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According to Statistics Canada, crop revenues in Canada rose by almost 6 per cent as canola sales rose by 15 per cent.Chris Bolin/The Globe and Mail

Farmers' debts rose by 7 per cent last year to a record $96-billion, but producers made more money than ever, Statistics Canada said on Wednesday.

Rising incomes mean the Canadian agriculture sector is well-positioned to pay down its debts, said J.P. Gervais, chief economist at lender Farm Credit Canada, who noted farmers have enjoyed several years of rising sales and land values as well as low interest rates and dollar values.

Realized net incomes rose by almost 8 per cent to a record $8.8-billion, aided by lower expenses for fertilizer and fuel, according to Statistics Canada.

"Our balance sheet in agriculture is still very strong," Mr. Gervais said.

The value of farm cash receipts for crops, livestock and insurance program payments, meanwhile, rose by 0.5 per cent in 2016, the smallest increase since 2010.

Crop revenues rose by almost 6 per cent as canola sales rose by 15 per cent. Sales of wheat and lentils fell by 11 per cent.

Dairy sales rose by 2.4 per cent, slightly behind the overall rise of 3.2 per cent for the entire supply-managed sector.

Beef and pork producers did not fare as well.

Hog-farm revenue fell by 3 per cent, as prices declined amid record U.S. pork production.

Revenue from cattle and calf sales fell by 18 per cent in 2016 as North American prices slumped in response to a surplus of beef.

North American ranchers had increased herd sizes and cattle weights in response to prices that had risen by about 40 per cent around 2014, said Brian Perillat, an analyst at Canfax, the market data division of the Canadian Cattlemen's Association.

Demand has increased lately, Mr. Perillat said, driven by favourable currency rates and low beef prices in Chicago.

With summer on the way, slaughterhouses are bidding up beef prices for barbeque season.

"Prices got too high and we saw beef movements slow down," he said. "And now we're just going through the exact opposite of that. We've seen retail and beef futures increases. Increasing domestic demand. Exports increasing. Imports declining. It's all happening faster than we expected."

"It's been a massive rollercoaster," Mr. Perillat said.

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