Brenda O’Farrell
The Advocate

Despite seeing an increase in farm cash receipts in 2022, Canadian farmers saw their net incomes for the year drop, according to an economic report just released by the Canadian Federation of Agriculture.

The combined effect of high inflation and elevated interest rates is putting what the CFA has described as “tremendous pressure” on both farmers’ financial and mental health.

Farmers earned 6 per cent less in 2022 compared with 2021, the CFA report claims, as operating expenses outpaced revenues across all agricultural sectors.

“While most Canadian farmers have managed to stay afloat, largely due to high commodity prices and farm cash receipts that increased 14.6 per cent over 2021 levels, the ongoing impact of high inflation, matched with increasing interest rates, is beginning to take a serious toll on the operating margins of Canadian producers,” states the Farm Financial Health Report 2023-2024, a 33-page overview issued by the CFA earlier this month.

In 2022, Canadian farmers saw their total farm cash receipts increase by 14.6 per cent compared with 2021, the report says. This jump in revenues, based on figures obtained from Statistics Canada at the end of 2023, are based primarily on higher crop prices, which increased by $7.1 billion across the country, and improved livestock revenues, which gained $3.6 billion overall.

See FARM FINANCIALS, Page 4.

Also see Report recommendations, Page 4.

Report highlights, Page 4.

Optimism waning, Page 4

FARM FINANCIALS: Gains outpaced by growing operating costs

From Page 1

These substantial gains, however, were outpaced by growing operating expenses, which were calculated to have shot up by 18.6 per cent overall. The net effect left farmers with an overall net income of $11.8 billion in 2022 – or 6 per cent less than the $12.8 billion realized in 2021.

“One of the most significant input costs for Canadian producers through 2021 and 2022 was fertilizer,” the report states.

According to Statistics Canada, fertilizer prices began rising rapidly in early 2021 due primarily to high natural gas prices and Russia’s invasion of Ukraine, resulting in a 54.4-per-cent increase in 2022.

Fuel prices also saw a 52.5-per-cent spike in 2022, the report states.

The report includes 18 recommendations aimed at government to help farmers manage the increasing cost of production, navigate regulatory barriers and mitigate the effects of climate change, while also provide support to the next generation of farmers.

The recommendations, the report states, “are aimed at ensuring Canada’s farmers have the flexibility and tools they need to weather the current financial climate and support the transition to a low emissions economy.”

“Canadian farmers play a crucial role in sustaining our rural communities, as stewards of our natural environment and in meeting our national and international food security needs,” the report states. It concludes: “Canadian agriculture has the potential to play an even bigger role in meeting many of the Government of Canada’s objectives related to sustainability, emissions reduction and sustainable growth while continuing to contribute to domestic and global food security.”