Canadian farmers see rising risk and weaker finances heading into 2026: Sentiment Index

The future of Canadian food is strong and FCC is ready to help the next generation of innovators like you with financing tailored to your needs and resources to help you keep growing. To get started, visit FCC CA youngfarmer welcome to the RealAgristudies podcast, the show where farmer voices meet the power of data. Here we break down the latest research from producers, dig into the trends shaping agriculture, and turn insights into action. Now, here are your hosts, Shaun Haney and Justin Funk. Shaun Haney and Justin Funk, here with RealAgristudies. And we are so excited to share with you the January results of the Canadian Farmer Sentiment Index. Okay. And we're going to look at, of course, financial, we're going to look at overview of the overall ag economy, mental health, direction of the markets. There's lots to discuss here, as well as maybe some banking relationship stuff as well. Justin, what I off the top though, so pumped. We had over what, how many people filled out this month's survey? Like 48 hours? 572. That's awesome that you know, none of this is possible. We are not able to shed light and provide the farmer and rancher perspective without you completing these surveys. So members of the RealAgristudies Insights panel, we thank you so much for taking the time to do this because this is the industry speaking with a voice in terms of what's really going on on your farmer ranch. So, Justin, let's, let's get into it. Yeah, you bet. So this is our January 2026, Shaun. This is our 16th iteration of the Canadian Farmer Sentiment Index. We started this back in September of 2022. If you remember, we did it every other month for a little while, but then we moved it to more of a quarterly survey. But what's remained the same is we've asked the same way. And that gives us idea of how things are changing with respect to what's going on around us in the industry. So let's jump right in. So the very first question that we asked in this intake of the survey was related to the level of risk going into the 2026 production season. And this probably isn't a surprise for most of you, especially those of you who answered the survey, three quarters of you said that coming into this year, there is more risk than there was last year. At the same time, only 1%, which is a very small amount. Right. Said there was less risk and 24% said that the risk level was about the same. So this kind of helps frame up some of the rest of the results that you're Going to see here knowing that this is how farmers are perceiving risk coming into this production year. This is what I've been hearing from farmers, interacting with them on the Farmer Rapid Fire on our Thursday Reel Ag radio show, interacting with audiences in my, in my different presentations. No surprise here. And let's look at the multi year comparisons because this is the third year that we've asked this question. Yeah. So, you know, as you can see, the results themselves have not changed from year to year. But you know what we kind of have to look at? Well, if in 2024 there was more risk and then in 2025 there was more risk and now 2026 there's more risk. This kind of compounds over the years. Yeah. And this is tied to, there's a number of different factors here. There's agronomic risk, there's financial risk, there's geopolitical risk, there's a lot of variables that are impacting farm income and farm health. And the question is, okay, knowing this and just a bit of a reminder that we need to make sure that we are knowing this. That's great, but what are we doing to manage that? Right. And how are you taking care of and trying to minimise some of those impacts on you? And of course you can't tell Mother Nature what to do, but there are ways and there is insurance programmes, there's currency hedging or market hedging, there's all that kind of stuff. So just as a bit of a reminder, everybody but risk is out there and it continues to increase year over year, at least from a perception standpoint. I think the reality is there as well. Yeah. Now, as we take a look at the sentiment index, you know, one thing I'm going to maybe preface this by saying is that, you know, over the past little while we have noticed that there was a general trend towards more pessimism. We're actually starting to not in everything, but see a little bit of a reversal on that, which I think that despite what we just looked at, is a very encouraging result. So for those of you who this may be one of your first times or first time in a long time completing the cfsi, just, just when you interpret the results, one, I want to remind us of this hundred mark. This is what we call the neutral line. So anything that falls above this line is positive sentiment and anything below it would be negative. And so keep that in mind. We're going to keep that line up there as we go through these results. So the first area that we look at Here is related to current farm financial performance. The question is, do you feel that your farm's in a better, worse or about the same financial position as you were 12 months ago and historically going back to January of 25. So we're going to be looking at this over a year's time frame. You can see where we started in a year ago at an 83, still negative, but it dipped really low, down to 64, and kind of remained there through October. We've seen a little bit of a resurgence here, coming back up to 78. So, you know, this is, I think, something that we would look at. Although it's not neutral or above neutral, it's nice to see a little bit of a rebound with the current farm financial performance question. And again, this is relative to 12 months ago. So we have improved from 64 to 78 in the last quarter, but we're still deteriorating when it comes to current farm financial performance relative to 12 months ago. Just. It's a, it's, it's, it's less of it. Less so. Right. But we're, we're still deteriorating because we're under that neutral level until we get over the hundred, then we're feeling better about our financial performance. Yeah. And you'll see that when we ask the question, the benchmark question, about how would you rate your situation today? Is it good, excellent, fair or poor? So hold that thought. You know, when we asked farmers to project a year out, do you feel a year from now your farm will be better off, worse off for about the same. You can kind of see that there is a very similar trend line here, although it didn't dip quite as low in April as the current farm financial performance did. But when you look at where we are today, you're seeing just a little bit. I mean, we got to be cautious here. This is not a hugely significant increase, but it is sort of mimicking the trend that we just looked at on the current farm financial performance. So sitting here at a 75, still in the negative territory, but rebounding a little bit since October of 25. Interesting that you look at the pattern for both current farm financial performance and future farm financial performance. The highest numbers are in January. Is this when we feel like relatively the best about things to our. In regards to our financial performance? It's just interesting that that's how that. Well, we'll see if that holds true for, you know, in the next couple years. But yeah, kind of show itself there. You know, I mean, there could be a sense of, well, now we have A better handle on what the year actually looked like by this point in time. I mean, that could be, that could be part of it, but you know, that would be speculating. Now here's something I wanted to share with you. It's a question that we started to ask more recently and it's how would you assess your overall farm's financial situation today? So, you know, recognising the other questions are looking a year ago, a year ahead. Well, where do we stand right now? And this is, you know, something that we've noticed over the past four times that we've asked the question. We've only asked it four times. But when you take a look at the combination of good and excellent, we've seen a gradual decline here. So in April it was 60% of farms said we were good or excellent. It dipped to 57, then to 45. And now that that number is at 37. Any like, when you look at this, it's, it's really showing because when we ask about like current financial assessment, we're not relative to another time period like in our prior graph. And so this is like a moment in time. Considering my income statement, my balance sheet, like my overall financial perspective, man, we have fallen. How would you describe the significance of moving as far as we have from 60 back in April to 37% now? How do you describe that drop? Well, first of all, I think that it's something that we need to pay attention to. I think the country needs to pay attention to it. It's not just ag industry thing. This is important. We've seen this before. The concerns that farmers have related to commodity prices, input price prices, weather, I mean all those things affect profitability one way or the other. So I don't think that this is a surprise. One thing I do want to notice though is we're gradually moving from, you'll see good to fair. Poor has not. I mean it's still a significant number, but it has not grown as significantly as the fair category has. So you know, when, when that poor starts to overtake the others, I mean, then I think that we really need. To start. Thinking about what these numbers actually mean. And this like, as we've moved from good to excellent, the amount of people that are good to excellent when they describe their financial assessment. I think these numbers match what we have been hearing anecdotally from a lot of our farmer audience. Clearly this is farmers and ranchers. Okay, so ranching industry and beef operations and throw dairy into that too. Livestock feeling much better about their financial Health than cropping farmers. And so a lot of this is being driven from the cropping side where we've seen rollover in prices, cost complex continues to rise. Obviously there's a lot of attention paid there to seed and fertiliser costs and things like that. But this all makes, this confirms what we've been hearing is essentially, I think what I'm trying to say. Yeah, yeah, I totally agree. So, going back to some of the now external questions, you know, optimism towards the ag economy. Do you feel the ag economy, are we looking at generally good times or bad times ahead? And then the future of the ag industry, which is more the five year outlook on things, you know, widespread good times, widespread bad times. You can see here that this number has historically been very low. It continues to be low. You know, there's not a whole lot of movement there on the one year outlook on the economy, on the five year outlook on the industry, really very little change that we have seen over the past few months here. One thing I want to address, and I've addressed this before, but in some of the qualitative comments that we leave at the end, some people suggest for this and for some of the other questions we ask too, where there's no neutral option, it's either good times or bad times. There's no, well, it depends or an in between. This is by design for two reasons. One, when we compare this to the Purdue Ag economy barometer, it's the way they ask the question too. So we want to have a very direct comparison to what our neighbours to the south are feeling. But also, I think we can all relate to this. Sometimes if you give somebody a neutral option, they'll take it because it's easy. We don't really learn anything that way. So we're forcing you to answer one way or the other based on what your gut is telling you. And while that may be far from what actually happens or reality, it's how you feel right now, given a choice between one or the other. Yeah. Think about it like a scale of five. If it's like rate this one out of five, it's like three. Right. Versus at a four, you're like, wow, is it two or is it a three? It's a little bit. You can't. You just can't meet in the middle. Yeah, exactly. So this is how we're feeling about the industry at large. Any thoughts on this, Shaun, before we move on to farm investments? Well, when we look at in both, you know, widespread good times, the next, in the next 12 months versus the next 60 months, we see 42 at a 200 on the next 12, and 61 at a 200 on the next five years. Overall, farmers feeling pretty poor about the overall ag economy in Canada, for sure. You know, I'd also like to highlight, you know, we have the ability to look at this geographically. There is zero difference in how eastern farmers answer this question relative to western farmers. Both of them. In fact, for the ag economy, one where it's 42 overall, it's 42 east and west. Really? It's that easy? It is. I mean, when I round it, it becomes 41 and 42, but, I mean, it's a virtual tie. And then for the future of the Canadian ag industry, we're aggregated at 61. It's 62 in the west, 60 in the east. So there's no difference. This is not an east west issue. Yep. Looking at the confidence in making farm investments, so we asked the question, is now a good time or a bad time to be making investments in things like infrastructure, machinery, land, things like that? And you can see that this number has remained relatively stable. It's actually gone up a little bit this time, and we've seen it before. But, you know, I always look at this one as being a positive, even though it's not anywhere close to the neutral line. The fact that it increases is a positive because this, this, to me, this is where rubber hits the road. Right. I mean, so if my farm, regardless of my farm's financial situation, if I'm looking at now at a time to make those investments, to me, I think that that, that tells us something. So I'm encouraged by that response right there. And in this one, again, there's no difference, east or west. It's 64 in the west, 65 in the east. So this is not an east west issue. Yeah. And the supporting ag industry, like agribusiness, especially if you're in the world of selling equipment or bins and, you know, maybe building shops like you, you want to see this number start to tick higher for sure. Again, though, still in the negative. So, like, overall, we've improved at 65 out of 200, coming up from 57 in the prior quarter. We're still in negative territory when it comes. This is not a great time. I don't have a lot of confidence right now. This is a great time to make farm investments. Again, though, it doesn't mean I'm not going to. It just means I don't. I wish that the time was better to do it, but I still may do it. So on that note, just an interesting finding here. Larger farms are more likely to display a willingness to make those investments. So that's a trend and we've seen that trend happen sort of consistently. But something that was interesting in this one. Farmers 35 and under, they score an 80 on this one. Farmers between 45 and 54 scored a 101. So there is definitely something to be said about where you are in your career as well in terms of your willingness to make these kinds of investments. You got more Runway Right. When you're younger, you got more time. To more Runway and more capital perhaps. So when you take a look at those different age categories, that 45 to 54, you know, maybe has been waiting in the wings to make those investments and now is at a point where they feel it's time. So again, hypothesising here. But you know, it's interesting when you start looking at, at some of the differences. I think it helps tell the storey. Absolutely. How about, Kay, one of the things, the big concerns out there that's driving some of this negativity is. Oh, Kay, before I get to. I was gonna ask you about marketing of crops, let's get to one of the big hang ups here. Considering the deterioration of farm financial assessment moving from 60 to the mid-30s. Okay. In terms of people that say they're good to excellent on their financial condition, how is that impacting access to capital? Because this is an industry that's driven by the ability to get loans and take on debt for growth. Right. We got a whole bunch of debt out there. So what do those results? Yeah, so 82% suggested that they would not have a major issue accessing the capital that they needed from their lender. We also asked the question too, our respondents may remember about how long you've been with your bank, what type of bank you deal with and how would you assess the relationship? And you know, I'm not sharing a bar chart on this, but overall, long time with the bank and pretty good relationship with the bank. And so, you know, whether there's a correlation that exists between that and what you see on this screen, I mean, we can run those numbers, but right now it doesn't appear that this is a major barrier for the time being. Yeah, we'll maybe at a later date show some of those, those charts in terms of time with the bank. But there's a lot of stability in the banking relationship. Right. Like people have been with the high. Majority of the people that completed the survey have been with the bank over 10 years now. I personally, Justin, I was, I was pleasantly surprised by the fact that 82% of respondents felt they were likely to have enough access to capital in the upcoming season. That is a big positive, especially considering how people feel about their financial condition. Relatively backwards and forwards in the future financial performance. And then that 37% good to excellent. Even with all of that and that negativity, I think it's a positive that people have the access to capital to be able to make a go of it here in 26. I personally, I thought this number would be lower. I don't know where I thought it would be. I just relatively, as I saw it, I thought it was going to be lower. Yeah, well, you know, there's two things that stand out. I mean, first of all, 52% says extremely likely. I mean that's pretty convincing. And then remember there's that 14% may or may not. There's likely some conditions attached to that. Which leaves 4% suggesting that they wouldn't. Yeah. One thing we didn't ask is, you know, what would cause you to switch bank? I guess I'm not sure if that was a really. That question says anything because there's so much stability to the banking relationships. They said most people were over 10 years anyway. Yeah. What would be interesting to know is if it was the person in that relationship changing, that would maybe constitute a change. You know, we've, we've done a lot of work, you and I, on sort of the customer experience with salespeople, you know, and it would stand to reason that that there, it's. That personal relationship matters. We did not ask about that, but that would be sort of my, my assumption. So going back to the sentiment index now we look at the markets and confidence in marketing crops. This has remained pretty much stable. 89 to 90, you know, is not really any different statistically speaking. And then outlook on selling crops, you can see this one took a big jump up in October and it's remained pretty much at the same level here in January. This is another one of those where I'll just address that. We only gave two options. And the reason we did is because we. Especially on the selling crops, it's like I should hold my crop now because prices are going up or I should be selling because I feel prices are going down. Understand it would be nice to have sort of a neutral response there, but we just, we want to really force the thinking here. Do you feel prices are going up or going down? So that's really what the nature of that question is designed, it's not necessarily designed to measure your marketing strategy. It's more where do you think the market is headed? But here's what we see. And you know, I think the conclusion here is there's no change from the last time we did the survey. Do you remember east, west differences here at all? Maybe if you could look that up, that'd be really super interesting. Yes. So there was a little bit of a difference here. I don't, I don't have it handy there. There was a, there was a difference. I don't have the exact numbers, but there was a difference. So we'll maybe get back on that one. This is the only real like. And we've held here, like you go back a quarter to October, we were at a 135. Now we're 132 farmers believing that. Listen, and we've been punished. Like, we've really seen a rollover when it comes to the crop commodity complex, really across all commodities. Now, Canola's kind of really bounced around in the west and things like that for all the tariffs and stuff like that. But if you look at this, farmers also have. There's a lot of crop on farms, especially when it comes to canola as an example, or lentils, for example, in the West. And you look in the US It's a lot to do with soybeans still on farm because of some of their challenges. And of course, these are Canadian numbers. So if the farmer is right here and we do see higher commodity prices going forward for whatever reason, that's going to be really helpful and try to balance out some of the concerns we have on the input cost side. But when you listen to some of the analysts that we have on RealAg radio and real agriculture.com all the time, you hear more analysts talking about we're in for more bearish times going forward than we are bullish. So farmer taking a little bit of a contrarian view here in comparison to some of the analysts I've heard on. It doesn't mean they're wrong. It doesn't mean they're wrong. It just is different than what the analyst community is saying. So I found the numbers we were looking for here on the confidence in marketing crops. Question, 87 in the. Sorry, wrong one. 90 in the west, 89 in the east. So really no difference there. So no difference on confidence in marketing crops. And then when we look at the outlook on the markets, we are looking at 137 for the west and 122 for the east. So more. More optimism. So 137, 122. So bit of a bigger difference there. Still. Still very positive. Still pretty close. Yeah. Yeah. Fascinating. What about mental health? Yeah, so mental health, you know, this one, we had a little dip there in April of 25, but that's. That's really been. Since the beginning of when we started doing this. That was the only one where there was a little bit of an outlier. And it's kind of remained around that, you know, mid-90s this time we actually saw it go up a little bit, which I think was definitely an encouraging sign. And, you know, we asked the question then, too. So this again is relative to 12 months ago. We asked, how would you rate the state of your mental health right this very minute? 75% indicated that their current state of mental health was either excellent or good, and that was up from 71% in October. That is with all of. I. My perception, with all of the farm financial challenges on the cropping side, for the aggregate number to be 75% indicating their current state of mental health was good or excellent. That. That sounds really encouraging, that. That sounds like a positive number, doesn't it? Yeah, 100%. Yeah. Yeah. You know, farmers are displaying that they are very resilient people. And, you know. Yep. And. And you know what I will say too, that, you know, for those of you who didn't answer excellent or good, you know, you know, we're sensitive to that and, you know, we're thinking of you, and please, you know, make sure that you take care of yourself in addition to everybody else that you need to look after. So it's a. It's a tough one for sure. Yeah, absolutely. Well, Justin, I think that's the end of our display of data for this month. We have more answers and data coming from this question package from January. So please pay attention to Real Agriculture.com and RealAgriStudies.com will be kind of going over more of it and looking at more some of those demographics. How do young farmers versus old farmers. And we talked a little bit today about the east versus west, but also how much does size matter when it comes to some of the perspectives here across these questions and a few other ones we asked that we'll get to in the coming weeks. So really, again, thanks to everybody in the RealAgristudies Insights Panel for completing the survey. Really appreciate it. None of this is possible without you. And Justin, thanks so much. All right. Hey, Shaun. Just a couple weeks till spring training starts. Oh, I know. I'm excited. Yeah. Good. Hey, thank you, everybody. No bow, but we. We got it. We could do without him. We're good. All right, thanks. Thanks, everybody. Take care. Sam.