After 30 consecutive years of growth, Canadian farmland values increased again in 2023 and are forecast to rise in 2024, says an expert at Farm Credit Canada, a Crown corporation that monitors land sales.
“Limited availability of farmland for sale and expanding demand for what we’re growing in Canada” will continue to propel appreciation in 2024, says FCC’s vice-president and chief economist J. P. Gervais.
Farmland values across Canada rose by approximately 8 per cent in 2023, compared with 12.8 per cent in 2022, according to FCC figures.
While next year’s increase may be less robust than in previous years, “we’re still seeing a very positive outlook for the industry,” says Mr. Gervais. “I’m a big believer that the demand for land will be strong going forward.”
In the past three decades, the average price per acre of Canadian farmland has skyrocketed 827 per cent, from $547 to $4,527.
Ontario farmland, Canada’s priciest, soared from $3,248 per acre to $17,962 – though a CBC report pegs the average price closer to $30,000.
Mr. Gervais says farmland unaffordability is at the “worst point” he’s ever seen.
“Farmers buying land must already have land – or an equity base – to be able to make a purchase.”
In southwestern Ontario, analysts agree that it can take 1,000 acres of farmland to support a farm family. This can cost $20- to $30-million to set up from scratch.
A 2020 analysis by the Canadian Centre for Policy Alternatives says “increasing difficulty in gaining access to farmland” has given rise to “concentrated ownership of the land, thus effectively stifling the possibility of farming as a career choice for young Canadians.”
Yet the next generation of farmers isn’t necessarily missing out on opportunities.
In the past 10 years, Mr. Gervais has seen a 15-per-cent increase in the number of non-farmer investors, such as private-equity firms, funding farmland transactions then leasing the land to farmer “partners,” as they’re sometimes called, who otherwise could not afford to be farmers.
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