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

When cannabis is included, realized net income dropped by nearly 10 per cent.

According to a May 25 report from StatCan, total cash receipts increased by nearly 15 per cent to $95.0 billion in from $82.8 billion in 2021. Crop revenues rose over 15 per cent to $54.1 billion due to higher average prices for all major grain and oilseed crops.

Cash receipts for wheat, excluding durum, rose by nearly 29 per cent to $9.3 billion — prices rose nearly 42 per cent, though marketings fell by nine per cent due to low carryover from 2021. Canola prices rose nearly 39 per cent, offsetting a more than 18 per cent drop in marketings, leading to an increase in cash receipts of more than 13 per cent.

Livestock receipts climbed 12 per cent to $33.6 billion with gains across cattle, dairy, poultry and the hog sectors. Cattle receipts increased nearly 17 per cent to $10.8 billion as the number of cattle slaughtered in Canada reached the highest levels since 2008, the report said. Dairy receipts rose about 11 per cent to $8.2 billion.

However, expenses rose by over 21 per cent — the largest gain since 1974, the report said.

“Farmers faced higher costs for key agricultural inputs, including fertilizer, feed and fuel,” the report said.

Total farm operating expenses were $72.5 in 2022. Fertilizer expenses rose by 62 per cent to $11.9 billion.

“Russia’s invasion of Ukraine added more pressure to fertilizer markets already stressed by natural disasters and high natural gas prices,” the report said.

Commercial feed expenses for livestock producers increased by nearly 21 per cent, a hangover from 2021’s drought. Alberta imported record amounts of corn.

And machinery fuel expenses increased nearly 59 per cent on supply chain disruptions, influenced by sanctions imposed on Russia.

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From January to September, those receipts reached $66.7 billion. That increase of more than $8 billion was due to higher receipts for crops, livestock and program payments.

The report noted crop receipts rose 7.3 per cent at $36.6 billion; canola and wheat excluding durum accounted for 41.7 per cent of the increase. Wheat excluding durum tacked on $892.6 million at $6.5 billion. Canola increased $102.9 million, rising to $8.8 billion.

Other gains came from corn, which added $585.3 million at $2.2 billion, largely due to a far better crop in Eastern Canada than on the Prairies. Soybeans were up $317.3 million at $1.6 billion. Among the declines were durum, which lost $386.2 million at $1.1 billion, and barley falling $143.4 million at $864.9 million.

StatCan said livestock receipts were up 11.8 per cent at $24.7 billion, with cattle accounting for 40 per cent of the increase by contributing $1.1 billion. Dairy and chickens for meat fetched $564.6 million and $343.7 million respectively.

Meanwhile program payments, such as crop insurance, jumped 125 per cent at $5.4 billion.

Alberta led all of the provinces by accounting for nearly 40 per cent of the increase. Farm cash receipts in the province were up 23.5 per cent at $16.3 billion during the first nine months of this year.

StatCan is scheduled to release its next quarterly report on Feb. 28, which will account for all of 2022.

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Marie-Claude Bibeau, summarizing discussions from Thursday’s online meeting with provincial and territorial (FPT) agriculture ministers, said the formal requests “are needed to trigger the process,” as both levels of government contribute.

AgriRecovery is the brand name for the FPT disaster relief framework, deployed on an as-needed basis during natural disasters to help farmers with “extraordinary costs.”

AgriRecovery programs, cost-shared by the federal and participating provincial governments, are launched in “situations where producers do not have the capacity to cover the extraordinary costs, even with the assistance available from other programs.”

During their meeting, the government said in a release, ministers “expressed their concern for farmers and workers dealing with the current heat waves, wildfires and drought conditions in Western Canada and other regions of the country.”

Bibeau’s Saskatchewan counterpart David Marit, for one, put his request in writing Thursday for an AgriRecovery assessment for the province, so as to “determine program requirements.” His letter CC’ed his counterparts in the four western provinces and Ontario.

Alberta’s ag minister Devin Dreeshen, in a separate statement Thursday, said the province has “received verbal commitment from Ottawa that a joint AgriRecovery program will be initiated to support Prairie producers affected by drought conditions prior to (a federal) election.”

Bibeau, in her summary tweets on Thursday, said Ottawa “will make sure our programs continue responding to the crisis” in the western provinces.

On that note she also asked that provinces hit by drought move to invoke the “late participation provision” of the AgriStability income stabilization program, “to help more farmers access the support they need.”

Bibeau also reiterated her previous request to the provinces that they match an earlier federal offer that would raise the AgriStability compensation rate to 80 per cent from the current 70.

The ministers’ statements follow requests earlier Thursday from the Canadian Cattlemen’s Association and provincial cattle associations on several drought-related measures, along with other recent requests from farm groups.

Among those requests, they called for drought relief programming under AgriRecovery to help with costs related to feed and water shortages as well as “impacts of wildfires.”

They also called on Ottawa to “immediately” set up the livestock tax deferral provision for this tax year, designating all of the Prairie provinces as well as parts of British Columbia and Ontario, but also to “extend eligibility to include all classes of cattle.”

That provision, if put in effect as it now stands, would allow producers in designated areas to temporarily defer tax owing on drought-induced livestock sales, but only on breeding stock.

Lianne Rood, the federal Conservatives’ ag critic, made the same request in a separate letter to Bibeau Wednesday, but cautioned that “a decision on this must be made quickly and cannot be delayed by the calling of a fall election.”

The cattle groups also called Thursday for governments to “expedite approvals for insured crops to be designated for livestock feed or grazing purposes” and allow parched crops to be grazed or converted to feed without penalty. Saskatchewan announced such a move Wednesday.

“Without timely and targeted assistance from federal and provincial governments, beef producers will be forced to make difficult management decisions including culling of their herds,” CCA president Bob Lowe said in a release Thursday.

“It is of critical importance that Canada’s beef cow herd be maintained throughout this disaster event.” — Glacier FarmMedia Network

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Federal Agriculture Minister Marie Claude Bibeau said she is confident counterparts from Quebec, Ontario and British Columbia will be willing to contribute their share to make significant improvements to AgriStability, the program most criticized by producers.

“It’s going to be more challenging with the Prairie provinces and some other provinces, who are saying that they have more financial or fiscal constraints,” she said.

BRM programs are funded by federal and provincial governments, at a cost-share ratio of 60-40. The cost has averaged roughly $1.5 billion in the past five years, but is expected to be higher this year because of the pandemic.

Consecutive years of strong commodity prices justified governments moving money away from risk management funding toward other programs, such as those focusing on innovation. By 2013, policy adjustments had made AgriStability more difficult for farmers to qualify for what became relatively lower payouts.

Now producers are calling for AgriStability to pay out at pre-2013 levels, and for the removal of its reference margin limits so it’s easier for producers to qualify.

Bibeau says her objective is to find consensus among the provinces to “make AgriStability more generous, easier to understand and to proceed with, and also fairer when we look at the different sectors in agriculture.”

She said she is confident in being able to accomplish it, but admits it won’t be easy.

“I still have to finalize my work at my own level, to get the authority to make changes that I’m looking for, and it will be obviously, for all of us, a matter of the financial capacity,” she said.

And while Ottawa knows there are a few levers it can play with — such as the compensation rate, payment triggers and the annual cap on payouts — Bibeau said “we all already agree on the fact that removing the reference margin limit should be the first step.”

Doing so is considered to be the most palatable option across government, largely because it is the least expensive option. Such a move may appease some producer groups, but others, such as pork or cattle producers, will want more substantive changes.

Cow-calf producers, for one example, have low eligible expenses, in part because they often produce their own feed and have low labour costs, so their margins must drop farther than other commodities before triggering payments from the program.

Bibeau maintains “all the options are still on the table” but said all the analysis done internally and externally shows “the best first step in the right direction” is to remove the reference margin cap.

In March, Agriculture and Agri-Food Canada officials confirmed lowering the threshold to qualify and raising the total amount that can be paid out under AgriStability were also options being considered.

While the agenda for the ministers’ meeting was still being finalized as of this writing, it’s expected the provinces will also receive an update on the status of international trade and discuss other issues pressing the agricultural sector, such as the potential threat of African swine fever (ASF).

Originally scheduled for July, the COVID-19 pandemic prompted the FPT meetings to be pushed to October. An election in Saskatchewan further delayed the meetings to the November dates.

During their last round of meetings, which took place in December 2019, the ministers agreed on making only minor changes to BRM programming.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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La Financiere agricole du Quebec (FADQ), the provincial ag lending agency, announced Wednesday it will pay out about $9.1 million to businesses participating in the four programs effective Nov. 1.

FADQ noted it made a similar advance payout effective May 1, sending $6.2 million to 3,364 farm clients under the programs, for which the regular payment dates each year are June 1 and Dec. 1.

The programs covered include:

• Programme Investissement Croissance (PIC), providing grants to farms making investments in productivity and sustainability;
• Programme d’appui au developpement des entreprises agricoles du Quebec (PADEAQ), a program supporting on-farm upgrades to meet new requirements;
• Programme d’appui a la diversification et au developpement regional (PDDR), a regional development and diversification program; and
• Programme de soutien au financement des investissements en matiere de bien-etre animal et d’efficacite energetique (PSFI), which supports on-farm investments in animal welfare and energy efficiency.

PIC was set up in April this year as a replacement for PADEAQ and PDDR — both of which ended March 31 but are still paying out on projects approved before then. PSFI runs to the end of March 2022 or until its funds are fully committed, whichever comes first.

The second round of early payments is meant to “support farm businesses in the context of the (COVID-19) pandemic,” FADQ said Wednesday.

FADQ noted it has put other exceptional measures in place to help get farmers through pandemic-related cash crunches, including moratoriums of up to six months on loan repayments, and loan guarantees of up to $50,000 to provide working capital to farms up against “temporary problems of liquidity.” — Glacier FarmMedia Network

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That confirmation came during a wide-ranging media availability Bibeau held Tuesday.

In March, Tom Rosser, an assistant deputy minister at Agriculture and Agri-Food Canada (AAFC), said the government is looking at a number of options to improve the programs, which are often the focus of complaints from producer groups.

It was expected at the time Bibeau would have the recommendations in time for a previously planned meeting in July with her provincial and territorial counterparts.

BRM programs are funded by federal and provincial governments, at a cost-share ratio of 60:40. The cost has averaged roughly $1.5 billion in the past five years.

Changes to any BRM programs generally require two-thirds of the provinces representing at least 50 per cent of the market, according to federal officials.

Now, because of the COVID-19 pandemic, that meeting has been delayed until October — and so too have plans to announce any BRM reforms.

Bibeau said her office is attempting to “build a new consensus” with the provinces.

“It’s not easy to get all the provinces at the same level, and us as well, finding a new consensus,” she said.

At the same time, Bibeau defended the current suite of programs and her government’s support for farmers in the midst of the pandemic.

“I understand that these programs are not at the level producers would want them to be, there are gaps, and we are trying to fill these gaps through ad hoc supports as well, and there will be more,” she said.

“We’re still working with the industry to identify the sectors who are most in need but still, these programs are working to a certain level.”

According to Bibeau, $1.6 billion could be available to producers under the current suite of programs and “double if farmers ask for that” and the situation they are facing.

“These programs are responding to the demand, according to the situation of course,” she said, repeating support is there for producers and more ad-hoc supports are coming.

In a Commons standing agriculture committee meeting Wednesday, Bibeau reiterated the available supports.

“One of my messages to farmers continues to be, these are important tools and please make use of them,” she said.

Bibeau said she is speaking with the provinces every week and despite the formal meeting being delayed until October, progress is being made.

“We are moving forward in the sense that we are putting some options on the table, discussing at what level one province would go, another one, us from the federal (side), so trying to find a consensus so how we can better support farmers,” she said.

Despite any imminent reform coming in the next few months, Bibeau said improving the programs is a priority.

“I can’t promise any deadline but this is top priority, this is the subject that is on the agenda each and every week,” she said.

The current agreement between federal and provincial governments was signed in 2017 and carried forward five programs aimed at BRM: AgriStability, AgriInvest, AgriInsurance, AgriRecovery and AgriRisk.

AgriInvest funds currently total $2.3 billion, according to Bibeau. She said the average producer has around $25,000 sitting in AgriInvest, which is a savings account program with matching government contributions. Funds can be withdrawn at any time to alleviate risk or for investment.

“It’s there to help producers in difficult situations when they need funding,” AAFC deputy minister Chris Forbes said at Wednesday’s committee meeting.

Supports offered by the other programs – particularly AgriStability – continue to frustrate producers, who argue it puts them at a competitive disadvantage on global markets because other countries offer more support for producers.

Bibeau was asked about Canada’s level of support during the pandemic for producers compared to that of the United States, where farmers are being given up to US$16 billion (C$21.7 billion) in coronavirus payments on top of additional direct payments and indications more support is coming.

“We can’t compare Canadian agriculture with another one. In Canada, the business risk management programs exist for a reason and it’s to (give) the farmers more predictability and support that they need,” she said, reiterating a recognition the programs could be better.

The current iteration of risk management support began in 2003 when provinces and the federal government agreed to standardize supports in a cost-shared policy framework.

Originally the programs were focused on income stabilization, but provincial and federal governments realized they were offering more coverage than they thought was needed.

Consecutive years of strong commodity prices also followed, resulting in higher levels of profitability and justification for governments to allocate funding away from risk management toward other areas, such as innovation and growth.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Federal Agriculture Minister Marie-Claude Bibeau on Friday launched the application process for membership in a new Canadian Agricultural Youth Council, setting the deadline for the first round of applications at Feb. 14. First-round applicants must be between the ages of 18 and 30 as of Jan. 1, 2020.

The council, once formed, is expected to meet twice a year, with additional meetings to be held online, providing a forum for members to work with Bibeau and “experienced public servants and national organizations.”

Council members, the government said, “will also have the opportunity to participate at roundtables and discussions, as well as in important government and industry events.”

Members would advise on “new and emerging issues that matter most to the sector” and enable “ongoing dialogue on food-related challenges and opportunities.”

They would also advise on “the strengths and weaknesses of policies and programs affecting the agriculture and agri-food sectors” and “share information and best practices.”

“The young women and men in Canada’s agriculture and agri-food sector have a valuable perspective on the challenges and opportunities facing them,” Bibeau said in a release Friday, adding the country “need(s) to bring the voices of these young women and men to the table and ensure that they take part in the decisions that affect their future.”

The government, on its application website, emphasized council members need not be actively farming, but should have “some background or experiences in the farming and/or food industry.”

“Whether you’re a young farmer taking over the family farm, a student considering a career in agriculture, or someone working in the food and beverage sector, we’re looking for a diverse group of people from across the country who are passionate about sharing their ideas,” the government said.

“Agriculture,” for the council’s purposes, includes not just on-farm activities but “processing and value added transformation of agriculture and food products.”

For applicants, assets would include “experience in addressing food-related opportunities and challenges” and “credibility among the agriculture and food industry, youth organizations, Indigenous organizations/communities and/or academia.”

“I need to hear your perspective, I need to understand better your reality, and what is your vision for the future of agriculture,” Bibeau said in a video on the council’s website. — Glacier FarmMedia Network

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Federal Agriculture Minister Marie-Claude Bibeau recently announced minor, cost-free tweaks to AgriStability, during the same week the public was given an updated look at Canada’s fiscal situation.

That update shows the Liberal government’s expected budgetary deficit has continued to grow. It is now billions of dollars more than what was expected when the budget was released in March — and the figures provided don’t account for the billions more in spending promised by the Liberals in the 2019 election.

The Liberals pledged to improve BRM programs during the campaign, and since her reappointment to cabinet, Bibeau has made a point of stating publicly — more than once — that she wants to improve Agristability.

That is why, rather than making changes now, Bibeau announced — alongside her provincial counterparts — a full review of BRM programs will be completed by April, then addressed when the country’s agriculture ministers meet again in July.

This suggests there won’t be a significant increase in funding in the budget when released (typically, this happens in March).

Bibeau knows BRM improvements are going to cost money (especially if there is to be a return to the long-called for 85 per cent reference price margin), telling reporters this week it was appropriate to do a review, to make sure, “that when we’re ready to put more money on the table, we would do it towards the right program.”

Her words combined with the overarching federal fiscal picture suggest the federal government isn’t ready to put more money on the table right now. Time will tell if it will be ready in July.

Farm groups are right to raise concern about significant improvements being ready for the 2020 season. They also have the right to be frustrated by slow or inadequate action.

Reviewing BRM programs before making changes is a necessary step, sure, but it’s not as if the problems with AgriStability are a mystery. The Liberals – in their own recent reports – have noted some of the issues.

They are aware that despite the number and value of AgriStability payments going down, the administrative cost of the program has stayed flat since 2013, when the program last experienced a major overhaul.

(Administrative costs as a percentage of the payments to producers increased from 15 per cent in 2010-11 to 21 per cent in 2014-15, for example).

They know – again, because it’s in a publicly available report — to address this issue, a major change in the program’s design is needed.

The Liberals are aware participation rates in AgriStability have consistently declined – something the minor tweaks looked to address but won’t, according to groups such as Grain Growers of Canada.

And of course they know about the longstanding ask for the reference price margin to increase and complaints of the program being cumbersome and complicated.

But improving upon all of that costs money. And while the Liberals have demonstrated a clear desire to spend, they clearly have not made improving BRM programs a priority.

If it was, Bibeau wouldn’t be buying time the way she is now.

— D.C. Fraser writes for Glacier FarmMedia from Ottawa.

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Dairy Farmers of Canada has had Grey, Clark, Shih and Associates regularly study the effect of U.S. government policy on dairy farms in that country.

The latest version of the project was released at the Dairy Farmers of Canada policy conference held last week in Ottawa.

It showed U.S. dairy farmers benefit from the equivalent of US$12.06 per hundredweight or C$35.02 per hectolitre. That’s close to 70 per cent of what farmers are paid now for their milk.

Peter Clark, a long-time trade consultant and lawyer with the firm, said at the conference that the U.S. is gradually moving more of its programs toward risk management.

“The U.S. has become aware of the WTO inconsistency of many of their programs,” said Clark. “They’re shifting from direct and countercyclical payments and other issues to various types of insurance programs.”

Clark’s 500-page report is a detailed analysis of many programs, and notes a certain amount of the funds for those programs is allocated to the potential use of those programs by dairy farmers, not actual use.

The programs include: domestic support, export subsidies, conservation programs, crop and livestock gross margin, risk management programs, disaster relief assistance programs, loan programs, crop insurance, livestock support as well as renewable fuels incentives and subsidies and irrigation programs.

Nick Thurler, a Dairy Farmers of Ontario board member from eastern Ontario, said that he knows numerous dairy farmers across the border in New York.

“I know if I told them they got $12 per hundredweight subsidy, I know what the answer would be,” he said.

Clark said he’s heard from people who say they know U.S. farmers who get no direct subsidies, but he points out that the subsidies are mostly indirect and farmers in the western U.S. have much greater benefit due to irrigation.

Alfalfa and forages are the biggest users of irrigation water, mostly to feed dairy cattle — hence the massive amount of money that goes into irrigation systems, he said.

“We look at what is available” to dairy farmers, said Clark. That’s typical of trade evaluations done by other countries as well, he added.

Clark’s study also included the impact of nutrition programs in the U.S. on dairy products.

“Some argue it should be seen as welfare and we shouldn’t be allocating it in this analysis,” he said, but he includes it as the original program was created as a way to deal with excess agriculture production.

U.S. Trade Representative Robert Lighthizer’s lawyers, Clark noted, have reports that list 160 subsidies on Canadian steel.

“When it comes to trade, you have to be precise.”

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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