Farm Credit Canada's (FCC) mid-year review shows that Canadian farmland values have continued to rise steadily, increasing by 5.5 percent in the first half of 2024.
From July 2023 to June 2024, farmland values grew by 9.6 percent. While this marks a slower pace compared to the January-December 2023 period, the growth remains significant. FCC's chief economist, JP Gervais, noted, “Farmland values grew at a slower rate, but 5.5 percent over six months is still a strong number.”
Saskatchewan and Quebec were the top performers in this period, with farmland values rising by 7.4 percent and 5.4 percent, respectively. Other provinces also saw solid gains: New Brunswick recorded a 5.2 percent increase, British Columbia 5.0 percent, and Alberta 4.6 percent. Manitoba’s growth was 3.9 percent, closely followed by Nova Scotia at 3.8 percent. Ontario’s increase was more modest at 2.1 percent, and Prince Edward Island had the smallest rise at 1.7 percent.
Despite higher borrowing costs, declining commodity prices, and rising land expenses, farmland remains a valuable investment for certain buyers. Looking ahead, lower borrowing costs and the limited availability of farmland are expected to keep prices high.
Gervais emphasized the positive outlook for the agricultural sector, stating, “The continued rise in farmland values highlights the sector’s strength and long-term potential. As we enter the latter half of 2024, trends in farm revenues and interest rates will play a critical role in determining the future direction of farmland values.”
However, Gervais also cautioned that farm cash receipts are expected to decline by 3.3 percent in 2024, as commodity prices show no immediate signs of rebounding. This could lead farmers to be more cautious about increasing farmland valuations.
Gervais concluded by stressing the importance of closely tracking economic and financial trends to inform strategic decision-making.
Reference: https://www.fcc-fac.ca
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