About 1 in 5 Canadian farmers have already bought or intend to buy land in 23/24

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The land market has provided a very stable investment opportunity for farmers for quite some time. As the industry looks forward, questions arise on what will happen to the price of land as external variables, such as rising interest rates, sticky input prices and commodity price concerns stack up.

In early October, Farm Credit Canada released its mid-year land value report that showed land values are up 7.7 per cent, on average, across the country. Anecdotally, I have heard many in the audience say that they are not a buyer in this land market, yet values continue to rise. In my interview with J.P. Gervais of Farm Credit Canada, he says that supply of available land has impacted values in the short term.

In July 2023, RealAgristudies asked farmers whether they had or intended to buy land in 2023/24. Seventeen per cent of farmers across Canada said they either already had or intended to buy in the 23/24 crop year.  The survey also found that 59 per cent will not participate in the land market in the described time period.

Some additional interesting takeaways from the survey were that the younger and larger the farm the more likely the farm would participate in the land market in 23/24. This definitely feeds the narrative that the big get bigger in this environment. To give you context, only six per cent of the the smallest farmers by acres intend to or have bought land while 44 per cent of the largest farms intend to or have bought land.

The survey found that 25 per cent are undecided on whether they will buying land which could be a real driver of how supply and demand shift in the next 18 months. What will it take for a quarter of the farmers surveyed to be in or out of the market in this time period?

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