Investing in Canadian farmland

Oct 14, 2021

As the humourist and writer Samuel Clemens aka Mark Twain famously said: “Buy land, they’re not making it anymore.”

While mostly a correct statement—China has been making artificial islands in an effort to move its borders closer to other countries to gain fishing and air territorial rights—land, especially arable farming land is always a keen investment.

A main reason for that, simply, is that people must eat, and farms produce that necessity of life. As the population of the planet grows, so too does that requirement.

Canada is the fifth-largest agricultural exporter on the planet per Agriculture and Agri-Food Canada, employing some 300,000 people.

Even in times of slower population growth in Canada, our exports to other countries creates a higher demand for our ag products, making Canadian real estate a stable and resilient investment.

Thanks to the adoption and continued increase of precision ag farming techniques—a use of technological tools to provide exacting farming data and advice to provide optimal land usage while creating higher crop yields— experts predict that 90 percent of the existing arable land will produce 70 percent more food.

Why wouldn’t you want to become involved in Canadian farmland real estate with its quality of life and business opportunities?

A 30-year examination of farmland values in Canada and the U.S. shows a steady increase, with few downturns.

According to Farm Credit Canada (FCC), in 2018 and 2019, its reports show, for example, a three-year average increase in farmland values in Saskatchewan (6.2 percent), British Columbia (3.3 percent) and Manitoba (4.2 percent).

For 2020 and 2021—impacted by the pandemic— Michael Hoffort, FCC President and Chief Executive Officer said: "The Canadian agriculture and food industry demonstrated its bend-not-break mentality and FCC was a part of that … I am honoured and proud to be part of an organization and serve an industry that stepped up to overcome many challenges."

And this is coming from an organization that is the only financial lender 100 percent invested in Canadian agriculture and food, again noting ag’s resilience.

With population expected to continue growing along with food demands and available farmable land remaining static, investing in ag real estate promises to a positive experience.

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.