Crops Boost 2020 Canadian Farm Cash Receipts

Mar 03, 2021

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A banner year for crop producers pushed Canadian farm cash receipts to a solid year-over-year gain in 2020, offsetting a drop in livestock receipts.
 
A Statistics Canada farm income report Tuesday pegged total national crop receipts for this past year at $41.88 billion, up 14.2% from a year earlier and the largest annual gain in eight years. The increase in crop receipts was enough to offset a 0.8% decline in livestock revenues to $26.36 billion. With government payments for the year up almost 11% to $3.45 billion, total farm cash receipts – including crops, livestock and government payments - amounted to $71.7 billion, an 8.1% increase from 2019.
 
Farm cash receipts were up in seven provinces, led by Saskatchewan (+$2.6 billion) and Ontario (+$1.3 billion), which accounted for over two-thirds of the national increase. Manitoba farm cash receipts were up 5.7% to just over $7 billion and Alberta receipts gained about 3% to $15.46 billion.
 
However, cannabis did have an outsized impact on 2020 total crop revenues, with receipts for the second full year of legalized recreational use soaring almost 74% from a year earlier to just over $4 billion. Stripping out cannabis from both 2019 and 2020, total crop receipts this past year would have been up a more modest 10.2%.
 
The demand for dried cannabis was spurred by the introduction of edibles, cannabis-based drinks and topicals in late 2019 and early 2020, StatsCan said.
 
For most other grains and oilseeds, StatsCan attributed the year-over-year increase in receipts to strong export demand. Grain exports were further boosted by an early Prairie harvest and rail companies having higher capacity to carry agricultural commodities in the wake of lower demand and movement of petroleum products due to the pandemic.
 
Canola receipts increased $1.6 billion to $10.2 billion as exports in 2020 increased (+42.8%) to 11.8 million tonnes, with just over half of total canola exports attributed to China, Japan and Mexico. Domestic seed crushing also increased (+7.1%) to 10.3 million tonnes in 2020.
 
Farm cash receipts for wheat, excluding durum, rose $747.4 million to $6.1 billion because of higher marketings (+15.2%). Exports of wheat were up 14.3%, with China purchasing 13.9% of Canada's total wheat exports in 2020. The expansion of China's hog herd in 2020 increased its need for feed grains following the African swine flu outbreak in 2019, StatsCan said.
 
Durum wheat receipts rose by $328.9 million to $1.7 billion. Exports were up 16.9%, with Italy, Morocco and the United States accounting for just over half of total durum exports.
 
Lentil receipts jumped $1 billion to $1.9 billion on higher marketings (+55.4%) and prices (+38.7%). Combined exports to India and Turkey almost doubled, accounting for almost half of lentil exports. India reduced its import tariff in June to allow more Canadian lentils.
 
Receipts for most other specialty crops also increased sharply in 2020, although canary seed and chickpea revenues did decline.
 
The decrease in livestock receipts this past year was largely attributable to a 4.9% decline in cattle receipts, down to $8.3 billion. In contrast, dairy receipts rose 1.9% to $7.1 billion, which helped to offset the large decline in cattle receipts.
 
Slaughter cattle accounted for 82.5% of the overall decline in cattle receipts. The $352.4 million decrease (-5.5%) in slaughter cattle receipts was attributed to pandemic-related challenges faced by cattle processing plants in 2020, which contributed to lower prices (-3.0%) and marketings (-2.6%). International exports declined since Canada's largest export market for cattle, the US, also faced COVID-19 outbreaks at processing facilities, resulting in temporary plant closures and slaughter backlogs.
 
Hogs fared better in 2020, with receipts up 1.5% to $4.7 billion on higher marketings (+5.7%). Hog slaughter receipts rose $138.1 million, while international exports fell by $58.3 million on lower prices (-17.2%).
 
Supply-managed receipts accounted for 44.2% of total livestock revenue in 2020. Farmers posted higher receipts for milk (+1.9%), eggs (+7.2%) and chickens for meat (+0.8%), but lower receipts for turkey for meat (-4.2%).
 
Meanwhile, Canadian farmers in 2020 received $340.1 million more in direct government payments compared with a year earlier, reaching $3.5 billion in 2020. Payments rose in five provinces, led by Alberta (+$214.4 million) and Quebec (+$109.5 million). Payments fell in the Atlantic provinces (-$38.2 million) and Ontario (-$25.6 million).
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