Features Fruit Production
New reports point to strong growth for Canadian ag

February
21, 2012, Ottawa, Ont – Two new reports point to another prosperous year for
farmers in 2011 and a positive outlook for 2012. The positive economic news is
contained in reports released recently by Agriculture and Agri-Food Canada
(AAFC).

February
21, 2012, Ottawa, Ont – Two new reports point to another prosperous year for
farmers in 2011 and a positive outlook for 2012. The positive economic news is
contained in reports released recently by Agriculture and Agri-Food Canada
(AAFC).

“In
2011, Canada benefited from another strong economic performance by the
agricultural industry,” said Agriculture Minister Gerry Ritz. “And the results
of our forecasts for 2012 are even better than expected. Continued high prices
in crop and livestock markets are predicted, meaning that prospects for
Canadian farmers look solid in the year ahead.”

Together,
the Farm Income Forecast for 2011 and 2012 and the Medium Term Outlook provide an overview of the sector
and give producers, stakeholders and governments a benchmark as they plan for
the years to come.

The
average net operating income for farms in 2011 is expected to reach record
levels of just over $65,000, and net cash income at the sector level is forecast
to rise 24 per cent to $11.7 billion, surpassing last year’s record high of
$9.5 billion. Despite difficult growing conditions last year in parts of the
country, and higher operating expenses driven by fertilizer, fuel and feed
costs, 2011 saw an increase in overall farm income levels due to higher prices
for hogs, grains and oilseeds. Disaster assistance and production insurance
payments to Prairie farmers dealing with a second year of excess moisture also
contributed to income levels. 

Preliminary
forecasts for 2012 promise another good year for the agricultural sector,
though farm incomes are expected to drop slightly from record highs in 2011,
based on the assumption that the year will see lower program payments and
modest increases in expenses, despite projections of continuing high market
prices.

Global
markets will continue to play an important role for Canada’s agriculture and
agri-food sector. The Medium Term Outlook for the 2011-2021 period is characterized by high
international grain and oilseed prices compared to the pre-2006 period,
something that analysts expect will lead farmers to increase their production
of these crops.

The
Outlook points to modest improvements for the red-meat industry, as prices have
been rising since 2010 after many difficult years. Supply-managed commodities
are also projected to register continued stable growth, according to this
year’s projections.

The Farm
Income Forecast
is prepared in consultation with provincial governments and Statistics Canada,
and is based on information available as of mid-December 2011.  The Medium
Term Outlook is
based on leading indicators as of the fall of 2011, including Canadian
macro-economic forecasts from the Conference Board of Canada, published in
September, and short-term price forecasts updated using November projections
from the United States Department of Agriculture.

The two
reports produced by AAFC’s Research and Analysis Directorate can be found
online at: Canada’s Farm Income Forecast for 2011 and 2012 and Medium Term Outlook for Canadian Agriculture 2012.