Alberta Farmers Go Into the Red in 2009, Says StatsCan
« Albertans Should Be On the Alert For Lyme Disease | Home | Hemisphere GPS Unveils New Software »
Statistics Canada has released a report showing that Alberta farmers had a record tough year of it financially. Although expenses declined for the first time since 1986, cash receipts came in even lower, plunging the province’s agricultural sector into the red.
Image: jscreationzs / FreeDigitalPhotos.net
Overall, reports the statistics-gathering organization, Albertan farmers lost $403 million on cash receipts of $9.3 billion. Cash receipts the previous year came in at $1.5 billion, with farmers benefiting from the high prices of commodities.
In a statement about the report, ATB Financial’s Chief Economist noted that “farming is not for the weak of heart,” and cited “volatile commodity prices, poor weather and the fluctuating Canadian dollar” as some of the causes “trouble.”
Although commodity prices and cash receipts were down in 2009, observed the economist, the most significant reason for the drop in income was the amount of inventory that was being held by producers, which declined over the year. Net income moved from its previous small gain of $399 million down to a loss of $403 million. Net income is calculated by taking the difference between farm cash receipts and operations expenses, including depreciation, income-in-kind, and adjustments for changes in inventory.
Across the country, livestock receipts fell by $900 million down to $17.9 billion, for the most part, due to a drop of 30 per cent in the number of hogs and cattle that were exported to the U.S. – most likely as a result of the country-of-origin labeling regulations. The global recession also contributed to lower demand.
Program pay-outs were decreased in 2009 as well, which contributed to the decrease in cash receipts. Payments from programs like the AgriStability program declined by as much as 20 per cent, in some cases as a result of strength in the grain and oilseeds sector.
Farm expenses fell for the first time since 1986 – by four per cent. This decrease followed the previous years’ increases of nine per cent and 7.6 per cent in 2008 and 2007, respectively. Depreciation charges were mildly offset by strong decreases in expenses like fuel, interest and fertilizer.
Operating expenses ran at about 80 cents for every $1 in receipts earned by farmers, slightly less than last year’s 81 cents.
