Rising Farmland Values Defy Elevated Interest Rates in 2023

Oct 11, 2023

According to FCC, despite economic headwinds in 2023, Canadian farmlands have witnessed unexpected value growth. This comes amidst the backdrop of soaring borrowing costs, attributed to a series of policy rate hikes by the Bank of Canada. Yet, farmland values haven't wavered.

The national average growth in dryland farmland values for the initial 2023 half has been impressive at 7.7%. Notably, Saskatchewan and Quebec emerged as the torchbearers, registering increases of 11.4% and 10.6% respectively.

Ontario and Manitoba weren’t far behind with growth rates of 6.9% and 6.4% respectively. However, British Columbia showcased a stable trend, with no significant changes, indicating a balanced scenario of growths and declines in different regions. Alberta, on the other hand, saw a moderate increase of 3%.

One of the intriguing aspects of this trend has been the resilience of farm cash receipts. Even when faced with downward pressure on agriculture commodity prices, projections anticipate a 6.6% surge in farm cash receipts this year. This stability, along with the limited availability of farmlands for sale, has been instrumental in driving land prices up.

Diving deeper into provincial trends, Saskatchewan remains a focal point with its uniform demand and value appreciation. Contrastingly, in Ontario, fluctuating rain volumes raise eyebrows over the anticipated crop yield, which in turn may influence land demand in the latter half of the year.

Looking ahead, the prevailing high-interest rates, soaring farm input costs, and volatile commodity prices are major concerns. While the land pr