Farm Credit Canada (FCC)  has published a new economic analysis exploring how changing interest rates and global uncertainty are reshaping borrowing decisions, as producers and businesses weigh whether fixed or variable loan terms make the most financial sense. 

The analysis discusses how different borrowing strategies would have performed under varying interest rate environments and finds that outcomes can shift significantly depending on economic conditions and future rate movements. While variable-rate strategies delivered stronger cash flow outcomes under several scenarios, future performance remains closely tied to factors such as inflation pressures, geopolitical events, trade disruptions and Bank of Canada decisions. 

As uncertainty around interest rates persists, the analysis highlights the importance of scenario planning and understanding how different lending structures may affect future cash flow. Rather than trying to predict markets, producers can use scenario analysis to better understand trade-offs and make more informed borrowing decisions. For latest insights and analysis, visit FCC Economics at fcc.ca/Economics.

Source:  Farm Credit Canada May 20, 2026 news release