Mid-year review shows farmland values increasing at a slower rate

Farmland is worth more, but the rate at which land values increased slowed in the first half of this year.

According to the mid-year farm values review by Farm Credit Canada (FCC), farmland values were up by an average of 5.5 percent from January to June 2024. The average from July 2023 to June 2024 was higher at 9.6 percent.

"Farmland values increased at a slower rate, yet 5.5 per cent growth in six months is still a very strong number," said J.P. Gervais, who is FCC's chief economist, in a press release.

For two years now, Saskatchewan and Quebec had the highest average six-month increase in farmland values. Saskatchewan’s was 7.4 percent and Quebec’s was 5.4 percent. Manitoba’s was 3.9 percent.

The FCC said higher interest rates and lower commodity prices isn’t deterring some buyers. However, with borrowing prices going down and the fact that there is a limited supply of farmland for sale, the current high prices for farmland should stay.

"The continued rise in farmland values highlights a positive and robust long-term outlook for the agriculture sector. As we move into the latter half of 2024, the trends in farm revenues and interest rates will be key indicators of where farmland values might head next," said Gervais.

According to Gervais, farmland values may also be affected by farm cash receipt values which he said are expected to go down by 3.3 percent this year.