On average, Canadian farmland values increased over 11% in 2023

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Canadian farmland values increased at a lower rate in 2023 compared to 2022, but still posted a double-digit average increase at 11.5 per cent. The national average was 12.8 per cent in 2022, according to the FCC Farmland Values Report.

The highest average provincial increases in farmland values were observed in Saskatchewan, Quebec, Manitoba and Ontario, with double-digit average increases of 15.7, 13.3, 11.1 and 10.7 per cent, respectively. Four provinces had single-digit average increases and were below the national average at 7.8 per cent in Nova Scotia, 7.4 per cent in Prince Edward Island, 6.5 per cent in Alberta and 5.6 per cent in New Brunswick.

10 year average farmland value increase (Source: Farm Credit Canada)

British Columbia recorded an average decline of 3.1 per cent, yet the province has the highest farmland values on average.

The number of farmland transactions in 2023 is estimated to have declined slightly relative to 2022 as farm operations exercised more caution towards investment decisions. “The expectation of weaker farm revenues and elevated borrowing costs and input prices are expected to stretch out this cautious environment for farmland transactions into 2024,” according to J.P Gervais, chief economist with FCC.

Gervais acknowledges that lower affordability of farmland is challenging for young producers, new entrants and those aspiring to grow their land base. This can expose some operations to more risk as they navigate higher rental rates and input costs.

Receipts of grains, oilseeds and pulses in Canada increased by 0.4 per cent in 2023 and are projected to decline by 13.2 per cent in 2024. “An important part of preparing for inevitable yet unpredictable economic changes is not only creating a risk management plan, but also updating it as those shifts in the economy unfold,” says Gervais. “Staying informed on the external factors like commodity prices and interest rates can help producers build in the necessary flexibility in their budgets.”

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