Agriculture producers in the region are facing significant challenges this growing season as a result of the trade dispute with China, said Mountain View County reeve Bruce Beattie.
“The ongoing trade dispute with China is certainly creating issues with our grain producers,” said Beattie. “When you rely on one or two export markets to take your commodities, it doesn’t take much to upset that pretty significantly.
“It's world politics and it shouldn’t interfere with trade, but unfortunately political considerations are being taken into account. The sad part is that it is beyond the control of the farm community.”
China has recently banned the import of some Canadian canola and other commodities, a move thought to be part of the ongoing political dispute between the countries.
Canola is one of the most commonly produced agricultural products in the county, he said.
“We are a major producer of canola in our area,” he said. “It is a major sector in the eastern part of our county.”
Producers in the region are certainly hoping that the China-Canada trade dispute is resolved soon, he said.
“Sometimes you wonder if the folks in Ottawa are listening to those issues and that goes back a long way,” he said. “It is a difficult situation. We are an export nation and our primary farm commodities rely on that export market.”
The current trade pressures facing the agriculture industry come in the wake of new statistics showing a steep decline last year in realized net farm incomes across Canada, and in Alberta in particular.
Rising feed, interest and labour costs were contributors to a marked decline in realized net farm incomes in 2018, with Alberta producers suffering the largest decline nationwide, according to new data released by Statistic Canada last week.
The realized net farm income of agricultural producers fell 45.1 per cent in 2018 to $3.9 billion, the largest percentage decrease since 2006. This followed a 2.8 per cent decline in 2017.
More than one-third of the national decrease was attributable to a 68.1 per cent decline in Alberta.
“Realized net income is the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind,” Statistics Canada officials said.
“Rising feed, interest and labour costs together with little change in farm cash receipts pushed realized net farm income lower.”
Farm cash receipts, which include crop and livestock revenues as well as program payments, edged up 0.1 per cent to $62.2 billion in 2018. This followed a 2.6 per cent rise in 2017.
Market receipts totalled $60.0 billion in 2018, up 0.4 per cent, as a small rise in crop receipts more than offset a small drop in livestock receipts.
Market receipts are the product of price and marketings. Marketings are quantities sold, using various units of measure.
Crop revenue edged up 0.9 per cent to $35.0 billion in 2018 as increases in wheat (excluding durum) and cannabis revenues more than offset a decline in canola receipts.
The revenue of licensed cannabis producers totalled $564.1 million in 2018, up from $189.0 million in 2017. The recreational use of cannabis became legal in October 2018, contributing to the 198.4 per cent hike in receipts.
Receipts for corn producers increased 9.9 per cent on rising prices and marketings.
The 6.5 per cent decline in canola receipts was driven by decreased marketings as exports were down. Canola producers in Alberta were especially hard hit as canola receipts decreased 16.1 per cent.
Marketings fell by a similar percentage, in the wake of rail disruptions early in the year, a late harvest and lower production.
Farm operating expenses, after rebates, increased 6.5 per cent in 2018 to $50.6 billion -- the largest percentage increase since 2012.
Feed costs were up 9.6 per cent, largely due to rising prices as feed grain supplies were tight prior to harvest. A large influx of imported corn from the United States provided an alternative source of feed.
Cash wages increased 8.0 per cent in 2018 -- well above the average increase of the previous five years (+3.5 per cent).
Higher prices pushed machinery fuel expenses up 18.1 per cent in 2018. This followed a price-related 9.3 per cent hike in 2017.
Total farm expenses -- the sum of operating expenses and depreciation costs -- rose 5.9 per cent to $58.4 billion in 2018 as depreciation charges increased 2.2 per cent.
Total net farm income fell $5.2 billion to $3.0 billion in 2018.
