2021 Census of Agriculture shows industry shifts and farmer adaptability
By Statistics Canada
The agriculture industry is one that must always adapt quickly to multiple challenges, such as extreme weather events, trade disputes and fluctuating prices. More recently, the COVID-19 pandemic added to these challenges in the form of labour shortages, disruptions in the food supply chain, and rising input prices. All of these issues play a role in the well-being of farm operators. In view of these challenges, collecting information about the status and resiliency of the agricultural sector is important.
Statistics Canada has released results from the 2021 Census of Agriculture, which provides new information about emerging trends and issues faced by farm operators in Canada. Statistics Canada owes a debt of gratitude to Canadian farmers who took the time to answer the Census of Agriculture questions in these difficult times.
Census data indicate that trends identified in previous census cycles, such as industry consolidation and aging of farm operators, continued in 2021. At the same time, the agriculture industry is adapting and modernizing, with higher rates of technology adoption, renewable energy production, use of direct marketing solutions, and sustainable farming practices.
In addition, the 2021 Census of Agriculture shows that livestock inventories and acreage for prominent crops have remained quite stable and even increased modestly since 2016, suggesting that farmers have proven to be resilient in the face of COVID-19 challenges. The industry has also been characterized by the emergence of niche sectors, as evidenced by the increase in the total reported area for greenhouses.
In 2021, the Census of Agriculture counted 189,874 farms, a moderate decrease of 1.9 per cent from 2016. While farms in Canada reported a 3.2 per cent decrease in total farm area from 2016, the total area for hay and field crops increased slightly, by 0.3 per cent, to 92.9 million acres in 2021. The number of head reported for major livestock categories has also increased modestly since 2016.
Farms classified as oilseed and grain continue to make up the largest proportion of farms in Canada. In 2021, there were 65,135 oilseed and grain farms, accounting for 34.3 per cent of total farms. This was followed by beef and feedlots (20.9 per cent). Meanwhile, 82.7 per cent of total farm area was accounted for by these two sectors, totalling 127.1 million acres.
Change in the farm definition
A significant conceptual change to the main statistical unit used by Statistics Canada’s Agriculture Statistics Program has been introduced for the 2021 Census of Agriculture: a “farm” or an “agricultural holding” (i.e., the census farm) now refers to a unit that produces agricultural products and reports revenues or expenses for tax purposes to the Canada Revenue Agency. Before 2021, a “farm” was defined as an agricultural operation that produced at least one agricultural product intended for sale. The change in the new farm definition may result in farms being classified differently across farm types than in previous censuses. As a result, comparisons with earlier census results should be interpreted with caution.
Large farms continue to change the face of the agriculture industry
Over time, farms have been evolving to become increasingly sophisticated businesses that harmonize automation, modernization and production operations. As a result, many farms have consolidated and become increasingly larger both in terms of sales and number of employees. Conversely, smaller and mid-sized farms are declining in Canada, thereby affecting the rural landscape and profile of Canadian regions.
Continuing the trend of farm consolidation from the previous census, the proportion of farms in the top two sales classes increased, while the number of smaller farms declined. The proportion of farms with sales of $1 million or more in 2020 was 9.9 per cent, up from 7.2 per cent in 2015.
Farms in the top sales classes also account for the largest share of total farm operating revenues and a larger share of total farm employees. For example, in 2021, farms reporting at least $2 million in sales accounted for 51.5 per cent of total farm operating revenues. This compared with 41.5 per cent in 2016.
Farms preparing to pass on to the next generation
The aging of Canadian farmers is not a new phenomenon and follows general population trends. Recently released data from the 2021 Census of Population indicated that the median age of Canadians was 41.6 years (up from 41.2 in 2016) and that 33.1 per cent of Canadians were at least 55 years old.
The average age of Canada’s farm operators increased by 1.0 year, to 56.0 years in 2021. Meanwhile, the median age of farm operators rose by 2.0 years from the previous census, reaching 58.0 years in 2021.
The proportion of farm operators aged 55 and older (older operators) grew by 6.0 percentage points from the previous census. In 2016, 54.5 per cent of operators were aged 55 and older, increasing to 60.5 per cent in 2021. Conversely, Canada’s share of young operators was 8.6 per cent, down slightly from 9.1 per cent in 2016.
The challenges associated with the COVID-19 pandemic and the aging of Canadian farmers may have caused some farm operators to consider succession plans for their farms. In 2021, 6,673 more farms reported having a succession plan than in 2016.
The proportion of farms in Canada reporting a succession plan increased from 8.4 per cent in 2016 to 12.0 per cent in 2021. As in the previous census, farms classified as oilseed and grain farming accounted for the largest share (44.5 per cent) of farms reporting a succession plan in 2021.
From 2016 to 2021, intermediate-sized farms reporting operating revenues from $50,000 to $99,999 reported the highest proportional increase (+3.9 percentage points) in succession planning compared with the other sales classes.
Industry consolidation and aging of farmers have led to fewer farms and farm operators
As a result of industry consolidation and aging of farm operators, the number of farms dropped by 1.9 per cent from 2016 (193,492 farms) to 2021 (189,874 farms). The decline in the number of farms, however, was the smallest in 25 years.
The decrease in the number of farms resulted in a 3.5 per cent decline in the number of farm operators reported from the previous census. In 2016, there were 271,935 farm operators, and by 2021 the number decreased to 262,455.
At the same time, the number of female operators has increased for the first time since 1991. In 2021, there were 79,795 female farm operators, up from 77,970 in 2016. In 2021, 30.4 per cent of total farm operators were female, up from 28.7 per cent in 2016.
Higher land values may represent a barrier to entry into the industry
The price of land is an important factor in the investment and management decisions of farms, particularly in an environment increasingly defined by large market players. Strong commodity prices, low interest rates and a growing demand for housing in urban areas have been identified as contributing factors to the rising value of farmland in Canada.
The reported total market value of land and buildings for farms in Canada increased by 22.7 per cent (in constant 2021 dollars) from the previous census, totalling $603.8 billion in 2021. The market value of owned land, buildings and fixed equipment increased by 19.1 per cent from 2016, to $420.9 billion in 2021. The market value of land and buildings rented from others or governments totalled $182.9 billion in 2021, up 32.0 per cent from 2016.
The market value of all farm vehicles, machinery and equipment increased by 3.9 per cent from the previous census, reaching $64.4 billion in 2021.
Sustainable practices becoming a hallmark of the agriculture industry
Another source of transformation in the agriculture sector is the use of sustainable practices to cope with climate change. These adaptations are important, as the frequency of extreme climate events has increased in recent years and such events could represent a challenge for the industry in years to come.
Land practice methods include in-field winter grazing or feeding, rotational grazing, plowing down green crops, planting winter cover crops, and having shelterbelts or windbreaks. In 2020, 64.5 per cent of farms reported land practices, up from 53.7 per cent in 2015.
Another way Canadian farms have adapted to warmer and drier conditions has been by shifting their focus to more drought-tolerant crops, such as barley. From 2016 to 2021, farms in Canada reported a 24.3 per cent increase in barley acreage. This was the biggest percentage increase among the top 10 contributors of hay and field crops reported in Canada. In 2016, farms reported 6.7 million acres of barley, and by 2021 there were 8.3 million acres.
In response to the growing demand for organic products, the number of farms that reported producing organic products increased 31.9 per cent from the previous census. In 2021, 5,658 farms reported growing organic products. These farms made up 3.0 per cent of total farms in 2021, compared with 2.2 per cent in 2016.
Farmers are transitioning towards renewable energy production
Over the past few years, numerous programs and policies have been implemented by governments to encourage farmers to adopt renewable energy production methods, such as solar energy production.
In 2021, there were more than twice as many farms reporting renewable energy production than in the previous census. The number of farms reporting renewable energy production increased from 10,185 in the previous census to 22,576 in 2021.
Expressed as a proportion of total farms, close to one in eight farms in Canada (11.9 per cent) reported some form of renewable energy production in 2021, more than double the rate (5.3 per cent) in the previous census. Solar energy production remained the most common form of renewable energy production on Canadian farms, as the number of farms that reported producing this form of energy increased by 66.5 per cent from the previous census to 2021.
Technology use is another growing trend in the agriculture industry as it improves the accuracy and efficiency of farm processes and helps farms stay competitive in the global trade market. Examples of technologies that became more prominent from 2015 to 2020 include automated guidance steering systems (+28.2 per cent) and geographic information system (GIS) mapping (+58.6 per cent).
Farmers ensuring Canada’s agricultural outputs are maintained during the pandemic
Data from the 2021 Census of Agriculture show that livestock inventories and acreage for prominent crops have remained quite stable and even increased modestly since 2016. As noted above, total hay and field crop area increased by 0.3 per cent since 2016, to 92.9 million acres.
As was the case in 2016, canola remained the top crop acreage in Canada among all types of hay and field crops in 2021, despite a ban from China that restricted total canola exports from Canada in 2018 and 2019. In 2021, farms in Canada reported 22.3 million acres of canola, an 8.1 per cent increase in canola acreage from the previous census. The number of farms reporting canola rose 0.8 per cent from 2016 to 2021.
Canola acreage was not the only field crop to increase from the previous census. For example, farms reported a 2.1 per cent increase in spring wheat acreage from 2016. Spring wheat remained the second-largest crop reported in Canada in 2021, with 16.0 million acres, followed by barley, alfalfa and durum wheat.
Greenhouse sector is emerging as a key industry in Canadian agriculture
One development in the horticulture sector has been the growth of the greenhouse industry, which constitutes an alternative way to provide a steady supply of fresh produce to local communities.
Farms in Canada reported a 23.2 per cent increase in total greenhouse area from the previous census, to 330.5 million square feet in 2021. The total greenhouse area for fruit and vegetables was 219.7 million square feet in 2021, which accounted for around two-thirds (66.5 per cent) of Canada’s total greenhouse area.
The total area of fruits, berries and nuts increased 0.4 per cent, from 332,812 acres in 2016 to 334,182 acres in 2021. Conversely, the total area of field vegetables decreased slightly to 260,757 acres, down from 270,294 acres in 2016.
Farms incur 83 cents in expenses for every dollar of revenue
Farm operating revenues in Canada totalled $87.0 billion in 2020, while expenses reached $72.2 billion. On average, for every dollar in revenues, farms incurred 83 cents in expenses. The expenses-to-revenues ratio across farm types shows that farms classified as oilseed and grain farming were the most profitable farm type in 2020, with an expenses-to-revenues ratio of 0.76. Conversely, sheep and goat farms had the highest ratio, at 0.97.
Farmers are adapting the ways they sell to people during the pandemic
In response to pandemic-related health measures that limited contact, direct delivery to consumers became the second most frequently reported direct sales method, behind on-site stands, in 2020. Half (50.1 per cent) of the farms that reported direct sales used direct delivery.
Both the proportion and number of farms reporting direct sales increased from the previous census. In 2020, 13.6 per cent of farms reported direct sales, up from 12.7 per cent in 2015, while the number of farms reporting such sales increased from 24,510 to 25,917 during the same period.
As in the previous census, vegetable and melon farms were the most likely to report direct sales. In 2020, 52.2 per cent of farms classified as vegetable and melon reported direct sales, up from 50.2 per cent in 2015.
Smaller farms are more reliant on direct sales
Direct sales made up a bigger part of smaller farms’ total operating revenue. In 2020, farms with less than $10,000 in sales accounted for nearly half (47.9 per cent) of farms in which direct sales represented more than three-quarters of total farm operating revenues. Meanwhile, farms with $2 million or more in sales accounted for 0.8 per cent of farms in which direct sales represented more than three-quarters of total revenues.
More farm operators are turning to off-farm work
The number of farm operators working off the farm increased by 3.8 per cent from the previous census. In 2020, 47.7 per cent of farm operators in Canada reported off-farm work. In 2015, there were 120,665 farm operators reporting off-farm work, and by 2020 the number increased to 125,280.
Of these farm operators, the proportion who worked off the farm on a full-time basis declined slightly from 68.1 per cent in 2015 to 66.0 per cent in 2020, while the number of those working part-time off the farm increased from 31.9 per cent to 34.0 per cent.