OTTAWA: Canadian farmers’ incomes will decline 7 percent in 2017, falling for the second year in a row but remaining at above-average levels, the country’s agriculture department predicted on Friday. A drop in North American cattle and calf prices from record highs in 2015 is the main reason for the two-year dip, Agriculture and Agri-Food Canada (AAFC) said in a statement. Crop revenues, however, are expected to rise due to a big harvest.
Net cash income, which measures revenue minus operating expenses, is expected to slide by C$1 billion, to C$13.8 billion ($10.52 billion) in 2017, following a 2 percent decline in 2016. Those two years are still expected to be among the highest income years on record. Canadian farmers’ incomes have historically followed the same trend as U.S. farm incomes, but diverged in 2014-15 due to depreciation of the Canadian dollar, AAFC said, which helped Canadian exports. U.S. farm income is forecast to fall 8.7 percent to $62.3 billion in 2017, another blow to an already reeling agriculture sector, the U.S.
Department of Agriculture said last week. [nC3N1AZ02L] Farmers’ income levels are watched closely by companies that sell fertilizer, chemicals and machinery, such as Agrium Inc <AGU.TO> and Deere & Co <DE.N>. Canada is a major wheat exporter and the biggest producer and exporter of canola. Farm Credit Canada, a government-backed lender, said in September that Canadian farmers’ debt would likely reach another record high in 2016, while incomes flatten, but the industry is still in strong financial shape.
