By Tom Collins
GUELPH — Net farm income, or profit, for dairy farmers has dropped to its lowest point in more than a decade and is just half of what it was five years ago, says a report from the Dairy Farmers of Ontario and the Canadian Dairy Commission.
Every year, the Ontario Dairy Farm Accounting Project takes a snapshot of the value of Ontario dairy farms. Researchers studied 65 farms in 2016 and found net farm income (revenue after expenses, including wages and salaries, and before taxes) was $90,114, the only time in the last 10 years that net farm income has been below $115,000. That’s a drop from $132,879 in 2015. Net farm income has been dropping steadily and is almost half of what it was when it reached $178,601 in 2012.
The last time net farm income was this low was when it was $68,513 in 2004. The 2016 numbers also show total farm expenses dropped about $9,000 per farm from 2015, while total farm revenue dropped $50,000.
The report broke down the farms into three categories: The top 15 dairy farms (total average assets of $8.78 million with total liabilities of $3.12 million and milking on average 113 cows); the middle 35 farms (total average assets of $7.28 million and total liabilities of $1.93 million with 85 cows) and the bottom 15 farms (average total assets of $4.07 million and total liabilities of $734,077 with 48 cows).
The report shows that the smaller farms’ net farm income lost an average of $5,171 last year. Because this is a snapshot of a small sample size, the numbers can vary greatly each year. In 2015, the bottom 15 farms had a net income of $37,919, while in 2014 it was at $31,683.
For 2016, the middle 35 farms saw a net farm income of $87,110 and the top 15 were at $192,406.