2022 farm cash receipts forecast update: Inflation spreading across ag markets

In our January forecasts, we expected Farm Cash Receipts (FCR) to continue growing in 2022, although at a more moderate pace than in 2021. Much has changed since the war in Ukraine and inflation ramping up. We forecast FCR to grow by nearly 16% because of elevated commodity prices and expectations that crop yields will match their projected trend.

FCR do not paint the full picture of farm profitability, as FCR growth does not necessarily mean that farm profits are increasing. The rapid rise of farm input prices and interest rates are significant factors to monitor for profitability in 2022.

2022 projections surpass record-high 2021 estimates
FCR data for the 2021 Q4 came out stronger than we expected in January, mostly from larger than forecasted direct payments (which include crop insurance payments) because of the drought in the Prairies.

Table 1 compares FCR data for 2020 and 2021 to FCC forecasts for 2022. Total FCR in Canada grew 14.9% in 2021, and we project receipts to grow even faster in 2022 (15.9%). We expand on the largest agricultural sectors below.