Canadian farm incomes look set to fall in 2016 after a year of record profits, but will still reach above-average levels, according to a report from the federal government.
Rising receipts for crops and livestock have boosted incomes in recent years, due to greater demand in developing countries and a weak Canadian dollar, a report from Agriculture and Agri-Food Canada said on Friday. Lower crude oil prices have also cut farmers' expenses.
Net cash income in 2016 should fall 9 percent to C$13.6 billion ($9.87 billion) from C$15 billion last year. Those earnings would be 14 percent higher than the average from 2010 to 2014.
U.S. farmers, who have been hurt by a strong U.S. dollar that has crimped exports, are in worse shape.
The U.S. Department of Agriculture forecast the nation's net farm income at $54.8 billion in 2016, down from $123.3 billion in 2013, when corn prices reached record highs.
For the near term, grain prices look likely to remain under pressure due to ample global stocks, while expansion of the U.S. livestock sector weighs on prices of cattle and hogs, the Canadian government report said.
Canada is the world's biggest exporter of canola and second-largest shipper of wheat.
Farmers' income is a measure of their spending power on crop inputs such as seed, fertilizer and chemicals, as well as tractors and other field equipment. Deere & Co, maker of John Deere tractors, cut its fiscal-year outlook and reported lower quarterly earnings on Friday as U.S. farmers' declining income weakened demand for agricultural equipment.
($1 = 1.3784 Canadian dollars)