May 30, 2007

Canadian farmers' earnings at its lowest since 2003 amid revenue increases from cattle and crops

Farmers' income in Canada suffered its lowest level since 2003 as it fell for the second-straight year in 2006 due to rising interest, wage and fuel costs, coupled with falling hog receipts and program payments which has more than offset increases in revenue from crops and cattle.

Realized net income - the difference between a farmer's cash receipts and operating expenses minus depreciation, plus income in kind - fell from 2005 to $1.1 billion CAD (Canadian dollar).

Only the provinces of Saskatchewan and New Brunswick posted a gain in realized net income last year.

Total farm cash revenue from livestock and crop receipts as well as program payments have inched up 0.6 per cent to $37 billion for the third straight annual increase but higher interest rates and higher energy as well as labour costs pushed up farm operating expenses by 3.3 percent to $31.5 billion.

Meanwhile, Statistics Canada reports that market receipts for Canadian farmers rose 13 percent in the first three months of 2007 over the same period last year due to higher grain and oilseed prices as global supplies tightened as well as the increasing demand for use in biofuels.

Farmers received $8.5 billion in market receipts from the sale of crops and livestock - the fourth straight quarterly increase after being relatively flat in 2005.

(US$1 - 1.07 CAD)