The net income of farmers in Canada declined 9.5% to $12.5 billion in 2022 as the cost of expenses outpaced a rise in earnings.
The decrease in income generated by farmers in 2022 followed a 50.8% gain in 2021 and a 79.1% increase in 2020.
Net income represents the difference between a farmer's cash receipts and their operating expenses.
In 2022, total farm cash receipts increased by 14.8% compared with 2021. Farmers across Canada received higher revenue for both crops (up $7.2 billion) and livestock (up $3.6 billion).
However, farmers also faced a 21.2% increase in their total expenses, which pushed their net income lower. Farmers paid more for key agriculture inputs, including fertilizer, animal feed and fuel such as gasoline.
Fertilizer, in particular, is a growing expense for farmers. The price of fertilizer in Canada rose 61.5% to $11.9 billion last year.
The global fertilizer market has been stressed by natural disasters and high natural gas prices, as well as the ongoing war in Ukraine.
Farmers based in Saskatchewan had the highest realized net income in 2022 at $4.5 billion, followed by Alberta at $3.3 billion and Ontario at $2.3 billion.
