Oh, Canada! Farmland Values Topped 10-Year Average Again

Demand for Canadian farmland has allowed it to reach nearly double-digit appreciation over the past year, which helps to offset a larger percentage decline in crop receipts. Farm Credit Canada found that farmland in Canada rose in value 9.1% last year, falling short of the 11.5% yearly increase in 2023.

“FCC has reported a national trend of increasing farmland values for more than 30 years, and 2024 continues the streak,” the FCC Farmland Values Report stated. “The overall trend reflects the ongoing demand for quality farmland, influenced by various economic and environmental factors.”

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Wheat in the Canadian Prairies, barley and oats in the Prairie Provinces, and corn in Ontario and Quebec make up major grain center producers in the country. Prairie Provinces are also key producers of rapeseed/canola and flaxseed, while Ontario headlines soybean production. Manitoba grows sugar beets. Atlantic Canada is a major producer of potatoes.  

Canada's agricultural landscape has experienced notable shifts in recent years, influenced by economic, climatic, and policy factors. These changes are evident in farmland values, ownership patterns, and regional agricultural practices.​

Farmland Value Appreciation

The rise in farmland value over the past two years tops both the five-year and ten-year average increases.

• 5-year average increase: 8.6%

• 10-year average increase: 9.1%

​Regional Variations

Regional disparities are evident in farmland value changes. Saskatchewan led with a 13.1% increase, followed by British Columbia at 11.3%. In contrast, Ontario experienced a modest 3.1% rise, suggesting a cooling market compared to other provinces. Prince Edward Island experienced a 1.4% value gain.

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Weather Pattern Changes Impact Farmland Values

Irrigated land attracted heightened demand following dry conditions in parts of the Prairies. That interest seems to have grown each year. While the amount of irrigated land keeps increasing due to weather volatility, market availability of these acres remains limited.

“The money invested to add irrigation has always been significant, so owners tend to keep it in their portfolio. As a result, irrigated land transactions are limited and irrigated land that comes up for sale usually finds a buyer quickly,” the FCC Farmland Values Report found.

Ownership and Consolidation Trends

The Canadian agricultural sector, similar to the United States, is witnessing increased consolidation. Larger farming operations generate a significant portion of total revenues.

The report pointed out that the largest 10% of farms now account for more than two-thirds of all farm market receipts. That underscores the shift towards larger-scale operations.

A mega-merger that has been in the works for more than 18 months added to concerns from some who worry about agriculture getting too “corporate.”

Canadian regulators approved Bunge’s $34 billion merger with Viterra. Bunge, a St. Louis-based company originally founded in 1818 in Amsterdam, is a global company focused on soybean exports, food processing, grain training, and fertilizer.

Canadian-based Viterra combined with Netherlands-based Glencore in 2013, creating a giant grain business. Those operations are now supersized with the new merger with Bunge.

Some questions for the future post-merger:

1.      How will the new company support biofuels expansion?

2.      What will it mean for markets for producers?

3.      How will it impact prices for consumers?

RELATED: Curt Covington, Senior Director of Managed Accounts at AgAmerica Lending, sensed last September that farmland values could be headed toward a correction. Here is what made him think that.