May 27, 2010

Alberta farms drop 26.87% income in 2009

Alberta producers' total revenue dropped to US$403 million in 2009, as compared with US$1.5 billion on-year, Statistics Canada reported Tuesday (May 25).

Average crops for grains and oilseeds weren't enough to offset a slump in the cattle and hog sectors, suffering from falling demand due to the recession. The outlook for this year is improving, after spring rains boosted moisture levels, said one industry official.

"Last year, the crops just weren't that good; they were average with good prices. This spring, we had good moisture, so the big fear on pastures and hay land has passed. We are getting pasture growth at least now and hay fields look a lot better, so there is some reason for optimism," said Rod Scarlett, executive director of Wild Rose Agricultural Producers, a farm lobby group.

It was the first time since 1986 that producers paid out less in expenses, the agency noted. Operating expenses - which include costs such as machinery, fuel, interest and fertiliser - fell 7% to US$7.6 billion. But income also dropped, with farm cash receipts dropping 8% to US$9.3 billion.

"Volatile commodity prices, poor weather and the fluctuating Canadian dollar can cause trouble, and last year saw more than a few such challenges for Alberta farmers," ATB Financial chief economist Todd Hirsch said.

Across Canada, net farm income was US$2.7 billion, compared with US$6.7 billion in 2008.

In Alberta, livestock receipts fell nearly 4% to $4.1 billion. Nationwide it fell US$900 million to US$17.9 billion, due largely to a more than 30 % drop in the number of cattle and hogs exported to the US, where country-of-origin labelling legislation came into effect.