Question Period Note: Farm Income Situation for 2024 and 2025
Updated from AAFC-2025-QP-00084

Question / Issue

Q1 – How are the recent shifts in U.S. and Chinese trade policy expected to impact producers’ economic situation in 2025?
Q2 – Many farmers have seen large increases in expenses in recent years. How has this impacted their bottom line?
Q3 – Which expenses have seen the largest increases in recent years?
Q4 – How are recent weather and climate challenges impacting farmers’ economic stability in 2025?
Q5 – What is the Government doing to support farmers during this challenging period?

Response

R1 – Trade policy. The documents provided do not give specific tariff rates, product coverage, dates or quantified estimates beyond the previous note’s reference to recent U.S. and Chinese tariffs and the pending China anti-dumping investigation into canola. The expected direction, however, is clear: tariff increases would likely negatively impact exports, pressure prices, and could further disrupt global supply chains, adding to production costs. More generally, changes in the trade environment are expected to increase overall uncertainty for producers.

Other sources of uncertainty also exist, including growing conditions in the upcoming year and continuing geopolitical shocks. Combined with adverse trade-policy shifts, these could increase global commodity prices and weaken steady global economic growth and demand. The resulting inflationary pressures could also increase farm input costs. The pending China anti-dumping investigation into canola remains a significant uncertainty for 2025. The extent to which these situations may affect farm income is still very uncertain, as it is unclear how they will evolve, although the expected impact is negative. The Government is committed to working with trade partners to maintain market access for agricultural products and to supporting producers.

R2 – Rising expenses and the bottom line. In 2024, total farm operating expenses after rebates rose 2.4 per cent to $78.3 billion, while total farm expenses after rebates, including depreciation, rose 2.0 per cent to $88.6 billion. This was a modest increase by recent standards, but farm cash receipts fell 1.6 per cent, so net cash income (NCI) declined 14.9 per cent to $19.7 billion. Even moderate expense growth therefore contributed to a weaker bottom line because crop receipts fell. Interest expenses led the gain, and farm debt rose 14.1 per cent in 2024—the largest annual increase since 1981. In the first half of 2025, farm cash receipts rose 3.3 per cent to $49.6 billion, driven by livestock, while crop receipts were practically unchanged and program payments fell 20.0 per cent. However, AAFC’s summer farm income forecast, based on conditions and data as of June 2025, projects a 6.0 per cent decline in net cash income for 2025. The bottom line is therefore expected to remain under pressure.

R3 – Which expenses increased most. In 2024, interest expenses increased the most among reported components, up 28.6 per cent, marking the second consecutive year that interest led the gain in total operating expenses. The Bank of Canada began cutting its key interest rate in mid-2024 after over two years of hikes, but producers had taken on more debt, driving interest costs higher. Livestock and poultry purchases also rose significantly, up 12.6 per cent to $4.3 billion, due to higher prices for cattle, hogs and lambs. Over recent years, fuel, fertilizer and feed expenses saw sharp increases in 2021 and 2022 as the economy recovered from the pandemic and global inflation rose; Russia’s war against Ukraine further disrupted global commodity markets. Those expenses moderated in 2023 and generally declined in 2024: commercial feed expenses fell 10.7 per cent to $10.4 billion, and fertilizer expenses fell 7.2 per cent to $9.1 billion. Interest expenses, however, increased further in 2023 and 2024, and livestock purchases increased due to higher animal prices.

R4 – Weather and climate in 2025. Growing conditions in 2025 have been variable. According to Statistics Canada’s model-based July 2025 estimates, national production is projected to fall 1.1 per cent for total wheat, rise 3.6 per cent for canola, fall 7.3 per cent for soybeans, and rise 1.4 per cent for corn for grain. In the Prairies, conditions varied: some areas had lower-than-average precipitation and prolonged high temperatures, resulting in below-average crop conditions as of the end of July, while parts of Western Canada that received sufficient precipitation saw above-average conditions. In Alberta, 64.8 per cent of major crops were rated good to excellent at the end of July, above the five-year average of 52.9 per cent, but some areas lacked sufficient moisture. In Saskatchewan, sufficient rainfall in some parts supported normal crop development, while moisture stress from dry conditions caused some crops to mature ahead of normal. Parts of Manitoba received less than half the normal precipitation through the end of July, which—combined with high temperatures early in the season—may have impacted yields. In Eastern Canada, temperatures were generally above average; rainfall was below average in much of Ontario and Atlantic Canada, while much of Quebec received above-normal rainfall. Satellite vegetation indices ranged from much lower to much higher than normal across the Prairies, and from lower than normal to similar to normal in Eastern Canada. These regional differences create uncertainty for yields and farm income. Final survey-based production estimates will be released on December 4, 2025.

R5 – Government support. Federal and provincial governments continue to provide support through business risk management programs to help producers manage risks such as drought, flooding, market declines and increased input costs. Producers are also supported by programs such as the Advance Payments Program, Agriculture Climate Solutions – On-farm Climate Action Fund, Resilient Agricultural Landscape Program, Poultry and Egg On-Farm Investment Program, Agriculture Clean Technology Program, as well as other grant and contribution programs. In 2024, AgriStability payments increased 50.5 per cent to $600.9 million, and private hail insurance payments rose 47.8 per cent to $256.5 million, partially offsetting the decline in crop insurance payments. The Government is also committed to working with trade partners to maintain market access for agricultural products and to supporting producers through the current trade uncertainty.

Background

Net cash income is the primary measure used by AAFC to assess the short-term outlook for farm income and is the difference between all cash receipts and operating expenses. It represents the amount of cash generated by the farm sector that is available for debt repayment, investment or withdrawal by operators.

As of Statistics Canada’s May 28, 2025 release, NCI in 2024 was $19.654 billion, down 14.9 per cent from the record 2023 level of $23.084 billion. Realized net income fell 25.9 per cent to $9.397 billion, the largest percentage decrease since 2018. Total net income decreased by $5.2 billion to $7.703 billion. Total farm cash receipts declined 1.6 per cent to $97.906 billion. Total crop receipts fell 6.2 per cent to $52.1 billion, the largest percentage drop since 2003, mainly on lower prices for most major grains and oilseeds. Livestock receipts rose 6.9 per cent to $39.9 billion, led by cattle and calves, which rose 11.6 per cent to $16.7 billion on historically high prices. Direct payments fell 10.8 per cent to $5.9 billion, as crop insurance payments declined 10.2 per cent, partly offset by higher AgriStability and private hail insurance payments.

Operating expenses after rebates rose 2.4 per cent to $78.252 billion in 2024. Interest expenses rose 28.6 per cent; livestock and poultry purchases rose 12.6 per cent to $4.3 billion; commercial feed expenses fell 10.7 per cent to $10.4 billion; and fertilizer expenses fell 7.2 per cent to $9.1 billion. Farm debt rose 14.1 per cent, the largest annual increase since 1981. Realized net income fell in every province except Prince Edward Island and Nova Scotia; Saskatchewan posted the largest decline, mainly due to lower crop revenues.

More recent Statistics Canada data show farm cash receipts in January to June 2025 totalled $49.6 billion, up 3.3 per cent from the same period in 2024. Livestock receipts rose 10.8 per cent to $21.3 billion, with cattle receipts up $1.2 billion and hog receipts up $436.4 million. Crop receipts were practically unchanged, up 0.3 per cent to $25.9 billion, as gains for soybeans, canola, durum wheat and wheat excluding durum were offset by lower barley receipts. Program payments fell 20.0 per cent to $2.3 billion, led by lower crop insurance payments, with Saskatchewan and Alberta accounting for most of the decrease. AAFC’s summer farm income forecast, based on conditions and data as of June 2025, projects a 6.0 per cent decline in net cash income for 2025. This supersedes the earlier February 2025 forecast of a 15 per cent decline, which is no longer current.

Additional Information

• A financially healthy agriculture sector is critical to Canada’s economic well-being.
• As global crop prices continued to fall from recent peaks, net cash income declined 15 per cent in 2024 to $19.7 billion, but remained above the previous five-year average.
• The impacts of changing economic conditions are not evenly distributed among producers. While grain prices are down, cattle prices have been very strong in recent years.
• The current trade situation is causing significant uncertainty for producers in 2025. The Government is committed to working with trade partners to maintain market access for agricultural products and supporting producers.
• AAFC’s summer forecast projects a 6.0 per cent decline in net cash income for 2025. This forecast is based on conditions and data as of June 2025 and is subject to revision.
• Statistics Canada will release revised 2024 net farm income estimates and January-to-September 2025 farm cash receipts on November 26, 2025. Final 2025 crop production estimates from the November Field Crop Survey will be released on December 4, 2025.
• The documents provided do not contain specific tariff rates, product coverage or timelines for U.S. and Chinese trade measures beyond the previous note’s references. Trade-policy impacts therefore remain qualitative and uncertain.

Question Period Note: Farm Income Situation for 2024 and 2025

Question / Issue

The Minister may be asked:

1. How are shifts in U.S. and Chinese trade policies expected to affect producers in 2025?
2. How have rising expenses affected farmers’ bottom line, and which expenses have increased the most?
3. How are weather and climate conditions affecting farmers in 2025?
4. What is the Government doing to support farmers?

Response

On trade policy: Changes in U.S. and Chinese trade policies are adding uncertainty for producers. Tariffs could affect exports and prices, disrupt supply chains and add to production costs. The outcome of China’s anti-dumping investigation into Canadian canola also remains uncertain. The extent of any effect on farm income in 2025 cannot yet be determined.

On farm income and expenses: Statistics Canada’s preliminary data show that net cash income—the cash remaining after operating expenses—fell 14.9 per cent in 2024 to $19.7 billion. Receipts declined while expenses increased. AAFC’s summer 2025 forecast, based on conditions and data as of June, projects a further 6.0 per cent decline in net cash income in 2025. First-half 2025 farm cash receipts were higher than a year earlier, but receipts are not farmers’ bottom line: they do not account for expenses or loans.

In 2024, interest expenses increased 28.6 per cent and livestock and poultry purchases rose 12.6 per cent. These were important contributors to higher operating expenses. Feed and fertilizer expenses declined.

On weather: Growing conditions in 2025 have varied across the country. Statistics Canada’s preliminary, model-based crop estimates indicate lower wheat and soybean production, but higher canola and corn production than in 2024. These estimates reflect mixed regional conditions and remain subject to revision.

On support: Federal and provincial governments continue to support producers through business risk management programs, including support to manage risks such as drought, flooding, market declines and higher input costs. Other federal supports include the Advance Payments Program and a range of agriculture grant and contribution programs. The Government is also working with trade partners to maintain market access for Canadian agricultural products.

Background and Additional Information

Farm income in 2024

Statistics Canada’s preliminary May 28, 2025 data show that net cash income was $19.7 billion in 2024, down 14.9 per cent from $23.1 billion in 2023. Net cash income is farm cash receipts, including program payments, less operating expenses after rebates. It represents cash available for debt repayment, investment or withdrawal by farm operators.

The decline reflected lower receipts and higher operating expenses:

• Farm cash receipts fell 1.6 per cent to $97.9 billion. Crop receipts declined 6.2 per cent to $52.1 billion, mainly because prices for most major grains and oilseeds were lower. Livestock receipts rose 6.9 per cent to $39.9 billion, led by cattle and calves.
• Direct payments fell 10.8 per cent to $5.9 billion, largely because crop insurance payments declined as growing conditions for some principal field crops improved in 2024. Higher AgriStability and private hail insurance payments partly offset the decline.
• Operating expenses after rebates rose 2.4 per cent to $78.3 billion. Interest expenses increased 28.6 per cent; Statistics Canada reported that higher farm debt contributed to the increase. Livestock and poultry purchases rose 12.6 per cent to $4.3 billion, with higher animal prices driving the increase. By contrast, commercial feed expenses fell 10.7 per cent and fertilizer expenses fell 7.2 per cent.

The income measure used here is net cash income. Other measures differ: realized net income, which also accounts for depreciation and income in kind, fell 25.9 per cent to $9.4 billion in 2024. Total net income, which also accounts for changes in inventories, was $7.7 billion. These measures should not be treated as interchangeable.

2025 outlook and receipts

AAFC’s summer farm income forecast, based on conditions and data as of June 2025, projects net cash income to decline 6.0 per cent in 2025. This is a forecast, not a reported result. Statistics Canada’s first-half 2025 receipts data, released August 29, show farm cash receipts rose 3.3 per cent to $49.6 billion compared with the first half of 2024:

• Livestock receipts increased 10.8 per cent, with cattle and hog receipts accounting for much of the rise.
• Crop receipts were nearly unchanged, up 0.3 per cent.
• Direct payments fell 20.0 per cent to $2.3 billion, mainly because crop insurance payments were lower, reflecting improved growing conditions in the 2024 crop year.

These receipts do not establish the 2025 bottom line because they do not include operating expenses. The supplied information does not provide a 2025 actual net cash income result or a breakdown of 2025 operating expenses.

Weather and crop production

Statistics Canada’s August 28, 2025 release provided preliminary model-based production estimates using satellite imagery and agroclimatic data. National production was projected to be:

• Wheat: down 1.1 per cent to 35.5 million tonnes.
• Canola: up 3.6 per cent to 19.9 million tonnes.
• Soybeans: down 7.3 per cent to 7.0 million tonnes.
• Corn for grain: up 1.4 per cent to 15.6 million tonnes.

The release describes variable conditions. Parts of the Prairies had below-average precipitation and prolonged high temperatures, while areas receiving sufficient precipitation had above-average crop conditions. In Eastern Canada, temperatures were generally above average; rainfall was below average in much of Ontario and Atlantic Canada, while much of Quebec received above-normal rainfall. The release notes that these conditions may have affected yields in some areas. These are preliminary model-based estimates; final survey-based 2025 production estimates are scheduled for December 4, 2025.

Government support

Federal and provincial business risk management programs support producers in managing risks such as drought, flooding, market declines and increased input costs. Other supports identified in the previous note include the Advance Payments Program, Agriculture Climate Solutions – On-Farm Climate Action Fund, Resilient Agricultural Landscape Program, Poultry and Egg On-Farm Investment Program, Agriculture Clean Technology Program, and other grant and contribution programs. The provided information does not detail changes to these programs since the previous note.

QUESTION PERIOD NOTE: FARM INCOME SITUATION FOR 2024 AND 2025

Question / Issue: Q1 – How are the recent shifts in U.S. and Chinese trade policies expected to impact producers' economic situation in 2025? Q2 – Many farmers have seen large increases in expenses in recent years. How has this impacted their bottom line? Q3 – Which expenses have seen the largest increases in recent years? Q4 – How are the recent weather and climate challenges impacting farmers' economic stability in 2025? Q5 – What is the Government doing to support farmers during this challenging period?

Response:

R.1 - It is likely that tariff increases would negatively impact exports, pressuring prices, and they could further disrupt global supply chains, adding to production costs. More generally, changes in the trade environment are expected to increase overall uncertainty for producers.

Other sources of uncertainty also exist, such as growing conditions in 2025 and continuing geopolitical shocks which, combined with adverse trade policy shifts, could increase global commodity prices and weaken steady global economic growth and demand. The resulting inflationary pressures could also increase farm input costs.

The recent U.S. and Chinese tariffs, and the pending outcome of the China anti-dumping investigation into canola, represent significant uncertainty for the agriculture sector in 2025. The extent to which they may impact farm income in 2025 is still very uncertain, as it is unclear how these situations will evolve, although it is expected they would have a negative impact on farm income.

R.2 - Net cash income (NCI), the main short-term measure of farm income used by AAFC, was $19.7 billion in 2024, down 14.9% from the record 2023 level of $23.1 billion, according to Statistics Canada's preliminary 2024 farm income data released May 28, 2025. Lower farm cash receipts (-1.6%) and slightly higher operating expenses (+2.4%) led to the decrease.

AAFC's summer farm income forecast, based on conditions and data as of June 2025, projects a 6.0% decline in NCI for 2025. While livestock receipts were up strongly in the first half of 2025, crop receipts were flat and program payments fell, and trade and growing conditions create continued uncertainty.

Generally, overall income remained strong from 2020 to 2023, as increasing global crop prices in 2021 and 2022, and higher crop marketings and strong cattle prices in 2023, helped offset elevated input costs. This has put most farms in solid financial positions such that weathering a period of lower prices and incomes is possible.

While the overall financial situation is solid, impacts have not been evenly distributed between sectors or regions, and the situation for many producers may be different. For example, while grain prices are down, cattle prices have been very strong.

R.3 - Fuel, fertilizer, and feed expenses saw sharp increases in 2021 and 2022, as the economy recovered from the pandemic with rising global inflation. Subsequently, Russia's war against Ukraine significantly disrupted global commodity markets even further. These expenses moderated in 2023 and have generally been declining since.

In 2024, total operating expenses rose a modest 2.4% to $78.3 billion, the smallest increase since 2016. This increase was led by interest expenses (+28.6%) for the second consecutive year, and higher livestock and poultry purchases (+12.6% to $4.3 billion), partly offset by lower commercial feed (-10.7% to $10.4 billion) and fertilizer (-7.2% to $9.1 billion) expenses.

Interest expenses rose as producers took on more debt. Farm debt rose 14.1% in 2024 — the largest annual increase since 1981 — despite the Bank of Canada beginning to cut its key interest rate in mid-2024 after over two years of hikes. Interest expenses also increased in 2022 as the Bank raised rates to fight inflation and saw further increases in 2023 and 2024. Livestock purchases have also increased in recent years due to higher animal prices.

R.4 - Based on Statistics Canada's model-based crop production estimates as of July 31, 2025, released August 28, 2025, Canadian farmers are projected to produce more canola (+3.6% to 19.9 million tonnes), corn for grain (+1.4% to 15.6 million tonnes), oats (+1.0% to 3.4 million tonnes) and lentils, but less wheat (-1.1% to 35.5 million tonnes), soybeans (-7.3% to 7.0 million tonnes) and barley (-1.9% to 8.0 million tonnes) compared with 2024.

Growing conditions in 2025 have been variable. In some Prairie areas, lower-than-average precipitation and prolonged high temperatures have resulted in below-average crop conditions, while parts that received sufficient precipitation saw above-average conditions. In Alberta, almost two-thirds (64.8%) of major crops were rated good to excellent at end-July, above the five-year average (52.9%), though some areas lacked moisture. In Saskatchewan, moisture stress caused some crops to mature ahead of normal. Parts of Manitoba received less than half normal precipitation as of end-July, combined with high early-season temperatures, which may have impacted yields. In Eastern Canada, temperatures have been above average; rainfall has been below average in much of Ontario and Atlantic Canada, while much of Quebec received above-normal rainfall.

In 2024, generally better growing conditions for some principal field crops supported increased yields, lessening demand for crop insurance payments.

R.5 - Federal and provincial governments continue to provide support through the business risk management programs to help producers manage risks (for example, drought, flooding, market declines and increased input costs). Producers are also supported by programs such as the Advance Payments Program, Agriculture Climate Solutions - On-farm Climate Action Fund, Resilient Agricultural Landscape Program, Poultry and Egg On-Farm Investment Program, Agriculture Clean Technology Program, as well as other Grant and Contribution programs. The Government is committed to working with its trade partners to maintain market access for agricultural products and supporting producers.

Background:

NCI is the primary measure used by AAFC to assess the short-term outlook for farm income and is the difference between all cash receipts and operating expenses. It represents the amount of cash generated by the farm sector that is available for debt repayment, investment or withdrawal by operators.

As of May 28, 2025, Statistics Canada reported preliminary 2024 NCI of $19.654 billion, down 14.9% from $23.084 billion in 2023:

Total farm cash receipts (FCR), including crop receipts, livestock receipts and program payments, declined 1.6% to $97.9 billion. Total crop receipts were down 6.2% (-$3.5 billion) to $52.1 billion, the largest percentage drop since 2003, primarily due to lower prices for most major grains and oilseeds despite higher marketings, as domestic and international supplies improved. Over half of the decline can be attributed to lower wheat (excluding durum) receipts as prices fell 20.4%. This was the first decline in crop receipts since 2014.

Livestock receipts increased 6.9% (+$2.6 billion) to $39.9 billion in 2024, on gains across all sectors except poultry and in all provinces. Cattle and calf receipts were up 11.6% to $16.7 billion, accounting for more than two-thirds of the rise, on historically high prices due to steady domestic and international beef demand and smaller herds in Canada and the United States. In 2024, average cattle and calf prices were more than 50% above the 5- and 10-year averages. Supply-managed receipts posted their slowest growth in four years, up 2.0% to $15.2 billion, on higher eggs (+4.0%) and dairy (+3.9%), moderated by lower turkey (-4.4%) and chicken (-2.1%) on lower prices.

Lower program payments (-10.8%) to $5.9 billion also contributed to the FCR decline. This was the second consecutive double-digit decline, following strong increases in 2021 (+71.8%) and 2022 (+23.6%) when drought led to higher payments. Crop insurance payments, close to 60% of total direct payments, declined 10.2%, with Alberta (-$283.9 million) and Saskatchewan (-$226.9 million) posting the largest decreases. Offsetting factors were higher AgriStability payments (+50.5% to $600.9 million) and private hail insurance (+47.8% to $256.5 million), as well as lower stabilization payments in Quebec and lower dairy direct payments.

Operating expenses in 2024 were up 2.4% to $78.252 billion. Realized net income, which is NCI plus income-in-kind minus depreciation, fell $3.3 billion (-25.9%) to $9.397 billion, the largest percentage decrease since 2018. Excluding cannabis, realized net income was down 23.0% to $9.7 billion. Total net income, which is realized net income adjusted for changes in farmer-owned inventories, decreased by $5.2 billion to $7.703 billion, as inventory values fell by $1.694 billion.

Realized net income fell in every province in 2024, excluding Prince Edward Island and Nova Scotia. Saskatchewan posted the largest decline (-$1.3 billion), mainly due to lower crop revenues, which account for nearly three-quarters of receipts in the province.

The outlook for 2025 is still very uncertain. AAFC's earlier forecast published in February 2025, based on conditions and data as of December 2024, forecasted a 15% decline for NCI in 2025. That forecast is no longer current. AAFC's summer forecast, based on conditions and data as of June 2025, projects a 6.0% decline in NCI for 2025.

Based on Statistics Canada's Farm Cash Receipts release of August 29, 2025, FCR in January-June 2025 totalled $49.6 billion, up $1.6 billion (+3.3%) from the same period in 2024. Livestock receipts (+$2.1 billion) rose, program payments (-$584.5 million) declined, and crop receipts (+$80.2 million) were practically unchanged (+0.3%) at $25.9 billion.

Total livestock receipts rose 10.8% to $21.3 billion on higher prices for all livestock except poultry. Cattle (+$1.2 billion) and hog (+$436.4 million) led the increase, together about 80% of the rise. Cattle receipts rose on higher prices (+20.3%) despite lower marketings (-3.1%) due to fewer cattle slaughtered. Hog receipts rose on higher prices (+10.5%) and marketings (+3.1%), with strong international pork demand. Supply-managed receipts grew 2.7% to $7.7 billion, driven by dairy (+$184.8 million) on higher prices and eggs for consumption (+$58.0 million) on marketings, partly offset by turkey (-$39.6 million) on lower quota.

Crop receipt gains for most crops were offset by reduced barley receipts (-$110.1 million) on lower prices and marketings and lower liquidations of deferred sales in Western Canada. Oilseed receipts rose on higher marketings for soybeans (+$103.2 million) and canola (+$76.4 million), though abundant soybean supply pressured prices. Cereal receipts rose on durum wheat (+$197.2 million) and wheat excluding durum (+$122.9 million), with higher marketings driving gains while lower prices moderated them.

Total direct payments dropped $584.5 million (-20.0%) to $2.3 billion, led by Saskatchewan (-$287.4 million) and Alberta (-$162.4 million). Crop insurance payments (-$381.4 million) accounted for nearly two-thirds of the decrease owing to improved 2024 growing conditions, with Saskatchewan contributing roughly 80% of the decrease.

Most provinces recorded higher FCR in the first half, led by Alberta (+$530.9 million) and Ontario (+$525.0 million), while Saskatchewan (-$96.2 million) and Prince Edward Island (-$3.1 million) posted small decreases.

Additional Information:

• A financially healthy agriculture sector is critical to Canada's economic well-being.
• As global crop prices continued to fall from recent peaks, net cash income declined 15 per cent in 2024 to $19.7 billion. However, it remained above the previous five-year average.
• The impacts of changing economic conditions are not evenly distributed among producers. For example, while grain prices are down, cattle prices have been very strong in recent years.
• The current trade situation is causing significant uncertainty for producers in 2025.

Question Period Note: FARM INCOME SITUATION FOR 2024 AND 2025 (Updated)

Organization: Agriculture and Agri-Food Canada Name of Minister: MacDonald, Heath (Hon.) Title of Minister: Minister of Agriculture and Agri-Food Updates: AAFC-2025-QP-00084 (June 18, 2025), reflecting Statistics Canada's May 28, 2025 preliminary 2024 farm income release, the August 28, 2025 model-based crop estimates, and the August 29, 2025 farm cash receipts release for January–June 2025.

Issue/Question

Q1 – How are the recent shifts in U.S. and Chinese trade policies expected to impact producers' economic situation in 2025? Q2 – Many farmers have seen large increases in expenses in recent years. How has this impacted their bottom line? Q3 – Which expenses have seen the largest increases in recent years? Q4 – How are weather and climate conditions affecting farmers' economic stability in 2025? Q5 – What is the Government doing to support farmers during this challenging period?

Response

R.1 – Trade policy Shifts in U.S. and Chinese trade policy continue to represent a significant source of uncertainty for producers in 2025. Tariff measures can be expected to pressure export prices and disrupt supply chains, adding to both revenue volatility and production costs. Note: the documents available for this update do not contain new information on the specific status of U.S. or Chinese tariff measures, or the outcome of China's anti-dumping investigation into Canadian canola, since the June 2025 note. Officials should confirm the current status of these files with the Trade Policy branch before the Minister speaks to specifics.

R.2 – Impact on the bottom line Farm income fell in 2024 and is expected to fall again, though more moderately, in 2025. Net cash income (NCI) – cash receipts minus operating expenses – dropped 14.9% in 2024, to $19.7 billion, from the record $23.1 billion recorded in 2023. This decline was driven by a 6.2% drop in crop receipts as grain and oilseed prices weakened, while expense growth was comparatively modest (+2.4%). Realized net income, which also accounts for depreciation, fell more sharply (-25.9%, to $9.4 billion), the largest percentage decline since 2018.

For 2025, AAFC's most recent farm income forecast (Summer 2025, based on conditions and data as of June 2025) projects a further 6.0% decline in NCI. This is a smaller decline than the 15% drop forecast in February 2025, reflecting stronger-than-expected livestock receipts. Preliminary 2025 data support this improved outlook: farm cash receipts for January–June 2025 rose 3.3% year over year, to $49.6 billion, led by higher livestock receipts, even as program payments fell sharply.

R.3 – Expenses driving the change Total operating expenses rose 2.4% in 2024, to $78.3 billion, a much smaller increase than in prior years. Interest expenses were the largest driver, up 28.6%, as producers took on more debt (farm debt rose 14.1% in 2024, the largest increase since 1981) even as the Bank of Canada began cutting rates. Livestock and poultry purchases also rose sharply (+12.6%), reflecting higher animal prices. These increases were partly offset by lower feed (-10.7%) and fertilizer (-7.2%) expenses, both of which fell as global supplies improved and input prices eased.

R.4 – Weather and climate in 2025 Growing conditions have been variable across the country in 2025. In the Prairies, Alberta reported generally favourable conditions (64.8% of major crops rated good to excellent at the end of July, above the five-year average of 52.9%), though some areas lacked sufficient moisture. Saskatchewan saw a mix of adequate rainfall in some areas and dry, moisture-stressed conditions in others, with some crops maturing early. Parts of Manitoba received less than half of normal precipitation, combined with early-season heat, which may reduce yields for some crops. In Eastern Canada, temperatures were generally above average; rainfall was below average in much of Ontario and Atlantic Canada, while Quebec received above-normal rainfall.

Statistics Canada's model-based estimates (released August 28, 2025) project national wheat production down 1.1%, soybeans down 7.3%, canola up 3.6%, and corn for grain up 1.4% compared with 2024. Final, survey-based production figures will be released December 4, 2025.

R.5 – Government support Federal and provincial governments continue to deliver Business Risk Management programs to help producers manage risks such as drought, flooding, market volatility and rising input costs. Additional support is available through the Advance Payments Program, the Agricultural Climate Solutions – On-Farm Climate Action Fund, the Resilient Agricultural Landscape Program, the Poultry and Egg On-Farm Investment Program, the Agriculture Clean Technology Program, and other grants and contributions. The Government remains committed to working with trading partners to preserve and expand market access for Canadian agricultural products.

Background

Definition: Net cash income (NCI) is AAFC's primary measure of the short-term farm income outlook. It is the difference between total farm cash receipts and total operating expenses, and represents cash available for debt repayment, investment, or withdrawal by farm operators.

2024 final data (Statistics Canada, May 28, 2025):

• Total farm cash receipts: $97.9 billion (-1.6%)
• Total operating expenses (after rebates): $78.3 billion (+2.4%)
• Net cash income: $19.654 billion (-14.9% from $23.084 billion in 2023)
• Realized net income: $9.397 billion (-25.9%)
• Total net income: $7.703 billion (down $5.2 billion from 2023)

Crop receipts fell 6.2% to $52.1 billion – the largest percentage drop since 2003 – driven by weaker prices for most major grains and oilseeds, notably wheat (excluding durum), which alone accounted for over half of the decline. Livestock receipts rose 6.9% to $39.9 billion, led by cattle and calves (+11.6%), reflecting historically strong prices amid tight North American supplies. Program payments fell 10.8% to $5.9 billion as crop insurance payments declined on improved yields, partially offset by a 50.5% rise in AgriStability payments.

At the provincial level, realized net income declined in every province except Prince Edward Island (+1.7%) and Nova Scotia (+13.3%). Saskatchewan recorded the largest dollar decline (total net income down $2.0 billion), driven by falling crop revenues, which make up nearly three-quarters of its farm cash receipts. Manitoba (-$949.9 million), Alberta (-$1.2 billion) and Ontario (-$650.2 million) also saw large declines. Quebec's realized net income fell 97.4% to $12.4 million, though total net income (which adjusts for inventory changes) fell by a smaller $378.8 million.

2025 in-year data:

• Farm cash receipts, January–June 2025: $49.6 billion, up 3.3% year over year.
  • Livestock receipts: $21.3 billion (+10.8%), driven by cattle (+$1.2 billion, on 20.3% higher prices) and hogs (+$436.4 million, on higher prices and marketings).
  • Crop receipts: $25.9 billion, essentially flat (+0.3%), as gains in soybeans (+$103.2 million) and canola (+$76.4 million) were offset by lower barley receipts (-$110.1 million) and reduced liquidation of deferred crop sales in Western Canada.
  • Program payments: $2.3 billion, down 20.0% (-$584.5 million), mainly due to lower crop insurance payments (-$381.4 million), with Saskatchewan accounting for roughly 80% of that decrease.
  • By province: Alberta (+$530.9 million) and Ontario (+$525.0 million) posted the largest gains; Saskatchewan (-$96.2 million) and Prince Edward Island (-$3.1 million) posted small declines.

2025 crop production outlook (Statistics Canada model-based estimates, August 28, 2025):

• Wheat: 35.5 million tonnes (-1.1%)
• Canola: 19.9 million tonnes (+3.6%)
• Soybeans: 7.0 million tonnes (-7.3%)
• Corn for grain: 15.6 million tonnes (+1.4%)
• Barley: 8.0 million tonnes (-1.9%)
• Oats: 3.4 million tonnes (+1.0%)

These are preliminary, model-based figures; updated modelled estimates were scheduled for release September 17, 2025, with final survey-based figures due December 4, 2025.

AAFC farm income forecast: The February 2025 forecast (based on data as of December 2024) projected a 15% decline in 2025 NCI. This forecast is superseded by AAFC's Summer 2025 forecast (conditions and data as of June 2025), which now projects a 6.0% decline in NCI for 2025, reflecting stronger livestock markets than assumed in the earlier forecast. This would bring NCI down from $19.7 billion in 2024 to roughly $18.5 billion in 2025 – a third consecutive annual decline from the 2023 record, but a considerably smaller drop than initially feared.

Gap flagged: The materials provided for this update do not include new information on the specific state of U.S. or Chinese tariff measures affecting Canadian agriculture, or an updated status on the China canola anti-dumping investigation, beyond what was known in June 2025. The Response above (R.1) is carried forward from the prior note in general terms; officials should seek an updated brief from the Trade Policy branch if the Minister requires current specifics on tariff rates, affected commodities, or the investigation's status.

Additional Information

• A financially healthy agriculture sector is critical to Canada's economic well-being and to food security.
• Net cash income fell 14.9% in 2024 to $19.7 billion, following a record $23.1 billion in 2023, and is forecast to fall a further 6.0% in 2025 according to AAFC's most recent (Summer 2025) forecast – a smaller decline than the 15% drop projected in February 2025.
• The effects of changing economic conditions are not evenly distributed across the sector: crop producers, particularly grain and oilseed growers in the Prairies, have faced falling prices and receipts since 2023, while cattle and hog producers have benefited from historically strong prices.
• Rising interest expenses (+28.6% in 2024) and increased farm debt (+14.1%, the largest rise since 1981) have been the leading driver of expense growth, alongside higher livestock and poultry purchase costs; these increases have been partly offset by falling feed and fertilizer costs.
• Growing conditions in 2025 have varied significantly by region, with dry conditions affecting parts of Saskatchewan, Manitoba, Ontario and Atlantic Canada, while Alberta and Quebec generally saw more favourable conditions. National crop production in 2025 is expected to be mixed: canola, corn and oats production is projected to rise, while wheat, durum, soybeans and barley are expected to decline, compared with 2024.
• The Government continues to support producers through Business Risk Management programs and targeted investment programming, and remains committed to defending market access for Canadian agricultural exports amid ongoing global trade uncertainty.