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 general.
“Farmland costs have continued to extend at a fast tempo during the last couple of years, even when financial situations urged the expansion ought to sluggish,” stated Gervais in a launch.
“A restricted provide of obtainable farmland mixed with a sturdy 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%, but it surely nonetheless has the very best common farmland values within the nation.
The variety of farmland transactions is estimated to have declined barely final yr.
Farmers are at the moment 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 yr forward will include cautious consideration of the worth and timing. Some operations will desire to attend and see the place land values will settle whereas others might transfer extra rapidly ought to adjoining land develop into accessible, 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 inexpensive, stated Gervais. This will likely expose some farm operations to extra danger amid increased rental charges and enter prices, he stated.
The very best will increase in common farmland worth final yr had been in Saskatchewan, Quebec, Manitoba and Ontario.
This report by The Canadian Press was first revealed March 12, 2024.
