Farmers and ranchers in Canada are paying more for land than they have in years, according to the latest Farmland Values Report from Farm Credit Canada.
The report shows nationally the value of cultivated farmland is up 12.8 percent in 2022.
JP Gervais with FCC said it was a bit of a surprise to see the increase because of the added costs producers are facing like an increase in fuel, fertilizer and equipment, “We weren’t sure exactly how the demand for farmland would be holding up but it looks as if you know demand remains extremely strong.
Gervais added the price is being driven by the sheer lack of land available across the country.
“Supply of land is very very limited,” Gervais said. “Available land for sale is very limited.”
Robin Burwash, a relator with Coldwell Banker Mountain Central who specializes in land, says the lack of available land has meant competition for buyers.
“Of all the deals I’ve done this year, I think there has only been one or two of them that weren’t competing offers,” added Burwash.
Burwash added that for many farmers to make their operations viable, they need a larger land base.
“The guys who own that big expensive equipment, they have to get bigger because they have to spread that value over a larger amount of acres.”
Pasture land is also seeing a price increase. Burwash said ranchers are often having to compete with people who want to purchase the land for recreation or just a place further from the city.
Gervais said with the high interest rates and overall value of land, many have to find other ways to help pay for the land because it can’t generate enough income on it own.
“You’re going to have to bring in net income from other parts of your operation to, in some way, substitute or help pay for the land because it in itself, the revenues coming off the land are in most cases not necessarily nearly enough to cover the price, the purchase price,” Gervais said.
The report said outlook for commodity prices are expected to be strong again for 2023.
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