Farming operating revenues and expenses 2002

by 5m Editor
2 December 2003, at 12:00am

CANADA - This article by Statistics Canada looks at the preliminary estimates for farming operating revenues and expenses in 2002. Average operating revenues per farm increased 7.0% in 2002 from 2001 to $202,389, according to taxation records. In the same period, average operating expenses went up 7.0% to $172,506.

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Operating margins rose 0.1 cents to 14.8 cents per dollar of revenue. Compared with the five-year average from 1997 to 2001, average operating revenues in 2002 were up 22.9% in current dollars and operating margins were up 0.1 cents per dollar of revenue. The total number of farms was down 3.6% from 2001 to 2002, the biggest annual drop in the last decade. This partly explains the increase in average operating revenues and expenses.

The overall rise in average operating revenues is partly explained by the 11.6% increase in average crop revenues, which were boosted by stronger prices. In particular, the export demand for fresh and processed potato products resulted in higher average revenues from the sale of potatoes (+42.7%). Greenhouse, nursery and floriculture products (+9.8%) also contributed to the advance in the crop sector. Sales of grains and oilseeds increased on average 7.1%. Total average livestock revenues were up 5.0%. Program payments and insurance proceeds were up 5.1%, now representing 6.8% of average revenues.

Average operating expenses climbed in 2002, mainly because of higher livestock expenses (+8.7%). In particular, higher feed costs (+19.7%) contributed to the rise. Expenses for custom work (+13.4%) and salaries (+11.5%) also rose. Costs of crop seeds climbed 12.9%.

Among all farm types, poultry and egg farms ranked first in average operating revenues ($751,595) in 2002, followed by greenhouse, nursery and floriculture production ($725,370) and hog and pig farms ($717,610). Potato farms posted the largest percentage increase (+24.6%) over 2001, averaging at $674,618. All farm types reported higher average operating revenues in 2002.

In 2002, hog and pig farms had the highest average operating expenses ($669,771), followed very closely by greenhouse, nursery and floriculture production ($669,689) and poultry and egg farms ($663,151). Potato farms recorded the largest percentage increase in average operating expenses (+20.1%) over 2001. Other animal production (excluding cattle, dairy, hogs and poultry and eggs) was the only farm type posting lower average operating expenses over 2001.

Grain and oilseed farms had the highest average operating margins, at 23.9 cents per dollar of revenue, up 1.1 cents from 2001. Dairy farms ranked second at 23.6 cents, down 0.6 cents from 2001.These were the only two farms types with average operating margins above 20 cents per dollar of revenue. Nine of the eleven major farm types posted higher operating margins in 2001. Other animal production posted the largest increase (+5.6 cents), while hog and pig farms posted the largest decrease (-5.2 cents).

On a sales-class basis, farms with operating revenues of between $100,000 and $249,999 had the highest operating margins, estimated at 21.3 cents, a decrease of 0.3 cents from 2001. All sale classes below $250,000 reported a decrease in average operating revenues while all sale classes above $250,000 reported an increase in average operating revenues. Farms with sales of $500,000 and over accounted for 52.9% of farming sales in 2002, according to taxation records.

Note: These estimates cover unincorporated farms with gross operating revenues of $10,000 and over, and corporations with total farm sales of $25,000 and over for which 50% or more of sales come from agricultural activities. Estimates presented in this release exclude communal organizations. Operating margin is defined as one dollar minus operating expenses (before depreciation) per dollar of revenue.

Average operating revenues and expenses per farm and operating margins
2002 (preliminary estimates)
Average operating revenues Average operating expenses Operating margins1
Dollars Cents
All farms 202,389 172,506 14.8
Poultry and eggs 751,595 663,151 11.8
Greenhouse, nursery and floriculture 725,370 669,689 7.7
Hogs and pigs 717,610 669,771 6.7
Potato 674,618 543,991 19.4
Other vegetable and melons 312,777 263,921 15.6
Dairy and milk production 295,786 226,097 23.6
Beef cattle and feedlots 186,243 170,124 8.7
Fruit and tree nut 146,334 125,946 13.9
Grain and oilseed 131,257 99,866 23.9
Other animal 102,770 96,945 5.7
Other crop 100,549 80,970 19.5
1 Defined as one dollar less operating expenses (before depreciation) per dollar of revenue.

Source: Statistics Canada - 1st December 2003

5m Editor