Rising Land Values Boost 2022 Canadian Farm Equity

Primarily stoked by rising land values, Canadian farm equity saw its largest annual increase on record in 2022. 

A Statistics Canada report Thursday pegged the value of national farm equity at the end of 2022 at $729.9 billion, up $83.6 billion or nearly 13% from a year earlier and the biggest year-over-year jump in records going back to 1981. 

The value of total farm assets grew by $92.3 billion or 12% to $861.5 billion as of Dec. 31, 2022, while liabilities increased by a more modest $8.7 billion (+7.1%) to $131.5 billion. 

More than 80% of the increase in assets in 2022 was attributed to gains in farm real estate, which climbed $76.4 billion or 12.8%, StatsCan said. According to Farm Credit Canada’s annual farmland values report, the 2022 increase in farmland values was the largest since 2014, boosted by higher commodity prices and a limited supply of farmland for sale, even as interest rates were higher. 

Rising crop and livestock inventories helped to lift 2022 farm equity as well. 

The value of crop inventories climbed $9.3 billion (+43.6%) to $30.7 billion as of Dec. 31, 2022 – also the largest annual percentage increase on record. Higher prices for most crops, along with heftier supplies in the wake of better yields following the 2021 Prairie drought, boosted inventory values, StatsCan said. 

Poultry and livestock inventory values rose by $1.6 billion or almost 18% to $10.9 billion on stronger prices for cattle, which were supported by higher export demand. 

Every province reported growth in farm equity, ranging from 3.4% in Newfoundland and Labrador to 16.8% in Ontario. Equity gains in Ontario, to $211.5 billion, accounted for more than one-third of the national increase. 

Farm equity increased by 11.2% in both Manitoba and Alberta to $57.7 billion and $187.02 billion, respectively. Saskatchewan farm equity was up 14.8% to $144.9 billion.