Ag Canada Sees Record Farm Income for 2021; Decline for 2022

After hitting a new high in 2021, Canadian farm income is projected to decline in 2022 but still remain historically strong.

An Agriculture Canada farm income forecast on Thursday pegged 2021 net cash income at $26.6 billion, up a whopping 49% from the previous year’s record of $17.8 billion. (Net cash income is the main metric Ag Canada uses to measure farm income).

Looking ahead to 2022, net cash oncome is forecast to decline 25.8% to $19.7 billion due to the impact of the 2021 Western Canada drought on supply going to market in the first half of the year. While this might be viewed as a substantial decrease, it is relative to the record levels of 2021 and would still be the second-strongest year on record, Ag Canada said.

The strength in 2021 farm income is attributed to lofty grain and oilseed prices, with overall crop receipts forecast up 17% from a year earlier. Livestock receipts for 2021 are projected sharply higher as well, with strong hog prices contributing to an expected 15% gain. Program payments are forecast higher for the year as well. Although input costs were also up in 2021, Ag Canada said the growth in receipts outpaced the gains in expenses.

Additionally, average net operating income per farm is forecast to have increased by 59% in 2021, from $91,500 in 2020 to $145,000 in 2021. Average farm family income for this past year is estimated at $229,000, up 27% from 2020.

Despite the impact of extreme weather, the global pandemic and trade disruptions, the Canadian ag sector remains “a resilient engine of growth and is playing a key role in re-igniting the Canadian economy,” Ag Canada said.

Final 2021 Canadian farm income numbers are expected from Statistics Canada later in the spring. StatsCan is scheduled to release fourth quarter farm receipts for 2021 on Feb. 28, and its estimates of farm income for 2021 on May 25.