Agriculture and Agri-Food Canada's (AAFC) Farm Income Forecast is a key tool for monitoring income and is used to understand the short-term outlook for primary agriculture in the farming sector.
Net Cash Income (NCI), which is the difference between cash receipts and operating expenses at the industry level, is the main metric that AAFC uses to measure farm income. After seeing a decline of 15% in 2024, NCI is forecast to have largely stabilized in 2025, and is expected to see a modest increase in 2026, although both years would remain below the previous 5-year average.
Farm income is forecast to have stabilized in 2025, while average net worth is expected to have increased
NCI is forecast to have levelled out in 2025 at $19.6 billion, although this would be 5% below the previous 5-year average. Overall receipts and expenses are forecast to have both increased, largely offsetting each other.
A key driver of the increase in farm cash receipts is an expected 12% growth in livestock receipts, due in large part to a strong price-driven increase in cattle receipts, as well as hog receipts. This increase is expected to have more than offset a 1% decline in crop receipts and a 14% decline in direct program payments.
Operating expenses are forecast to have stayed high, but overall growth is expected to have remained below the significant increases of 2021 and 2022, with an anticipated increase of 4% in 2025. Some key expense items, such as interest and to a lesser extent, feed, are expected to have declined while others, such as livestock purchases, fertilizer and labour, are forecast to have increased.
Average Net Operating Income (NOI) per farm, which measures producers’ revenue minus cash expenses at the farm-level, is forecast to have increased by 14% to $142,000 in 2025, influenced by the same drivers as NCI. While there can be variability by farm type, all farm types except grains are expected to have seen an increase in 2025. The direction and size of changes in farm-level measures of income (like average NOI) can sometimes differ from sector-level measures (like NCI) due to differences in data and methodology.
Average per farm net worth is forecast to have modestly increased by 3% in 2025 to $4 million, as the increase in assets is expected to have been larger than the increase in liabilities.
Outlook for 2026
The forecast for 2026 is subject to significant uncertainties, such as continued volatility in global markets, as well as the potential impact of weather events. In particular, uncertainty around the trade environment could have a significant impact on the 2026 forecast results. This forecast is based on market, growing and trade conditions as of December 2025.
That said, NCI is forecast to increase 3% to $20.2 billion in 2026, slightly below the level of the 2020-2024 average. Growth in livestock receipts is expected to mostly level out but still increase, while the record grain crop of 2025 should support increased marketings and crop receipts in 2026. These increases are expected to more than offset modest growth in expenses and further declines in program payments. A comparable increase of 3% in average NOI per farm to $146,000 is also expected, and average net worth is forecast to further increase by 3%.
For more information and supporting documents, please contact AAFC at aafc.info.aac@agr.gc.ca.