Canadian cultivated farmland values rose by an average of 5.5 per cent in the first half of 2024, according to the mid-year farmland values review by Farm Credit Canada (FCC). Over the 12 months from July 2023 to June 2024, there was a 9.6 per cent increase, representing a slowdown compared to the previous 12-month period (January to December 2023).
“Farmland values increased at a slower rate, yet 5.5 per cent growth in six months is still a very strong number,” said J.P. Gervais, FCC’s chief economist.
For the second consecutive year, Saskatchewan and Quebec have recorded the highest average six-month increases in the country, at 7.4 per cent and 5.4 per cent, respectively. The rates in New Brunswick, British Columbia, and Alberta all settled in the same range, 5.2 per cent, 5.0 per cent, and 4.6 per cent, respectively. Manitoba recorded a growth rate of 3.9 per cent, closely followed by Nova Scotia at 3.8 per cent. Ontario recorded a lower increase at 2.1 per cent, with Prince Edward Island concluding the list at 1.7 per cent.
Elevated borrowing costs, lower commodity prices and the increased price of land hasn’t deterred some buyers. Looking ahead, declining borrowing costs and a limited supply of available farmland should sustain the current high prices for farmland.
“The continued rise in farmland values highlights a positive and robust long-term outlook for the agriculture sector. As we move into the latter half of 2024, the trends in farm revenues and interest rates will be key indicators of where farmland values might head next,” said Gervais.
Gervais noted that farm cash receipts are projected to decline overall in 2024 by 3.3 per cent as commodity prices show few signs of a quick rebound, possibly limiting farmers' willingness and capacity to assign higher valuations to farmland.
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