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 new 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 at $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.