On common, land worth elevated 11.5% in 2023
22 March 2024
3 minute learn
The typical worth of Canadian farmland continued its regular climb in 2023, growing by 11.5%, barely lower than the 12.8% improve reported in 2022, based on the most recent FCC Farmland Values Report.
“Farmland costs have continued to extend at a speedy tempo over the past couple of years, even when financial circumstances prompt the expansion ought to gradual,” stated J.P. Gervais, FCC’s chief economist. “A restricted provide of obtainable farmland mixed with a sturdy demand from farm operations is driving that progress.”
The very best common provincial will increase in farmland values had been noticed in Saskatchewan, Quebec, Manitoba and Ontario, with double-digit common will increase of 15.7, 13.3, 11.1 and 10.7%, respectively. 4 provinces had single-digit common will increase and had been beneath the nationwide common at 7.8% in Nova Scotia, 7.4% in Prince Edward Island, 6.5% in Alberta and 5.6% in New Brunswick.
British Columbia recorded a mean decline of three.1%, but the province has the very best farmland values on common.
There have been an inadequate variety of publicly reported gross sales in Newfoundland and Labrador, Northwest Territories, Nunavut and Yukon to totally assess farmland worth tendencies in these areas.
“The land market has proven to be very resilient,” stated Gervais. “Buying land within the 12 months forward will include cautious consideration of the worth and timing. Some operations will choose to attend and see the place land values will settle whereas others might transfer extra shortly ought to adjoining land turn out to be out there, or just because it suits their strategic enterprise plans.”
The variety of farmland transactions in 2023 is estimated to have declined barely relative to 2022 as farm operations exercised extra warning in direction of funding selections. “The expectation of weaker farm revenues and elevated borrowing prices and enter costs are anticipated to stretch out this cautious surroundings for farmland transactions into 2024,” based on Gervais.
Gervais acknowledges that decrease affordability of farmland is difficult for younger producers, new entrants and people aspiring to develop their land base. This could expose some operations to extra danger as they navigate larger rental charges and enter prices.
Receipts of grains, oilseeds and pulses in Canada elevated by 0.4 per cent in 2023 and are projected to say no by 13.2% in 2024. “An necessary a part of making ready for inevitable but unpredictable financial adjustments is just not solely making a danger administration plan, but in addition updating it as these shifts within the financial system unfold,” stated Gervais. “Staying knowledgeable on the exterior elements like commodity costs and rates of interest might help producers construct within the crucial flexibility of their budgets.”
“The excellent news is that farmland worth will increase mirror a constructive outlook for the demand of agriculture commodities and the standard meals we produce in Canada,” Gervais stated. “Producers have a protracted monitor file of constructing strategic investments in land. These long-term investments in meals manufacturing have spurred progress and create a shiny future for Canada’sagriculture and meals business.”
