Farmers' net income to nosedive in 2010

By his own description, Norm Nordgulen is "just a poor cowboy" trying to adapt and survive on the farm.

The Saskatchewan man says he has made a lot of changes to save money. Nordgulen grows his own hay because it's a cheaper way to feed about 125 head of cattle he has in his operation near Assiniboia. About a decade ago he switched to organic farming of lentils, peas, wheat, durum and flax.

"One of the big reasons I'm still here is I'm organic farming," says Nordgulen. "I don't have the chemical inputs. My biggest input is fuel [to run machinery], so I save tens of thousands on chemical inputs.

"I would not have been able to survive this long without that."

Nordgulen's feeling that "everybody's got to adjust" seems fitting in light of the latest farm income forecast from Agriculture Canada.

The agency quietly released its 2010 predictions in late April, two months later than usual. It said realized net income for farmers across Canada is expected to total $291.5 million — a 91 per cent drop from 2009.

"Canada's farm sector was not immune to the global economic downturn. In fact, global economic conditions have a far-reaching effect on farm income," the forecast reads.

"The global recession has left producers facing lower consumer demand for their products — red meats in particular."

The agency says the livestock sectors will continue to struggle.

Cattle farms are expected to lose an average of $5,195 in 2010 — a drop largely blamed on country-of-origin labelling regulations for meat products in the United States and a strong Canadian dollar.

In Manitoba, Quebec and Ontario, net operating incomes for hog producers are expected to be below historical averages this year, mainly because increases in expenses are outpacing higher receipts and program payments.

And, after record income years in 2008 and 2009, the net income of the average grain and oilseed farm is expected to drop, "having an impact on the overall farm income outlook."

Alberta farmers' wallets hit hard

Some provinces will feel the hit more than others.

Agriculture Canada forecasts that realized net income for farmers in Alberta will be negative $516.3 million this year — a 254 per cent drop from $334.9 million in profit in 2009. In Saskatchewan, the realized net farm income is expected to total $980 million — a 55 per cent drop from the $2.2 billion forecast in 2009.

While numbers are expected to be down across the country, it's still fixing to be a better than average year. The forecast drop for 2010 appears worse because 2008 and 2009 were record income years.

Greg Marshall, president of the Agricultural Producers Association of Saskatchewan, said the forecast is disappointing.

"Nobody likes to be staring a decrease in income in the face, but actually it's no real surprise," said Marshall. "I guess we all kind of expected that this was coming with the increase in input costs and lower commodity prices and the lack of support from existing safety net programs."

Still, Marshall said he was astounded at Agriculture Canada's predictions.

"We're providing sustenance to people, producing food, and when you see a 91 per cent drop right across the nation, that's scary."