More Modest than Expected but Decline in 2022 Realized Net Farm Income Still Sharp

Nov 28, 2023

The fall in Canadian farm income in 2022 was not as steep as originally expected although it was still a dramatic turn for the worse compared to the previous two years.

In a farm income report Tuesday, Statistics Canada estimated 2022 realized net farm income for Canadian producers at $11.8 billion, down 7.6% on the year. That is a more modest decline than the 9.5% drop StatsCan was projecting back in May but stands in sharp contrast to the nearly 70% increase posted in 2021 and the 101.6% jump recorded in 2020.

Excluding down trending cannabis returns, last year’s farm income picture looks a bit better, with 2022 realized net farm income - the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind - down a more modest 5.9%.

According to StatsCan, total farm cash receipts, which include crop and livestock returns as well as government payments, actually increased year-over-year in 2022, rising 14.6% to $95.1 billion. However, the bottom line was undone by an 18.6% increase in total farm expenses (operating expenses and depreciation) to $83.4 billion.

Alone, farm operating expenses (after rebates) increased by 19.9% to $73.3 billion in 2022 — the largest gain since 1979 (+21.1%) — and easily surpassing the 9.5% rise in 2021.

“Farmers faced higher costs for key agricultural inputs, including fertilizer, feed and fuel,” StatsCan said.

Saskatchewan had the highest realized net farm income in 2022 at $3.84 billion, although that was down a steep 24.4% from a year earlier. Alberta realized net farm income, at $3.03 billion, was up almost 19% on the year, while Manitoba was down 2.1% at $1.55 billion. Ontario realized net farm income came in at $2.53 billion, an increase of just over 2%.

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Video: Spring 2026 weather outlook for Wisconsin; What an early-arriving El Niño could mean

Northeast Wisconsin is a small corner of the world, but our weather is still affected by what happens across the globe.

That includes in the equatorial Pacific, where changes between El Niño and La Niña play a role in the weather here -- and boy, have there been some abrupt changes as of late.

El Niño and La Niña are the two phases of what is collectively known as the El Niño Southern Oscillation, or ENSO for short. These are the swings back and forth from unusually warm to unusually cold sea surface temperatures in the Pacific Ocean along the equator.

Since this past September, we have been in a weak La Niña, which means water temperatures near the Eastern Pacific equator have been cooler than usual. That's where we're at right now.

Even last fall, the long-term outlook suggested a return to neutral conditions by spring and potentially El Niño conditions by summer.

But there are some signs this may be happening faster than usual, which could accelerate the onset of El Niño.

Over the last few weeks, unusually strong bursts of westerly winds farther west in the Pacific -- where sea surface temperatures are warmer than average -- have been observed. There is a chance that this could accelerate the warming of those eastern Pacific waters and potentially push us into El Niño sooner than usual.

If we do enter El Nino by spring -- which we'll define as the period of March, April and May -- there are some long-term correlations with our weather here in Northeast Wisconsin.

Looking at a map of anomalously warm weather, most of the upper Great Lakes doesn't show a strong correlation, but in general, the northern tiers of the United States do tend to lean to that direction.

The stronger correlation is with precipitation. El Niño conditions in spring have historically come with a higher risk of very dry weather over that time frame, so this will definitely be a transition we'll have to watch closely as we move out of winter.