Housing Prices Causing Canadian Farmland Shrinkage

Sep 23, 2021

It’s not really new news, but urban sprawl continues to play into the shrinking landscape that is farmable land in Canada.

Despite being the second-largest country on the planet and only 40 million people to occupy it, Canada’s arable farmland is diminishing owing to continued demands for more housing—reigniting concerns of eventual food production shortages.

Recently, lower interest rates in Canada have helped fuel the desire to purchase property, and developers are keen to oblige—purchasing arable acreage close to urban populations to turn into new housing.

Usually, the larger the city the more expensive the housing is, becoming less expensive as one moves away from the urban centre. This causes more and more farmable land to be snatched up by developers looking to turn it into a new urban suburb.

In defense of the developers, many have sat on purchased property for decades, and make their money back by leasing it to farmers of every kind.

Along with the financial incentive of lower interest rates, the ongoing pandemic has also been pointed to as a reason for some wanting less to do with the urban with fewer “concerns” in a newly gentrified rural community. IE, they want to move out of the city and into a new suburb to avoid future contamination.

According to the advocacy group, Ontario Federation of Agriculture, Ontario is losing 70 hectares of agricultural land every day. Every single day. And it’s due to the creation of new urban rural habitation.

But it’s not all bad—cities such as Toronto and Vancouver already have in place a Green Belt policy to protect agricultural farmland to prohibit further development.

Although provinces are the official arbiters of more expansive land-use planning regulations, the federal government has measures to ensure that the ag sector will have the necessary support to provide food for Canadian tables by monitoring the challenges farmers face.

And yet, for the many people willing to leave their urbanized surroundings, others continue to follow their own goal of owning and operating their own farm and agricultural business—and where better to seek out that dream than by perusing the Farms.com Real Estate section.

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.