Calgary

'No end in sight': Worry sets in as Alberta farmer income drops 68%

Income for the province's agricultural producers fell by 68.1 per cent last year, with the sector earning a net income of $250.5 million across the province, according to a Statistics Canada report.

National farm income decline largest since 2006, according to Statistics Canada

Farmers unload canola while harvesting on a farm near Beiseker, Alta., in this file photo. (Todd Korol/Reuters)

Income for the province's agricultural producers fell by 68.1 per cent last year, with the sector earning a net income of $250.5 million across the province, according to a Statistics Canada report.

The report is attributing the sharp revenue decline to higher expenses combined with lower on-farm inventories of livestock and select crops.

Kevin Serfas farms barley, canola, corn and more near Lethbrdige, Alta. He was surprised to see earnings dip so low, but added it's the third year in a row that drought has hit.

"It was a pretty tough year, for sure," Serfas said. "And I don't see an end in sight at the moment, to be honest."

He said if there isn't rain in the next 10 to 14 days in southern Alberta, crops will suffer.

While he said 2018's harvest was mainly hurt by weather, the first quarter of 2019 has seen a new challenge: trade.

He's on the board of the Alberta Canola Producers Commission, where concerns are mounting over China's canola embargo.

Trade issues bigger in 2019

"[Last year] was relatively bump-free in regards to trade, but 2019 — that's going to stick a whole other spin to it," Serfas said.

Hannah Konschuh farms an hour and a half east of Calgary.

She said trade, politics and the weather are always huge factors for farmers in Alberta, and while 2018 wasn't without its challenges, she's learned to be optimistic.

She said wheat prices dropped off before seeding, but they've since come back. And she expects to see strong prices in feed crops like barley.

'I'm not throwing in the towel'

"We're still early enough in the season that if we did get a nice rain, things could probably turn around for us," she said. "But at this point, I'm not throwing in the towel. There's still a lot of time left for a good crop."

Konschuh added most farmers have risk-management plans like crop insurance, and support from the provincial and federal governments to help with farm margins.

"They aren't great programs, but they do provide some help when we're experiencing factors like we are now," she said. "But farming … it's a risky business to be in where you need to be used to fluctuations."

High feed prices took a bit of a bite out of the cattle profit in 2018, and this year the industry is watching the weather closely. (Reuters)

On the livestock side, Brian Perillat is a senior analyst with Canfax. He says feed took a bit of a bite out of the cattle profit in 2018, and this year they're watching out for much of the same.

"Things have been incredibly volatile," he said. "We've got a bit of drought in Western Canada, we have flooding going on in the United States, grain prices have gone up … but with a higher feed cost that could bite into profits a little more."

On the flip side, he said, there's potential for strong exports in beef this year.

Statistics Canada is attributing more than one third of the national decrease in farmer income to Alberta's decline.

In 2017, Canada's farmer income fell by 2.8 per cent nationally. In 2018, income of agricultural producers fell 45.1 per cent across the country.

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