Farm Cash Receipts Projected to Rise in 2022

Canadian farm cash receipts will increase again in 2022, although the gains will be more modest compared to a year earlier, according to a Farm Credit Canada forecast.

Released Tuesday, the FCC forecast suggests overall farm cash receipts will rise 4.6% to $82.9 billion this year, compared to an expected 10% advance to $79.23 billion for 2021.

The 2022 forecast assumes strong crop prices will continue this year, outweighing an expected decline in deliveries in the wake of last year’s punishing Prairie drought. The drought slashed the production of many crops by one-third or more and meant that a good share of the 2021 harvest was actually sold back in the fall, leaving less to be sold in the New Year.

(FCC’s forecast for 2021 incorporates Statistics Canada farm cash receipt estimates for the first three-quarters of the year and data from various other sources.)

Among the Prairie provinces, Saskatchewan is forecast to see the biggest rise in 2022 farm cash receipts versus a year earlier, up 6.6% to $18.5 billion. Manitoba cash receipts are projected to rise 2.2% to $8.33 billion, while just a 1% increase is expected for Alberta to $17.9 billion. In Ontario, where producers enjoyed a strong production year, particularly in terms of corn and soybeans, this year’s farm cash receipts are seen rising 6.1% to $19.2 billion.

In terms of individual crops, FCC expects durum to be the strongest performer in 2022. Durum cash receipts for the year are estimated to reach $2.84 billion, up a whopping 32.6% from 2021. On the other hand, wheat (excl durum) receipts are projected to ease 0.2% to $6.94 billion. Canola receipts in 2022 are also seen declining slightly from 2021 (-0.4%) to $11.94 billion.

Barley receipts are forecast to decline 12% to $1.24 billion in 2022 but oat returns are expected to increase 11.3% to $831 million.

As for corn and soybeans, the FCC forecast predicts increases of 13.7% and 9.9% in 2022 receipts, respectively, to $2.94 billion and $3.27 billion.

FCC’s outlook for the livestock sector is mixed, with 2022 receipts for cattle and calves projected to total $10.59 billion, up 4.3% from last year. In contrast, hog receipts are expected to dip 1.8% to $6.12 billion.

FCC warned that farm cash receipts are only half of the equation for measuring profitability. Indeed, growth in farm cash receipts does not necessarily mean that farm profits are increasing - especially this year with the rapid rise of farm input costs.