Farm Income, Financial Conditions and Government Assistance Data Book, 2016
The Farm Income, Financial Conditions and Government Assistance Data Book is a compendium of historical data series from several sources compiled into a single, convenient resource of key economic and financial data for the agriculture sector. The information provides a comprehensive view of the situation in primary agriculture and the expenditures that governments are making to ensure a strong and competitive sector. The Data Book also provides valuable information on government assistance to the agriculture and agri-food sector not readily available from other sources.
Information is provided by several organizations within Agriculture and Agri-Food Canada, as well as by other federal departments. Information in the Data Book is also prepared in consultation with the provincial ministries responsible for agriculture.
The Data Book is divided into four sections. Section A presents information related to farm income while Section B contains information on farm financial conditions. Section C provides data on government expenditures for the agri-food sector and Section D provides information on estimates of support to agriculture. Notes on the methodology are provided at the end of each section. Each edition of the Data Book provides the most up-to-date economic and financial indicators.
Section A - Farm income
- In 2015, total market receipts from both crop and livestock sources reached $57.6 billion, the highest level over the 10-year period 2006-2015. The increase in market receipts in 2015 was driven by both record crop receipts of $31.9 billion and record livestock receipts of $25.7 billion.
- Program payments totalled $2.1 billion in 2015, unchanged from the previous year. Since 2008, high incomes due to strong market conditions have led to lower program payments.
- Net cash income (in nominal terms), at $15.2 billion in 2015 was the highest level yet reported, surpassing the previous record of $14.0 billion reached in 2014. By comparison, the lowest net cash income level over the 2006-2015 reference period was $5.9 billion in 2006.
- Average total operating revenue and expense data for 2014 show that Newfoundland farms had the highest operating revenue, at $694,692. Saskatchewan farms reported the lowest operating revenue, at $363,688. Nationally, average reported operating revenues were $418,080 and operating expenses were $347,084, for a net operating income of $70,997. This is a 2% increase from $69,507 in net operating income reported a year earlier.
- There is considerable variation in average net operating income by farm type. Hog farms had the highest average net operating income in 2014, at $294,862, which was up 154% from a year earlier. Potato farms had the second highest, at $238,519. Average net operating income for grain and oilseed farmsstood at $84,492, for dairy farms at $153,611, and for beef cattle farms at $25,764.
Section B - Farm financial conditions
- Farms controlled total assets worth $561.1 billion in 2015. Farm real estate, consisting of land and buildings, made up almost three-quarters of farm total assets in 2015.
- Farmers take on debt to meet short-term financial obligations and to make investments in their farming operations that take advantage of emerging marketing opportunities. In 2015, total farm debt outstanding in Canada stood at $91.8 billion.
- There were 27 farm bankruptcies in 2016, up slightly from 25 in 2014 and 20 in 2015. Quebec reported the highest number, at 11 in 2016. The number of farm bankruptcies in Canada generally followed a declining trend over the past decade, although this decline has flattened out recently.
- Farm Credit Canada approved 46,796 new loans in 2015-16. The average size of loan approved by Farm Credit Canada rose to $191,689.
- There were 1,414 new loans registered under the Canadian Agricultural Loans Act in 2015-16. Almost 71% of new loans were in Saskatchewan.
- Farm balance sheets were generally robust in 2015, the latest year for which there is currently data. The average Canadian farm reported $3.4 million in assets and $0.6 million in debt, for an overall net worth of $2.8 million. There was considerable variation by farm type, with the net worth of poultry farms averaging $5.8 million, potato farms $4.6 million, dairy farms $3.8 million, hog farms $2.9 million, grain farms $3.1 million and beef farms $2.1 million.
- Among provinces, farms in British Columbia had the highest average net worth, at $3.6 million, followed by Alberta, at $3.5 million. Farms in the Atlantic provinces had the lowest average net worth, at $1.7 million.
- In the fall of 2016, urea cost an average of $506 per tonne in Ontario, $396 per tonne in Manitoba and $383 per tonne in Saskatchewan. Farmers in Ontario paid slightly more for urea compared to farmers in the neighbouring U.S. states of Michigan, Ohio and Indiana, while farmers in Manitoba paid slightly less than their neighbours in Minnesota and North Dakota, and farmers in Saskatchewan paid less than their neighbours in Montana.
- Also in the fall of 2016, farmers in Saskatchewan and Manitoba saw lower gasoline prices than their counterparts in Ontario, while diesel prices were lower in Ontario and Saskatchewan compared to Manitoba. Compared to neighbouring U.S. states, both Ontario and Manitoba had more costly gasoline and diesel.
- Total net farm expenses increased by 2% in 2015 to $51.6 billion. The main drivers of this were increases in depreciation, livestock purchases, fertilizer and lime, as well as cash wages, room and board. However, these were partly offset by lower machinery operating costs and lower crop and hail insurance expenses.
Section C - Government expenditures in support of the agri-food sector
- Total government expenditures in support of the agriculture and agri-food sector fell by 3.8% in 2015-16 to $5.18 billion. Federal expenditures declined by 3.4% to $2.62 billion, while provincial expenditures fell by 4.2% to $2.56 billion.
- It is projected that federal expenditures will increase by 2.3% in 2016-17 to $2.68 billion. Provincial expenditures are also expected to increase, by 7.4% in 2016-17 to $2.75 billion. Total expenditures are expected to increase by 4.8% to $5.43 billion.
- In 2015-16, federal expenditures on payment programs declined to $0.81 billion and represented 28% of total federal expenditures. These payments are expected to increase to $1.17 billion in 2016-17 and will represent 38% of total federal expenditures. At the provincial level, expenditures on payment programs dropped to $0.97 billion in 2015-16 and represented 34% of total provincial expenditures, but are expected to increase to $1.2 billion in 2016-17 and will represent 40% of total provincial expenditures.
- Federal government expenditures as a percentage of agriculture gross domestic product (GDP) are expected to drop from 12.2% in 2015-16 to 11.9% in 2016-17, while provincial government expenditures as a percentage of agriculture GDP are expected to increase from 11.9% in 2015-16 to 12.3% in 2016-17.
Section D - Estimates of support to agriculture
- Expressed as a percentage of gross farm receipts, the Producer Support Estimate (PSE) for Canada decreased slightly from 10% in 2014 to 9% in 2015.
- In the United States (U.S.), from 2014 to 2015 the level of support expressed as a percentage of gross farm receipts decreased from 10% to 9%. In Mexico, support also dropped from 10% to 9%. Support stayed the same in Australia and New Zealand at 1%, and in the European Union, support increased from 18% to 19%.
- Support to specific commodities has fallen over time, but some commodities still receive high levels of support. This support is measured by the single commodity transfer (SCT), an indicator that measures transfers linked to the production of a specific commodity. This indicator is expressed as a percent of gross receipts for the commodity.
- In 2015, milk was the commodity that received the highest level of support in Canada, with an SCT of 47%. In the European Union, beef and veal received the highest level of support, with an SCT of 28%. In the U.S., milk received the highest level of support with an SCT of 15%.
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