Rising livestock receipts – especially for cattle – were not enough to turn the tide as Canadian farm income saw its sharpest decline in six years in 2024 amid lower crop prices and higher expenses.
A Statistics Canada farm income report on Wednesday pegged national 2024 realized net farm income at $9.4 billion, down $3.3 billion or 26% from a year earlier and the largest percentage fall since 2018. Stripping out cannabis makes things appear slightly better, with net farm income down a more modest 23% to $9.7 billion.
In 2023, realized net income for Canadian farmers rose 13.7% to $13.6 billion, as growth in receipts more than offset an increase in expenses. Realized net income is the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind.
Today’s report basically confirms StatsCan’s preliminary 2024 headline farm income numbers that were released back in May.
Realized net income fell in every province but Newfoundland and Labrador and Nova Scotia in 2024 compared to a year earlier. Saskatchewan posted the largest decline among the provinces, down $1.3 billion or more than 24% to $4.02 billion, mainly due to lower crop revenues and slightly higher total farm operating expenses. At $2.44 billion, Alberta realized net farm income was down 22%, while Manitoba was down 22% as well to $1.22 billion. Ontario realized net farm income fell 19% to $1.85 billion.
Nationally, total farm cash receipts – which include crop and livestock returns as well as producer payments - dropped $1.4 billion to $98.1 billion in 2024, the first decline since 2010.
Total crop receipts declined 6.1% to $52.2 billion, mainly on lower prices for most major grains and oilseeds. Producer payments also declined, falling 10.8% to $5.9 billion in 2024. It was the second consecutive double-digit percentage decline in producer payments, following two years of strong increases in 2022 (+23.6%) and 2021 (+71.8%), when drought-related losses led to higher payments.
On the other hand, livestock receipts rose 7.2% to $40 billion in 2024, on gains across all livestock sectors except poultry.
StatsCan said the drop in 2024 crop receipts, the largest percentage decline in more than two decades, was due to ‘ample domestic and international supplies’ putting downward pressure on grain and oilseed prices, leading to lower returns, despite higher marketings.
Canadian canola receipts in 2024 amounted to $12.92 billion, down 5.4% on the year, while wheat (excl durum) receipts dropped about 18% to $8.44 billion. Corn receipts fell to $3.1 billion from $3.58 billion a year earlier, while soybean returns dropped 12% to $3,68 billion.
On the livestock side, cattle and calves receipts were up 12.2% to $16.9 billion in 2024, accounting for more than two-thirds of the rise in total livestock receipts. The cattle market continued to record historically high prices, due to steady domestic and international demand for beef, as well as smaller herds in Canada and the United States. In 2024, average prices for cattle and calves were more than 50% above the five- and 10-year averages, StatsCan said.
Hog receipts amounted to $6.32 billion in 2024, up 8.1% on the year, while receipts from the supply-managed sector posted their slowest growth in four years, up 2% to $15.2 billion.
Total farm operating expenses (after rebates) rose 2.7% to $78.5 billion in 2024.
For the second consecutive year, interest expenses led the gain in total farm operating expenses, up 28.6% in 2024 from the previous year. In response to easing inflation, the Bank of Canada began cutting its key interest rate in mid-2024 after more than two years of hikes. Producers took on more debt, driving up interest expenses, StatsCan said.
Livestock and poultry purchases rose 16.4% to $4.5 billion in 2024.
Commercial feed expenses moderated the increase in total farm operating expenses in 2024, falling 10.7% to $10.4 billion. Meanwhile, lower prices pushed fertilizer expenses down, falling 7.2% to $9.1 billion in 2024.
