Agriculture and Agri-Food Canada has completed an analysis of farm income for 2020 and 2021, and the results show that Canadian farm income and the value of farms is expected to be at an all-time high.
Minister of Agriculture and Agri-Food Marie-Claude Bibeau shared the results of the analysis while speaking at the annual meeting of the Canadian Federation of Agriculture (CFA).
"Despite all the challenges they have faced because of COVID-19, the men and women in the agriculture sector have stepped up to keep our grocery store shelves stocked. Today's farm income forecast and our strong export performance last year are welcome signs that Canadian farmers are finding success during these unprecedented times," said Bibeau.
The agriculture sector is expected to see significant growth in key financial areas for 2020 and 2021.
Net cash income (NCI) is forecast to have grown by 21.8 per cent in 2020, from $13.5 billion in 2019 to $16.5 billion in 2020. In addition, farm-level income is also forecast to have increased in 2020, with average net operating income (NOI) per farm increasing by 25.4 per cent, from just under $76,000 in 2019 to approximately $95,000 in 2020. Average farm family income is forecast to have increased by 8.6 per cent to just over $194,000 in 2020, driven by increases in NOI from farming.
The grains sector had a very strong year, contributing to an 11.9 per cent increase in overall crop receipts. However, disruptions to the workforce, shifting international trade patterns, and fluctuating commodity prices have caused challenges, including for some parts of the crop sector, such as horticulture. Livestock receipts were forecast to have declined 1.9 per cent, largely due to negative impacts of COVID-19 on the red meats sector.
Looking ahead to 2021, there continues to be uncertainty surrounding COVID-19. However, based on the expectation that the current situation continues to return to normal market conditions, NCI is forecast to further grow in 2021 by 6.8 per cent to $17.6 billion. Average farm-level NOI is forecast to increase 8.5 per cent to approximately $103,000 per farm, and average farm family income is forecast to grow 7.2 per cent to just under $208,000. Net worth is forecast to reach $3.5 million per farm, up 2.9 per cent from 2020 levels.
Building on this income forecast, the sector also had a strong export showing in 2020, reaching nearly $74 billion up from $67 billion in 2019. This brings the government close to achieving its target of $75 billion in agri-food and seafood exports by 2025. The sector has shown resilience in posting a record performance for agriculture and agri-food exports, despite COVID-19 and its challenges.