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The value of Canadian farmland rose 11.5% in 2023, a new report by agriculture lending firm Farm Credit Canada has found. 

Chief economist J.P. Gervais said while that’s a slight slowdown from the growth in 2022, it’s still a rapid pace given cooling economic conditions overall.

“Farmland prices have continued to increase at a rapid pace over the last couple of years, even when economic conditions suggested the growth should slow,” said Gervais in a release. 

“A limited supply of available farmland combined with a robust demand from farm operations is driving that growth.”

The lender’s latest report on farmland values found that they increased in every province tracked except for British Columbia.

That province saw an average decline of 3.1%, but it still has the highest average farmland values in the country. 

The number of farmland transactions is estimated to have declined slightly last year. 

Farmers are currently being cautious when it comes to investing in their operations, the report said, with expected weaker revenues and elevated borrowing and input costs.

“Purchasing land in the year ahead will come with careful consideration of the price and timing. Some operations will prefer to wait and see where land values will settle while others may move more quickly should adjacent land become available, or simply because it fits their strategic business plans,” Gervais said. 

Young producers face a challenging environment as farmland becomes less and less affordable, said Gervais. This may expose some farm operations to more risk amid higher rental rates and input costs, he said. 

The highest increases in average farmland value last year were in Saskatchewan, Quebec, Manitoba and Ontario. 

Source: Canadian Mortgage Trends