Crops drive farm cash receipts in early 2008

Market cash receipts for farmers hit a record high in the first quarter of 2008, boosted primarily by a surge in grain and oilseed prices, Statistics Canada reported Monday.

At the same time, cattle and hog farmers were squeezed by a combination of lower prices, higher feed costs and the higher Canadian dollar, the federal agency wrote.

Cash receipts from crop sales reached $5.4 billion, up 38.5 per cent over the first quarter of 2007 and 59.1 per cent higher than the previous five-year average between 2003 and 2007. The driving force behind this increase was higher grain and oilseed prices fired by strong demand, tight supplies and uncertainty over new crop production.

Livestock receipts decreased 6.4 per cent to $4.4 billion, largely the result of lower prices for hogs, cattle and calves. Prices received by hog producers fell close to 30 per cent compared with the first quarter of 2007, partly due to high supplies in the U.S.

In contrast, dairy and poultry receipts increased, cushioning the decline in overall livestock receipts. Overall livestock revenues were 1.9 per cent below the previous five-year average for a first quarter.

Program payments amounted to $1.3 billion in the first quarter of 2008, down 2.7 per cent from the same quarter last year, and 8.5 per cent below the previous five-year average for a first quarter. This decline was due in part to improved prices in the grains and oilseeds sector.

Total farm cash receipts, which include crop and livestock revenues plus program payments, reached $11.1 billion during the January to March period of 2008.

Farm cash receipts increased in all provinces, except Prince Edward Island, Nova Scotia and Quebec, where they declined, and New Brunswick, where they remained stable.

Gains ranged from 4.4 per cent in British Columbia to 31 per cent in Saskatchewan, where grains and oilseeds account for a significant portion of the total receipts.

Farm cash receipts measure gross revenue for farm businesses only. They do not represent their bottom line, as farmers have to pay their expenses and loans and cover depreciation.

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