Despite strong yields and production for Alberta's three largest crops (wheat, canola, and barley) and record cattle prices last year, the increase in farm revenue didn’t keep up with the increase in expenses. As a result, the realized net income* for Alberta farmers declined in 2025.

The bottom line looks better when the huge increase in farm inventory values (e.g., grain stored in silos and cattle on ranches for sale in the future) is included, but these gains will not be realized until the inventory is sold and will depend on what price is actually received.

Income versus expenses

Farm cash receipts in Alberta increased by 5.9% to $24.5 billion last year after declining by 0.8% in 2024. Operating costs, however, increased by 8.4% to $19.9 billion. This was the fourth year in a row that expenses increased faster than revenue.

After taking into account income in kind and depreciation, realized net income was down by 14.3% to a little under $2 billion. At this level, realized net income was about 11% higher than the 10-year average.

It was a similar story nationally, but the decline in realized income was smaller. Cash receipts were up by 4.7% in Canada as a whole while expenses increased by 5.1%. After including income in kind and depreciation, realized net income decreased by 0.3%.It was, however, only about 1% higher than the 10-year average.

The overall numbers mask some large differences between crop and livestock operations. In Alberta, crop receipts were down by 4.2% last year as, according to Statistics Canada, “ongoing geopolitical tensions continued to put downward pressure on the price of grains and oilseeds in 2025.” Farmers also left more of their harvest in storage in the hope that they can sell it later for a better price.

Livestock receipts, conversely, were up by 17.7% on the back of record high prices.

Unfortunately, the statistics do not include a breakdown of operating expenses specifically for livestock and crop production. However, we do know that livestock (especially feeder cattle, bred cows and heifers) and poultry purchases increased collectively by 40.3% in Alberta last year, putting a lot of upward pressure on the operating costs of livestock producers.  

Inventory is up

Strong crop production (it was an all-time record for wheat) helped push the value of farm inventories in Alberta up from -$409 million in 2024 to +$2.1 billion last year. Adding this stored value to realized income pushes 2025 “net farm income” up to over $4 billion compared to $1.9 billion in 2024 for an annual increase of 114.8%.

Nationally, inventory value also jumped, pulling up net income by 51.8% to $12.7 billion versus $8.4 billion in 2024.

The degree to which these inventory values are turned into cash receipts will depend on domestic and foreign demand and the related price levels at the time of sale.  

Looking ahead

Alberta’s farmers and ranchers are constantly adapting in real time to changing weather, operating costs, market conditions, public policy, and geopolitics, so it can be hard to forecast what’s ahead. With that caution in mind, the primary agriculture sector is expected to post strong cash receipts as last year’s build up in inventory is sold off and prices remain supportive. At the same time, the closure of the Strait of Hormuz is pointing to higher fertilizer and diesel costs which will cut into net income.

Cattle markets, meanwhile, are expected to remain robust with margins strongest in cow-calf operations and thinning as you move downstream to feedlot operators and, in particular, for processors. 

As always, moisture will be a key variable. So far this year, it's already been dry in some areas of the province and this could be exacerbated by a stronger El Niño effect, especially in the southern part of the province.

*Realized net income is the difference between a farmer's cash receipts and operating expenses, minus depreciation, plus income in kind.

Answer to the previous trivia question: Canada imported $13.2 billion worth of oil from the U.S. in 2025.

Today’s trivia question: When were Aberdeen Angus cattle first imported into Canada?