Regina, SK (Rural Roots Canada) — Farmland prices across Canada are still climbing.
A report from Farm Credit Canada (FCC) shows farmland values increased by 9.3 per cent, continuing a three-decade-long upward trend, which brings both benefits and challenges.
FCC says that while current farmland owners benefit from the rising values, it poses a significant barrier for those trying to enter the industry.
“Demand for farmland remained robust, supported by long-term confidence in Canadian agriculture, lower borrowing costs, strong livestock prices and the limited supply of land available for sale,” says J.P. Gervais, vice-president of agricultural production at FCC.
According to the report, the unpredictability of future farmland values affects those wanting to be able to afford land and those looking to retire. Factors such as supply and demand, interest rates, product rental rates and farm income affect the farmers.
RELATED: Canadian Farmland Values Continue to Climb, Alberta Sees Boost in Irrigated Land Demand
“The ongoing uncertainties related to trade and tariffs, high input costs and low commodity prices did not deter buyers’ interest in farmland. These factors, combined with varying local market conditions, will influence future trends in farmland affordability,” says Gervais.
Manitoba and Alberta recorded the largest farmland value increase, with Alberta’s farmland value rising by 11.4 per cent.
Increases were seen across most provinces. The only decline recorded was in British Columbia, where values decreased by 1.7 per cent. FCC says that although British Columbia has the highest farmland values on average, insufficient information from the Northwest Territories made a full assessment difficult.
Over the past year, the Canadian farmland market has been exceeding expectations, FCC says. Producers showed resilience by making strategic purchases and staying true to irrigation and paturland values.
FCC encourages future buyers of land to use a logical approach. Factors such as short-term and long-term goals for the land should be taken into consideration, as well as whether it is the best move to rent or buy property.
For more information, visit the FCC website.
