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Farm Debt, Value of Farmland, Buildings Still Rising

Canadian farm debt is continuing to march higher but so too is the annual increase in the per acre value of farmland and farm buildings.
 
Nationwide farmers owed a collective $114.91 billion at the end of 2019, up about 8.8% from a year earlier and the 26th straight year of increase, according to a Statistics Canada farm income report released Wednesday. Meanwhile, the national per acre value of farmland and farm buildings as of July 1, 2019 was pegged at an average of $3,245, a rise of $173 or 5.6% from 2018 and also the 26th straight year of increase.
 
The rising debt load is becoming a major expense for farmers, with interest payments in 2019 up 16% to $4.21 billion, following a 19.6% gain in 2018, StatsCan said. Amid the increase in overall farm debt, average interest rates for 2019 were also higher, up 6.6% compared with 2018.
 
Ontario farmers remained the most indebted in the country in 2019, with farm debt in the province rising about 7.5% on the year to $29.72 billion. However, the per acre value Ontario farmland and farm buildings was also the highest in the land at $11,446, an increase of 5.2% from 2018.
 
Alberta farm debt was estimated at $25.55 billion at the end of 2019, up 6.5% from the previous year, while the average per value of farmland and farm buildings in the province gained $138 or 5.1% to $2,842. Saskatchewan debt increased 9.4% to $17.74 billion, and the value of farmland and farm buildings rose 6.7%.
 
Manitoba farm debt amounted to $10.56 billion versus $9.77 billion a year earlier, an 8% increase. The per acre value of farmland and farm buildings in the province as of July 1 was estimated at $2,201, up almost 4%.
 
Since 2000, national farm debt has increased roughly three-fold, while the per acre value of farmland and farm buildings has jumped almost four-fold.
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