Profit Margins Under Pressure
Even without tariffs, farm profits were expected to be tight for the 2025-26 season. With trade disruptions, the situation is more challenging. In Western Canada, projected returns for wheat and canola are around $50–$75 per acre, excluding land costs. A 15% drop in prices could lead to losses in canola and break-even outcomes for wheat. In the East, corn and soybean returns could fall from $375 to around $240–$280 per acre under the same conditions.
Seeding Plans Likely to Hold Steady
Farmers in Eastern Canada typically maintain stable crop rotations, particularly for corn and soybeans. Seeding estimates for 2025 show minimal change, with Ontario and Quebec expected to plant 3.9 and 3.1 million acres of soybeans and corn respectively. Western farmers also tend to keep canola and wheat acreages steady, even during past trade challenges.
Changing Global Markets
Unlike earlier tariffs that targeted seed, current Chinese measures focus on oil and meal. Canada's increased domestic processing and exports to Europe—driven partly by lower European rapeseed production—have helped support prices. Future EU crop yields could further impact canola values.
Potential Shifts in Minor Crops
Some acres might shift to crops like flax and lentils, which are showing better returns. Manitoba may also see more soybeans and fewer potatoes this year due to changing buyer demand.
Conclusion
With market volatility high and trade policies shifting quickly, understanding production costs and seizing timely pricing opportunities will be critical for Canadian farmers in 2025 suggest the two FCC Economists.
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