Farmland prices rising but pace cooling off, FCC says

OTTAWA — Ontario farmland prices continued to track upward during the first half of 2023 but at a substantially slower pace than 2022, according to Farm Credit Canada data analyst Corbin Chau.

Higher interest rates may have eroded buyers’ purchasing power, but demand for the limited supply of farmland still adds up to rising prices, Chau writes in a bulletin from the federal farm lender. At the same time, Ontario’s southern region has seen a “considerable decline” in the number of farmland sales.

Ontario farmland prices increased 6.9 % in the first six months of 2023 (January through June), a drop from the 10.9 % increase recorded between July 2022 and June 2023 and the 19.4 % increase recorded in 2022 overall.

Southwestern Ontario farmland averaged about $20,700 in 2022, an FCC report said.

According to FCC, the province’s most valuable farmland of 2022 was found around St. Thomas and Tillsonburg, north to about Harriston and West to Lake Huron — selling for an average $28,900 per acre.

Meanwhile, Quebec farmland sales seem undaunted by higher interest rates. During the first half of 2023, Quebec farmland prices went up 10.6 % — almost quickly as they did in the prior 12 months and in 2022 generally. Farmland price increases in Quebec were second only to those in Saskatchewan this year.