Farms in financial good shape, says Farm Credit Canada

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Although total farm debt in Canada now tops $100 billion, the sector is “well positioned to thrive in the current economic and financial environment,” says the chief economist with Farm Credit Canada.

“The current debt-to-asset ratio in agriculture remains lower than the 10-year average… and farm liquidity remains healthy,” said JP Gervais.

A relatively low debt-to-asset ratio provides financial flexibility and represents lower risk, while liquidity reflects the ability of producers to absorb fluctuations in farm input prices, demonstrate patience with their marketing plans, or take advantage of unexpected opportunities, the farm lender said.

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