Saskatchewan farmland value increases led the nation in the first six months of 2023.
Farmland prices in Saskatchewan grew at the rapid rate of 11.4 per cent in those six months, says a mid-year report from Farm Credit Canada.
High interest rates have not slowed the pace of land prices as limited supplies are available for farmers wanting to expand, says the report
Interest rates have increased from three per cent to seven per cent, more than doubling payments.
“A limited supply of farmland available for sale and robust farm income have contributed to higher land values in the first six months of 2023,” the report said.
Most regions in Saskatchewan saw dryland price increases between seven and 11 per cent with highest in the northeast and for clay soils that retain moisture better.
Alberta dryland prices increased six per cent with a 6.4 per cent increase in Manitoba and 6.9 per cent in Ontario.
Some evidence of interest rate pressure was seen in B.C. where prices increased by three per cent.
Atlantic land sales were so sparse that data was not developed.
For this year “high interest rates, elevated farm input costs, and uncertainty regarding future commodity prices characterize the current environment” requiring caution.
Farm Credit Canada sees no impact on the demand for dryland.
“Yet the balance of demand for farmland relative to the supply available is pushing land prices higher. It would be prudent to expect farmland value appreciation to slow until the uncertainty over the economic environment vanishes.”
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