Canada’s farmers are preparing for another unpredictable harvest season, as the latest crop outlook from Agriculture and Agri-Food Canada—released on June 20—highlights deepening drought across the West, excessive rainfall in the East, and a global market shaped by trade tensions and rising biofuel demand.
The 2025–26 season presents a tough balancing act for producers: managing tighter margins, volatile weather, and shifting geopolitical forces.
Over half of Canada’s farmland began the growing season under drought stress. In Alberta and Saskatchewan, spring brought intense heat and dryness, worsening already scarce water supplies in key agricultural zones.
Meanwhile, coastal and Eastern regions experienced heavy rains, delaying planting and compromising crop stability—especially for canola.
This stark regional divide sets the tone for the 2025–26 crop year.
lts production is expected to decline slightly from last year, with some areas thriving while others face potentially damaging losses.
The message is clear: the future of farming is increasingly local in nature, even as it’s influenced by global currents.
Grain Sector Outlook
Wheat remains a cornerstone crop, both in land coverage and economic value. Spring wheat, known for its high protein content, is expected to maintain stable production and pricing.
Saskatchewan’s average price is forecasted to rise modestly to $290/tonne. However, this outlook is clouded by dwindling reserves and an urgent need for timely rainfall.
Durum wheat, crucial for pasta production, tells a more volatile story.
After a record-breaking export year to Italy, Algeria, and Morocco, those countries are now replenished, and Canadian exports are forecasted to fall by 10%. Prices remain stable for now, but future demand is uncertain.
Barley and oats are under quiet pressure. Barley acreage is shrinking, pushing carry-out stocks toward historic lows. While U.S. demand for oats remains solid, global interest is waning, leaving Canadian supplies barely sufficient.
Oilseeds: Between Climate and Commerce
Canola, the crown jewel of Canada’s crop sector, faces mounting challenges.
Yields declined in 2024 due to drought and extreme heat, and although 2025 planting looks strong, the projected 18 million tonnes will heavily depend on soil moisture levels.
What’s changed is demand. Domestic processing is booming, driven by increased industrial use and expanded biofuel capacity—positioning Canada as a growing player in the global biofuel market.
Yet with slower exports, especially to China, farmers are wary. With prices projected to hit $700/tonne, every hectare is critical.
Pulses Feeling the Strain
The pulse sector presents a mixed picture. Lentil performance is steady, but dry peas are struggling.
After years of strong exports to China, new tariffs have sharply reduced demand, pushing Canadian stockpiles to record highs. Prices have dropped by 20%, with further declines possible.
This shift underscores a broader trend: with global trade in flux, diversification has become a necessity for survival.
Soybeans, Rye, and Changing Demand
Soybean planting remains consistent, and healthy yields in Ontario and Quebec are keeping production strong. However, a global oversupply is driving prices down to $480/tonne, signaling a weakening competitive edge for Canada.
Rye, by contrast, is making an unexpected resurgence. Acreage is up 56%, and production has reached a 30-year peak.
Once considered niche, rye is gaining popularity for its drought resilience and its growing role in artisanal foods, whiskey, and regenerative farming systems.
The Big Picture
Despite declining prices across many crop categories, overall carry-out stocks are expected to increase in 2025–26. While that might suggest stability, it’s largely the result of sluggish exports, market saturation, and geopolitical headwinds.
The paradox is clear: Canada is producing more, but farmers are earning less.
Frequently Asked Questions (FAQs) and Concepts
What is Agriculture and Agri-Food Canada’s Crop Outlook?
This is an official government report that forecasts agricultural production, pricing, and market trends for Canadian crops. The 2025–26 outlook, released on June 20, assesses climate challenges, crop performance, and international market conditions. It’s a key planning tool for farmers, policymakers, and agri-businesses across Canada.
What is Carry-Out Stock in Agriculture?
Carry-out stock refers to the leftover quantity of a crop at the end of a marketing year. High carry-out levels, as forecast for 2025–26, may signal lower demand or oversupply. While this ensures some supply stability, it often results in weaker prices for farmers and reduced export competitiveness.
What is the Impact of Drought on Crop Yields?
Drought reduces soil moisture, disrupts plant development, and lowers yields. In 2025, over half of Canadian farmland is facing drought, particularly in Alberta and Saskatchewan. This can cause widespread crop stress and force reliance on irrigation or risk insurance, affecting profitability.
Why is Canola Important to Canada’s Economy?
Canola is Canada’s leading oilseed crop and a major export commodity. In 2025, production is forecast at 18 million tonnes, but dry conditions and shifting trade dynamics are pressuring yields and exports. Growing domestic use for biofuels adds a new layer to its economic significance.
What are Biofuel Demand Trends in 2025?
Biofuels are renewable fuels made from crops like canola. In 2025, domestic demand in Canada is surging due to new industrial processing capacity. This shift reduces reliance on exports and positions Canada as a key player in global clean energy markets.
What is the Role of Global Trade in Canadian Agriculture?
International markets heavily influence Canadian crop prices and demand. For 2025–26, trade relations with China and North African countries are shifting, impacting exports of pulses, durum wheat, and canola. Tariffs and geopolitical tensions are pushing farmers to diversify their markets.
Why is Crop Diversification Critical in 2025?
With erratic weather and trade disruptions, relying on a single crop is riskier than ever. Diversifying into crops like rye or lentils helps farmers adapt to changing demand, climate stress, and price volatility. It’s now seen as a survival strategy, not just a growth one.
What is the Outlook for Wheat and Barley in 2025–26?
Wheat remains stable in production and price, with spring wheat staying globally competitive. Barley, however, is facing declining acreage and record-low stocks. These trends suggest tight domestic supply and price instability for livestock feed markets in particular.
What are the Effects of Excess Rainfall on Crops?
In Eastern Canada, heavy rainfall in 2025 delayed planting and damaged crop structure, especially for canola. Too much water can cause root diseases, reduce standability, and delay harvests—further impacting yields and quality in affected regions.
How is Climate Variability Reshaping Canadian Farming?
The 2025–26 season highlights Canada’s growing regional climate divide—drought in the West, excess rain in the East. Farmers are being forced to make local decisions under global pressures, signaling that climate adaptation must be both national and regionally specific.
