A combine harvester works in a field near Elmira, Ont. Economic uncertainty has caused market prices for many field crops to fluctuate wildly.

For the past two years, farmers were able to charge higher prices than usual for their crops, and as recently as a month ago they anticipated another good year.

But a volatile market of fluctuating prices — due mainly to a meltdown in the U.S. economy — dashed those expectations.

"Now the right word to describe it is 'uncertainty'," says Ron Bonnett, vice-president of the Canadian Federation of Agriculture (CFA). "There's huge volatility in the pricing of products we are selling - wheat, corn, soybean - you see prices fluctuate all over the place."

Farmers hoped that declining fuel prices over the past two months would cut their own costs and therefore boost profits. But the economic downturn quickly sank their hopes, experts say.

Because of these abrupt changes, Bonnett says farmers are finding it increasingly difficult to predict prices, often leading to unanticipated losses.

Livestock farmers are struggling with higher prices for fuel and fertilizer.

"With that volatility, it's really hard to get some predictability into the market so that you get to know how much you are going to sell those products for," Bonnett says.

As prices keep shifting, farmers are worried about paying for the tools they need to maintain their crops. The costs of machinery, fertilizers and other inputs have been rising, yet prices for their output are declining.

"We see significant increases in farmers' input costs, like the price of fertilizers have almost doubled for the past six months," says Grant Robertson, a livestock farmer in Ontario.

Bonnett says the unpredictable nature of the economy right now is making farmers unsure what to do next.

"It's really hard for farmers to know, 'Should I buy fertilizers or a tank of fuel? What should I do that can make a huge difference to profit margins?' These issues might worsen if the crisis persists," Bonnett says.

A significant number of Canadian farmers have yet to feel the full effect of the meltdown, but many remain worried that if the crisis persists, it will carry a toll on their production in the next crop year.

Thirty-five per cent of U.S. agricultural imports come from Canada.

"I wouldn't say that I have made losses as yet but it worries me that if the situation persists till tomorrow, then certainly we will begin seeing losses," says Bill Medel, an apple grower in Ontario.

Medel sells three per cent of his apples to the U.S., but for the past 12 days, he has not shipped any product because of a slow demand in this market.

Some farmers are also nervous that the global financial crisis could tighten up the credit they count on to tackle the rising cost of planting crops and feeding livestock. However, there have been few signs of a credit crunch for agriculture in Canada to date, experts say.

"Credit available through banks and other private lenders is still available as far as CFA is aware," says Bonnett.

Related Links Canadian Federation of Agriculture National Farmers Union Agriculture and Agri-Food Canada