Farmers’ net income hit record $4.2B in ’15

Realized net income for Saskatchewan farmers set another record in 2015, growing by 38 per cent to $4.2 billion, according to Sask Trends Monitor.

“Preliminary estimates for farm incomes in 2015 have been released (by Statistics Canada). They show that Saskatchewan farmers had another good year — the fifth in a row for net cash income to exceed $3.5 billion.’’

And 2016 is shaping up to be another strong year for Saskatchewan farm income, says the report’s author, Doug Elliott, publisher of Sask Trends Monitor.

“On the revenue side, gross receipts from crops grew by 13.3 per cent to reach $11.1 billion. A 13-percent increase in average crop prices was the main reason. Receipts from livestock and products fell by 2.5 per cent and program payments dropped by 4.2 per cent,’’ Elliott said in the May edition.

Total expenditures were near 2014 levels with a decline in fuel prices and no change in spending on fertilizer and pesticides. “This meant that all of the increase in revenues went to the bottom line and net cash income grew by 28 per cent to $5.8 billion,’’ Elliott said.

Realized net income, which is considered a better measure of profitability than net cash income because it takes into account depreciation on machinery and equipment, grew by 38.2 per cent to reach $4.2 billion in 2015 — an all-time high for the province.

Total net income, which adjusts for changes in inventory, doubled to $2.9 billion last year, largely due to farmers selling the remaining grain from the massive 2013 crop.

“The outlook for 2016 is positive. Crop prices have increased while fuel costs are even lower. The crop is in early and growing conditions have been good. Ranchers are still enjoying cattle prices that are well above the long-term average,’’ the report said.

“This is all good news; a good year for agriculture is just what the provincial economy needs right now.’’

According to BMO Capital Markets commodity price index for May, the agricultural index edged up 0.6 per cent last month based on a “thoroughly mixed performance across all components.” Canola prices gained 4.8 per cent, while hog prices shot up 10 per cent. These gains, however, were largely offset by a modest drop in wheat prices and a 6.8 per cent slide in cattle prices, the BMO said.