Others would rather be outside working with cattle or at conferences learning the latest disease management techniques. 

If you’re not in the first category, your banker might know more about your farm financial indicators than you do. 

There are such long lists of financial indicators available it can be hard to know where to start. And once you calculate a financial ratio, how do you know if yours is “good”? 

If you don’t calculate these three financial ratios, your banker will. So, why not start by doing the math at home and taking them along to your next meeting?

Why financial indicators matter

Rising land prices have pulled up many farmers’ net worth statements. 

“There is not an equity issue out in farm country. Most operators are holding land that has appreciated well,” says Craig Macfie, founder of consulting firm Spring CFO (link to www.springcfo.com). Macfie has seen all kinds of farm financial statements through his consulting work, as an accountant, as a past CFO for Monette Farms and through his experience as a farmer in Crystal Springs, Sask.

But lenders care about more than net worth. Lenders want to know if your assets are generating profits, and if you’re able to repay loans. 

In some banks, Macfie says, “the bank credit department is God, and your bank relationship manager is the Pope.” That is, the banker you meet with doesn’t typically have authority to make lending decisions without support from someone in the credit department. 

When you need a loan, Macfie says, “You need the Pope on your side, advocating for you.” Your bank manager can tell the credit department what a strategic farmer you are, but the credit department is still going to want to see the numbers. 

Your financial indicators will have to carry the day. 

The lenders’ perspective

Macfie suggests three key financial indicators can show your farm’s ability to repay loans. 

Roxane Lieverse is an executive vice president and the head of agricultural banking with Rabobank in Canada. When asked which financial indicators are important for lenders, she lists the same three indicators. 

The financial indicators these two professionals see as highly relevant to bankers are:

1. Working capital to expense ratio
2. Debt service coverage ratio
3. Debt to equity ratio

Together, these three indicators show lenders your farm’s recent financial performance and your farm’s ability to repay loans. 

1. Working capital to expense ratio 

What it measures: The working capital to expense ratio measures your farm’s ability to stay in business through the next production season. 

“It shows the actual working capital available for a producer to put in their crop, whatever it is they’re growing or producing,” Lieverse says.

How to calculate it:

First, calculate your working capital:

Working Capital = Current Assets – Current Liabilities

Where current assets equal assets that can be converted to cash within one year (e.g., bank accounts, inventory, prepaid expenses) and current liabilities that must be paid within a year (e.g., accounts payable, operating loans, rent payments, credit card debt, taxes).

Working Capital to Expense Ratio = Working Capital / Annual Operating Expenses

Some financial analysts use these same measures to calculate the Current Ratio, which compares current assets to current liabilities. 

Current Ratio = Current Assets / Current Liabilities

The current ratio can be used to measure short-term viability, but Lieverse and Macfie both find comparing working capital to annual expenses more intuitive. 

A “good” ratio for you depends on your strategy. 

If working capital is equal to annual farm expenses, your ratio is 1:1. “Your farm can finance next year’s crop,” Macfie says.

Many farms’ ratio is less than one. 

“Some farms put all of their working capital into more land and machinery, and that’s how they grow.” These farmers are using cash-on-hand to finance expansion, whether it’s land, machinery or equipment. “That works,” Macfie says, “until it doesn’t.”

If the working capital to expense ratio is too low, the farm will be short on cash, perhaps to the point of financing short-term inputs with expensive retail credit. 

“Once you maximize retail credit, there’s really no options besides refinancing or selling land,” Macfie says.

The safest approach is to keep your working capital to expense ratio well above 1:1. But this plan may not keep your money working hard enough. Maybe some capital could replace depreciated assets or repay high interest loans.

Macfie visualizes this ratio as a teeter-totter, with managers balancing cash on hand against re-investments. “The hard part is that balance.”

What does Macfie advise? “The easy advice is 50 percent,” Macfie says, noting that the ideal situation will always vary from farm to farm according to your strategy and your industry.

2. Debt service coverage ratio (DSCR)

What it measures: “Bankers are concerned that you can repay your debts,” Macfie says. “Why would you loan more money to someone who hasn’t shown recently that they can service debt? If your three- or five-year history doesn’t show you can service more debt, why would I give you more debt?”

The debt service coverage ratio compares your recent annual income to the size of your debt. 

How to calculate it:

DSCR = Income / Debt Service

Where income equals farm revenues (after taxes) minus operating expenses (excluding interest), plus off-farm income. Debt service equals payments on short-term and long-term loans, including principal and interest.

What is a good ratio? If your debt service coverage ratio is 1:1 or higher, you have enough income to pay your debt. A higher DSCR indicates higher profitability relative to debt.

Lieverse would like to see a ratio a little higher than 1:1. “Ideally above 1.25, but it’s very heavily dependent on the industry.” 

Rising interest rates will increase your debt costs, decreasing your DSCR. You could raise your DSCR by restructuring or paying down debt. 

A manager focused strictly on DSCR might turn down growth opportunities that require debt. The ideal ratio is the number that fits your strategy.

3. Debt to equity ratio (DER)

What it measures: The first two indicators on this list are more important to banks, says Lieverse, as they’re more relevant to day-to-day operations. The DER shows your long-term viability. “If there was a profitability concern, long-term, how could the producer sustain themselves?”  

How to calculate it:

DER = Total Liabilities / Total Shareholders Equity

Where total liabilities equals all short- and long-term debt and total shareholders equity equals total assets minus total liabilities.

Corporate balance sheets usually show long-term assets such as land and buildings at purchase price (book value). Updating asset values to current fair market prices makes the results more realistic (and probably more comforting). 

What is a good ratio? A low DER indicates a farm with flexibility to borrow money if opportunities arise. A farm with a high DER may have taken on debt to buy more land or may be in a financially vulnerable position.

While long-term customers may have some leeway, Macfie says, “Banks don’t care if you’re sitting on a bunch of land equity if the farm hasn’t been profitable in a few years.” 

You could raise your DER by selling land or equipment to repay loans. But unless downsizing is part of a long-term strategy, it may not be the ideal solution for you or your lender.

Take action to control financial indicators

Many aspects of farm financials are outside your control. If you find yourself with less-then-perfect ratios, here are four steps to take:

1. Develop good working relationships: “You can’t control the weather, but you can control having a good relationship with your banker and your accountant,” Macfie says. 
2. Timely financial statements: Your financial indicators may not be great, but they can still be timely. “You can control getting your bookkeeping to the accountant on time, so they can get it to the banker on time,” Macfie says.
3. Check your corporate year end: Ratios change depending on where you are in your annual production cycle. For example, if you’re a grain farmer with a July 31 year end, “the bank is testing your balance sheet at the worst time of year.” Your Working Capital to Expense ratio will be low, since your current assets are still out in the field. Re-calculate that ratio on October 31, when your barley is in the bin. 
4. Cut costs: If most of your financial indicators are grim, it’s time to look at your operation. “There are efficiencies to be found across the board on land, machinery, labour, agronomy and other operating expenses,” Macfie says. “Keep looking.”

Looking to the future

Lieverse describes herself as a “disruptive agricultural banking leader.” But even innovative bankers still calculate ratios. 

“Banking has a bit of tradition to it,” she says.

Most of Lieverse’s clients are operational experts. “I very seldom stop at an operation where a producer doesn’t know their costs of inputs down to the acre and cannot articulate soil health with a degree of expertise.”

But some farmers have become experts in these areas at the expense of “soft side” business aspects. “Many farms have struggled in operational items related to finance and HR.”

When rising land prices create strong balance sheets, Lieverse says, “you can make mistakes and not really be forced to learn from them.” This probably won’t always be the case. “We’re going into a commodity cycle where margins are tightening. What are you doing to future-proof the farm?”

“Financial ratios are great because they tell us how the farm has done,” Lieverse says. “But what I’m equally interested in is hearing from producers about what they’re going to do. Financial ratios are about looking in the rearview mirror. But I know that operators are driving looking out the window ahead.”

The post A guide to farm financial ratios appeared first on Country Guide.

Well, the tide is going out in primary producer agriculture. Who will be left with clothes on?

Is the shifting tide due to the highest cost of production ever? The changing policy discussions? The geopolitical factors that come with trade wars? Or just the fact that weather events are becoming more common?

Whatever it is, there’s definitely a shift.

Growing up I never realized how much agriculture was trailing other industries in terms of financial acumen. We could once obtain loans with looseleaf net worth statements and personal tax returns. The words “accrual,” “debt service” or “working capital” were not words frequently thrown around, much less understood by most famers. 

In my early years agriculture was not profitable, and land was traded for property taxes. 

How things have changed.

As 2025 progresses, indicators of change have appeared. Banks are tightening up on reporting and covenants. Farms are starting to see cracks in their financial foundations. Even agricultural educational institutions are taking notice. 

A colleague of mine once commented that he had to be careful when discussing financial acumen with farmers during his presentations as it was a “touchy” subject. Well, guess what? Touchy doesn’t pay the bills.

As farmers move into a new reality of financial requirements, let’s break down the non-negotiables when it comes to running your business.

Accrual financial statements

For the first time, this spring I had a conversation with a lender who refused a restructure due to lack of historical accrual reporting. 

It was almost a breath of fresh air. 

For years the industry has been trying to push producers towards understanding and using accrual reporting over cash. Accrual allows the farm to identify if it’s profitable, not just if there’s money in the bank to pay the next bill. This is not to say that cash doesn’t have a place in key performance indicators, it just cannot be the only conversation.

Our partners to the south have been trying to push this standard for 30 years. Ever since the 1980s agriculture crisis, U.S. regulators and standards boards made it a key objective. But they have made little headway. 

I would like to think that Canada is closer but let’s say its efforts are the “best of the worst.” Over half of the primary producer industry has still not adopted accrual reporting and does not know if they are profitable year over year.

Call it the Holy Grail, but a true business requires accrual information throughout the year. Many of the farms we consult for now have internal controllers, monthly accrual reporting and know exactly where they stand in terms of profitability. 

This is how you can make decisions with no emotion, just data.

Budgets and projections

Budgeting is more of a spectrum than a destination. 

There are many factors that need to be considered when preparing a true projection that most fail to execute. The key areas of focus should be the following:

• Cost of production: The need to identify a farm’s true cost of production has never been greater. To move a step further you need to identify both an accrual and a cash number to appropriately market your product. One requires amortization (yes, this is a true cost as you are losing equity in your machines at a rapid pace per hour); the other needs debt payments as they are a cash drain and, depending on your leverage model, may be material. Overall, you need to identify a marketing plan that shows a sustainable return per bushel and per acre.
• Monthly burn rate: Without a monthly cash flow (preferably planned over an eighteen-month period) your ability to market falls only on price. For most farms, cash flow, logistics and many other factors go into when and how you market your products — even more so on livestock operations where you don’t have steady cash flow throughout the year. Knowing your monthly cash out-flows will help you make longer-term decisions.
• Capital planning: The time to decide on equipment and infrastructure is not when the salesperson sits down for a coffee. Most progressive farms create capital plans years in advance and stick to them. In the past, operations bought equipment in good years and then held tight when times got tough. This doesn’t allow for any future strategy or plan; it is purely emotional buying. Know what you can afford, when machinery requires replacement and how this affects your profitability and banking.

Key performance indicators

It still amazes me how many producers have never read a commitment letter from their lenders. 

On many farms, financial institutions are the only thing between them affording to put a crop in and calling the auctioneers. Agriculture is an equity rich-cash poor business and, as such, the ability to understand your key banking and internal ratios is more important than ever.

Following are the three indicators every operator should know at any point in their day:

• Working capital: How much cash you have available to cover future costs. This could be working capital cash in a bank account or grain in the bin that can be easily converted to cash. Working capital is calculated by your current short-term assets less your obligations due over the next year. This ratio determines how easily you can make sales and procurement decisions and whether you can take the family out for dinner on a Sunday night.
• Debt service: The indicator of whether you can make enough cash to pay your debt. For non-farm individuals this would be your employment income compared to your mortgage and car loans. For farms, this is whether over a three-to-five-year period the farm creates enough cash to cover the current debt obligations. This determines whether your banker will give you more money or shut the tap off.
• Debt to tangible net worth: Are your assets larger than the debt you maintain? This is the least important indicator with your lenders, but often a covenant, nonetheless. This indicates whether you have left enough of your personal wealth in the business in comparison to the bank’s risk. This often only becomes a broader conversation if land values decline or if you are slowly taking large amounts of cash out to buy personal assets.

Every time agriculture enters a down cycle the industry pushes primary producers into positive change.

It is an interesting trend as it follows the concept that good times create soft people, and hard times create hard people. 

Whether 2025 continues to be the year where we see the industry force change, only time will tell. But as an individual who speaks with a significant number of farms every year, I sometimes hope for short-term pain to force a long-term change.

The post Shifting tides bring change to agriculture  appeared first on Country Guide.

The increase followed a 4.1 per cent decline in 2022 and a 69.6 per cent increase in 2021. However, total net income, which adjusts for changes in farmer-owned inventories of crops and livestock was down on the year.

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

Total farm cash receipts rose 4.4 per cent compared with 2022.  Higher prices for cattle and calves resulted in increased livestock receipts while higher crop marketings contributed to increased crop receipts. Program payments decreased $758.4 million in 2023, as much of the relief related to the 2021 drought had been paid out in 2022, said StatCan.

Total expenses (after rebates) increased at a more modest pace of 2.4 per cent in 2023. Farmers faced higher costs for interest expenses (+39.1 per cent) and livestock and poultry purchases (+36.5 per cent), while key agricultural inputs, such as fertilizer and lime (-18.9 per cent) and machinery fuel (-14.1 per cent) declined following gains in 2022.

Saskatchewan saw the largest increase in realized net income, rising by C$1.9 billion on the year to hit C$6.065 billion. Manitoba’s realized net income was up by C$227 million at C$1.823 billion, while Alberta saw realized net income up by C$374 million at C$3.528 billion.

To the east, both Ontario and Quebec reported reductions in realized net farm income, with Ontario down by C$67 million at C$2.501 billion and Quebec posting a C$244 million drop at C$601 million.

The gains in the Prairie provinces were mainly the result of a drop in fertilizer prices, the largest expense item for grain growers, while lower hog receipts were the main factor in the decrease in Quebec.

While realized net income was higher for Canadian farmers overall, net income decreased by C$8.9 billion on the year to come in at C$12.8 billion in 2023.

Total net income is realized net income adjusted for changes in farmer-owned inventories of crops and livestock. It represents the return to owner’s equity, unpaid farm labour, management and risk. In 2023, the year-end inventories were lower compared with 2022 due to increased marketings. Inventories in 2022 were higher as result of better growing conditions, which led to higher production following the drought in 2021, according to StatCan.

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That’s according to the official 2023 and 2024 estimates released February 16 by Agriculture and Agri-Food Canada.

For 2023, net cash income (NCI), the main metric Agriculture and Agri-Food Canada uses to measure farm income, is forecast to have increased 13 per cent to a new record of $24.8 billion.

In a media release AAFC noted that growth in expenses and income was forecast to be “much more modest” than 2021 and 2022, but the growth in farm receipts outpaced the increase in expenses, resulting in a new record for net cash income.

The strong economic performance for production agriculture came against a challenging backdrop, AAFC noted, including a drought in Western Canada, extreme weather events across the country and global conflicts such as the war in Ukraine.

AAFC’s release stated “…this continued growth of overall farm income shows that despite the uncertainty and volatility of the past year, the sector remains resilient.”

The largest driver of this expected increase is a forecasted increase in livestock receipts of almost 10 per cent, to $37.3 billion.

Cattle receipts saw price-driven growth that, combined with moderate growth in receipts from the supply-managed sector, more than offset an expected decline in hog receipts.

Crop receipts were also forecast to have grown four per cent to $56.0 billion, as improved crop production largely mitigated declining prices.

Operating expenses are forecast to have increased only two per cent to $74.9 billion, well below the 20 per cent increase seen in 2022. While some key inputs, such as labour and interest expenses, were seen to have continued increasing, others, such as fertilizer and fuel expenses, are expected to have come down.

Similar results are expected for average net operating income (NOI) per farm, which is forecast to have increased by 17 per cent in 2023 to $155,000, compared to $132,000 in 2022. This increase is 34 per cent above the 2018-2022 average.

Average farm family income, which includes income earned off-farm, is forecast to have increased by 11 per cent to $239,000 in 2023. Increases in average NOI are expected for all farm types except for hog farms and poultry and egg farms.

Looking ahead to 2024, net cash income is forecast to decline 14 per cent to $21.3 billion, as cash receipts are forecast to fall slightly, with expenses modestly increasing, although net cash income would still be 28 per cent above the 2018-2022 average.

Under the assumption of a normal production year, crop receipts are expected to decline five per cent as prices continue to fall. Livestock receipts are forecast to continue increasing, but at a much less aggressive rate of two per cent, as growth in cattle prices is forecasted to slow down.

Average farm and farm family incomes are expected to follow a similar trend.

–Gord Gilmour is Sr. Editor of News and National Affairs for Glacier FarmMedia. He writes from Winnipeg.

The post New farm income record set in 2023, estimates suggest appeared first on Country Guide.

Net income was under the LSEG consensus forecast of 724 million reais, and far below the whopping four billion-real gain in the third quarter of 2022.

In a financial statement, the company said adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at 5.4 billion reais, above consensus estimates of 5.15 billion reais.

JBS felt pain across key business divisions and posted net revenues of 91.4 billion reais, down 7.6 per cent year-on-year.

In the U.S., the company’s biggest market by sales revenue, beef margins fell sharply as reduced cattle herds limited the availability of animals for slaughter and raised costs, a situation also affecting rival Tyson Foods.

Citing USDA, JBS said U.S. beef exports were down 19 per cent year-on-year through end-September, mainly due to supply restrictions combined with lower Asian demand, which hurt the firm. The three main destinations of U.S. beef exports remain South Korea, Japan and China, it added.

Also in the U.S., wholesale pork prices fell about seven per cent in the quarter from a year ago, as companies made an effort to reduce stock levels, according to JBS.

The silver lining for pork was the international market, as JBS cited data from the USDA showing a 12 per cent increase in pork exports, especially to Mexico and Canada, from January to September.

In its local Seara processed foods divisions, revenues dropped 13.3 per cent year-on-year to 10.2 billion reais as export sales plunged on a persistent global chicken oversupply.

Seara’s exports in dollars slid 14 per cent from the year-ago quarter to $1 billion on lower export prices in the currency. This was partially offset by a rise in the volumes sold by the division, JBS noted.

— Reporting for Reuters by Ana Mano and Roberto Samora.

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Still, it beat analysts’ forecasts.

JBS reported a 4.6 per cent fall in revenue for its U.S. beef division, which is normally the company’s cash cow, while earnings before interest, tax, depreciation and amortization (EBITDA) slumped 55 per cent compared with the same year-ago quarter.

Domestic markets for JBS’ North American beef business — which includes its Canadian operations — saw strong beef demand, “even with the delay in the start of the grilling season due to atypical weather conditions” — but margins were pressured as cattle prices rose “above the expected level.”

North American beef division exports, meanwhile, were up 7.4 per cent in volume from the year-earlier quarter, JBS said — noting China “despite the lockdowns during the period” had kept purchase volumes high.

U.S meat processors are now reeling from the effects of lower cattle availability in North America, where a drought is leading ranchers to terminate animals rather than sending them for processing.

In the second quarter, overall U.S. pork exports fell 17.7 per cent due to a drop in demand from China, Japan and Canada, JBS said, citing USDA data.

As such, results for its U.S. pork division were affected, with JBS sales for that unit dropping 3.2 per cent on an annual basis, to 10.3 billion reais.

JBS’ Pilgrims Pride poultry unit, however, provided a silver lining in the United States, as its chicken sales rose by 18.3 per cent to 22.7 billion reais.

In Brazil, likewise, JBS’ Seara processed foods division did well. Seara sells about 47 per cent of its output in Brazil, and that business brought in five billion reais (US$969.24 million) last quarter, 20 per cent more than a year ago, JBS said.

To fend off cost inflation, Seara was able to raise prepared products prices by 19 per cent on average, while increasing sales volumes by five per cent.

At the same time, Seara’s export sales reached $1.1 billion, a 27.9 per cent rise from the same quarter a year ago.

In Brazil, JBS beef product sales rose by almost 11 per cent to 14.1 billion reais, in spite of a 12 per cent fall in cattle processing because China temporarily halted imports from a large plant.

— Reporting for Reuters by Ana Mano in Sao Paulo. Includes files from Glacier FarmMedia Network staff.

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Speaking at a conference call to discuss fourth-quarter results, management said JBS will benefit from strong U.S. domestic demand for food products and steady meat trade flows to Asian markets, especially China.

JBS overall reported net income of 20.5 billion reais (C$5.24 billion) in 2021 on revenue of 350.7 billion reais, up 345 per cent from its 2020 net.

In Brazil, where the company is headquartered, cost pressure will continue to weigh on the Seara division as meat processors scramble to buy corn used as feed.

The scarcity during the inter-harvest period for corn, which will last through the middle of the year, is compounded by the war in Ukraine, which has caused grain prices to spike globally, affecting operations across all geographies.

Seara, which processes pork and poultry, has been unable to pass on higher costs onto consumers in Brazil, management said citing the weakness of Brazil’s economy. In the United States on the other hand, consumers have the purchasing power to continue buying, executives said.

Citing USDA data for 2022, JBS managers said beef and pork production will fall from the previous year in the United States, while poultry output will likely rise.

In the United States, where the company derives most of its revenue, the outlook for prices and margins remains positive. In Australia, herds are still recovering but the outlook is improving.

On Monday, JBS reported record sales last year on the back of the strength of its U.S. business, which is also buoyed by strong trade ties with China.

In its JBS USA beef unit, which includes its Canadian operations, the company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US$1.34 billion on net revenue of US$7.5 billion in its fourth quarter, and full-year 2021 EBITDA of US$4.89 billion, up 105 per cent on the year, on US$27.18 billion in revenue.

Regarding acquisitions JBS made in 2021, the company said companies acquired are performing better than expected.

— Reporting for Reuters by Ana Mano; includes files from Glacier FarmMedia Network staff.

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Statistics Canada on Tuesday released full-year data on farm income, pegging Canada’s realized net farm income for 2019 at $4.9 billion — a 10.4 per cent increase from 2018 and the first such increase in three years.

The increase in 2019 also comes in the wake of a 37.4 per cent decline in 2018 from 2017 — in that case due to “sharply higher” input costs and lower canola receipts, the federal statistics agency said.

For 2019 over 2018, higher cannabis and livestock receipts and increased program payments “just offset” the rise in overall operating expenses, StatsCan said.

A 3.9 per cent increase in crop receipts, at $36.6 billion, was due mainly to the $1.7 billion increase in licensed cannabis producer receipts compared to 2018 — the year in which recreational cannabis was legalized in mid-October.

Growth in cannabis receipts in Ontario and Alberta alone accounted for 56.5 per cent of the national increase, StatsCan said.

Leaving cannabis aside, crop revenues at the national level would have declined 1.1 per cent, StatsCan said. That decline came mainly from drops of 7.4 per cent and 17.7 per cent in canola and soybean revenue, due to China’s import restrictions on Canadian canola seed and reduced soymeal demand from China and other countries due to swine fever.

Canada’s durum wheat sales, meanwhile, were up 22.5 per cent in 2019 from 2018, as “production shortfalls elsewhere in the world led to increased export demand for high-quality Canadian durum,” StatsCan said.

In Canada’s livestock sector, hog producers saw an 11.6 per cent lift in revenue in 2019 over 2018 on higher prices and marketings, even despite China’s block on Canadian pork imports from June into November.

Cattle revenue was 3.3 per cent on the year on increased marketings, with “strong global demand for beef and lower end-of-year cattle inventories in the United States,” StatsCan said. Among the supply-managed commodities, increased receipts were seen in dairy (up 5.1 per cent), chicken (4.7 per cent) and eggs (six per cent).

Program payments in 2019 were up 40.6 per cent on the year, at $3.1 billion, including a 57.7 per cent increase in crop insurance payments due to “adverse” crop conditions. The first instalment ($293 million) from the federal Dairy Direct Payment Program was also released in 2019.

Increases in realized net income in 2019 were shown in Alberta ( up $425 million), Quebec (up $373 million), British Columbia (up $102 million), New Brunswick (up $41 million) and Prince Edward Island (up $20 million).

“Reduced” receipts from oilseeds — and smaller increases in cannabis receipts — led Saskatchewan to a $311 million decline from 2018, while Manitoba booked a $179 million decrease, StatsCan said.

Farm operating expenses, after rebates, were up 5.7 per cent on the year, at $53.1 billion. Factors in that increase included interest expenses (up 16 per cent), cash wages (up 9.2 per cent) and fertilizer (up 7.1 per cent). Increased cannabis production alone accounted for just under half the increase in operating expenses overall.

Total net income — that is, realized net income adjusted for changes in farmer-owned inventories of crops and livestock — came out at $3.9 billion in 2019, up $82 million from the previous year. Increases in total net income in Alberta and Quebec “partially offset” declines in Saskatchewan and Manitoba, StatsCan said.

First-quarter receipts in

StatsCan on Tuesday separately released new data on farm cash receipts for the first quarter of 2020, reporting a 5.5 per cent increase from the year-earlier period at $16.9 billion.

Again, increased crop receipts in Q1 2020 were mainly in cannabis, at $1 billion alone. Canola receipts were also up on increased marketings and lentil receipts rose on rising exports and higher prices, but without cannabis, crop receipts were down 4.7 per cent.

In the livestock sector, hog and dairy receipts showed gains at 14.4 per cent and 5.9 per cent respectively. Receipts for cattle and calves combined were down three per cent.

Farm program payments, at $991.7 million, were up 42.4 per cent from the year-earlier Q1, again mainly from crop insurance and the Dairy Direct Payment Program. — Glacier FarmMedia Network

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The Agricultural Producers Association of Saskatchewan on Monday released new estimates on the financial impacts of carbon pricing, accounting for all “major farm expenses not currently exempt” from the tax.

Such costs, APAS said, include grain drying, rail transportation, heating and electricity, as well as hauling crops off the farm by truck. The group said it will press for a carbon tax exemption on all farm expenses, including those from 2019.

Using the example of a household managing a 5,000-acre grain farm in Saskatchewan, APAS said the tax in 2020 would amount to an “$8,000 to $10,000 bill” and when the carbon tax increases to $50 per tonne in 2022, “this bill will go up to $13,000-$17,000 for the same household.”

APAS and Manitoba’s general farm organization, Keystone Agricultural Producers, have gone public with such numbers as federal Agriculture Minister Marie-Claude Bibeau has asked the provinces and ag industry for hard numbers to back up assertions of how much the tax costs farmers.

“We’ve responded with estimates that are backed up by producer bills in 2019,” APAS president Todd Lewis said in Monday’s release.

“Farmers don’t set our prices, so those increased costs are coming directly off our bottom line.”

APAS vice-president Bill Prybylski said the group’s numbers “reflect my personal experience down to the penny,” and described 2019 as “unprecedented in terms of the role grain drying played for farmers in our province. Without using propane to dry our grain, the wet fall would have meant losing a huge portion of our crop.”

Manitoba’s KAP last month reported its corn-growing members paid an average $3.69 on grain drying per acre, and the average farmer growing 500 acres of corn paid an estimated $14,145 on fuel for dryers, of which $1,722 went to carbon tax.

Grain transportation is also a “huge and unavoidable” carbon-taxable expense for farmers, APAS noted Monday. “Trucking my crop to the grain elevator, and then shipping it by rail to the coast is one of my biggest annual expenses,” the group’s vice-president Ian Boxall said.

“Our hope is that this is the evidence (Bibeau) is looking for,” Lewis said of APAS’s latest numbers. — Glacier FarmMedia Network

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Canadian National Railway on Tuesday reported third-quarter net income of $1.195 billion on $3.83 billion in total revenues, up from $1.134 billion on $3.688 billion in the year-earlier period.

Canadian Pacific Railway on Wednesday reported $618 million in net income on what it reported as a “record” in Q3 total revenue of $1.979 billion, down from $622 million on $1.898 billion in the previous Q3.

During the quarter, Calgary-based CP moved about 106,600 carloads of grain, down from 107,400 in its year-earlier Q3, and 14,800 carloads of fertilizers and sulphur, up from 13,800. It booked revenue per carload of $3.837 for grain, up eight per cent, and $4,459 for fertilizer and sulphur, up 13 per cent from the year-earlier Q3.

Montreal-based CN, which lists grain and fertilizer traffic as a single market segment, reported moving 145,000 carloads of grain and fertilizer during its third quarter, down from 156,000 in last year’s Q3. It also reported revenue per carload of grain and fertilizers at $3,807, up five per cent.

More generally, both railways’ quarterly reports cite what CN described as “deterioration in North American rail demand, as the economy continues to weaken.”

“CN delivered strong results, despite a softening economy,” CN CEO J.J. Ruest said Tuesday in the company’s Q3 release, adding the company “aligned resources with the weaker demand to achieve solid efficiency gains.”

CP CEP Keith Creel, in that company’s release Wednesday, said the company’s approach “puts us in a position to control what we can as we navigate softer volumes, macroeconomic challenges and geopolitical tensions into the fourth quarter.”

While CP now expects low-single digit growth in volumes handled, Creel said, “we remain confident in our guidance to deliver full-year double-digit adjusted diluted EPS (earnings per share) growth.”

Looking ahead on the rest of fiscal 2019, CN said its outlook assumes a 2019-20 grain crop in Canada “in line with the three-year average” and that the U.S. 2019-20 crop will come in below the three-year average. –– Glacier FarmMedia Network

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