Farm Credit Canada (FCC) does not expect rising fertilizer prices to significantly alter the spring seeding plans of Canadian producers. But the farm lender says there is still enough flexibility in the market for some acreage shifts, with canola and soybeans the most likely to benefit at the expense of wheat.
In a new analysis authored by senior economist Leigh Anderson and released Wednesday, FCC said seeding intentions for 2026 were gathered before the outbreak of the U.S. war in Iran, which has since driven fertilizer prices higher and added another layer of uncertainty just as farmers finalize planting plans. While crop rotations and existing contracts mean many acres are already locked in, FCC estimates up to 5.5 million acres, or about 7.3% of total principal field crop area, could still be considered “swing acres” that may shift depending on margins and input costs.
Canola appears well positioned to capture some of those acres. Statistics Canada’s preliminary survey pegged intended 2026 canola area at 21.8 million acres, up about 1% from last year. FCC said canola remains attractive despite expectations for large ending stocks, helped by improved market access after China lowered canola tariffs, expanding domestic crush capacity and favourable price relationships relative to spring wheat. Rising oil prices linked to Middle East tensions have also improved biofuel economics, adding more support to canola demand and producer confidence. FCC said canola acreage could still rise above 22 million acres, with a reasonable range of 22 million to 22.5 million acres.
Soybeans are also seen as a likely winner in the higher fertilizer price environment because they require less nitrogen than corn. Statistics Canada projected soybean and corn acreage both rising by nearly 2%, but FCC said the outlook now favours soybeans more strongly, especially in Manitoba and eastern Canada, where growers are more exposed to fertilizer price shocks at planting and where futures price relationships continue to favour soybeans over corn. With soybean acreage historically showing more flexibility than corn, FCC said additional soybean gains are plausible this year.
Corn, by contrast, is expected to be less responsive. Although higher fertilizer costs could discourage some acreage, FCC said Canadian corn acres have historically shown limited flexibility because much of the crop is tied to local livestock demand. That means any acreage shift toward soybeans is more likely to come partly at the expense of spring wheat rather than corn, particularly in Manitoba.
Wheat appears to face the biggest downside risk. Statistics Canada’s preliminary survey suggested little change in spring wheat acres from 2025, but FCC said spring wheat is the crop most vulnerable to acreage losses if farmers move toward crops with stronger margins or lower input requirements. Canola’s stronger price relationship and growers’ tendency to prioritize fertilizer applications on canola over wheat both add to that pressure.
Overall, FCC said large acreage swings are not expected, but higher fertilizer costs are likely to influence the remaining decisions on flexible acres. In that environment, the biggest story may be a modest shift toward canola and soybeans, limited movement in corn, and some erosion in wheat area as farmers try to protect margins heading into the 2026 growing season.
The full analysis can be seen here:
https://www.fcc-fac.ca/en/knowledge/economics/2026-fertilizer-prices-reshape-planting-decisions
