204-960-0595
An expert lays out tips and advice
Farmers in 2026 will want to take careful stock of their farm profit outlook and the financial tools and investments they can use to get an extra edge in what might be a tough year
By Kate Badger
Farming has always required resilience. Producers make significant investments months before seeing a return, all the while navigating weather, markets, interest rates, inflation, and global events.
In a recent conversation with Adam Pukalo, portfolio manager at Pukalo Prairie Wealth Group of Harbourfront Wealth Management, we discussed practical strategies farmers can use to strengthen cash flow, reduce financial stress, and think long term about both farm and personal financial security.
The conversation was not about finding a “perfect” financial strategy. Instead, it focused on building awareness, understanding available tools and helping to navigate both opportunities and uncertainty.
Stress testing the farm
Pukalo emphasized that many operations underestimate how interest-rate increases can affect profitability. His recommendation was simple: stress test the operation.
What happens if borrowing costs rise by two per cent? Could the farm still cash flow at five per cent interest rates?
The goal is understanding where the business stands before stress arrives. A basic spreadsheet using last year’s operating numbers can help producers understand their exposure.
Pukalo noted that, while no one can predict where interest rates are headed, producers can monitor signals from the Bank of Canada and pay attention to inflation trends and broader economic conditions. He also highlighted two key financial ratios that indicate economic health:
- Debt-to-equity ratio: commonly benchmarked around 20 per cent in Canada, though it varies by commodity and region.
- Current ratio: current assets divided by current liabilities. A ratio above 1.5 is generally considered healthy.
Reducing spring cash flow pressure
Spring can be one of the most financially stressful times of the year. Input bills arrive long before revenue does, creating significant cash flow pressure. Pukalo highlighted the Advance Payments Program (APP), often referred to as the cash advance program, as one of the most underutilized tools available to farmers. In 2026, producers can access substantial working capital through eligible commodity programs, including interest-free portions on advances.
Programs available in Manitoba include:
- Manitoba Crop Alliance
- Manitoba Livestock Cash Advance Program
- Canadian Canola Growers Association Advance Payments Program.
Financial diversification
One of the most relatable themes of the conversation was diversification. Farm operations carry significant exposure to weather, commodity prices, land values and interest rates.
Off-farm investments can help reduce overall risk exposure and create additional stability during difficult production years. Pukalo noted that RRSPs should be leveraged to help reduce taxable income during strong years, while spousal RRSPs may help balance income between spouses. Tax-Free Savings Accounts (TFSAs) also remain valuable because both growth and withdrawals are tax free.
The conversation also highlighted the importance of understanding how different forms of income are taxed. Pukalo explained that interest income from products such as GICs (Guaranteed Investment Certificates) is taxed more heavily compared to dividend type investments in non-registered accounts.
Rather than focusing solely on reducing taxes, he encouraged producers to better understand the financial tools available during high-income years. Depending on the operation, that could include capital improvements, charitable giving, RRSP contributions, corporate investing and maintaining liquidity within the farm corporation.
Understanding risk and volatility
Global events naturally create anxiety, particularly when headlines focus on wars, inflation or energy markets.
Pukalo encouraged producers to focus on long-term thinking rather than reacting emotionally to headlines. Markets, he explained, are forward-looking. While geopolitical events may create short-term volatility, investment strategies should align with the producer’s long-term goals and risk tolerance.
He also discussed lower-volatility investment tools such as dividend-focused investments, principal protected notes (PPNs), and covered call strategies, all of which aim to balance cash flow, risk, and long-term growth differently.
The recurring message throughout the conversation was not about chasing returns, it was about understanding options.
Succession, trusts and the bigger picture
As the conversation evolved, succession planning naturally entered the discussion. Pukalo noted trusts can support succession planning, asset protection, tax planning and intergenerational farm transitions while still allowing parents to maintain operational control. He also discussed how corporate-owned life insurance is often used as part of broader estate planning strategies, particularly when balancing farming and non-farming children within succession plans.
The strongest farm operations rarely make decisions in isolation. Financial advisors, accountants, lenders and farm partners all play a role in helping producers understand risk, identify opportunities and make informed decisions. As Pukalo put it, “The more data you have on your farm, the more educated decisions you can make.”
He will be one of three panelists sharing economic and financial insights as part of a moderated panel discussion hosted by Brenda Tjaden at the 2026 Manitoba Forage and Grassland Association Regenerative Agriculture Conference Nov. 9-10, 2026, at the Victoria Inn in Brandon. As producers work through another busy season, one of the biggest takeaways from the conversation was the importance of understanding both your numbers and your options before stress arrives.
Article on The Manitoba Co-Operator website: Farmer tips for financial resilience in a tough year