Average net operating income among Canadian farms declined in 2022, undermined by rising expenses.
A Statistics Canada report Thursday pegged average farm net operating income in 2022 at $131,632. That was down 2.9% from a year earlier as a 10.1% increase in operating revenues to $707,635 was outstripped by a 13.6% rise in operating expenses to just over $576,000.
A farm income report released late last year by Statistics Canada put realized net farm income in 2022 at $11.8 billion, a 7.7% decline following a nearly 70% gain in 2021 and a 101.6% increase in 2020. Realized net income, a key farm income metric, reflects the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind.
StatsCan said crop revenues accounted for nearly half of all operating revenues earned by Canadian farms in 2022 at 48.2%, while livestock revenues accounted for 38.3%. The remaining revenues were from program payments, insurance proceeds and other revenues such as custom work and machine rental.
Of the 11 major farm types, grain and oilseed farms had the highest average operating profit margin in 2022, at 28.3 cents/ dollar of revenue. However, the operating profit margin was still down from 2021 amid higher expenses for such things as fertilizer, feed and fuel, StatsCan said.
On the other hand, beef cattle farms reported $522,735 in average operating revenues and $501,661 in average operating expenses in 2022. That translated to 4 cents of net operating income for every dollar of revenue, the lowest among all farm types.
Hog farms had the highest average operating revenues across all farm types in Canada, at $3.4 million. But at the same time, operating expenses were relatively large at $3.2 million. Hog farms had a profit margin of 6.5 cents for each dollar of revenue in 2022.
