The worth of Canadian farmland rose 11.5% in 2023, a brand new report by agriculture lending agency Farm Credit score Canada has discovered.
Chief economist J.P. Gervais stated whereas that’s a slight slowdown from the expansion in 2022, it’s nonetheless a fast tempo given cooling financial situations total.
“Farmland costs have continued to extend at a fast tempo over the past couple of years, even when financial situations prompt the expansion ought to sluggish,” stated Gervais in a launch.
“A restricted provide of obtainable farmland mixed with a strong demand from farm operations is driving that progress.”
The lender’s newest report on farmland values discovered that they elevated in each province tracked aside from British Columbia.
That province noticed a mean decline of three.1%, nevertheless it nonetheless has the best common farmland values within the nation.
The variety of farmland transactions is estimated to have declined barely final 12 months.
Farmers are presently being cautious with regards to investing of their operations, the report stated, with anticipated weaker revenues and elevated borrowing and enter prices.
“Buying land within the 12 months forward will include cautious consideration of the value and timing. Some operations will want to attend and see the place land values will settle whereas others could transfer extra shortly ought to adjoining land develop into out there, or just because it suits their strategic enterprise plans,” Gervais stated.
Younger producers face a difficult surroundings as farmland turns into much less and fewer reasonably priced, stated Gervais. This will likely expose some farm operations to extra threat amid larger rental charges and enter prices, he stated.
The best will increase in common farmland worth final 12 months have been in Saskatchewan, Quebec, Manitoba and Ontario.
This report by The Canadian Press was first printed March 12, 2024.