Farm Credit Canada is highlighting trade uncertainty, interest rates and broader financial conditions as key economic issues for Canadian farmers and agribusinesses through the remainder of 2026.
In an economic update webinar released Tuesday, FCC’s economics team reviews the major economic and financial variables affecting farms, food and beverage manufacturers and agribusinesses, while providing its outlook for the months ahead.
The 39-minute presentation features FCC chief economist Craig Johnston, principal economist Krishen Rangasamy and deputy chief economist Desmond Sobool.
The update comes amid a challenging backdrop for the Canadian economy, including renewed U.S. trade barriers, geopolitical uncertainty and elevated borrowing costs. FCC has previously estimated Canadian economic growth at around 1% for 2026, with trade restrictions weighing on non-energy exports and contributing to weaker business conditions.
Interest rates are another important consideration. Although FCC expects relatively weak Canadian growth and subdued underlying inflation to limit upward pressure on the Bank of Canada’s policy rate, longer-term borrowing costs remain elevated. Canadian bond yields have been pulled higher partly by developments in the U.S., including persistent inflation, fiscal pressures and higher Treasury yields. That means fixed-rate financing costs may remain well above the levels seen during much of the previous decade.
Trade remains a major source of uncertainty for agriculture and food businesses. Recent U.S. restrictions and Canadian counter-tariffs are affecting export opportunities and raising some input, transportation and processing costs, while encouraging businesses to place greater emphasis on market and supply-chain diversification.
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