Farm Profits Rising

Farming proved more profitable in 2010 in most provinces, compared to 2009 figures. According to Statistics Canada, net farm income rose 46.1% in 2010, following a 16.6% drop in 2009. Realized net income (the difference between a farmer's cash receipts and operating expenses, minus depreciation plus income in kind) was up in all but two provinces ñ Alberta and New Brunswick. Revenues for oilseeds such as canola and soybeans increased, while wheat, barley and potato income fell due to lower prices for these crops and fewer of them brought to market.

Farm operating expenses fell across the board as fertilizer, feed and pesticide costs dropped enough to more than offset higher labour and fuel expenses.

Total net income adjusts realized net income for changes in farmer-owned inventories of crops and livestock. It represents the return to owner's equity, unpaid labour, and management and risk. Total net income rose to $2.7 billion in 2010, up $131 million from 2009. Declining inventories and production losses hampered further growth.

Farm cash receipts for the first quarter of 2011 have been released by Statistics Canada and there is more good news for farmers for this year. Farm cash receipts include crop and livestock revenues and program payments. A record high of 12.1 billion was received by Canadian farmers with all provinces except Manitoba and British Columbia increasing revenue and with Quebec, PEI and Ontario showing double digit returns. Farm cash receipts had declined 0.2% in 2010. Prices for grains, dried peas and oilseeds rose due to lower supplies and increased demand for biofuels. Livestock, dairy and egg revenues have also been higher higher so far this year.

Self-employed farmers are reminded that the filing deadline for unincorporated businesses is June 15th, 2011 - it's coming right up!

ADDITIONAL EDUCATIONAL RESOURCES:  Master Your Investment in the Family Business