May 28, 2008

Income more than double to US$1.7 billion for Canadian grain farmers

After two years of declines,  net income for farmers in Canada more than doubled last year thanks to higher grain and oilseed prices, Statistics Canada said Monday (May 26, 2008).

Statistics Canada said that net income rose to CAN$1.7 billion (US$1.7 billion) in 2007 from CAN $771 million in 2006. This was also 2-percent above the previous five-year average.

However, producer costs increased 8.2 percent the fastest rate of growth since 1981, and 14 percent higher than the previous five-year average.

Alfons Weersink, an agricultural economist at the Ontario Agricultural College in Guelph, Ontario, said crop prices are likely to remain high. Although revenues look good, it would be hard to predict how margins would be affected by rising costs, he remarked.

Feed and fertilizer costs have risen 22 percent over the past year while the Canadian dollar has been strengthening against the weak US dollar.

However, not all farmers benefited from the increased incomes -- the income gains were concentrated in Quebec and the Prairie provinces, while net income levels in British Columbia, Ontario and the Atlantic provinces dropped to "extremely low levels," the report said.