Canadian Farm Incomes Plunge

OTTAWA - May 26/06 - SNS -- First-quarter market cash receipts for Canadian farmers fell to their lowest quarterly level in a decade, according to Statistics Canada, because of a substantial decline in revenue from crops and a marginal drop in livestock receipts.

Market receipts, or revenues from the sale of crops and livestock, fell to $7.5 billion in the first quarter of 2006, down 3.4% from the same period last year.

Crop producers continued to contend with low commodity prices as their revenue tumbled 8.0% to $3.0 billion. This level was 11.3% below the previous five-year average between 2001 and 2005. Abundant world grain supplies and a strong Canadian dollar continue to depress prices.

At the same time, livestock receipts edged down 0.1% to $4.5 billion, with a decline in hog receipts offsetting gains in the cattle and calf sector. This level was at par with the previous five-year average, a period which included the impact of the bovine spongiform encephalopathy (BSE) crises that closed the border to the United States.

Farmers received $1.6 billion in program payments during the first quarter, down 2.6% from the same three months last year. However, the amount disbursed to farmers through various programs was $413 million above the 2001 to 2005 year average.

Including these payments, total farm revenue for January to March reached $9.1 billion, down 3.3%. Overall, total receipts for the first quarter were 0.3% above the previous five-year average.

Provincially, farm cash revenue declined in Ontario and Quebec, mainly the result of lower hog receipts, and in Saskatchewan and Manitoba, where grain and oilseed were responsible. The largest increase in total receipts (+14.7%) occurred in Prince Edward Island as potato prices rebounded.

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