Saskatchewan farmland continues to increase in value compared to previous years according to the latest report from Farm Credit Canada (FCC). Farmland value increased the most in Saskatchewan, rising by 15.7% last year. FCC’s senior economist Justin Shepherd explains the many factors that contribute to rising prices.
“We did see slower land sales in 2023, a lot of that is just fewer parcels coming to the market. So that attributed to the demand for those fewer amounts of land. We also saw a changing environment during the year where interest rates stayed strong, commodity prices started to come down, but that did lead to strong value growth throughout the year.”
Farmers competing for land with the higher interest rates and lower land availability have had a hard time committing to expansion. However, Shepherd states that those with either new or already established operations will have to work with what’s best for them.
“Each operation is unique, and they're at different growth stages as far as kind of the cycle, whether they're in expansion or they're in kind of maintained mode. So, each operation has to consider what their cost of production is, where they're profitable at, are they looking to expand into different areas. Overall, we continue to see strong demand, but each operation would have their own set of goals and outcomes that they're looking for when they choose to expand.”
The best course of action for farmers is to continue to stay aware of the changing market conditions, interest prices, and available land for sale. From there, they can plan and figure out the best course of action for their farming operation.