The federal government expects grain and oilseed prices to stay high, input inflation to moderate and a rebound for cattle and hog producers
Strong commodity prices and healthy world demand have put Canadian farmers in an enviable position, says Agriculture and Agri-Food Canada in its annual crystal ball look at the industry.
Net income for most producers will be at or above record levels once all the data for 2012 is added up, thanks to better-than-forecast crop prices and a moderate recovery in the livestock sector, the department says. And it predicts robust markets this year should increase farm receipts more than enough to offset higher operating expenses.
“It’s a great time to be in farming,” Agriculture Minister Gerry Ritz told the recent annual conference of the Canadian Federation of Agriculture.
With exports rising 7.4 per cent to a record $47.7 billion last year, the agriculture and food sector, which employs one in eight Canadians, “played a key role in stabilizing the economy during the recent recession,” he added. Later he told reporters that “the last few years have seen a steady growth in farm income. Producers have taken on significant debt load, but they can handle it.”
Senior officials said increased overseas crop production and an easing of the U.S. drought will moderate grain and oilseed prices during this year. But they said they also expect demand for grains and oilseeds for food, feed and biofuel to continue to rise, and for the loonie to stay near par with the U.S. dollar. Livestock prices are predicted to rise because farmers reduced herds in recent years and, coupled with more normal feed prices, pig farmers should see their fortunes rise. Input prices are expected to be in line with the general rate of inflation.
Net cash income at the sector level is expected to reach $13.1 billion in 2012 while farm-level average net operating income is forecast to be $74,190. Add in off-farm income, the average total income of farm families is projected to reach $127,106 in 2012 and $131,947 in 2013.
On the balance sheet, average net worth per farm is expected to reach $1.8 million in 2012 and $1.9 million in 2013.