The latest FCC Farmland values report shows average farmland values rose another 9.3 per cent in 2025 -- matching the pace seen in 2024. Farm Credit Canada (FCC) has also been tracking Canadian farmland rental rates for years to better understand their relationship to farmland values. Rent to price ratios, however, did not climb at the same pace as farmland values. Canada’s rent to price (RP) ratio has steadily compressed from 2.70 per cent in 2020 to 2.50 per cent in 2024, and most recently, 2.35 per cent in 2025.
For many farm businesses, renting land is a practical way to expand without the long-term financial commitment of buying. Still, lease terms - length, inclusions and renewal provisions - shape what tenants will pay. Because many agreements are fixed, rental rates often lag land values and adjust gradually. Ultimately, rents are limited by farm economics: tenants must cover costs and earn a return amid weak commodity prices and elevated input costs.
The Prairies recorded the strongest gains in farmland values nationally; however, rent-to-price ratios in Alberta, Saskatchewan and Manitoba declined, as rental rates did not increase at the same rate as rising land values. In Ontario and Québec, average farmland value growth was modest in 2025, and RP ratios remained essentially unchanged relative to the previous year. RP ratios in the Maritimes also softened.
The decision to rent or purchase farmland is influenced by multiple considerations, including the comparative cash flow benefits commonly linked to leasing and the asset appreciation evidenced by the significant increase in farmland values across the country. While the cash flow advantages of renting have remained stable over the past three years, potential changes may arise from 2026 onward. Producers are advised to continually assess their options for expansion, considering their individual financial circumstances and carefully weighing short-term profitability against long-term asset growth.
Source : The Grower