The Canadian agriculture industry is in a good position to weather inflationary pressures and higher interest rates, said J.P. Gervais, Farm Credit Canada’s (FCC) chief economist in a July 13 news release.
“We are in a unique position where record farm revenues are helping to offset the impact of a sharp increase in input costs and rising interest rates,” Gervais said. “The key for producers is to pay close attention to projected income and expenses to avoid any cash flow challenges that could put pressure on operations.”
“The ability to service debt is arguably the most critical financial risk indicator for a farm operation.”
FCC’s most recent projections suggest farm cash receipts could climb 15.9 per cent to $96 billion in 2022, driven by robust commodity prices and prospects of much stronger crop yields than last year, the release said. This would surpass the 2021 record high, which was itself an increase of 14.9 per cent over 2020.
“Even if our projections were more modest, the Canadian agriculture industry certainly seems financially healthy and in a good position to weather inflationary pressure and higher interest rates,” Gervais said.
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