Strong commodity prices combined with low interest rates continue to sustain farmland value increases in most parts of Canada, according to a mid-year review by Farm Credit Canada.
“While the drought across most of Western Canada and the pandemic have captured most of the headlines, strong commodity prices and low interest rates have been quietly supporting a vibrant farmland market for the first six months of 2021,” said J.P. Gervais, FCC’s chief economist. “Higher-than-normal prices for wheat, canola and corn have improved the profitability of many operations in the second half of 2020 and early 2021, putting them in a better position to invest in farmland as the opportunities arise.”
Average farmland values in Canada are once again showing steady increases for the first half of 2021, although the full impact of widespread drought this summer has yet to be weighed.
The average value of Canadian farmland increased by 3.8 per cent for the first half of this year, compared to an average increase of 3.7 per cent for the same time last year. This increase is in line with mid-year results over the past six years, which showed single-digit increases for the full year.
In general, Prairie and Atlantic provinces reported the most modest increases, while Ontario, British Columbia and Quebec had the largest increases.
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