June 27, 2005

Canadian farmers make profit in 2004
 

Canadian farmers finally made money last year-its first in three years, the federal government said.

Two consecutive years of drought, the closure of the border to all Canadian cattle exports and some beef sales since May 2003 had forced Canada's nett farm income down in 2002 and 2003.

Though the border remains shut for cattle and some beef, conditions have since improved, with nett farm income hitting C$6.3 billion (US$5.12 billion) in 2004, Statistics Canada reported last month.

Better returns on crops and hogs have also pushed receipts higher for the first time since 2001. Farmers received a total of C$36.5 billion from crops, livestock sales and government subsidies last year.

Livestock receipts rose 6 percent to C$17.2 billion in 2004, but this was just marginally higher than the previous five-year average of C$17.1 billion.

Though receipts for hog producers hit a high, revenues from cattle and calves fell to their lowest level since 1996 as the industry's BSE-related problems continued. However, a more normal weather permitted Canadian farmers to harvest larger crops.

Government subsidies grew only slightly. After rising substantially in 2003, it grew by a marginal 0.8 percent in 2004 to C$4.9 billion (US$3.98 billion). About 22 percent of these subsidies were paid out in BSE-related assistance programs.

In the face of drought and BSE problems, Canadian farmers managed to slash expenses despite higher energy costs. As such, operating expenses grew at the lowest rate since 1990.