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SASKATOON, Saskatchewan (Reuters) - Canadian farmers' market cash receipts, a measure of gross revenue, rose 7.5 percent to C$11 billion ($9.7 billion) in the first quarter from the year-earlier period despite the onset of the global recession in the interval, Statistics Canada reported on Monday.
The increase likely reflects a surge in grain shipments during the quarter, said Greg Marshall, a farmer and president of Agricultural Producers Association of Saskatchewan, who noted "(first quarter) commodity prices aren't reflecting any increase in farm income by any means."
Grain prices have rallied in the second quarter after falling sharply from last year's record levels.
Receipts for potatoes, soybeans and canola all saw large increases in the first quarter, helping crop farmers collect a 7.8 percent increase in receipts.
Livestock producers had a 7.1 percent increase despite low prices and new U.S. food-labeling laws that have reduced American imports of meat from Canada. Cattle and hog farmers sold or thinned herds during the quarter to stem losses.
"It's simply just a selloff," said Marshall, who added he recently sold his entire cattle herd.
Hog prices remained low in the first quarter, but they were 27 percent higher than the year-earlier level, Statscan said.
Including payments from government programs, farm cash receipts reached C$11.9 billion. Farm cash receipts do not take into account expenses, loans and depreciation.
Farmers' net income in 2008 rose sharply with an unprecedented runup in grain prices, Statscan also reported.
Realized net farm income, which takes into account cash receipts as well as expenses and depreciation, rose 63.2 percent from 2007 to C$3.3 billion, the second consecutive yearly increase.
The rise came despite the biggest increase since 1981 for prices for key inputs such as fertilizer and fuel. Farmers' operating costs jumped 11.1 percent to C$37.5 billion.
Hog revenue for 2008 dropped for the fourth straight year, by 2.9 percent, while cattle receipts rose 2.4 percent.
Reporting by Rod Nickel; editing by Peter Galloway