FCC Raises 2022 Farm Cash Receipts Forecast

Farm Credit Canada (FCC) is now projecting a bigger increase in 2022 Canadian farm cash receipts compared to a year earlier in the wake of rising inflation and the war in Ukraine. 

In a forecast Tuesday, FCC said it expects farm cash receipts – which include payments from crop and livestock sales, as well as government payments – to increase by 15.9% to $95.95 billion this calendar year. That is well above FCC’s initial forecast in January of a 4.6% increase in farm cash receipts and would top the gain of 14.9% seen in 2021. 

“Major disruptors like the war in Ukraine made our January farm cash receipt forecasts obsolete,” FCC said. “This update captures the available information and makes us appreciate how much can change in the ag economy in a few months.” 

The Russian invasion of Ukraine, which was launched in late February, has sent global prices for several agricultural commodities sharply higher, particularly wheat. Meanwhile, soaring inflation has added to the upward pressure on prices. Canada's inflation rate rose at a 6.8% annual pace in April, a new 31-year high, while US inflation surged 8.6% in May compared to a year earlier. 

Total crop farm cash receipts are now forecast by FCC to increase 30.7% to $42.72 billion in 2022, compared to its January projection of a 4.4% rise to just over $34 billion. In calendar year 2021, crop revenues amounted to $32.69 billion, up 12.2% from the previous year. 

Cattle receipts are forecast by FCC to grow 5.2% to $10.71 billion in 2022 (versus the January projection of a 4.3% increase to $10.59 billion), while hog receipts are now seen climbing 6.5% to $6.57 billion. Back in January, FCC was expecting hog receipts to slip 1.8% to $6.12 billion. In 2021, cattle receipts were up 10.9% to $10.18 billion, and hog receipts soared 32.5% to $6.17 billion. 

Manitoba cash receipts are forecast by FCC to climb 20.5% to $10.19 billion in calendar year 2022, followed by Alberta with a 19% rise to $22.26 billion and Saskatchewan with a gain of 17.2% to $22.41 billion. Ontario farm cash receipts are pegged at $20.4 billion, up 10.5%. 

In a farm income report released last month, Statistics Canada pegged national farm cash receipts for the first quarter of 2022 at $23.3 billion, up $3.5 billion or 17.6% from the same quarter in 2021.