REGINA - Canadian farmers appear to be reaping the rewards from their crops despite the economic downturn, but there could be storm clouds on the horizon.
Statistics Canada said Monday that realized net farm income increased to $3.3 billion in 2008. That's up $1.3 billion, or more than 63 per cent, from 2007 and is the second consecutive annual increase.
''Crop producers continued to benefit from higher grain and oilseed prices through the first part of 2008, more than offsetting large increases in operating costs,'' the agency said.
Market receipts - the revenues from the sale of crops and livestock - increased just over 14 per cent to $41.8 billion in 2008.
The agency also reported Monday that market receipts from the sale of crops and livestock during the first quarter of 2009 totalled $11.0 billion, up 7.5 per cent from the first quarter of 2008.
The biggest increase was in potato, soybean and canola receipts.
Potato prices were more than 52 per cent higher, soybean sales increased just over 26 per cent and canola sales were up over 25 per cent.
Most provinces showed increases over 2007 levels in realized net farm income. But Statistics Canada noted that farm income dropped in Newfoundland and Labrador, Prince Edward Island, Nova Scotia and Manitoba as operating costs outpaced gains.
''Producers saw their operating costs increase 11.1 per cent to $37.5 billion in 2008, as fertilizer and fuel prices soared. This was the strongest annual rate of growth in expenses since 1981,'' said Statistics Canada.
Livestock producers were also hit hard by higher feed costs, lower prices and uncertainty over the country-of-origin labelling law in the United States.
And Statistics Canada suggested things may not stay so rosy.
It noted that since mid-2008, grain and oilseed prices have fallen in the wake of rising stocks and the impact of the economic downturn on the global demand for commodities.