(Rural Roots Canada) – Canadian farmland values increased by 5.5% during the first half of 2024, according to the latest mid-year review by Farm Credit Canada (FCC). This follows a 9.6% rise over the previous 12 months, marking a slowdown in growth.
“Farmland values increased at a slower rate, yet 5.5 percent growth in six months is still a very strong number,” said J.P. Gervais, FCC’s chief economist.
Saskatchewan and Quebec lead the pack for the second year running, with average increases of 7.4% and 5.4%, respectively. New Brunswick, British Columbia, and Alberta, also recorded similar growth, at 5.2%, 5.0%, and 4.6%. Manitoba is close behind at 3.9%, and Nova Scotia saw 3.8% growth. Ontario had only modest growth at 2.1%, while P.E.I. trailed behind at 1.7%.
Despite a rise in borrowing costs, lower commodity prices, and increased land prices, that hasn’t deterred some buyers. Looking ahead, Gervais said declining borrowing costs and a limited supply of available farmland should sustain the current high prices for farmland.
“The continued rise in farmland values highlights a positive and robust long-term outlook for the agriculture sector,” he said. “As we move into the latter half of 2024, the trends in farm revenues and interest rates will be key indicators of where farmland values might head next.”
However, a dip in farm cash receipts could impact the market. Projections suggest a 3.3% decline in 2024, driven by low commodity prices which could limit some farmers’ ability and willingness to invest further in higher-priced land.
For more information, you can visit the FCC website.
COMPARE TO LAST YEAR: Despite Challenges, Farmland Values Remain Resilient
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