 2022.

For 2023, Net Cash Income (NCI), the main metric AAFC uses to measure farm income, is forecast to have increased 13 per cent to a new record of $24.8 billion.

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While growth in both expenses and receipts is forecast to have been much more modest than what was seen in 2021 and 2022, growth in receipts for 2023 is still forecast to have outpaced that of expenses, resulting in a new record for NCI.

While some key inputs, such as labour and interest expenses, are forecast to have continued increasing, others, such as fertilizer and fuel expenses, are expected to have come down.

Looking ahead to 2024, NCI is forecast to decline 14 per cent to $21.3 billion, as cash receipts are forecast to fall slightly with expenses modestly increasing, although NCI would still be 28 per cent above the 2018-2022 average.

Under the assumption of a normal production year, crop receipts are expected to decline 5 per cent as prices continue to fall. Livestock receipts are forecast to continue increasing, but at a much less aggressive rate of 2 per cent, as growth in cattle prices is forecasted to slow down. Average farm-level and farm family incomes are expected to follow a similar trend to the aggregate measures of income.

The agriculture sector continued to be strong despite numerous challenges including droughts in western Canada and other extreme weather events, Russia’s continuing war on Ukraine, and other global conflicts.

Statistics Canada will be releasing fourth quarter receipts for 2023 on Feb. 29, and estimates of farm income for 2023 on May 29.

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alice.mcfarlane@pattisonmedia.com

On X: @farmnewsNOW