Statistics Canada reports realized net farm income jumped 46.4 per cent to $13.5 billion, as strong growth in receipts offset higher expenses.

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

Farm cash receipts, which include crop and livestock revenues, as well as program payments, rose 14.9 per cent to $82.1 billion in 2021, the largest year-over-year gain since 1981. Farm cash receipts were up in all provinces, except Prince Edward Island. Alberta (+21.2 per cent) and Manitoba (+20.5 per cent). Saskatchewan recorded a 13.9 per cent increase.

Higher grain and oilseed prices—partially caused by widespread drought in Western Canada, produced very good returns for the 2020 crop that was sold the following year. Canola cash receipts rose 17.8 per cent to $12.1 billion. Canola prices jumped 43 per cent which more than offset a four million tonne, or 17.8 per cent decline in marketings. Farm cash receipts for wheat (excluding durum) increased 16 per cent to $7.1 billion. Prices rose 29 per cent while marketings fell 10 per cent.

Last summer’s drought in Western Canada also led to increased crop insurance payments. Total direct payments to Canadian producers were $5.9 billion—a 71.8 per cent increase. More than four-fifths of the total was attributed to higher crop insurance payments in Saskatchewan and Alberta. The Dairy Direct Payment Program and AgriRecovery contributed to the remainder.

Livestock receipts climbed 13.4 per cent to $29.9 billion dollars on stronger hog and cattle markets. The improvement followed a 0.7 per cent drop in livestock receipts in 2020, when the COVID-19 pandemic disrupted the meat processing supply chain.

The financial news was not all good though. Higher prices for fertilizer, feed and fuel led to a 10.4 per cent jump in operating expenses (after rebates), the largest amount since 1981.  Fertilizer was up 32 per cent, feed for livestock increased 23 per cent and machinery and fuel costs were up 29 per cent.  Feedlots in Alberta imported more corn for livestock feed in the last quarter of 2021 than in the two previous years combined.

You can view additional details in the Statistics Canada report here.