Commodity prices drive everything in agricultural lending. When grain prices are strong, lenders are confident. When livestock margins are tight, credit gets more expensive.
Let’s look at where commodity markets stand in early 2026, and what that means for farmers seeking financing.
The Current Commodity Picture
We’re in what I’d call a mixed environment. Not great, not terrible. Differentiated.
Grain markets have stabilized after the volatility of 2023-2024. Wheat is trading in the range that makes farming viable but doesn’t create the kind of equity growth we saw in 2021-2022. Canola has been steady, supported by decent crush margins and ongoing demand for vegetable oils. Corn is under some pressure from large U.S. inventories, but Canadian corn growers are still finding adequate pricing.
Soybeans are interesting right now. We’re seeing renewed demand from Asian markets, which is supporting prices better than many people expected six months ago.
Pulses have been challenging. Lentil and pea prices are below the levels that make growers enthusiastic, and we’re seeing some producers rethink their rotations as a result.
On the livestock side, cattle prices have been strong. Beef demand remains solid, herd rebuilding in the U.S. has supported prices, and Canadian cattle operations have generally had good margins over the past eighteen months. That’s creating confidence in the sector.
Hog margins have been tighter. Production costs remain elevated, particularly feed costs, and while prices have been adequate, the margin compression is real.
Dairy is, as always, a different animal. Supply management provides stability, but quota values have been under pressure in some provinces. We’ll talk more about that in a separate piece, but the short version is that lenders still view dairy as relatively low risk compared to many other farm enterprises.
How Lenders Are Viewing Ag Credit
Here’s what we’re hearing from agricultural lenders in early 2026.
Farm credit is available. That’s the good news. Unlike some periods in the past when lenders pulled back from agriculture, we’re not in that environment. Banks, credit unions, Farm Credit Canada, private lenders, they’re all active.
But lenders are being more analytical about farm fundamentals than they were two years ago.
The land value appreciation that happened from 2020 through 2022 created a lot of equity on farm balance sheets. Lenders got comfortable with loan-to-value ratios that might have made them nervous in the past, because the collateral values were strong.
Now, land values have plateaued in most regions. They haven’t crashed, but they’re not growing at 8% to 12% annually anymore. That means lenders are looking more closely at operating performance.
Can the farm generate cash flow to service debt? What do the last three years of financials show? What’s the crop rotation and risk management strategy? How diversified is the revenue?
These questions have always mattered, but they matter more when collateral values aren’t bailing out weak operations.
Regional Commodity Trends
Let’s break this down by region, because Canada is a big place with different commodity dynamics.
In the Prairies, grain and oilseed production dominates. Saskatchewan and Manitoba farmers are looking at what I’d call steady fundamentals. Not boom times, but workable economics. Alberta has more livestock presence, and the cattle sector strength is showing up in ranch financing availability.
Ontario is heavily corn and soybean, plus significant dairy, poultry, and horticulture. The commodity picture is mixed. Corn margins are okay but not great. Soybeans are performing better. Supply-managed sectors remain stable.
Quebec’s agricultural economy is more diversified, with significant dairy, pork, and grains. The dairy stability helps, but pork margins have been under pressure.
British Columbia agriculture is less commodity-dependent in the traditional sense. More horticulture, greenhouse production, tree fruits, wine grapes. These sectors face different market dynamics, but many B.C. farm operations have been seeing solid demand.
Atlantic Canada has more mixed farming, smaller operations on average, and less direct exposure to global commodity swings. Local markets matter more, and farm financing tends to be more relationship-driven than purely commodity-driven.
What Commodity Trends Mean for Financing Terms
Here’s how this translates to actual lending decisions.
For grain farms with good management, solid crop rotations, and reasonable debt levels, five-year fixed mortgage rates are in the 5.0% to 6.0% range. That’s competitive with commercial lending, and in some cases better because agricultural land is viewed as strong collateral.
Livestock operations with demonstrated profitability, particularly beef cattle, are seeing similar pricing. Lenders like the current fundamentals in cattle and are willing to finance expansion, herd purchases, and facility improvements.
Specialty crop operations are getting more scrutiny. If you’re growing high-value crops with proven markets, lenders are interested. But if you’re proposing to shift into a new crop without a track record, expect more questions and potentially higher rates or lower loan-to-value ratios.
Commodity-dependent operations without diversification are finding lenders more cautious. If 80% of your revenue comes from one crop, and that crop has volatile pricing, lenders want to see excellent management and strong equity position.
The Input Cost Factor
We can’t talk about commodity prices and farm lending without addressing input costs.
Fertilizer prices have come down from the peaks of 2022, but they’re still elevated compared to the 2015-2019 average. Fuel costs are moderate. Chemical costs vary by product but generally remain a significant expense.
The challenge is that input cost inflation happened faster than commodity price appreciation in many cases. Farmers’ margin per acre has compressed even when gross revenue stayed steady.
Lenders are very aware of this. When they’re analyzing farm operations, they’re looking at the whole picture: revenue, direct costs, fixed costs, debt service. A farm that looked strong at 2022 commodity prices might look marginal at 2026 prices with 2026 input costs.
This is why more lenders are asking for detailed operating plans, multi-year projections, and scenario analysis. They want to see that the farm can handle commodity price variation.
Export Markets and Lender Confidence
Canada is a major agricultural exporter. What happens in global markets matters for farm lending.
Right now, we’re seeing reasonable demand from traditional export markets. China is buying Canadian canola, pork, and pulses, though the relationship has had political ups and downs. Europe remains a market for various Canadian ag products. The U.S., our largest trading partner, continues to buy Canadian cattle, hogs, and grains.
When export markets are functioning normally, lenders are confident that Canadian farmers will find buyers. When trade relationships get rocky, as they have periodically, lenders get nervous about commodity price support.
The current environment is reasonably stable on the trade front. That’s supporting lender confidence in agriculture generally.
Practical Implications for Farm Borrowers
If you’re looking at farm financing in 2026, here’s what you should focus on.
First, have a clear story about your farm’s economics. Lenders want to see that you understand your cost structure, your revenue sources, your margin per acre or per head, and your sensitivity to price changes. If you can present that clearly, you’re ahead of the game.
Second, demonstrate risk management. Are you using crop insurance? Do you forward contract some of your production? Do you have diversified revenue streams? Lenders view risk management as a sign of sophisticated operation.
Third, show equity strength. In a period when land values aren’t climbing rapidly, having strong equity position matters. If you’re at 60% loan-to-value, you have flexibility. If you’re at 80%, lenders will be more cautious and pricing will be higher.
Fourth, think about term structure. If commodity prices for your particular products are currently strong, that might be a good time to lock in longer-term fixed rate financing. If prices are weak but you expect improvement, shorter-term financing might give you more flexibility to refinance when your operation looks stronger.
The Opportunity in Current Markets
Here’s what’s interesting about the current environment.
We’re not in a period of extreme optimism or extreme pessimism about agricultural fundamentals. Lenders are being rational. They’re analyzing deals carefully, but they’re not walking away from agriculture.
For well-managed farms with good fundamentals, this is actually a reasonable time to secure financing. Rates aren’t at historic lows, but they’re workable. Credit is available. Land values are stable, which means you’re not chasing rapidly appreciating assets.
If you’ve been thinking about expansion, acquisition of additional land, facility improvements, or generational transition planning, current market conditions allow for those conversations with lenders.
Looking Ahead
Commodity prices will continue to fluctuate. That’s the nature of agriculture. But the underlying factors supporting Canadian agriculture remain solid: good land, water resources, growing global food demand, reputation for quality and food safety.
Lenders know this. They’re not abandoning agriculture. They’re just being more selective about which operations they finance and on what terms.
Your job as a borrower is to present your operation in the best light: clear financials, sound business plan, demonstrated management capability, and realistic understanding of your market position.
Work With Agricultural Lending Specialists
At Creek Road Financial Inc., we specialize in agricultural mortgages across Canada. We understand commodity markets, farm economics, and how different lenders view different types of operations.
Whether you’re financing farm property acquisition, refinancing existing debt, or funding farm improvements, we can help you navigate the current lending environment and secure competitive terms.
Let’s talk about your farm financing needs. We’ll review your situation, discuss your options, and help you find a solution that works for your operation.