Thursday, March 17, 2011

Canadian Farm Size and Total Farm Operating Income

I know you hate charts and tables and stuff but I have two more related to Canadian farm size and gross farm income.  A colleague, Kevin Hursh of Hursh Consulting and Communications sent me the numbers after including some of them in his "Today's Comments" so I did the charts up for him. I forgot to ask him exactly how many farms there were in Canada but I guess I could look it up.

There are lots of small farms but in the grand scheme of things they don't produce much.  The old 80:20 rule but in this case it is 80:18.  80% of Canadian farms produce only 18% of the total farm operating revenue (revenue generated by growing and selling agricultural products), not counting off farm income, government payments and such like).  20% of Canadian farms generate 82%. 

Now the question is what IS a farm?  By Canadian tax definition, it is an agricultural operation that generates over $5,000 in sales of farm products.  43% of Canadian "farms" gross under $10,000 dollars per year.  22% of Canadian farms gross between $10,000 and $100,000 per year.  My parents farm in Saskatchewan would have fallen into that category with 3 quarters of native pasture (190 ha) and 5 of cultivated land (320 ha), all sandy loam soils .  The next income division, $100,000 to $250,000 accounts for 15% of Canadian farms.  These three categories generated 18% of Total Farm Operating Revenues (Figure 2).

Only 4% of  farms grossed over the million dollar mark.  My guess is that feedlots and pig operations fall into this category along with a few huge grain farms.

Margins are slim and operating costs are phenomenal while any profits are bid back into the value of land (or in the case of dairy and poultry, into quota prices). Asset rich, cash poor.

Figure 1: (Gross farm income is in $'000)

Figure 2: (Gross farm income is in $'000)

3 comments:

  1. If most Canadian farmers don't make more than $5000 a year then why do they keep farming?

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  2. I for one like to see information presented as graph or chart.

    I would assume the 43% with income <$10,000 would include people who sell some fruit or vegetables or a few animals and are classed as a farm. They would need something else as their main income.

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  3. Farms under $50,000 and even under $100,000 depend on other sources of income or the people live very poor. I forget what % of farms show off-farm income usually from one spouse but sometimes from both. The job in town pays the family bills and the farm provides lifestyle and income to make land and machinery payments. This is especially true for young beginning farmers.

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