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Lower crop prices results in lower cash receipts

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Lower grain and oilseed prices have taken a bite out of the incomes of Manitoba farmers in the early stages of 2014.

First-quarter data released today by Statistics Canada shows farm cash receipts in Manitoba were down 5.2 per cent from the first three months in 2013 — $1.7 billion versus $1.8 billion.

However, farmers in Alberta and Saskatchewan fared even worse. They saw their cash receipts plummet by 16.8 per cent and 15.3 per cent respectively, which were the two biggest declines among the seven provinces that posted weaker Q1 totals.

That, in turn, drove down Canadian farm cash receipts by 9.6 per cent to $14.2 billion from $15.7 billion in the first quarter of 2013.

Farm cash receipts measure the gross revenue for farm operators and include the money earned from the sale of crops and livestock, and from government support programs. However, they are not the farmers’ bottom line because they still have to deduct their expenses for such things as fertilizer, farm fuel, loan payments, and depreciation in the value of their machinery and equipment.

Statistics Canada noted crop receipts have taken a hit this year in Canada, falling by 17.6 per cent compared to a 10.1 per cent increase in livestock receipts. In Manitoba, the decline was 7.8 per cent versus a 19.2 per cent increase in livestock receipts.

It said the decline in crop receipts was due mainly to lower prices for the major grains and oilseeds.

"Crop prices began to drop in August 2013, reversing a growth trend that had started in September 2010," it noted. "Grain and oilseed prices came under downward pressure as production in both the United States and the rest of the world recovered, adding to global supplies. As well, Canadian production of most field crops increased in 2013 compared with 2012."

Because of last year’s record crop in Western Canada, farmers also filed fewer crop insurance claims in 2013. So payments from government support programs were down 43.8 per cent in Canada in Q1 of this year, and down 63 per cent in Manitoba.

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