A new report shows the price of Canadian farmland continues to climb.
Farm Credit Canada’s chief economist, J.P. Gervais says the growth is being driven by limited supply of available farmland combined with a robust demand from farm operations.
The latest FCC Farmland Values Report shows an 11.5 percent increase in 2023, slightly less than the 12.8 percent hike reported in 2022.
Ontario had one of the highest average provincial increases, coming in at 10.7 percent, coming in below Saskatchewan, Quebec, and Manitoba.
“The land market has shown to be very resilient,” said Gervais. “Purchasing land in the year ahead will come with careful consideration of the price and timing. Some operations will prefer to wait and see where land values will settle while others may move more quickly should adjacent land become available, or simply because it fits their strategic business plans.”
Gervais acknowledges that lower affordability of farmland is challenging for young producers, new entrants, and those aspiring to grow their land base. This can expose some operations to more risk as they navigate higher rental rates and input costs.
However, he says the good news is that farmland value increases reflect a positive outlook for the demand of agriculture commodities and the quality food being produced in Canada.
