Canadian farm income is expected to remain strong for the next decade, according to a report released on Monday by Agriculture and Agri-Food Canada.
The Mid-Term Outlook forecasts relatively strong international grain and oilseed prices, and modest improvements for the red-meat sector. AAFC also projects average net operating income for farmers in 2011 will reach a record level of just over $65 thousand.
"It certainly is an optimistic report. Certainly we've seen good commodity prices in 2011, but with the production challenges we've had with flooding and 25 percent of our acres going unseeded, we did not get the opportunity in Manitoba to capitalize on these good prices," says Doug Chorney, President of Keystone Agricultural Producers.
"The report projects a 10 years of strong demand, so that gives us a real reason for optimism for the future of our industry. With Manitoba being a big exporter producers are in a position to be part of that success story. We just hope the weather cooperates and we are able to do that," he says.
Chorney notes the strong prices and optimism about the future are quickly translating into higher costs for producers. Higher grain prices have been capitalized into higher land costs.
"That happens very rapidly. Bred cows are also going at record prices for cattle producers, so there's some concern about how they can sustain those levels. You don't always know what you're going to be selling your calves for and you don't know that grain prices are going to remain strong," he says.