While the growth rate of Canadian farmland values in 2023 was lower than in 2022, it still recorded a double-digit increase at an average of 11.5 percent. The national average in 2022 was 12.8 percent, according to the FCC Farmland Value Report.
The provinces with the highest average provincial farmland price increases were Saskatchewan, Quebec, Manitoba and Ontario, which recorded double-digit average increases of 15.7, 13.3, 11.1 and 10.7 percent, respectively. Four provinces recorded average increases in the single digits, below the national average: Nova Scotia at 7.8 percent, Prince Edward Island at 7.4 percent, Alberta at 6.5 percent and New Brunswick at 5.6 percent.
Although British Columbia recorded an average decline of 3.1 per cent, the province still had the highest average farmland value.
It is estimated that the number of farmland transactions will be slightly lower in 2023 compared to 2022, as farm businesses become more cautious with their investment decisions. FCC Chief Economist JP Gervais said: “This cautious environment for farmland transactions is expected to continue into 2024 as farm incomes are expected to decline and borrowing costs and input prices rise.” .
Mr Gervais acknowledged that lower farmland purchase prices are a challenge for young producers, new entrants and those looking to expand their land base. This could put some businesses that have to contend with higher rents and input costs at greater risk.
Canada’s grain, oilseed and pulse imports are projected to increase by 0.4% in 2023 and decline by 13.2% in 2024. “The key to preparing for inevitable but unpredictable economic changes is not only to create a risk management plan, but to update it as the economy changes,” Gervais says. “By staying informed about external factors such as commodity prices and interest rates, producers can build needed flexibility into their budgets.”
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