In the midst of international trade disputes Canada’s Crown-owned federal agricultural bank grew the loan portfolio by 3.2 per cent.
Farm Credit Canada financial statements for the year ended March 31, 2020, show the loan and leasing portfolio grew by $1.2 billion.
Net income fell $42.1 million to $632.6 million, driven by higher credit loss provisions and last-minute increased allowance for COVID-19 impacts.
Provisions for credit losses increased over three times to $103.3 million from $30.9 million. One of the largest losses likely was on Ilta Grain, which had a plant near Belle Plaine.
Ilta was sold in bankruptcy to Viterra, but FCC had lent the grain buyer/processor $86 million.
“Offsetting (price and export) challenges in the commodities sector, higher commodity prices for livestock and the expansion of cannabis receipts will support overall farm cash receipts,” said the management discussion report.
Crop receipts increased 3.9 per cent with livestock receipts up 5.1 per cent last year.
Farm prices averaged a two per cent swing up but crop production inputs — seed and fertilizer — prices increased an average 4.2 per cent.
Market concerns ranged from Chinese restrictions on Canadian canola, once 40 per cent of our exports, to market access on pork, peas and soybeans over strained foreign relations.
Credit impaired loans, not requiring loss provisions. increased from $192.1 million to $297.4 million.
Impaired loans for agri-business and agri-food increased 61 per cent to $89 million. Oilseed and grain impaired loans were up 75 per cent to $58.1 million with impaired beef loans, up 100 per cent to $30 million.
Loans in three regions declined with $194.2 million less in Alberta and British Columbia, $133.8 million less in Ontario, and $47.3 million less in Manitoba.
In Saskatchewan, loans increased by $292.8 million to $7.12 billion with Quebec loans up $66.1 million and Maritime loans were up $1.25 million.
Oilseed and grain loans of $11.885 million made up almost one-third of the $38.44 billion portfolio.
Other loan categories and amounts are dairy, $6.47 billion; agri-business, $4.02 billion; poultry, $2.74 billion; beef, $2.67 billion.
Part-time farmers have $2.2 billion loans with $2.16 billion to other farmers; $1.56 billion to alliances; $1.27 billion to greenhouses; $1.11 billion to agri-food; and $.1 billion to fruit farms.
Ron Walter can be reached at ronjoy@sasktel.net
