OTTAWA – Agriculture and Agri-Food Canada (AAFC) has completed its farm income forecast for 2023 and 2024, with results suggesting overall Canadian farm income will have reached a new record in 2023.
Despite numerous challenges such as drought and global conflict, a Feb. 16 press release states the agriculture sector showed strong overall economic performance last year, and remains resilient.
Net cash income, the key metric AAFC uses to measure farm income, is forecast to have increased by 13 per cent to a new record of $25 billion, according to the release.
“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 [net cash income],” states the release.
AAFC attributes the increase largely to an increase in livestock receipts of almost 10%, to $37 billion — particularly with cattle.
“Cattle … 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,” the release states.
AAFC also expects crop receipts to grow by four per cent to $56 billion.
The federal ministry credits “improved grain marketings” for mitigating the effect of declining prices.
The federal government states operating expenses will have grown by 2% to $75 billion, which it notes is below 2022’s 20% increase.
“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,” the release states.
Similar results are expected for average net operating income per farm, adds the release.
Average net operating income is forecast to have increased by 17% in 2023 to $155,000, compared to $132,000 in 2022.
The increase is 34 per cent above the 2018-22 average.
Average farm family income (including off-farm income) is forecast to have increased by 11% to $239,000 in 2023.
Increases in operating income are expected for all farm types, except for hog, poultry and egg farms, according to AAFC.
2024 decline projected
A decline in net cash income by 14%, or $21 billion, is projected this year.
“Cash receipts are forecast to fall slightly with expenses modestly increasing,” the release states, adding, income “would still be 28% above the 2018-22 average.”
Assuming a typical production year, AAFC anticipates crop receipts declining by five per cent because of falling prices.
Livestock receipts however are forecast to continue increasing, according to AAFC, but at “less aggressive” rate of two per cent.
That’s because of a projected slow in in cattle price growth.
“Average farm-level and farm family incomes are expected to follow a similar trend to the aggregate measures of income,” the release states.
Statistics Canada will be releasing fourth quarter receipts for 2023 on Feb. 29, and final estimates of farm income for 2023 on May 29.
AAFC’S next forecast will build on those releases, and provide an updated forecast for 2024, as well as a new forecast for 2025.
