Farm Credit Canada (FCC) has now published its 2023 Farmland Values Report which covers the average yearly changes in farmland values on a regional, provincial, and national level with the goal of providing accessible market information so producers can make reliable business decisions.
The latest report covers a period from Jan. 1, 2023 – Dec. 31, 2023, and was published this March.
The methodology of reporting these values takes into consideration cultivated land, irrigated land, and pastureland, and represents 90 per cent of sales data collected in the past year, excluding five per cent of the highest and lowest numbers to eliminate outliers.
National trends
Canada’s average value of cultivated farmland increased by 11.5 per cent in 2023, which is slightly less than was reported in 2022 (12.8 per cent) and was ahead of the increase reported in 2021 (8.3 per cent). 2023 saw the second highest increase reported by the FCC since 2014.
These increases occurred amidst elevated interested rates and increased farm input prices, reportedly strong farm incomes, and were recorded regardless of moisture levels.
The national demand for farmland has remained “robust” and supply in terms of land available for sale continues to be limited.
Provincial trends
In 2023, Saskatchewan was the national leader when it came to increasing cultivated farmland values across Canada.
Land values increased by a province-wide average of 15.7 per cent, which is slightly higher than the reported increase of 14.2 per cent in 2022 and is more than double the 7.4 per cent increase reported one year prior in 2021, according to the report.
These increases were seen across the province, with one exception in the West Central region which brought down the provincial average. This was due to a significant lack of moisture during the 2023 growing season.
Looking back as far as 2014, the trend in annual per cent changes have been parabolic with 2014 seeing an 18.7 per cent increase, 2020 seeing the lowest increase at only 5.4 per cent, and the curve is trending back upwards going into 2024.
Higher market values were reported in 2023, and this was similar to values reported in 2022. The reasoning, according to the report, is due to a lack of available farmland to meet growing demand which ran parallel to reduced moisture in many areas.
The South Eastern region including Moose Jaw and the surrounding area saw farmland continue to sell at premium price levels in localized regions with heavy clay soil as compared to areas with lower soil quality. The region saw an increase closely reflecting the provincial average at a 15.3 per cent average increase and saw less of an impact from drought conditions than in the South West.
The highest 2023 average increase was seen in the East Central region at 20.8 per cent, and the lowest was experienced in the West Central region with an 8.2 per cent average increase.
Irrigated regions in the West Central and South Western portion of the province only saw a 3.2 per cent increase. Following several consecutive years of drought conditions, many producers have been looking to expand the amount of irrigated land and several irrigation projects have already been completed with more in the works.
Saskatchewan relies heavily on the supply of mountain runoff for much of its water needs, which is a cause for concern going into 2024 along with reservoir levels that are currently lower than they were at this time last year.
The FCC defines pastureland as being land unsuitable for growing crops and it traditionally sells for less than cultivated land.
Pastureland in the province saw the largest reported year-over-year increase among Canadian provinces analyzed by the FCC in 2023. In Saskatchewan, the provincial average value increase was reported to be 12.7 per cent. The largest increase took place in the East Central region at 25.7 per cent and the smallest increase was reported in the North Eastern region at 5.7 per cent.
In the South East region, pastureland reportedly increased at 9.9 per cent with a dollar value per acre stated as $1,100 with a value range of $600 - $1,700 (excluding outliers).
The largest pastureland increase was seen in the East Central region at 25.7 per cent and the lowest increase was in the North East at 5.7 per cent.
It should also be noted that there were insufficient pastureland sales in Central and Eastern Canada at the time of the report, so this data is exclusive to western provinces starting with Manitoba.
The full 2023 Farmland Values Report can be viewed online at fcc-fac.ca.
