Rising livestock receipts more than compensated for a decline in crop receipts as well as a drop in direct payments.

Every province saw an overall increase, except Saskatchewan, where the crop sector is much larger than livestock.

Total farm cash receipts in Canada were $101 billion last year, up from $98 billion in 2024. However, crop receipts declined from $52 billion to $51 billion, the lowest level in five years.

Livestock surges from $30B to $45B in four years

Total livestock receipts more than made up the difference, going from about $40 billion to $45 billion. In 2021, livestock receipts totalled only $30 billion and have been rising each year since, fueled largely by rising cattle prices.

The other aspect of farm cash receipts is direct payments from governments and various private insurance programs. Those have been declining.

Total direct payments in 2022 were $7.3 billion, with crop insurance being the largest source. With better crops and fewer claims, total direct payments in 2025 were down to $4.8 billion.

Crop insurance payments drop with better harvests

While crop insurance is the largest portion of direct payments, the numbers are a bit deceiving unless you consider the premiums producers pay into the program.

In Saskatchewan for 2025, the StatCan numbers show roughly $725 million in gross crop insurance payments. However, producer premiums were about $469 million. Therefore, net crop insurance payments were $255 million.

That’s down substantially from 2024 when net crop insurance payments in Saskatchewan were $886 million.

Calendar year payments won’t exactly align with growing seasons because some payments are carried beyond the end of the year. However, Saskatchewan had a lot better crop in 2025, with most claims restricted to the southwestern corner of the province.

Alberta did not fare as well. Crop insurance net payments in 2024 were $868 million, while 2025 still hit $615 million.

Net crop insurance payments in Manitoba were $66 million in 2024 and $42 million in 2025.

AgriStability payments nearly double to $905M

AgriStability payments, on the other hand, have been rising, going from $399 million in 2023 to $601 million in 2024 and $905 million last year. Long criticized as ineffectual, more financial advisers now promote the program.

The recent change to allow pasture-related feed costs as an eligible expense should make the program more relevant for livestock producers. As well, improving returns for cow-calf producers should translate into better reference margins in the event of a future downturn.

Payments from AgriInvest accounted for $305 million last year, with $38 million paid in Manitoba, $67 million in Alberta and $99 million in Saskatchewan.

Critics question AgriInvest’s value as research funding shrinks

Since government support is based on one per cent of eligible net sales, total government contributions don’t change drastically from one year to the next.

An increasing number of academics and industry observers are questioning whether the money spent on AgriInvest could be better deployed elsewhere. It’s really a government subsidy of up to $10,000 per farm whether it made money that year or it didn’t.

The forerunner to AgriInvest was the Net Income Stabilization Account, established with somewhat different trigger mechanisms in the early 1990s.

Free money with few strings attached is always popular, but is this the best use of government resources?

Public plant breeding is in jeopardy due to the large government funding cuts to research at Agriculture Canada.

Investment in plant breeding would pay greater dividends to the crop sector than the paltry interest rates achieved on the money accumulating in AgriInvest accounts.

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Net farm income, a broad measure of profitability in the agricultural economy, is forecast to drop 0.7 per cent to $153.4 billion (C$210.1 billion) in 2026 from the year before, USDA said. When adjusted for inflation, net farm income is projected to decrease by $4.1 billion or 2.6 per cent.

Without government payments, net farm income this year would fall nearly 12 per cent to $109.1 billion, according to agency data.

“Government payments are doing a lot of the work in supporting crop producers,” said Wesley Davis, a partner at Meridian Agribusiness Advisors, an agricultural economics consultancy in New York City.

Increasing dependence on gov. support

But farmers, economists and lawmakers warn that even more government support may be needed to offset the impact of low crop prices, a global grain glut, rising operational costs and lost export sales due to Trump-era trade and economic policy changes.

Many farmers are increasingly dependent on federal support to pay their bills — while also taking on record levels of debt — even as government payments near record levels, economists said.

USDA forecast that producers will receive $30.5 billion in direct payment support in 2025 and $44.3 billion in 2026, excluding additional payouts from federal crop insurance indemnities.

Such levels have not been seen since 2020 and 2021 amid COVID-19 pandemic upheaval and trade disruptions during President Donald Trump’s first term.

Farmers suffering losses

On Thursday, USDA said the higher support figures reflect payments from Farm Bill programs triggered by falling crop prices, along with continued high levels of supplemental and disaster assistance.

The data, which is published three times a year, was not released in December due to an earlier federal government shutdown and those findings were incorporated into the regular February report. Agricultural economists said that delay has made it harder to assess stress in the sector.

USDA forecast that farmers’ cash receipts – what they get paid for their crops – would rise this year for corn, hold generally steady for soybeans and fall for wheat. Livestock receipts are expected to drop due mainly to lower egg and milk prices, while cattle receipts will continue to increase.

The chair of the U.S. Senate’s agriculture committee said on Tuesday that many farmers were suffering heavy losses, while more than two dozen former USDA officials and industry leaders cautioned lawmakers that U.S. agriculture faced the risk of a “widespread collapse” in part because of the Trump administration’s policies.

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That’s according to Farm Credit Canada chief economist Desmond Sobool during FCC’s most recent economic outlook on Jan 22.

FCC expects farmers will see another jump in their bills this year. Its farm cost projections expect overall expenses to rise four per cent in 2026 over the previous year.

“If you look back to 2019, which is kind of our base pre-pandemic year, overall farm expenses are up over 50 per cent since 2019,” Sobool said. “In comparison, inflation in Canada overall is up 20 per cent, so you can just see how much more significant the impact of inflation has been on farm expenses.”

WHY IT MATTERS: Canada’s economy, agriculture included, is till trying to navigate volatile seas when it comes to trade and geopolitics, affecting projected farmer profit margins, investment and growth prospects in the agriculture sector and more. However, Canadian cattle prices will continue a run of strong, stable prices.

Sobool’s most energizing message concerned Canada’s new agreement-in-principle with China, which promised to drop Chinese tariffs on Canadian canola seed from 76 per cent to 15 per cent by March and eliminate China’s tariff on Canadian canola meal (at least for 2026) and peas — a boon for the domestic canola crushing sector.

“(Producers) have some certainty that there will be market access for canola this year,” he said.

That was before U.S. President Donald Trump threatened 100 per cent tariffs on Canadian goods if Canada makes a trade pact with China. The U.S. is Canada’s biggest canola customer, worth about $7.7 billion of oil, meal and seed exports.

Cattle wave still rolling

Sobool reported Canadian cow-calf producers and feedlots are set for another year of strong prices, driven in part by moderating feed costs.

Canadian cattle growers are finally seeing signals for expansion of the national herd, which steadily dropped over the drought years of the early 2020s.

The U.S., meanwhile, has its own challenges on herd retention. Heifer retention rates remain at a 75-year low, Sobool said.

Sobool also looked at the number of cows and heifers being sent to slaughter as a percentage of total animals to determine cattle herd trends. Once that percentage dips below 40 per cent, it’s a signal that the cattle herd is expanding. Canada’s percentage is currently at 41 per cent.

“In the U.S. it’s still about 49 per cent through 2025, so in the U.S., we’re still not seeing those market signals and so that’s going to continue to support prices.”

GDP slowdown

Canada’s economy is still growing, but FCC expects that growth to be slow.

The lender is forecasting Canada’s economic growth will slow from 1.7 per cent in 2025 to 1.2 per cent in 2026.

“I understand that what we’re saying here is quite different from consensus on interest rates, because most forecasters are predicting either no change to the overnight rate or even an increase later this year,” said Krishen Rangasamy, principal economist with FCC.

“That may well be the right forecast if the economy picks up materially. But … we think economic growth will weaken this year and if we’re correct about that additional stimulus by the central bank should not be ruled out.”

Uncertainty over the future of the soon-to-be-reviewed Canada-United States-Mexico Agreement (CUSMA) will continue to be a limiting factor, Rangasamy said.

He suspects Canadian exporters in CUSMA’s tariff-free categories such as farm, fishing and intermediate food products have felt above-expected tariff impacts due to confusion over rules of origin requirements, losing their CUSMA compliance in the process.

“Remember that the majority of our exports to the U.S. is tariff-free thanks to CUSMA, and yet, outside of the energy sector, our exporters have really struggled since the U.S. tariffs were imposed,” he noted.

Tariffs placed on Canadian goods have caused U.S. importers to look elsewhere. This has caused Canada’s share of the U.S. market to drop to 11 per cent — its lowest ever — in 2025.

Diversified trade

Although Rangasamy considers Canada’s attempts to diversify trade partners commendable, he was disappointed in the country’s apparent inability to “materially reduce” dependence on the U.S., in light of its 15 free trade agreements with 51 countries.

“We’re not capitalizing on opportunities presented by those trade deals,” he said, citing ignored opportunities presented by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

That agreement was designed to offer Canadian businesses preferential access to the EU market. But some expected big winners when the deal was first inked have failed to see major gains, particularly meat sectors who say regulation conflicts continue to keep them out.

Leveraging the house

This year will also see a large share of Canadian households renewing mortgages at higher interest rates than their origination. According to Bank of Canada estimates, mortgage payments will increase by an average six per cent this year.

“Those households that are renewing their fixed-year, five-year mortgage — which, by the way, is the most popular mortgage product in the country. For those folks, payments will increase by about 20 per cent,” listeners heard.

If there’s a bright spot for Canada, Rangasamy said it’s the federal government’s new focus on ambitious public projects that could rekindle business investment. But don’t expect big results too soon.

“It’s probably not a 2026 story. It’s probably something more like next year or even 2028.”

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Average income for families operating a single farm in Canada grew by 0.9 per cent to $216,021 in 2023 compared to 2021. However, this was driven by higher off-farm income — namely through investment and pension revenue.

Average net operating income fell by 0.6 per cent.

Farm family income is published every two years, StatCan said.

Highlights of the report include:

• Families operating potato farms saw the largest increase at 25.5 per cent growth since 2021. Poultry and egg farmers came in second with 8.6 per cent growth.
• Families operating pig farms saw the largest decline in income — a 21.9 per cent decline between 2021 and 2023. Greenhouse, nursery and floriculture farm families saw a 17.2 per cent decline in average income.
• Average off-farm income increased by 2.2 per cent to $116,788. Off-farm income accounted for 54.1 per cent of total farm income in 2023.
• Prairie farm families earned the highest average total income in Canada, led by Saskatchewan at $264,991 in 2023, Manitoba ($247,707) and Alberta ($242,130)

Farm average net operating income jumped in 2023 by 17 per cent over 2022, according to Agriculture Agri-Food Canada data. The net operating income tracks producers’ revenue minus cash expenses at the farm level. High livestock receipts, driven by strong cattle markets, bolstered the total. Crop prices were also strong for most of the year.

Conditions were less favourable for hog farmers.

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“We’ll probably have another two years of this,” said Steve Nicholson, global strategist of grains and oilseeds with Rabobank.

Grain prices are unlikely to rally much due to a global glut of the major crops.

“We have monster supplies,” he told reporters attending the bank’s Fall Harvest Outlook webinar.

WHY IT MATTERS: Grain farmers need to know when their operations will be profitable again.

Nicholson said it is hard to come up with an outlook for the sector in an environment of trade spats, tariffs and shifting government policy.

“With all the things swirling around, I’m back to the fundamentals,” he said.

He looked at U.S. corn prices dating back to 1900 and discovered that every 25 to 35 years, prices bump up to a new plateau.

Nicholson believes the grain sector is in year 17 of the current plateau, where corn prices have a floor of US$3 per bushel and a ceiling of $7.

Current prices are closer to the bottom of that range than the top due to the large supplies.

He also noted that the price range in the current plateau is a whopping $4 per bu., when in previous plateaus it was $1 to $1.50. That means there is more price volatility.

Nicholson suspects it will be a supply-side shock that jolts the market out of the current doldrums rather than a demand-side shock.

There have been 18 year-over-year declines in global production of the four major crops (corn, soybeans, rice and wheat) since the 1960-61 crop year, most of which were caused by drought.

There have only been five times since 1960-61 where domestic consumption of the major crops has dropped and that was by a fraction of a percentage point.

“Any shortfall in production can move the market very quickly,” he said.

Nicholson pointed out that while global stocks are in the top 10 per cent of all time, the stocks-to-use ratio has been falling every year since 2018-19, a sign that the increase in stocks is not keeping up with the increase in demand.

He also noted that while the volume of stocks has increased, the amount of corn, wheat and rice in the hands of the major exporting countries is low.

“Free stocks are not highly available,” he said.

Soybeans are the exception to the rule, with exporters holding 56 per cent of the stocks.

Nicholson said North American farmers are at the bottom of the typical row crop cycle, where operating capital is drying up.

Farmers are drawing down their operating lines of credit by more than 50 per cent per year, compared to the usual 20 per cent.

They are cutting back on inputs and machinery purchases and attempting to renegotiate land rents.

However, Nicholson said there will probably be two more crop years of losses before farmers once again break even in 2027-28.

That is partially because input costs have been “stickier” than usual. They are coming down, but not fast enough.

U.S. farmers are not doing enough to cut back on inputs, partially because they will be receiving about $40 billion in government payments in 2025, which will be close to the largest subsidy program on record.

Owen Wagner, Rabobank’s grains and oilseeds analyst, thinks current market conditions favour U.S. farmers increasing soybean acres and decreasing corn plantings next year.

However, that could change if trade talks between the United States and China fizzle.

The post Grain farming’s hard times expected to continue appeared first on Alberta Farmer Express.

“Demand for farmland remained strong in the first half of the year regardless of lower commodity prices,” said FCC chief economist J.P. Gervais in a news release.

“Buyers continued to invest, driven by long-term confidence in the agriculture sector and the limited supply of available land.”

The overall range of sale prices per acre has increased “only modestly,” the farm lender said. Provinces that had seen strong growth in recent years are seeing softening farmland prices while regions that had previously seen more modest growth are seeing solid gains.

“Overall, the market appears to be stabilizing,” FCC said in the news release.

Where and why values are growing

Farmland values gained 10.4 per cent year over year between July 2024 and June 2025.

That compares with 5.5 per cent growth in land values in the first half of 2024 and a 9.3 per cent annual increase that year.

Manitoba led all provinces with 11.2 per cent growth in the first half of 2025, with the Parkland and Westman regions seeing the strongest growth. In the Parkland region, large grain operations are building their land bases, FCC said. Alberta and Saskatchewan saw growth near the national average with 6.6 per cent and 6.0 per cent respectively.

New Brunswick saw the second-highest growth with a 9.4 per cent increase January to June. Strong growth in southern New Brunswick, particularly the dairy farming region, drove the increase. Gains in the other Maritime provinces were more modest with Nova Scotia at 1.0 per cent and Prince Edward Island at 2.3 per cent.

British Columbia and Ontario land values remained flat, and Quebec saw 2.6 per cent growth.

Cash receipts steady

FCC noted that farm cash receipts, interest rates and the overall supply of farmland are key drivers of values.

In the first half of 2025, cattle receipts were up 18.3 per cent on record prices. This pushed total mid-year cash receipts up 3.3 per cent. Grain and oilseed receipts rose slightly in early 2025, though this varied by region.

Grain and oilseed receipts are expected to fall by six per cent in 2025 compared to last year. Increased production, the effects of China’s tariffs on Canadian canola and peas and tariffs between the U.S. and China are expected to weigh on commodity prices.

However, easing interest rates and healthy balance sheets carrying over from the record crop years of 2022 and 2023 should lend support to farmland values.

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It certainly wasn’t an overnight process, and it involved a steep learning curve, but Steeves says being involved in Canada’s largest renewable energy, solar power generation project has been a game changer not only for his family’s Yetwood Farms, but for several other family farms in the Lomond area, about an hour north of Lethbridge.

The system of grazing sheep (or really any agricultural activity) under arrays of solar panels is known as agrivoltaics. For most that is not a household term. Agri of course relates to agriculture and voltaic (pronounced vol-tay-ick) refers to some process that generates electricity. You put them together and the term refers producing an agricultural commodity under these solar fields. Agrivoltaics is a relatively new concept to Canada, but has been used with solar power generating projects in the United States and other parts of the world for many years.

The Steeves family were just regular grain farmers, cropping about 6,000 mostly dryland acres of grains and oilseeds when they were approached in 2017 by Calgary based Greengate Power Corporation asking if they would make land available for a solar power project.

“I thought the first phone call was a joke,” says Steeves. “Some sort of scam as they were talking about a large solar project. There was a second call and I said if this is legitimate why don’t you come here and have a meeting with the people to properly explain the project.” So they did. Starting in July 2017, the company met with several farm families in Lomond during a number of meetings, which resulted in contracts being signed in October 2017.

That was the beginning of the Travers Solar Project “a trail blazer among solar power projects in Canada,” says Steeves. The project itself, today the largest solar project in Canada, involved installation of 1.3 million solar panels in arrays covering about 3,400 acres of farmland. The Steeves family has about nine quarters or 1,440 acres being leased to the project, while several nearby farm families leased another 14 quarters or 2,240 acres to Greengate.

It took about two years for the company to obtain all necessary permits. Construction started in 2020 and the project was completed and producing power by late 2022. The $700 million project is designed to generate 465 megawatts of electricity which in general terms is enough to power more than 150,000 homes.

So how did the Travers Solar Project benefit Yetwood Farms and the other producers who leased their land to the project? First of all are the lease payments from the energy company. Depending on the project, lease rates can range from $700 to $1,200 per acre per year. On top of that if the landowners are contracted to look after vegetation control — keep the grass and weeds cut under the panels — that can be worth another $200 to $400 per acre per year.

“When we looked at the project, here we are farming in the Palliser Triangle — the brown and dark brown soil zone — and on average our net return from crop production would be around $70 per acre,” says Steeves. “That’s an average. Some years better and during several years of drought conditions we could collect crop insurance which was less. Whereas on those acres leased to the solar project a person can potentially earn from $900 to $1,600 per acre just to have the project there. We saw getting involved with the solar project as an excellent opportunity to diversify the farm. With mostly dryland crop production and years of drought, this project has perhaps saved our farming operation, along with other family farms in the area.”

But, don’t these solar projects take good farmland out of production? Not at all. That’s were agrivoltaics kick into gear. When these large solar projects were first introduced in Alberta, for example, the asset owners wanted the bare ground underneath the solar arrays covered with forages. But it was soon realized that the real risk to these solar panel arrays wasn’t hail, although that can be concern, but potential for grass fires that could wipe out the whole operation. Hence the need for vegetation control.

There could be mechanical means for removing the forages, but with spacing of 21 feet between solar arrays and only about four feet of clearance under the panels when they are in the table top position, mowing and perhaps even baling the forage for removal would require specialized equipment.

For vegetation control in other solar projects around the world, grazing livestock — namely sheep — under and around these solar panels was a common practice.

“My dad had raised pigs at one time and we did run some cows at different times years ago, but I had zero experience with sheep,” says Steeves.

In preparation for the providing vegetation control for the solar project under construction, Steeves bought 50 sheep in 2020. He wanted to get some idea of what it was like to manage sheep.

“I soon realized that sheep are a lot different than cattle and for a project this size I was going to need some expert help with management,” he says. Steeves did some research, located an expert on sheep, a professor specializing in small ruminant livestock, who was managing a ranch raising sheep and goats connected with the University of Mexico, in Mexico City. He was interested in working on the Yetwood Farms project. In late 2023 he moved to Alberta and has been managing the flock.

Today, Yetwood Farms, which is managing the sheep and vegetation control for the entire Travers Solar Project, is running 2,000 head of breeding females. The plan is to increase that to 3,500 ewes over the next year and within five years grow the flock to about 8,000 head. They have built lambing facilities as well as feedlot for finishing lambs. The plan is to manage the flock so it is producing lambs on a year-round basis. Lambs are finished to an average of 130 pounds and marketed through the Westpine Meats processing plant at Innsifail in south central Alberta.

Steeves says when the flock is fully stocked, it has potential to produce about 13,600 lambs per year, with a total carcass weight of about 850,000 pounds of meat. If the price averages about $5 per pound that meat has a total value of $4.25 million. Along with land lease rates to farmers, agrivoltaics provides further return to producers through sale of agricultural commodities such as lamb.

Interestingly, the wool from the sheep has no value as a fibre. As sheep are shorn annually all wool, which is high in nitrogen, is mixed with manure and composted, with the compost applied to the Yetwood Farms annual crop acres. The farm hires contract shearers to shear the flock. Shearers are paid about $6 per head. A shearer with proper technique can shear up to 30 sheep per hour.

While sheep is a very common commodity for agrivoltaics, he says there are many options. There are a number of research projects across Canada, including Olds College, looking at the potential to produce poultry, hogs, beef cattle, hay and even annual crops under properly designed solar projects.

The sheep flock at Yetwood Farms is managed in an intensive rotational grazing system. The ground beneath the solar panels has been seeded to a forage blend. Right now the flock is divided, with 1,000 head of sheep grazing on about 60 acres and moved weekly. As numbers increase there will be multiple flocks moving through the field of solar panels. With rotational, mob grazing, they are able to run two to two and a half sheep per acre for the grazing season. With more extensive grazing management in the early days, carrying capacity was in the 0.8 to one sheep per acre range.

Steeves says the farm did invest in a low-profile Avant 860i loader which can travel between the arrays. It can be outfitted with a boomless sprayer to apply herbicide. For seeding they also have a small custom built air seeder that works between the solar arrays.

“If we have bare ground the air seeder is probably the best way to get grass established,” says Steeves. “But in areas were we want to renew or add forage species we found the best approach is to hire a drone applicator, apply the seed by air, then turn the sheep on to that area to graze. The hoof action of the sheep works the seed into the soil.”

Shade from the solar panels provides the sheep shelter from the sun and also creates a micro-climatic zone under the arrays, that suits forage production.

As they tried to establish forages during dry years in some areas the kochia took over before the grass. Some areas of the pasture areas were at one time 85 per cent kochia and 15 per cent grass. But through grazing management and seeding where necessary those percentages have been reversed. “We do have a couple areas of foxtail that we will address with herbicide, but for the most part forage production is trending in the right direction,” he says.

Steeves says the agrivoltaics project has been an intense learning experience. “When we started nine years ago, it really was the wild, wild west,” he says. “There were no guidelines, or regulations. We had to learn this system from scratch and we are still learning. There were a number of pain points as we went along, but the fact is that the benefits far outweigh any pain we experienced. It is a diversification opportunity that could benefit many farms.”

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Overall receipts between January and June totalled $49.6 billion, up $1.6 billion from the same period last year, Statistics Canada reported on Friday.

Lower crop insurance payments drove a decline in direct payments. Total direct payments dropped by $584.5 million (20 per cent), led by declines in payouts in Saskatchewan and Alberta.

Prices drive livestock receipts surge

Receipts for livestock rose by $2.1 billion to $21.3 billion in the first two quarters — a 10.8 per cent gain. Higher prices for all livestock except poultry drove the surge.

Cattle receipts were up by $1.2 billion (20.3 per cent) despite a 3.1 per cent decline in marketings, on high cattle prices. Hog receipts rose $436.4 million (10.5 per cent) compared to the same period in 2024 due to strong international demand for pork products, StatCan said.

Supply-managed receipts grew 2.7 per cent to $7.7 billion largely due to a $184.8 million increase in dairy receipts. Turkey receipts fell by $39.6 million due to a reduction in national quota.

Crop receipts steady

Crop receipts were relatively similar to last year at $25.9 billion — a 0.3 per cent rise. For most crops, receipts rose but these were offset by reduced receipts for barley and lower liquidations of deferred crop sales in the West, StatCan said.

Soybean receipts rose by $103.2 million and canola receipts gained $76.4 per cent on higher marketings.

Cereal and grain receipts rose on higher durum receipts — up 197.2 million. Wheat, excluding durum, rose by $122.9 million.

“For most grain crops, higher marketings drove the rise in receipts while lower prices moderated gains,” StatCan said.

Barley receipts fell by $110.1 million as prices and marketings declined.

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The value of the sector totalled $832.5 billion as of Dec. 21, 2024, up by $38.9 billion or 4.9 per cent from the same date the previous year. That compares with 8.5 per cent growth in 2023.

Farm equity rose in every province but gains in Saskatchewan and Alberta accounted for more than two-thirds of the national increase.

Lower crop values weigh on current assets

Farmers’ total assets grew by 6.3 per cent in 2024 to reach $991.5 billion with most of the growth due to the rise in farm real estate value. Farmland value rose 7.0 per cent to $713.3 billion in 2024.

The value of current assets (short-term assets like cash and crop or livestock inventory) fell by 0.8 per cent to $57.9 billion, mostly due to lower values for crop inventory. The value of crop inventories was down by 17.9 per cent to $21.9 billion as crop prices fell by 14.6 per cent, StatCan said.

Poultry and market livestock inventory value grew by 26.6 per cent to $16.5 billion on sharply higher prices. However, inventory fell by 4.9 per cent.

Farmers’ ability to pay interest declines

Canadian farmers’ total liabilities grew 14.4 per cent to reach $159.0 billion at the end of 2024. This was the largest percentage increase in total liabilities since tracking began in 1981 said StatCan. Most of the rise was due to long-term liabilities. Rising liabilities in Alberta, Ontario and Quebec accounted for more than two-thirds of the national increase.

At the same time, farmers’ ability to meet interest payments fell for the second consecutive year. The interest coverage ratio settled at 2.12 at year’s end. This was the lowest ratio since 2007.

A lower ratio indicates that farms are less able to service debt obligations.

The interest coverage ratio continued to deteriorate because of the decrease in farm income, said StatCan. That decrease was due to a decrease in crop inventories and higher interest expenses, it said.

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Farmers’ realized net income fell by $3.3 billion to $9.4 billion in 2024, a nearly 26 per cent decline. Excluding cannabis, the figure improves slightly to $9.7 billion or a 23 per cent decline.

Realized net income is the difference between farm cash receipts and operating expenses, minus depreciation and plus income in kind, StatCan said.

Realized net income fell across all provinces except Nova Scotia and Prince Edward Island. Saskatchewan saw the largest decline — a drop of $1.3 billion — largely due to decreased crop revenues. Farm operating costs also rose by 0.6 per cent.

The preliminary total of farm cash receipts is $97.9 billion for 2024, down $1.6 billion. Receipts were down in five provinces. They were led by Saskatchewan, which saw a $1.3 billion decline, and Manitoba, which was down $433.5 million over the previous year.

Meanwhile, Ontario saw the largest increase in farm cash receipts on the year, up by $179 million at $22.663 billion.

Total crop receipts declined 6.2 per cent to $52.1 billion in 2024, largely due to lower prices for most grains and oilseeds.

Livestock receipts rose nearly seven per cent in 2024 to $39.9 billion, buoyed by higher prices. Cattle and calf receipts gained nearly 12 per cent over 2024 to total $16.7 billion as cattle markets saw record high prices.

Average prices for cattle and calves were more than 50 per cent above five and 10-year averages, StatCan said.

Total farm operating expenses after rebates were $78.3 billion in 2024, up 2.4 per cent from 2023. Interest expenses led the gain, even as the Bank of Canada cut its key interest rate.

Producers took on more debt, which drove up interest expenses. Farm debt rose 14.1 per cent in 2024 — the largest increase since 1981.

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