Net Cash Income is forecast to see slight declines in 2016 and 2017, but will remain above the 2011-2015 average. That prediction comes from Agriculture and Agri-Food Canada’s 2017 Canadian Agricultural Outlook.
Released on Feb. 17, the report provides a forecast of farm income in the agricultural sector for the previous and current calendar years and looks ahead to longer term trends that could impact the agriculture sector.
Ag Canada says most indicators suggest a continuing positive economic situation for the sector. A growing world population, increasing disposable incomes in developing nations and increasing trade in farm products present opportunities to further grow the Canadian agriculture sector.
The primary driver of declining income is weakness in North American livestock markets as cattle and calf prices descend from record high levels observed in 2015.
Crop receipts are expected to increase in both 2016 and 2017 due to strong marketings, or volumes marketed, of canola in 2016, and an overall increase in grain marketings in 2017 as the large crop harvested last fall works its way through the grain marketing system.
Canadian Agricultural Outlook Highlights:
- Net cash income in 2016 is estimated to experience a modest 2% annual decline to $14.8 billion.
- A decline of 7% to $13.8 billion is expected in 2017, however 2016 and 2017 are still expected to be the second and fourth best years on record, respectively.
- Livestock receipts in Canada are expected to decrease by 7% in 2016 to $23.9 billion as a result of downward pressure on North American red meat prices from growing meat supplies in the U.S. with a further decline of 4% for 2017.
- Crop receipts are expected to increase 2% to $32.6 billion in 2016, and increase by a further 1% to $32.9 billion in 2017.
- With lower market receipts anticipated in both forecast years, program payments are expected to make up some of the shortfall, increasing by 24% in 2016 to $2.6 billion, and by a further 22% in 2017 to reach $3.2 billion.
- Farm operating expenses are forecast to decline by about 1% in 2016, to $44.2 billion, and increase by 2% in 2017 to $45.1 billion.
- The net worth of the average farm is expected to increase, reaching $2.8 million in 2017.