Canada’s seed industry is watching a complex market unfold—one where strong international demand continues to support exports, but softening commodity prices and mounting trade friction are beginning to reshape growers’ plans and, by extension, seed demand. A new report from Agriculture and Agri-Food Canada (AAFC) sheds some light on the situation.
Robust Exports Drive Seed Demand—For Now
According to AAFC, exports of key field crops are forecast to increase 5% in 2025. Durum, lentils, and canola are leading the charge—driven by strong global demand. That’s no doubt good news for seed companies serving those markets, but tightening domestic stocks (projected to fall 10%) signal a need to carefully watch seed inventory and positioning for 2026.
Even as export numbers impress, prices are trending downward for most major crops. Exceptions include corn, flax, and sunflower seed—highlighting potential bright spots where growers may shift their seed purchases toward crops offering better margins.
2025-26: Trade Tensions Shift the Outlook
The seed industry’s forward planning must now account for volatile trade dynamics. China’s new tariffs on Canadian peas, canola oil, and meal, along with potential U.S. trade responses, introduce fresh uncertainty—especially since StatsCan’s March seeding survey predates these developments.
Overall, total seeded area is expected to rise slightly (+0.3%), led by spring and winter wheat (+2.6%). But oilseed acreage could fall nearly 2%, driven by shrinking canola and soybean intentions. Seed demand in pulses and special crops may also dip, except for dry peas, where growers are increasing acres—possibly in response to short-term pricing optimism or rotational needs.
Assuming average growing conditions, total production is expected to decline marginally. For the seed industry, this points to selective shifts in varietal demand, as growers look to optimize profitability under tighter margins.
Crop-by-Crop Implications for Seed Demand
- Durum: Shipments are up 38% this year, and while demand remains strong from North Africa, increasing global competition may push prices down in 2025-26. Expect continued strong seed demand in the near term, but more selective purchasing ahead.
- Wheat (excl. durum): A rebound in wheat acres (+2.6%) spells opportunity for seed suppliers, even as exports face headwinds. Growers may prioritize high-yielding or quality-focused varieties to compete globally.
- Barley: Declining acres and falling prices could reduce seed movement, especially if corn continues to pressure feed markets.
- Oats: With stocks at decade lows, some growers are expected to return to oats, creating modest lift in seed demand despite price pressure.
- Rye: Strong production growth may not translate into higher seed sales if prices fall amid surplus supply and weak row crop markets.
- Flax: Tighter supply and improving prices may spark renewed interest in flax seed, especially if growers seek niche market returns.
- Canola: Despite record crush capacity, production challenges and trade risk are bearish signals.
- Dry Peas: Increased seeding intentions offer a silver lining for seed sales, but looming export barriers (China, India) could blunt demand if growers lose confidence.
- Lentils: Falling prices and softening profitability could pull back seeded area and seed demand for 2025-26.
- Dry Beans: Weak prices and reduced exports are expected to drive down acreage and seed use.
- Chickpeas: High carry-in stocks and weak prices will likely curb planting.
- Mustard: A steep decline in seeded area is projected. Even if prices recover, burdensome inventories may limit seed movement.
What Seed Professionals Should Watch
As growers make decisions for 2026, several key factors could possibly shape seed orders in one way or another:
- Trade policy volatility with China and the U.S.—both of whom escalated tariffs this week.
- Moisture conditions across Western Canada, which could sway last-minute crop choices.
- Shifting profitability across crop types, which may prompt rotations or switches to more resilient or premium-value crops.
The next official AAFC outlook arrives April 17, with fresh seeded area estimates from Statistics Canada due June 27.
For seed companies, the 2025 season will require agility—anticipating not just what farmers can grow, but what they will grow come 2026 in an environment where global demand is strong but increasingly unpredictable. It’s a year to align closely with growers, understand their risk calculus, and help them choose genetics that offer stability and marketability in a shifting landscape.
