Farm Credit Canada (FCC) has released its second quarter Economic and Financial Market Update.

Kyle Burak is a senior economist with FCC.

"Starting off with the first quarter, GDP growth was pretty strong but we do expect that to start to slow down in the second quarter and into the end of the year. Inflation has increased above what we would consider comfortable levels and this is impacting everybody across the agri-food chain from farmers to consumers, just what they're able to buy and their wallets are getting tight and so as a result, we are seeing the Bank of Canada start to increase its policy rate pretty aggressively. We haven't seen them be this aggressive in over 20 years and this is resulting in tighter economic conditions, tighter credit conditions and higher lending rates for everybody across the country."

Burak commented on the Russian invasion of Ukraine.

"The Russian invasion of Ukraine has impacted commodity markets from oil to wheat. We've seen prices really increase across all those markets in February. We're really seeing that starting to trickle into our processes into Canada, now they're paying a higher price for those commodities and we're now seeing that trickle in and the consumers are paying more for products because of that."