Saskatchewan farmers, bolstered by good crops and lower expenses, reaped a bigger net farm income in 2009 even as the national figure edged downward.
However, new statistics for the first quarter of 2010 suggest there are clouds on the horizon.
Realized net farm income in the province grew to $1.9 billion last year from $1.6 billion in 2008, says a Statistics Canada report released Tuesday.
The better bottom line in Saskatchewan was, in part, due to a 6.6 per cent decline in farm expenses such as machinery, fuel and fertilizer in 2009, after the province’s farmers weathered a 13.5 per cent spike in expenses the previous year, the report found.
On a national scale, realized net farm income — the difference between a farmer’s cash receipts and operating expenses, minus depreciation plus income in kind — dropped by $10 million, or less than one per cent, to $3.6 billion.
The revenue from crops increased about four per cent in Saskatchewan in 2009 and grew less than one per cent nationally as a drop in prices was offset by an increase in the quantities sold, Statistics Canada reported.
"(2009) was a pretty solid year and that was a result of pretty fair commodity prices and large production numbers," said Greg Marshall, president of the Agricultural Producers Association of Saskatchewan, adding the province fared well compared to some other provinces due to its diverse mix of crops.
But Marshall said the report also highlights the ongoing challenges in the livestock sector.
Saskatchewan livestock receipts were down 15 per cent in 2009, and dropped almost five per cent nationally, due to a "sharp decline" in the number of animals exported as new food labelling legislation came into effect in the United States. There was also less demand for meat products due to the global recession, the report said.
Marshall said cattle and hog prices have shown some improvement in recent weeks, but producers "have had some serious losses in the past they’ve got to be able to recover from."
Saskatoon agricultural economist Richard Gray said Saskatchewan’s large grains and oilseeds sector was the big reason the province accounted for more than half the national realized net farm income.
"We’re the dominant grain producer. . . . The prices were off a little bit but they were still pretty good," Gray said.
"Livestock was under some pressure," he said, citing high feed grain prices and fallout from the H1N1 flu outbreak being dubbed swine flu as some of the challenges.
Meanwhile, data for the first quarter of 2010 also released Tuesday shows the revenue farmers are getting for livestock and crops has fallen from a year earlier.
Farm cash receipts, which also include the money farmers get from program payments, are down 14 per cent in Saskatchewan in the first quarter. Nationally, receipts are down 12.3 per cent compared to the same time period in 2008.
"The slide in grain and oilseed prices has persisted since they peaked in 2008, as world grain and oilseed supplies continued to grow," Statistics Canada reported.
"On the livestock side, both the number of animals sold and the prices received for cattle and hogs were lower."
An Agriculture Canada forecast released earlier this spring projected that realized net farm income could decline 55 per cent in Saskatchewan in 2010 to $980 million, and national net farm income could drop 90 per cent from 2008.
(REGINA LEADER-POST)
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