Ministry of Agriculture Food and Fisheries GENERAL INFORMATION NOTE by bobbybrull

VIEWS: 9 PAGES: 7

									                  Ministry of Agriculture, Food and Fisheries
                         GENERAL INFORMATION NOTE
Date: March 14, 2005

 AAFC Forecast of 2004 Year-end BC Farm Income

BACKGROUND:

  • Agriculture & Agrifood Canada, released its December forecast of 2004 farm
    income for BC and other provinces on February 17, 2005. Key influences on the
    forecast for 2004 are the ongoing national closed border BSE crisis which has
    resulted in continued losses to cattle farmers, and the provincial avian flu crisis that
    severely impacted BC poultry farmers and those in related sectors. The
    appreciating Canadian dollar is a further influence that reduced receipts in several
    exporting sectors.
  • Following the steep (64%) decline in 2003, the total net income of BC farmers is
    forecast to show a recovery in 2004. BC farmers’ net cash income (farm cash
    receipts minus operating expenses) is expected to total to $394 million, up 26%
    from 2003 ($312 million). Total net income (after accounting for non cash items
    such as depreciation and the change in inventory values) is forecast at $155
    million, up 49% from 2003.
  • At the national level, the net cash income of Canadian farmers is forecast at $6.1
    billion, up 37%, and their net income is forecast at $3.0 billion, up 15%. This also
    represents a recovery from the severely BSE and drought reduced net cash and
    total net incomes of 2003.

ANALYSIS
  • In BC, the higher net cash and total net incomes forecast for 2004 are the result of
    a 4.9% increase in farm cash receipts to an expected $2.39 billion. Livestock
    receipts are seen to continue declining (by 10%) but an 8.4% rise in crop receipts
    and a substantial 210% increase in program receipts is expected to support total
    receipts.
  • Depressed cattle markets, due to the US border closure in May, 2003, persisted for
    most of 2004 and reduced annual cattle receipts by19%. Hog receipts rose,
    however, driven by strong prices in the US, but the continued increase in the
    exchange rate that affects exports limited the gain to 16%. Receipts from dairy
    were up slightly, but poultry and eggs receipts were sharply lower, by 16% and
    34% respectively, due to the impact of the avian flu that devastated production.
• In the crops sector, berry and grape receipts were up by 32% due to excellent
 harvests, expanded acreage and good prices, but tree fruit receipts dipped by
 1.9%, despite an 11% increase in apple receipts. Vegetable receipts grew
 modestly by 4% despite lackluster sales of greenhouse vegetables which were
 affected by the increase in the exchange rate. Grain and oilseed receipts were
 higher for wheat, and particularly canola due to larger marketing as US soy bean
 supplies shrank to low levels, while barley and oat receipts declined due to
 reduced marketing and/or lower prices from weather-affected crops. Total grain
 and oilseed receipts grew by 8 percent.
• Floriculture and nursery receipts continued to increase as in past years with
 domestic sales rising to $500 million. Favourable weather and strong prices for
 ornamentals and cut flowers, combined with demand, stimulated by consecutive
 years of higher housing starts, lifted sales although export values were lowered
 somewhat by the stronger Canadian dollar.
• Government payments increased to record levels (by over $125 million), mainly as
 a result of large payments to cattlemen under various ad hoc BSE recovery
 programs. The new CAISP program and other income-disaster programs also
 made significant payments. Additionally, the production insurance program paid
 out larger amounts for more area insured in risk management and for weather
 damage to crops (sweet cherries, apples, coarse grains, canola and potatoes).
• While receipts are forecast to increase, so are expenses but by less. Crop
 expenses are forecast to show increases as prices for seed, fertilizer and
 machinery fuel increased. However, livestock expenses are forecast to show
 declines with reduced feed costs and feeder livestock purchases. Overall,
 increases in farm expenses are expected to increase by 1.5%, and when combined
 with higher cash receipts, an increase of 26% is forecast for net cash income.
• In Ontario, net cash incomes and total net incomes are forecast to decline 5% and
   8% respectively. In the Prairie provinces, livestock receipts, severely impacted in
   2003, showed some recovery as slaughter levels rose significantly and prices
   improved somewhat in the fall with the cattle set-aside program. Higher grain
   receipts due to larger crops and marketing, especially to overseas buyers, also
   supported receipts and net cash income. Net cash incomes are forecast to
   increase 167% in Alberta, 15% in Saskatchewan and 25% in Manitoba.
• Caveats to this forecast are that the December year-end forecast was prepared on
 partial information (to October-November) for 2004. Additionally, it uses
 incomplete information on 2003 BC horticulture crop production from Statistics
 Canada’s baseline data on crops for the 2003/04 marketing year. MAFF’s
 submission of new data for the baseline revisions by Statistics Canada done after
 the forecast can alter the actual relative situation of BC in 2004.
SUMMARY

       The 2004 year end forecast of BC farm income is that it will improve significantly
       despite the continued border closure to cattle and other ruminants, the avian flu
       crisis in the poultry and egg sector and the additional impact of a continued
       appreciation in the Canadian dollar that affected exporting sectors. Net cash
       income, nationally, and in the other major provinces is also forecast to rebound,
       propelled mainly by large grain harvests and high commodity prices.

Prepared by the
Statistics & Economics Unit
Policy & Economics Branch
BC Ministry of Agriculture, Food & Fisheries
March 14, 2005
                  BC Farm Cash Receipts All Commodities by Commodity Group


                                       2002            2003           2004f           02-03 Chge.      03-04f Chge.
                                      ($'000)         ($'000)        ($'000)              %                 %

Grains & Oilseed                       24,275          29,605          31,986                  22.0             8.04
Forages                                18,316          15,307          14,803                 -16.4            -3.29
Treefruit                              66,367          86,038          84,400                  29.6            -1.90
Berries & Grapes                      107,611         131,350         172,929                  22.1            31.66

Vegetables (incl. Potatoes)           339,278         365,900        381,537                    7.8              4.27
Ginseng                                22,525          21,928         20,802                   -2.7             -5.13
Floriculture & Nursery                423,694         460,747        499,441                    8.7              8.40
Other                                  18,533          10,137         10,508                  -45.3              3.66
Forest Products                        15,877          15,352         15,460                   -3.3              0.70
Total Crops                         1,036,476       1,136,364      1,231,866                    9.6              8.40

Cattle & Calves                       317,922         229,105         185,152                 -27.9           -19.18
Hogs                                   37,761          39,307          45,751                   4.1            16.39
Sheep & Lamb                            5,714           7,053           4,619                  23.4           -34.51
Dairy Products                        368,630         393,102         397,450                   6.6             1.11
Poultry                               259,615         275,291         229,043                   6.0           -16.80
Eggs                                   70,294          71,917          47,183                   2.3           -34.39
Honey                                   7,306           7,489           6,750                   2.5            -9.87
Other                                  62,067          59,072          58,574                  -4.8            -0.84
Total Livestock                     1,129,309       1,082,336         974,522                  -4.2            -9.96

Total Direct Payments                  30,915          59,406        184,027                   92.2            209.8
Total Cash Receipts                 2,196,700       2,278,106      2,390,415                    3.7              4.9

f forecast
Source: Statistics Canada, Agriculture Division for 2002 and 2003. Agriculture & Agrifood Canada for 2004 forecast.
CANADA & PROVINCES 2003r
                                                  Receipts, Expenses, Income
                                                          ($ millions)
                           NFLD     PEI     NS      NB        QUE       ONT      MAN      SASK       ALTA        BC    CANADA
Crop Receipts              17.3   220.1   143.5   192.1   1,429.4   3,722.6    1,678.2   2,743.9   1,898.4   1,136.4   13,181.9
Livestock Receipts         63.9   112.7   257.9   199.7   3,664.0   4,160.7    1,553.0   1,337.5   3,753.1   1,082.3   16,184.9
Total Market Receipts      81.2   332.8   401.4   391.8   5,093.4   7,883.3    3,231.2   4,081.4   5,651.5   2,218.7   29,366.8
Program Payments            0.8    22.8    16.4    12.0     875.2     585.4      308.1   1,601.1   1,362.0      59.4    4,843.3
Total Farm Cash Receipts   82.0   355.6   417.9   403.7   5,968.6   8,468.7    3,539.4   5,682.5   7,013.5   2,278.1   34,210.1
Total Operating Expenses   75.8   321.2   379.3   363.3   4,941.5   7,347.6    3,030.6   5,043.6   6,300.5   1,965.9   29,769.4
Net Cash Income             6.2    34.3    38.6    40.5   1,027.2   1,121.1      508.7     638.8     713.0     312.2    4,440.7
Realized Net Income         1.1    -0.3    -1.0    -0.5      46.1      45.5       90.1    -264.1    -412.4      62.0      -28.1
Total Net Income            1.1     5.9    -9.5    -0.5     584.0     137.9      499.5     707.3     602.8     104.2    2,632.7

CANADA & PROVINCES 2004f
                                                  Receipts, Expenses, Income
                                                          ($ millions)
                           NFLD     PEI     NS      NB        QUE       ONT      MAN      SASK       ALTA        BC    CANADA
Crop Receipts              17.7   183.2   145.6   179.9   1,468.6   3,596.6    1,708.0   3,373.2   2,577.3   1,231.9   14,482.1
Livestock Receipts         67.5   121.3   289.3   201.2   3,980.0   4,299.8    1,552.5   1,433.9   4,182.1     974.5   17,102.2
Total Market Receipts      85.2   304.5   435.0   381.1   5,448.7   7,896.4    3,260.5   4,807.0   6,759.6   2,206.4   31,584.3
Program Payments            1.2    41.4    25.8    36.2     867.2     713.0      461.7   1,163.1   1,418.5     184.0    4,912.2
Total Farm Cash Receipts   86.5   346.0   460.8   417.3   6,315.8   8,609.4    3,722.2   5,970.1   8,177.9   2,390.4   36,496.5
Total Operating Expenses   77.9   330.2   383.7   373.6   5,108.8   7,543.8    3,085.4   5,232.8   6,273.9   1,996.2   30,406.4
Net Cash Income             8.6    15.7    77.1    43.7   1,207.0   1,065.7      636.8     737.3   1,904.0     394.2    6,090.1
Realized Net Income         3.3   -19.9    27.2     0.9     650.8     -36.3      212.3    -166.1     795.1     135.4    1,602.6
Total Net Income            3.1   -20.0    25.9    -2.3     682.9     126.7      290.6     615.1   1,153.0     155.1    3,030.1
CANADA & PROVINCES 2004f/2003r
                                                        Receipts, Expenses, Income
                                                                           % Chg.
                                   NFLD          PEI      NS       NB        QUE          ONT      MAN       SASK       ALTA        BC    CANADA
Crop Receipts                        2.3       -16.8      1.5     -6.4         2.7         -3.4      1.8       22.9      35.8       8.4       9.9
Livestock Receipts                   5.6         7.6     12.2      0.8         8.6          3.3      0.0        7.2      11.4     -10.0       5.7
Total Market Receipts                4.9        -8.5      8.4     -2.7         7.0          0.2      0.9       17.8      19.6      -0.6       7.6
Program Payments                    50.0        81.6     57.3    201.7        -0.9        21.8      49.9      -27.4       4.1     209.8       1.4
Total Farm Cash Receipts             5.5        -2.7     10.3      3.4         5.8          1.7      5.2        5.1      16.6       4.9       6.7
Total Operating Expenses             2.8         2.8      1.2      2.8         3.4          2.7      1.8        3.8      -0.4       1.5       2.1
Net Cash Income                     38.7       -54.2     99.7      7.9        17.5         -4.9     25.2       15.4     167.0      26.3      37.1
Realized Net Income                200.0          **       **       **          **      -179.8     135.6         **        **     118.4        **
Total Net Income                   181.8      -439.0       **       **        16.9         -8.1    -41.8      -13.0      91.3      48.8      15.1
r Revised; f Forecast
Revised 2003, Statistics Canada (November 2004); forecast estimate for 2004, Agriculture & Agrifood Canada (February 17, 2004).

								
To top