Net incomes of Canada's farmers plunged last year
For years, the financial stability of Canadian farmers was the envy of their American counterparts, but rising costs, drought, and a dispute with China have weakened their bottom lines.
Net incomes plunged last year, and that setback was followed in March by China's halting purchases of canola, Canada's biggest crop.
Now farmers are turning to government aid to avert disaster, lenders are extending the term on loans, and machinery dealers are seeing declining sales.
Shaun Dyrland, who farms near Kyle, Saskatchewan farm, said conditions are the toughest in about 20 years, forcing the farm to make its first claim from AgriStability, a federal government program that helps farmers weather losses due to poor crops, rising costs or market disruptions.
Dyrland, 40, has eliminated two hired positions on his fourth-generation farm and cut chemical and fertilizer purchases.
Payments from AgriStability have jumped 37% year over year, a spokesman for the federal agriculture department said.
Canadian farmers' net income plummeted 21% last year to C$11.6 billion ($8.6 billion) due to soaring debt and labor costs, marking the lowest income level in seven years. Farmers owed a record-high C$106 billion.
Canadian farmers have fared relatively better under low commodity prices than U.S. growers in recent years due to a weak dollar that helped exports and greater crop diversity, said Ryan Riese, national director of agriculture at Royal Bank of Canada. Now amid harder times, interest in buying farmland is tapering off, he said.