Gross Farm Incomes Plunge to 8-year Low
OTTAWA - May 28/02 - SNS -- Canadian farm cash receipts plunged 5.4% below year earlier levels to an eight-year low during the first quarter of 2002, according to numbers compiled by Statistics Canada.
Crop receipts amounted to $3.3 billion, down 14.5% from the previous five-year average as lower deliveries for most of the major grains and oilseeds more than offset the increase in prices for all of them.
On a provincial basis, the biggest net decline was recorded in Manitoba, where farm cash receipts during the opening quarter of the calendar year were down 4.6% at $927 million. Cash receipts in Saskatchewan dropped 1.5% to $1,876 million, while those for Alberta were down 1.1% at $2,054 million.
Farm incomes in eastern Canada went the opposite direction. Cash receipts in Ontario were up 1.8% at $1,935 million, while Quebec boasted a 4.4% increase to $1,237 million and New Brunswick registered a 22.8% jump in gross farm sales at $113 million.
Canola producers, who experienced the largest decline, recorded receipts of $321 million during the first quarter, down 43.4% from the same three months last year. Despite an increase of almost one-third in prices, marketings fell 57.2%. The decrease in deliveries was mainly due to lower exports to China, which normally buys canola during the summer and fall, but purchased large quantities during the early part of 2001.
The next largest decrease was wheat (excluding durum) as lower payments from the Canadian Wheat Board (CWB), as well as lower deliveries, offset a 17.5% increase in prices. The timing of the final CWB payment - January 2001 for the prior crop year and December 2001 for last crop year - accounted for the decline in CWB payments in the first quarter of 2002. A slight recovery in prices during the last months of 2001 encouraged farmers to sell the major part of their crop during the fall. As a result, low stocks led to reduced deliveries in early 2002. Receipts were $463 million, 22.4% below the level reached for the same period in 2001.
Barley receipts plunged 40.1% to $121 million, while receipts for durum wheat fell 35.9% to $125 million. As in the case of wheat (excluding durum), the timing of final CWB payments, along with low stocks at the end of 2001, contributed to these decreases. The low stocks led to reduced deliveries early in 2002.
The decrease in receipts for most of the major grains and oilseeds was partly softened by higher liquidations of deferments. In anticipation of reduced returns in early 2002, farmers deferred a larger portion of their crop receipts in 2001. As a result, the liquidations were up 39.4% to $747 million during the first quarter of 2002, the highest value in three years for this period.
After two consecutive years of decline, potato receipts rose 38.2% to a record $235 million on the strength of higher prices. The increase in prices can be attributed to the large decline in potato production in 2001, which placed strong upward pressure on prices.
Cattle receipts for the first quarter of 2002 were $1.9 billion, up 10.1% from the same period last year. This increase was driven by a 13.1% rise in the number of head sold in the first quarter of 2002, while overall prices remained unchanged. Nearly three-quarters of the increase in head sold was due to cattle being exported abroad, largely to the United States, while the rest resulted from an increase in the number slaughtered.
Hog receipts for the first quarter of 2002 were $945 million, up 6.8% from the first quarter of 2001. This was largely due to an 8.7% increase in the number of hogs marketed, as overall prices remained steady. Over one-half of the increase was due to the rise in slaughter hog receipts, as the increase in number slaughtered offset the marginal decrease in price. The remainder was due to an increase in the number and price of hogs exported internationally.
Program payments also declined during the first quarter. However, both declines were offset by a jump in livestock revenues, which rose 6.6% to $4.8 billion. This increase was the result of higher receipts for cattle and to a lesser extent hogs. As a result, total cash receipts for the first quarter increased a slight 0.6% to $8.9 billion, 9.3% over the average for the previous five years.
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