Investing in farmland has been a very secure investment over the past twenty-five-plus years. Many times over that period, people have speculated on the demise of Canadian farmland’s value or its ability to keep pace and increase in value like it has historically. In October of 2024, the RealAgristudies Insights Panel weighed in, with 36 per cent of respondents believing land values will go up while 10 per cent feel they are set to decline.
Farm Credit Canada reported that farmland values rose 5.5% in the first half of 2024 a strong result, but the annual increases over the past few years have been at a declining rate. Many farmers are concerned about profitability in the coming year but how this negative margin pressure impacts land prices will be the story to be told. At this point, farmers do see a separation between the two.
The amount of farmers intending to buy or having already purchased land for 2025 is only 15 per cent, which shows the concentration of the expansion within agriculture. Additionally, to this same question, 62 per cent said they would not be acquiring more land for 2025 and 23 per cent were undecided.
For the farmers that believe land prices will increase, 44 per cent see a 5 per cent or less increase, while 47 per cent predict a 6 to 10 per cent increase. For the limited 10 per cent of farmers who see land prices declining, 36 per cent predict a 5 per cent or less decrease and 47 per cent forecast a 6 to 10 per cent decrease.
Western Canadian farmers are a little firmer on their appreciation prediction with 39 per cent in the west and 30 per cent in the east forecasting prices will be positive in 2025.
It will be interesting to follow up on these numbers when Farm Credit Canada releases its next land values report. Stay tuned.
