Preliminary estimates for a calendar year are available in May of the following year (i.e., five months after the end of the reference year). The November release revises these estimates to incorporate data received too late to be included in the first release, data revisions received from administrative source agencies, and to incorporate estimates from the Agriculture Taxation Data Program (ATDP), based on a partial sample. Updates based on the 100% ATDP sample are incorporated into the issue released the following May (i.e., 17 months after the end of the reference year).
Preliminary estimates for each farm operating expense except interest, irrigation, livestock and poultry purchases, crop and hail insurance, and stabilization premiums are obtained by applying price and quantity indicators to the previous year's final estimates. These are available in May—five months after the end of the reference year. Prior to 1991, most of the final estimates for farm operating expenses came from the National Farm Survey (NFS) and a sample of farmers' income tax records for unincorporated farms outside of the Prairies. From 1991 to date, the Agriculture Taxation Data Program (ATDP) is the main data source. The first sets of estimates that are based on a partial ATDP sample are released in November of the following year. Estimates based on the complete ATDP sample are released the following May, seventeen months after the end of the reference year.
Revisions are made in an effort to improve the quality of the estimates and may cover two years preceding the reference year for the November release, and one year for the May release.
Revisions are also incorporated into this series after the results of each Census of Agriculture have been reviewed. Concepts, methods and format may also be changed at this time, to provide a historical time series which is methodologically and conceptually consistent.
To obtain detailed technical information on the data quality of the Agriculture Taxation Data Program, whose estimates form the base of this series, users can refer to the Definitions, data sources and methods section of the release of Farm operating revenues and expenses.
For the other expense items (interest, irrigation, livestock and poultry purchases, crop and hail insurance, and stabilization premiums), preliminary estimates of the previous calendar year are released in May and includes all data received from source agencies or Statistics Canada sources at the time of release. The November release revises these to incorporate changes made by the source agencies, and to accommodate data received too late to be included in the first release.
Interest expenses are estimated from administrative data prepared by banks, credit unions, the Farm Credit Canada, federal and provincial governments, and from Agriculture and Agri-Food Canada. The data are adjusted to conform to the required concepts. Examples of such adjustments would be converting fiscal year data to a calendar-year basis, or the exclusion of the personal share portion of the interest on the house mortgage.
Irrigation expense estimates come from the Association of British Columbia Irrigation Districts, Alberta Agriculture and Rural Development, the Saskatchewan Water Corporation, and the Prairie Farm Rehabilitation Administration.
Livestock purchase expense estimates are based on international and interprovincial import data. The number of animals imported interprovincially and internationally is obtained from supply and disposition balance sheets published by the Agriculture Commodities section. The values for animals imported interprovincially are based on prices received by farmers in the exporting province, as compiled by the Canadian Agricultural Financial Statistics section. Transportation costs between provinces, as provided by the transportation industry, are added to the livestock purchase expense. The value of animals imported internationally is calculated using International Trade Division data.
Prior to 1997, poultry purchase expense estimates included the cost of purchasing chicks from hatcheries. With hatcheries becoming part of the agricultural sector in 1997, only the value of chicks and hatching eggs imported interprovincially and internationally is measured. Quantities of pullet and broiler chicks, turkey poults and chicken and turkey hatching eggs are obtained from Agriculture and Agri-Food Canada. Prices are obtained from the Canadian marketing agencies for eggs, broiler hatching eggs and turkeys. International import prices are obtained through the International Trade Division, Statistics Canada.
Crop and hail insurance estimates come from the Canadian Crop Hail Underwriters Association and Agriculture and Agri-Food Canada's administrative data.
Stabilization premium estimates are provided by the provincial governments. Stabilization programs include the Farm Income Stabilization (ASRA) program in Quebec, the Dairy Subsidy (1981 to 2002), the private Dairy Livestock Insurance Program in Nova Scotia (1991 to present), private livestock insurance in Newfoundland and Labrador (1991 to present) and the Cattle Price Insurance Program (CPIP) in Alberta (2009 to present). In recent years, additional programs include the Ontario Risk Management Program (2007 to present), Nova Scotia poultry insurance (2008 to present), PEI livestock insurance (2009 to present), the Hog Price Insurance Program in Alberta (2011 to present), and the Overwinter Bee Mortality Insurance in Manitoba (2012 to present). The method for handling stabilization premiums was revised as part of the 1971-to-1987 intercensal revisions. For 1971 to date, premiums are reported in the farm operating expenses series.
Estimation methodology for depreciation charges
The depreciation on farm buildings is based on the value of farm land and buildings. Provincial owner-occupied proportions are derived from the Census of Agriculture estimates of land tenure. The building depreciation expenses are revised from 1997 to 2007 using the Farm Credit Canada (FCC) farmland sales data to adjust the building/land value split. Unlike the FCC data, the Census of Agriculture does not separate the value of buildings from the value of land. The FCC sales data are used in combination with information from the Census of Agriculture on the value of land and buildings and land tenure to derive the building/land value splits by province. The proportions of houses and other buildings to land are derived from the special 1958 Farm Income and Expenditure Survey, with some adjustments prior to 1984 to account for changes in the proportions over time.
The business share of the house was based on tax allowances and expert opinion. These proportions are used to derive the owner-occupied farm business share of the value of farm houses and other buildings. Depreciation is calculated using the declining balance method where the appropriate capital value is multiplied by the depreciation rate. The depreciation rate is 2% for farm houses and 5% for other buildings. It would take 80 and 31 years, respectively, to depreciate 80% of the value from any particular year, using the declining balance method.
Depreciation of autos, trucks and other farm machinery are based on their respective capital value series, using the declining balance method. Depreciation rates vary by province, but range between 9% and 17%. It would take approximately 17 and 9 years, respectively, to depreciate 80% of the value from any particular year, using this method. Only the farm business portion of depreciation on autos or trucks is included. The business share of the autos and trucks was based on tax allowances and expert opinion.
Leasing of automobiles, trucks and farm machinery
Beginning in the early 1990s, the leasing of vehicles and farm machinery became increasingly common. The portion of the value of autos, trucks and farm machinery that was being leased by farmers was removed from the depreciation calculation.
Machinery and equipment is separated into five categories :
- automobiles
- trucks
- tractors
- self-propelled combines
- all other machinery.
The practice of leasing is most common for the first four categories (above) while "all other machinery" is, for the most part, owned outright by farmers.
Decisions made on the basis of information provided by manufacturers, dealers, surveys, administrative data, etc. are the following :
- Automobiles, trucks, tractors, and self-propelled combines purchased prior to 1992 were not purchased under a lease agreement.
- The capital value owned by the farm operator used in calculating depreciation was reduced when the leasing calculations began in 1992.
Automobiles and trucks
It is assumed that at the end of the lease agreement for automobiles and trucks (i.e., after three years) either the leasee buys the vehicle outright at a "buy out" value or another farmer buys the used vehicle outright or the leasee returns the vehicle to the dealer who sells it to the non-agriculture sector.
Tractors and self-propelled combines
At the end of the lease agreement for tractors (i.e., after four years) and self-propelled combines (i.e., after three years) either the leasee buys the machinery outright at a "buy out" value or another farmer buys the used machinery outright. In either case, the value of used farm machinery purchased outright is included in the total value of owned farm machinery.
Estimation methodology for rebates
The rebate estimates include all payments made directly to producers under federal, provincial and municipal expense-reducing programs. Administrative data are obtained directly from provincial departments of agriculture and finance.
As the data are obtained directly from the agencies administering the rebate programs, and making payments to the producers, they are deemed to be of good quality.