Value of Farm Capital

Detailed information for 2008

The value of capital estimates the market value of capital employed in the production of agricultural commodities, regardless of whether the capital is owned or leased.

Data release - May 25, 2009

• Description
• Data sources and methodology
• Data accuracy

Description

The value of farm capital, at July 1, is estimated annually. It represents the value of capital used in the production of agricultural commodities, regardless of whether the capital is owned or leased. The three components of farm capital are land and buildings, livestock and poultry, and farm machinery and equipment.

Agriculture and Agri-Food Canada and other federal and provincial departments use the data to develop, administer and evaluate agricultural policies and programs. Government, universities and the private sector also use the data for industry performance measurement and market development.

Reference period: July 1

Collection period: During the six-week period prior to release.

Subjects

• Agriculture and food (formerly Agriculture)
• Farm financial statistics

Data sources and methodology

Target population

All Canadian agriculture operations as defined by the Census of Agriculture.

Instrument design

This methodology does not apply.

Sampling

This methodology does not apply.

Data sources

Data are collected from other Statistics Canada surveys and/or other sources.

Livestock and poultry inventory estimates are benchmarked every five years to the Census of Agriculture. Values per head are estimated by the Agriculture Division's Farm Income and Prices Section in consultation with provincial statisticians and administrative data on market prices.

The value of land and buildings is benchmarked to the Census of Agriculture. Farm Credit Canada surveys farmland values every six months. These are used to calculate land and building values between censuses.

The value of machinery and equipment is benchmarked to the Census of Agriculture. Data obtained through the Farm Input Price Index (FIPI-Survey ID 2305), the Canadian Farm and Industrial Equipment Institute and The Farm Financial Survey (FFS-Survey ID 3450) are used to calculate the values between census benchmarks.

Error detection

Livestock and poultry numbers, land and building values and machinery and equipment values are benchmarked to the Census of Agriculture and are subject to their own quality-control procedures. Intercensal values estimates for all annual series are derived using change ratios from a variety of administrative and survey sources and analyzed for time series consistency, links to current economic events, issues arising from the source data, and for coherence with other sources.

Imputation

This methodology does not apply.

Estimation

The value of livestock and poultry is estimated for each province, based on farm inventories and average farm values per head for cattle, hogs, sheep (Livestock Survey - Survey ID 3460), hens and chickens (Eggs Producers Survey - Survey ID 3421), turkeys, mink and fox (Fur Farm Report - Mink and Foxes - SDDS 3426 ). Estimates of livestock numbers on farms are as of July 1. The values per head are estimated by the Agriculture Division's Farm Income and Prices Section in consultation with provincial statisticians.

Provincial estimates of the total area of land are made by multiplying the previous year's estimate by the annualized change in the total area of land between the two previous censuses.

The value of farm land per acre is estimated for each province by multiplying the previous year's estimate by the change ratios obtained from Farm Credit Canada's (FCC) survey of farm land values.

The values of automobiles and trucks are calculated for each province by multiplying the previous year's estimate by price and quantity change indicators. Year-over-year changes in the Farm Input Price Index (FIPI) for auto replacement and truck replacement, published by Statistics Canada, are used as provincial price change indicators.

The value of other machinery is estimated using a constant dollar, perpetual inventory model which accounts for investment and depreciation. Other farm machinery is valued at the aggregate level only, as the information needed to prepare estimates by type of farm machine is not available. Estimates of national investment are made by multiplying the previous year's estimate by a change indicator which is primarily derived from data on sales of farm machinery, excluding repair parts, by Canadian Farm and Industrial Equipment Institute (CFIEI) members. CFIEI is a coalition of most of the large manufacturers of farm machinery and implements, and of other associations that represent the industry. National investment is allocated provincially using proportions derived from the Census of Agriculture and the biennial Financial Farm Survey (FFS).

Quality evaluation

The quality of the value of farm capital and value per head estimates are evaluated by checking the consistency of these data with other sources or previous occasions. An interpretative analysis is also conducted. The data that goes into the calculation of farm capital are derived from various surveys and administrative sources. The majority of the data are already audited by the source organizations. Anomalies are thoroughly investigated prior to release.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Data are published twice each year, at the end of May and at the end of November. In May, data for the previous two calendar years are subject to revision. In November, data for the previous three years may be revised. Every five years, a historical revision is done based on the results of the Census of Agriculture. The results of the latest intercensal revision, based on the 2006 Census of Agriculture apply to the period 1997 to 2007.

Data accuracy

Estimates of livestock and poultry number and value per head estimates are the best available and deemed to be of reasonable quality. Census of Agriculture respondents are asked to report the market value of their land, buildings, machinery and equipment. This is difficult for some respondents; however, the Census of Agriculture estimates are considered to be the best available.

The results of the latest intercensal revision, based on the 2006 Census of Agriculture, increased total farm capital value in 2006 by 17.2% at the Canada level. The value of land and buildings increased by 21.4%. Revisions to the value of machinery and equipment resulted in a 4.8% increase. The value of livestock and poultry revisions decreased by less than 1%.