Ontario soybean farmers face price pressure as China shifts buying and Brazil ramps up production

Soy Canada logo

By Amanda Nelson

Ontario soybean farmers are watching global trade negotiations closely as uncertainty around exports — particularly to China — adds to price pressure in a market already facing strong global crop supplies.

Brazil is expected to have a record soybean harvest in 2026, a development that analysts say will weigh on prices worldwide.

“There’s forecast to be record production in Brazil, and when there’s strong production, that has downward pressure on price,” said Brian Innes, executive director of Soy Canada. “That’s the first thing to watch for prices in 2026. The second is what happens globally with geopolitics and tariffs.”

Innes said changes in trade relations between major economies — especially the United States and China — can have a direct impact on the prices Canadian farmers receive.

“Due to the Trump administration, tariffs on soybeans have changed,” he said. “One thing to watch for 2026 is how the situation between the U.S. and China evolves, and how the situation between Canada and China evolves. That can have an impact on price if tariffs change.”

More than 70 per cent of Ontario’s soybean crop is exported, with prices shaped by global demand, particularly from China. While China historically sourced much of its soybeans from the United States, it is increasingly turning to Brazil due to generally lower prices.

The Canadian and U.S. soybean markets are also closely linked through cross-border trade and processing, which could impact prices for Canadian farmers.

“Products flow back and forth across the border,” said Innes. “For example, Ontario soybeans are shipped to Michigan, processed into soybean meal, and then shipped back into Ontario. Soybean meal and soybean oil trade back and forth across the border, and that’s why prices are very linked.”

Soybeans are priced on global benchmarks — particularly U.S. futures markets — meaning Canadian prices move in step with broader world trends.

“The price that Ontario farmers see is based on what conditions Canada faces when exporting to the world, including China,” said Innes. “In the past, the difference between Michigan and

Ontario was largely tied to exchange rates, but now, with global trade disruptions, Canada and the U.S. face different tariffs and different market conditions.”

Despite growing competition from lower-cost producers, Innes said Ontario remains well positioned as a high-quality soybean supplier.

Ontario is a global leader in identity-preserved and food-grade soybeans, a niche market that allows farmers to compete on quality rather than volume alone.

“We’re living in a time of unprecedented global uncertainty, and if market conditions change for Canadian soybean exports, that will have an impact on price,” said Innes. “But Canadian soybeans have been flowing under strong export conditions for some time, and that has meant strong demand for Ontario soybeans.”Unlike 2022, when rising input costs were offset by strong commodity prices, 2026 is shaping up very differently. Farm Credit Canada is estimating a 40 per cent increase in the cost of nitrogen would cut average Saskatchewan margins in half, from $50 per acre to $25 per acre for an average wheat and canola rotation. It would also lower average margins in Ontario from $365 per acre to $345 per acre for an average corn and soybean rotation. These margin estimates are provincial averages and exclude the cost of land which is much higher in Ontario than in Saskatchewan.

The margin estimates only account for the shock to the nitrogen price. They do not consider potential margin compression because of other fertilizer price increases, potential yield reduction (resulting from less fertilizer being used) or higher fuel prices. A prolonged conflict could disrupt regional fertilizer production, especially if natural gas supply—critical for nitrogen fertilizer production—continues to be limited out of the Strait of Hormuz. Unless the war is resolved quickly, expect global fertilizer supplies to tighten further and put additional pressure on global food production and prices.

Communication during turbulent times such as these is crucial. Farmers may want to contact their crop input retailers to confirm they’ll have the tonnes they need this spring and work together on any backup plans which might include adjustments to crop mix, fertilizer rates and target yields. Early discussions with credit providers may be necessary as well should the need arise as seeding approaches.