More Modest than Expected but Decline in 2022 Realized Net Farm Income Still Sharp

The fall in Canadian farm income in 2022 was not as steep as originally expected although it was still a dramatic turn for the worse compared to the previous two years. 

In a farm income report Tuesday, Statistics Canada estimated 2022 realized net farm income for Canadian producers at $11.8 billion, down 7.6% on the year. That is a more modest decline than the 9.5% drop StatsCan was projecting back in May but stands in sharp contrast to the nearly 70% increase posted in 2021 and the 101.6% jump recorded in 2020. 

Excluding down trending cannabis returns, last year’s farm income picture looks a bit better, with 2022 realized net farm income - the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind - down a more modest 5.9%. 

According to StatsCan, total farm cash receipts, which include crop and livestock returns as well as government payments, actually increased year-over-year in 2022, rising 14.6% to $95.1 billion. However, the bottom line was undone by an 18.6% increase in total farm expenses (operating expenses and depreciation) to $83.4 billion. 

Alone, farm operating expenses (after rebates) increased by 19.9% to $73.3 billion in 2022 — the largest gain since 1979 (+21.1%) — and easily surpassing the 9.5% rise in 2021. 

“Farmers faced higher costs for key agricultural inputs, including fertilizer, feed and fuel,” StatsCan said. 

Saskatchewan had the highest realized net farm income in 2022 at $3.84 billion, although that was down a steep 24.4% from a year earlier. Alberta realized net farm income, at $3.03 billion, was up almost 19% on the year, while Manitoba was down 2.1% at $1.55 billion. Ontario realized net farm income came in at $2.53 billion, an increase of just over 2%.