Canadian grain and oilseed producers are facing another challenging year ahead, with profit margins projected to remain below average in 2025-26, according to Farm Credit Canada (FCC). While the immediate threat of U.S. tariffs has been temporarily deferred, economic conditions remain difficult, though showing signs of modest improvement.
In its 2025 economic outlook last month, FCC economists J.P. Gervais, Krishen Rangasamy, and Desmond Sobool provided an overview of current global and Canadian economic conditions, along with a look at what may be ahead for the various agricultural sectors. The bottom line was generally weaker economic growth both here and worldwide, and another year of below average profit margins for crop producers in both western and eastern Canada.
According to Sobool, Prairie margins for a wheat-canola rotation (before land costs) are expected to hover just above $50/acre in 2025-26. While this marks an improvement from 2024-25, when some farmers saw negative margins, it remains below the five-year average of approximately $100/acre.
The FCC’s 2025 crop outlook, released after the economic forecast, projects new-crop canola prices at $600/tonne, spring wheat at $330, and durum at $425 — figures that either match or fall below five-year averages. Canola, in particular, is forecasted to decline from its 2024-25 average of $645.
On a more positive note, Sobool highlighted the downward trend in input costs, with fertilizer affordability expected to improve further in 2025-26.
For corn-soybean rotations in eastern Canada, the forecast is similarly restrained. Sobool estimated 2025-26 margins at roughly $300/acre before land costs, slightly above the previous year but still short of the five-year average of $400. FCC’s projections place corn prices at $245/ tonne and soybeans at $525.
If accurate, it would mark the third consecutive year of below-average margins for Canadian farmers. This follows the peak of 2021-22, when Prairie farm margins neared $200 per acre and eastern margins soared to $650.
Adding to the uncertainty are potential trade disruptions, particularly regarding US tariff policies under President Donald Trump. While an expected 25% tariff on Canadian goods was postponed until March due to Canada’s border security commitments, it remains unclear whether the US will proceed with the measure. Uncertainty surrounding US biofuel regulations and China’s anti-dumping investigation into Canadian canola exports are other wildcards
“We acknowledge there’s a lot of uncertainty now,” Gervais said during the presentation.
