According to the mid-year farmland values review by Farm Credit Canada (FCC), Canadian cultivated farmland values rose by an average of 5.5 percent in the first half of 2024. This increase reflects a 9.6 percent rise over the 12 months from July 2023 to June 2024, although it marks a slowdown compared to the previous year. J.P. Gervais, FCC's chief economist, remarked, “Farmland values increased at a slower rate, yet 5.5 percent growth in six months is still a very strong number.”
Saskatchewan and Quebec once again led the nation in average six-month increases, with farmland values soaring by 7.4 percent and 5.4 percent, respectively. Other provinces followed suit, with New Brunswick, British Columbia, and Alberta recording growth rates of 5.2 percent, 5.0 percent, and 4.6 percent. Manitoba and Nova Scotia were not far behind, at 3.9 percent and 3.8 percent, respectively. In contrast, Ontario saw a modest increase of 2.1 percent, while Prince Edward Island had the lowest growth at 1.7 percent.
Despite elevated borrowing costs, lower commodity prices, and rising land prices, many buyers remain undeterred. Gervais indicated that declining borrowing costs and limited availability of farmland are likely to sustain high prices in the near term. He stated, “The continued rise in farmland values highlights a positive and robust long-term outlook for the agriculture sector.”
As the second half of 2024 approaches, trends in farm revenues and interest rates will be crucial indicators of future farmland values. Gervais pointed out that farm cash receipts are expected to decline by 3.3 per cent overall in 2024, primarily due to stagnant commodity prices that show little sign of recovery. This decline may limit farmers' capacity to assign higher valuations to farmland.
"Understanding economic and financial trends is essential for making informed decisions," Gervais added. "FCC is committed to providing the industry with data-driven insights that can help producers and investors navigate the current economic headwinds."
FCC prides itself on being 100 percent invested in Canadian agriculture and food, with a team dedicated to supporting the long-term success of those who produce and process Canadian food. The organization provides flexible financing and capital solutions, along with valuable data and insights to help navigate the complexities of the agriculture sector. As a commercial Crown corporation, FCC reinvests its profits back into the industry and communities it serves.
For further insights and economic analysis, visit FCC Economics at [fcc.ca/Economics](http://fcc.ca/Economics).