The worth of Canadian farmland rose 11.5 per cent in 2023, a brand new report by agriculture lending agency Farm Credit score Canada has discovered.
Chief economist J.P. Gervais mentioned whereas that’s a slight slowdown from the expansion in 2022, it’s nonetheless a speedy tempo given cooling financial situations general.
“Farmland costs have continued to extend at a speedy tempo over the past couple of years, even when financial situations urged the expansion ought to gradual,” mentioned Gervais in a launch.
“A restricted provide of accessible farmland mixed with a sturdy demand from farm operations is driving that development.”
The lender’s newest report on farmland values discovered that they elevated in each province tracked aside from British Columbia.
That province noticed a mean decline of three.1 per cent, however it nonetheless has the very best common farmland values within the nation.
The variety of farmland transactions is estimated to have declined barely final 12 months.
Farmers are at present being cautious in relation to investing of their operations, the report mentioned, with anticipated weaker revenues and elevated borrowing and enter prices.
“Buying land within the 12 months forward will include cautious consideration of the value and timing. Some operations will want to attend and see the place land values will settle whereas others could transfer extra shortly ought to adjoining land turn into out there, or just because it suits their strategic enterprise plans,” Gervais mentioned.
Younger producers face a difficult setting as farmland turns into much less and fewer reasonably priced, mentioned Gervais. This may occasionally expose some farm operations to extra threat amid greater rental charges and enter prices, he mentioned.
The best will increase in common farmland worth final 12 months have been in Saskatchewan, Quebec, Manitoba and Ontario.
