Farm revenue reaches record levels

Glacier FarmMedia – Canada’s agricultural producers enjoyed record revenues in the first six months of 2021, thanks to high commodity prices, brisk sales and strong global demand for agricultural products.

According to Statistics Canada, total farm cash receipts across the country exceeded $38.2 billion in the first six months of 2021, a year-over-year increase of 12.4 per cent.

During the same six-month period in 2020, national farm cash receipts were valued at just a shade over $34 billion.

Why it matters: Strong crop prices have kept farm revenue growing, especially in Ontario where weather has been excellent for growing crops in 2021.

Cash receipts from crops were up by $2.8 billion from last year and revenues from livestock sales were $1.6 billion higher, StatsCan said. Direct government payments were $125.5 million lower.

On a province-by-province basis, Alberta farm incomes showed the greatest increase, rising year-over-year by $1.6 billion or 20.6 per cent, followed by Manitoba, up $895.5 million, or 28.3 per cent.

Saskatchewan farm receipts rose by nearly $650 million, or 7.9 per cent.

Statistics Canada cautioned, however, that changing conditions across the country during the past few months — specifically drought conditions across much of the Prairies and higher feed costs affecting livestock operations — will have a negative impact on full-year 2021 numbers.

“Much has changed since these data were collected,” Canada’s national statistics agency said in an Aug. 31 release.

“Farmers are contending with higher-than-average temperatures and drought conditions throughout the growing season across much of the Prairies, higher feed costs and forest fires.”

The full impact of these challenges will become clearer in the future, it said.

Nationally, first-half farm revenues from the sale of agricultural crops were up by more than 14 per cent this year versus last year.

Total crop sales of $22.5 billion in the six-month period ending June 30 were the result of higher revenues from sales of canola (up $1.5 billion), wheat excluding durum (up $718 million) and durum (up $284 million).

In fact, farm revenues were up for every major crop type grown in Western Canada, with the exception of lentils. First-half sales revenue from lentils decreased by more than $250 million, or 30.2 per cent, StatsCan said.

All told, crop receipts rose in seven of Canada’s 10 provinces, it added.

The only provinces that saw a year-over-year decline in crop-related revenue were Quebec (down $59.1 million), New Brunswick (down $22 million) and Nova Scotia (down $1.5 million).

“Strong international demand pushed prices higher for grains and oilseeds,” StatsCan said.

“To meet this demand, the transportation of grains and oilseeds by rail destined for international markets continued at near-record levels for the two major railways” during the first half of 2021.

Canola was a shining star. Revenues (up 33.7 per cent nationally) and canola prices (up 39.1 per cent on average) both rose in the first half of 2021, with China, Japan and Mexico accounting for two-thirds of Canada’s first-half canola exports.

The domestic canola crush also increased by 2.1 per cent.

Cash receipts from wheat excluding durum were also up on the strength of higher sales volumes (up 5.2 per cent) and higher prices (up 19.9 per cent).

China, which is expanding its national hog herd after recent outbreaks of African swine fever, continued to be a large buyer of Canadian grains and oilseeds, especially for feed crops.

China was the largest single buyer of Canadian wheat during the first half of 2021, taking 16.8 per cent of all Canadian wheat exported.

Canadian livestock receipts also rose sharply during the first half of the year. Total livestock receipts were up 12.4 per cent to $14.3 billion, thanks largely to gains in the hog sector.

Hog revenues were up $846 million or 37.6 per cent from the same period a year earlier. Average hog prices for the six-month period were nearly 31 per cent higher this year, than last, the StatsCan report said.

Cattle receipts, including slaughter receipts, rose 8.8 percent to $4.3 billion on the strength of higher prices (up 4.4 per cent) and larger sales volumes (up 4.2 per cent).

Revenues in supply-managed farm sectors were pegged at $6.1 billion, a year-over-year increase of 5.3 per cent.

Farm Credit Canada, the country’s largest agricultural lender, was unavailable to comment, citing concerns over the perception of voter influence during the federal election.

But in an earlier news release, FCC president and chief executive officer Michael Hoffort acknowledged that summer weather conditions will have a negative impact on 2021 yields and production.

Even with record prices for many agricultural commodities, lower production will impact farm incomes.

FCC said it will consider additional short-term credit options, deferral of principal payments and other loan payment schedule amendments to reduce financial pressures on those affected by unfavourable weather.

This article was originally published at The Western Producer.