In 2023, Canadian farmers witnessed an 18.3% increase in realized net income, reaching $14.5 billion, according to data from Statistics Canada released on Wednesday. This growth contrasts with a 4.1% decline in 2022 and follows a substantial 69.6% increase in 2021. When excluding cannabis, the realized net income rose by 16.2% to $14.2 billion. Digging beneath the surface, considerable variations are evident in cash receipts and expenses.
Realized net income, defined as the difference between a farmer's cash receipts and operating expenses (minus depreciation plus income in kind), surged primarily due to higher farm cash receipts which grew by 4.4% from the previous year. This increase was driven by significant rises in livestock receipts (+$3.3 billion) and crop receipts (+$1.7 billion), despite a decrease in program payments by $758.4 million.
Farm Cash Receipts Up, Livestock Variable
Farm cash receipts climbed to $99.6 billion in 2023, a 4.4% increase from 2022, fueled by strong livestock and crop marketings. Livestock receipts alone rose by 9.8% to $37.3 billion, marking the third consecutive year of growth. Notably, cattle receipts soared by 25.4% to $13.5 billion, bolstered by a 21.2% rise in slaughter cattle receipts. This was despite a decrease in the number of cattle slaughtered, which fell by 4.5% due to higher feed costs and tight supplies.
In the supply-managed sectors, accounting for approximately 40% of total livestock receipts, gains were also significant. Dairy receipts increased by 3.9% to $8.6 billion, while poultry receipts rose by 8.1%, despite challenges such as avian influenza.
Crop receipts experienced a modest 3.1% increase to $55.7 billion. Wheat, excluding durum, was a major contributor with a 10.6% rise in receipts, driven by a 25.0% increase in marketings despite an 11.6% price drop.
However, certain sectors faced declines. Hog receipts fell by 10.3% to $5.9 billion, primarily due to a significant reduction in slaughter hog prices and the closure of a major pork processing facility in Quebec.
Regional Variations in Income and Expenses
Regionally, changes in realized net income varied. Saskatchewan saw a significant increase of $1.9 billion, attributed mainly to lower fertilizer costs, the largest expense item in the province. In contrast, Quebec experienced a decline of $244.3 million.
Total farm expenses rose at a slower pace than receipts, increasing by 2.4% to $85.1 billion. Noteworthy expense changes included a 39.1% rise in interest expenses and a 36.5% increase in livestock and poultry purchases. Conversely, fertilizer and machinery fuel expenses dropped by 18.9% and 14.1%, respectively, due to improved supplies and lower production costs.
Overall, 2023 was a year of robust financial performance for Canadian farmers, marked by increased realized net income driven by higher farm cash receipts. However, rising expenses, particularly in interest and livestock purchases, and regional disparities presented significant challenges.
