The increase followed a 4.1 per cent decline in 2022 and a 69.6 per cent increase in 2021. However, total net income, which adjusts for changes in farmer-owned inventories of crops and livestock was down on the year.

Realized net income is the difference between a farmer’s cash receipts and operating expenses, minus depreciation, plus income in kind.

Total farm cash receipts rose 4.4 per cent compared with 2022.  Higher prices for cattle and calves resulted in increased livestock receipts while higher crop marketings contributed to increased crop receipts. Program payments decreased $758.4 million in 2023, as much of the relief related to the 2021 drought had been paid out in 2022, said StatCan.

Total expenses (after rebates) increased at a more modest pace of 2.4 per cent in 2023. Farmers faced higher costs for interest expenses (+39.1 per cent) and livestock and poultry purchases (+36.5 per cent), while key agricultural inputs, such as fertilizer and lime (-18.9 per cent) and machinery fuel (-14.1 per cent) declined following gains in 2022.

Saskatchewan saw the largest increase in realized net income, rising by C$1.9 billion on the year to hit C$6.065 billion. Manitoba’s realized net income was up by C$227 million at C$1.823 billion, while Alberta saw realized net income up by C$374 million at C$3.528 billion.

To the east, both Ontario and Quebec reported reductions in realized net farm income, with Ontario down by C$67 million at C$2.501 billion and Quebec posting a C$244 million drop at C$601 million.

The gains in the Prairie provinces were mainly the result of a drop in fertilizer prices, the largest expense item for grain growers, while lower hog receipts were the main factor in the decrease in Quebec.

While realized net income was higher for Canadian farmers overall, net income decreased by C$8.9 billion on the year to come in at C$12.8 billion in 2023.

Total net income is realized net income adjusted for changes in farmer-owned inventories of crops and livestock. It represents the return to owner’s equity, unpaid farm labour, management and risk. In 2023, the year-end inventories were lower compared with 2022 due to increased marketings. Inventories in 2022 were higher as result of better growing conditions, which led to higher production following the drought in 2021, according to StatCan.

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That’s according to the official 2023 and 2024 estimates released February 16 by Agriculture and Agri-Food Canada.

For 2023, net cash income (NCI), the main metric Agriculture and Agri-Food Canada uses to measure farm income, is forecast to have increased 13 per cent to a new record of $24.8 billion.

In a media release AAFC noted that growth in expenses and income was forecast to be “much more modest” than 2021 and 2022, but the growth in farm receipts outpaced the increase in expenses, resulting in a new record for net cash income.

The strong economic performance for production agriculture came against a challenging backdrop, AAFC noted, including a drought in Western Canada, extreme weather events across the country and global conflicts such as the war in Ukraine.

AAFC’s release stated “…this continued growth of overall farm income shows that despite the uncertainty and volatility of the past year, the sector remains resilient.”

The largest driver of this expected increase is a forecasted increase in livestock receipts of almost 10 per cent, to $37.3 billion.

Cattle receipts saw price-driven growth that, combined with moderate growth in receipts from the supply-managed sector, more than offset an expected decline in hog receipts.

Crop receipts were also forecast to have grown four per cent to $56.0 billion, as improved crop production largely mitigated declining prices.

Operating expenses are forecast to have increased only two per cent to $74.9 billion, well below the 20 per cent increase seen in 2022. While some key inputs, such as labour and interest expenses, were seen to have continued increasing, others, such as fertilizer and fuel expenses, are expected to have come down.

Similar results are expected for average net operating income (NOI) per farm, which is forecast to have increased by 17 per cent in 2023 to $155,000, compared to $132,000 in 2022. This increase is 34 per cent above the 2018-2022 average.

Average farm family income, which includes income earned off-farm, is forecast to have increased by 11 per cent to $239,000 in 2023. Increases in average NOI are expected for all farm types except for hog farms and poultry and egg farms.

Looking ahead to 2024, net cash income is forecast to decline 14 per cent to $21.3 billion, as cash receipts are forecast to fall slightly, with expenses modestly increasing, although net cash income would still be 28 per cent above the 2018-2022 average.

Under the assumption of a normal production year, crop receipts are expected to decline five per cent as prices continue to fall. Livestock receipts are forecast to continue increasing, but at a much less aggressive rate of two per cent, as growth in cattle prices is forecasted to slow down.

Average farm and farm family incomes are expected to follow a similar trend.

–Gord Gilmour is Sr. Editor of News and National Affairs for Glacier FarmMedia. He writes from Winnipeg.

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Net income was under the LSEG consensus forecast of 724 million reais, and far below the whopping four billion-real gain in the third quarter of 2022.

In a financial statement, the company said adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at 5.4 billion reais, above consensus estimates of 5.15 billion reais.

JBS felt pain across key business divisions and posted net revenues of 91.4 billion reais, down 7.6 per cent year-on-year.

In the U.S., the company’s biggest market by sales revenue, beef margins fell sharply as reduced cattle herds limited the availability of animals for slaughter and raised costs, a situation also affecting rival Tyson Foods.

Citing USDA, JBS said U.S. beef exports were down 19 per cent year-on-year through end-September, mainly due to supply restrictions combined with lower Asian demand, which hurt the firm. The three main destinations of U.S. beef exports remain South Korea, Japan and China, it added.

Also in the U.S., wholesale pork prices fell about seven per cent in the quarter from a year ago, as companies made an effort to reduce stock levels, according to JBS.

The silver lining for pork was the international market, as JBS cited data from the USDA showing a 12 per cent increase in pork exports, especially to Mexico and Canada, from January to September.

In its local Seara processed foods divisions, revenues dropped 13.3 per cent year-on-year to 10.2 billion reais as export sales plunged on a persistent global chicken oversupply.

Seara’s exports in dollars slid 14 per cent from the year-ago quarter to $1 billion on lower export prices in the currency. This was partially offset by a rise in the volumes sold by the division, JBS noted.

— Reporting for Reuters by Ana Mano and Roberto Samora.

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Still, it beat analysts’ forecasts.

JBS reported a 4.6 per cent fall in revenue for its U.S. beef division, which is normally the company’s cash cow, while earnings before interest, tax, depreciation and amortization (EBITDA) slumped 55 per cent compared with the same year-ago quarter.

Domestic markets for JBS’ North American beef business — which includes its Canadian operations — saw strong beef demand, “even with the delay in the start of the grilling season due to atypical weather conditions” — but margins were pressured as cattle prices rose “above the expected level.”

North American beef division exports, meanwhile, were up 7.4 per cent in volume from the year-earlier quarter, JBS said — noting China “despite the lockdowns during the period” had kept purchase volumes high.

U.S meat processors are now reeling from the effects of lower cattle availability in North America, where a drought is leading ranchers to terminate animals rather than sending them for processing.

In the second quarter, overall U.S. pork exports fell 17.7 per cent due to a drop in demand from China, Japan and Canada, JBS said, citing USDA data.

As such, results for its U.S. pork division were affected, with JBS sales for that unit dropping 3.2 per cent on an annual basis, to 10.3 billion reais.

JBS’ Pilgrims Pride poultry unit, however, provided a silver lining in the United States, as its chicken sales rose by 18.3 per cent to 22.7 billion reais.

In Brazil, likewise, JBS’ Seara processed foods division did well. Seara sells about 47 per cent of its output in Brazil, and that business brought in five billion reais (US$969.24 million) last quarter, 20 per cent more than a year ago, JBS said.

To fend off cost inflation, Seara was able to raise prepared products prices by 19 per cent on average, while increasing sales volumes by five per cent.

At the same time, Seara’s export sales reached $1.1 billion, a 27.9 per cent rise from the same quarter a year ago.

In Brazil, JBS beef product sales rose by almost 11 per cent to 14.1 billion reais, in spite of a 12 per cent fall in cattle processing because China temporarily halted imports from a large plant.

— Reporting for Reuters by Ana Mano in Sao Paulo. Includes files from Glacier FarmMedia Network staff.

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Speaking at a conference call to discuss fourth-quarter results, management said JBS will benefit from strong U.S. domestic demand for food products and steady meat trade flows to Asian markets, especially China.

JBS overall reported net income of 20.5 billion reais (C$5.24 billion) in 2021 on revenue of 350.7 billion reais, up 345 per cent from its 2020 net.

In Brazil, where the company is headquartered, cost pressure will continue to weigh on the Seara division as meat processors scramble to buy corn used as feed.

The scarcity during the inter-harvest period for corn, which will last through the middle of the year, is compounded by the war in Ukraine, which has caused grain prices to spike globally, affecting operations across all geographies.

Seara, which processes pork and poultry, has been unable to pass on higher costs onto consumers in Brazil, management said citing the weakness of Brazil’s economy. In the United States on the other hand, consumers have the purchasing power to continue buying, executives said.

Citing USDA data for 2022, JBS managers said beef and pork production will fall from the previous year in the United States, while poultry output will likely rise.

In the United States, where the company derives most of its revenue, the outlook for prices and margins remains positive. In Australia, herds are still recovering but the outlook is improving.

On Monday, JBS reported record sales last year on the back of the strength of its U.S. business, which is also buoyed by strong trade ties with China.

In its JBS USA beef unit, which includes its Canadian operations, the company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US$1.34 billion on net revenue of US$7.5 billion in its fourth quarter, and full-year 2021 EBITDA of US$4.89 billion, up 105 per cent on the year, on US$27.18 billion in revenue.

Regarding acquisitions JBS made in 2021, the company said companies acquired are performing better than expected.

— Reporting for Reuters by Ana Mano; includes files from Glacier FarmMedia Network staff.

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Statistics Canada on Tuesday released full-year data on farm income, pegging Canada’s realized net farm income for 2019 at $4.9 billion — a 10.4 per cent increase from 2018 and the first such increase in three years.

The increase in 2019 also comes in the wake of a 37.4 per cent decline in 2018 from 2017 — in that case due to “sharply higher” input costs and lower canola receipts, the federal statistics agency said.

For 2019 over 2018, higher cannabis and livestock receipts and increased program payments “just offset” the rise in overall operating expenses, StatsCan said.

A 3.9 per cent increase in crop receipts, at $36.6 billion, was due mainly to the $1.7 billion increase in licensed cannabis producer receipts compared to 2018 — the year in which recreational cannabis was legalized in mid-October.

Growth in cannabis receipts in Ontario and Alberta alone accounted for 56.5 per cent of the national increase, StatsCan said.

Leaving cannabis aside, crop revenues at the national level would have declined 1.1 per cent, StatsCan said. That decline came mainly from drops of 7.4 per cent and 17.7 per cent in canola and soybean revenue, due to China’s import restrictions on Canadian canola seed and reduced soymeal demand from China and other countries due to swine fever.

Canada’s durum wheat sales, meanwhile, were up 22.5 per cent in 2019 from 2018, as “production shortfalls elsewhere in the world led to increased export demand for high-quality Canadian durum,” StatsCan said.

In Canada’s livestock sector, hog producers saw an 11.6 per cent lift in revenue in 2019 over 2018 on higher prices and marketings, even despite China’s block on Canadian pork imports from June into November.

Cattle revenue was 3.3 per cent on the year on increased marketings, with “strong global demand for beef and lower end-of-year cattle inventories in the United States,” StatsCan said. Among the supply-managed commodities, increased receipts were seen in dairy (up 5.1 per cent), chicken (4.7 per cent) and eggs (six per cent).

Program payments in 2019 were up 40.6 per cent on the year, at $3.1 billion, including a 57.7 per cent increase in crop insurance payments due to “adverse” crop conditions. The first instalment ($293 million) from the federal Dairy Direct Payment Program was also released in 2019.

Increases in realized net income in 2019 were shown in Alberta ( up $425 million), Quebec (up $373 million), British Columbia (up $102 million), New Brunswick (up $41 million) and Prince Edward Island (up $20 million).

“Reduced” receipts from oilseeds — and smaller increases in cannabis receipts — led Saskatchewan to a $311 million decline from 2018, while Manitoba booked a $179 million decrease, StatsCan said.

Farm operating expenses, after rebates, were up 5.7 per cent on the year, at $53.1 billion. Factors in that increase included interest expenses (up 16 per cent), cash wages (up 9.2 per cent) and fertilizer (up 7.1 per cent). Increased cannabis production alone accounted for just under half the increase in operating expenses overall.

Total net income — that is, realized net income adjusted for changes in farmer-owned inventories of crops and livestock — came out at $3.9 billion in 2019, up $82 million from the previous year. Increases in total net income in Alberta and Quebec “partially offset” declines in Saskatchewan and Manitoba, StatsCan said.

First-quarter receipts in

StatsCan on Tuesday separately released new data on farm cash receipts for the first quarter of 2020, reporting a 5.5 per cent increase from the year-earlier period at $16.9 billion.

Again, increased crop receipts in Q1 2020 were mainly in cannabis, at $1 billion alone. Canola receipts were also up on increased marketings and lentil receipts rose on rising exports and higher prices, but without cannabis, crop receipts were down 4.7 per cent.

In the livestock sector, hog and dairy receipts showed gains at 14.4 per cent and 5.9 per cent respectively. Receipts for cattle and calves combined were down three per cent.

Farm program payments, at $991.7 million, were up 42.4 per cent from the year-earlier Q1, again mainly from crop insurance and the Dairy Direct Payment Program. — Glacier FarmMedia Network

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The Agricultural Producers Association of Saskatchewan on Monday released new estimates on the financial impacts of carbon pricing, accounting for all “major farm expenses not currently exempt” from the tax.

Such costs, APAS said, include grain drying, rail transportation, heating and electricity, as well as hauling crops off the farm by truck. The group said it will press for a carbon tax exemption on all farm expenses, including those from 2019.

Using the example of a household managing a 5,000-acre grain farm in Saskatchewan, APAS said the tax in 2020 would amount to an “$8,000 to $10,000 bill” and when the carbon tax increases to $50 per tonne in 2022, “this bill will go up to $13,000-$17,000 for the same household.”

APAS and Manitoba’s general farm organization, Keystone Agricultural Producers, have gone public with such numbers as federal Agriculture Minister Marie-Claude Bibeau has asked the provinces and ag industry for hard numbers to back up assertions of how much the tax costs farmers.

“We’ve responded with estimates that are backed up by producer bills in 2019,” APAS president Todd Lewis said in Monday’s release.

“Farmers don’t set our prices, so those increased costs are coming directly off our bottom line.”

APAS vice-president Bill Prybylski said the group’s numbers “reflect my personal experience down to the penny,” and described 2019 as “unprecedented in terms of the role grain drying played for farmers in our province. Without using propane to dry our grain, the wet fall would have meant losing a huge portion of our crop.”

Manitoba’s KAP last month reported its corn-growing members paid an average $3.69 on grain drying per acre, and the average farmer growing 500 acres of corn paid an estimated $14,145 on fuel for dryers, of which $1,722 went to carbon tax.

Grain transportation is also a “huge and unavoidable” carbon-taxable expense for farmers, APAS noted Monday. “Trucking my crop to the grain elevator, and then shipping it by rail to the coast is one of my biggest annual expenses,” the group’s vice-president Ian Boxall said.

“Our hope is that this is the evidence (Bibeau) is looking for,” Lewis said of APAS’s latest numbers. — Glacier FarmMedia Network

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Canadian National Railway on Tuesday reported third-quarter net income of $1.195 billion on $3.83 billion in total revenues, up from $1.134 billion on $3.688 billion in the year-earlier period.

Canadian Pacific Railway on Wednesday reported $618 million in net income on what it reported as a “record” in Q3 total revenue of $1.979 billion, down from $622 million on $1.898 billion in the previous Q3.

During the quarter, Calgary-based CP moved about 106,600 carloads of grain, down from 107,400 in its year-earlier Q3, and 14,800 carloads of fertilizers and sulphur, up from 13,800. It booked revenue per carload of $3.837 for grain, up eight per cent, and $4,459 for fertilizer and sulphur, up 13 per cent from the year-earlier Q3.

Montreal-based CN, which lists grain and fertilizer traffic as a single market segment, reported moving 145,000 carloads of grain and fertilizer during its third quarter, down from 156,000 in last year’s Q3. It also reported revenue per carload of grain and fertilizers at $3,807, up five per cent.

More generally, both railways’ quarterly reports cite what CN described as “deterioration in North American rail demand, as the economy continues to weaken.”

“CN delivered strong results, despite a softening economy,” CN CEO J.J. Ruest said Tuesday in the company’s Q3 release, adding the company “aligned resources with the weaker demand to achieve solid efficiency gains.”

CP CEP Keith Creel, in that company’s release Wednesday, said the company’s approach “puts us in a position to control what we can as we navigate softer volumes, macroeconomic challenges and geopolitical tensions into the fourth quarter.”

While CP now expects low-single digit growth in volumes handled, Creel said, “we remain confident in our guidance to deliver full-year double-digit adjusted diluted EPS (earnings per share) growth.”

Looking ahead on the rest of fiscal 2019, CN said its outlook assumes a 2019-20 grain crop in Canada “in line with the three-year average” and that the U.S. 2019-20 crop will come in below the three-year average. –– Glacier FarmMedia Network

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The growth was well below the 6.4 per cent increase reported the previous year, and continued a trend of slower growth since 2013.

Realized net farm income was down by 45.1 per cent on the year, the report noted.

Equity was up in eight provinces, with New Brunswick unchanged and Nova Scotia down 4.3 per cent.

Total farm assets increased by 4.4 per cent in 2018, to $623 billion, due largely to a 6.1 per cent increase in farmland values. However, the value of inventories declined by 3.2 per cent during the year which partially offset the farmland value increase.

Lentils in Saskatchewan and peas in Alberta were down by 24.2 per cent and 27.8 per cent respectively, accounting for much of the decline. Import duties imposed by India were cited as a main reason for the losses.

Total liabilities in the farm sector rose by 8.7 per cent in 2018, hitting $100.8 billion, according to the report. The debt-to-asset ratio increased to 16.2 per cent, from 15.5 per cent in 2017, hitting its highest mark since 2011.

The interest coverage ratio, which measures the ability of the farm business to meet its interest payments (net income, before interest and taxes, divided by interest expenses), fell to 2.4 in 2018 from 4.1 a year earlier, which was its lowest value since 2007, according to the report.

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Canadian Pacific Railway (CP) on April 23 reported grain segment revenue of $380 million for the quarter, up six per cent from the year-earlier period, on about 92,800 grain carloads, down five per cent, for grain revenue per carload of $4,089, up 12 per cent.

Canadian National Railway (CN) on Monday last week also reported an increase in its grain-and-fertilizers segment revenue at $577 million, up seven per cent, and in grain and fertilizers revenue per carload, at $3,872, up four per cent — but it also booked a three per cent increase in grain and fertilizer carloads, at 149,000.

“Despite a prolonged period of historic cold temperatures in key segments of our network, CN railroaders delivered record first-quarter carload volumes,” CN CEO J.J. Ruest said in the company’s first-quarter release.

“This past winter was one of the most challenging in my railroading career,” CP CEO Keith Creel said in the company’s release the previous week. “I applaud our employees for their resiliency in overcoming loss and pushing through extraordinary conditions and challenges throughout February and March.”

The loss to which Creel referred was a fatal train crash in the Rocky Mountains in British Columbia in early February. Three CP employees were killed when a 112-car grain train’s emergency brakes let go at the site of a crew change and the train accelerated downhill on its own, with most of the cars then derailing at a nearby curve.

CP, in a separate release Friday, also reported “all-time record” traffic in Canadian grain and grain products for April 2019, having moved 2.643 million tonnes, topping its previous record from October last year.

In terms of overall Q1 profit, CP reported first-quarter net income of $434 million on $1.767 billion in revenues, up from $348 million on $1.662 billion in the year-earlier period. CN, for the same quarter, reported net income of $786 million on $3.544 billion in revenues, up from $741 million on $3.194 billion.

Percentage-wise, CN’s most significant increases in gross revenue came from its petroleum and chemicals segment, up 30 per cent at $735 million, and coal, up 15 per cent at $163 million. CP’s most-improved revenue segments were in energy, chemicals and plastics, up 23 per cent at $315 million, and forest products, up 11 per cent at $73 million. — Glacier FarmMedia Network

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