According to farm income information released last week by Statistics Canada, farm income dropped while farm debt saw a big increase from 2023 to 2024.
Realized net income for Canadian farmers, excluding cannabis, was $9.7 billion in 2024 down 23 percent compared to the previous year. Saskatchewan posted the largest decline of any province, dropping $1.3 billion.
Interest expenses as a share of total operating expenses are on the rise. Back in 2015, interest expenses were 5.9 per cent of total farm expenses. By 2020, that had climbed to 7.3 per cent. In 2023, the percentage was 9.2 and in 2024 interest expenses accounted for 11.5 per cent of total operating expenses.
This is a function of interest rates as well as debt levels and debt levels are steadily increasing.
In 2023, Canadian farmers owed a total of $146 billion. In 2024, that had jumped to nearly $167 billion. In Saskatchewan, farm debt increased from $21.5 to $24.4 billion.
Across the country in 2024, chartered banks held 39 per cent of the farm debt, followed by federal agencies, mainly FCC, at 27 per cent and credit unions at 15 per cent. The numbers are a bit different in Saskatchewan where federal agencies are the biggest debt holder at 39 per cent, followed by chartered banks at 23 per cent and credit unions at 19.
While some observers point to rising farm debt levels as a concern, others point out that debt is just keeping pace with the total value of farm capital, which in Canada increased from $855 billion in 2023 to $912 billion in 2024. About 88 per cent of farm capital comes from land and buildings.
