Canadian Farms Incomes Squeezed Hard

OTTAWA - Dec 3/04 - SNS -- The cost of running farm businesses in Canada grew faster than income in 2003, resulting in the lowest operating margins for farmers since at least 1990, according to tax records analyzed by Statistics Canada.

Operating revenues per farm increased 2.0% from 2002 to $202,022 on average. At the same time, average operating expenses rose 5.0% to $177,174. As a result, operating margins tumbled 2.4 cents to 12.3 cents per dollar of revenue.

The gain in average operating revenues was partly due to a 4.8% increase in average crop revenues. In the crop sector, sales gains in two commodities in particular played an important role: fruit (+17.2%) and vegetables (+14.8%). Sales of grains and oilseeds rose 4.5% on average, partly the result of a 31.5% increase in soybeans.

Total average livestock revenues declined 3.8% in 2003. Average cattle revenues fell 13.9%, mainly because of the ban on beef trade due to the detection of a single case of bovine spongiform encephalopathy (BSE) on May 20th, 2003. Most other average livestock revenues were up.

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