News Farmland
Agricultural land in Canada is again significantly more expensive
Canadian farmland prices rose by an average of 2024% in 9,3. While this is a slightly more moderate increase than in 2023, growth is still above the five- and ten-year average. Prices have risen particularly sharply in the province of Saskatchewan, with an increase of 13,1%. Price growth in 2025 may be slowed by the trade war between Canada and the United States.
Despite rising costs and declining margins in agriculture, demand for farmland remains high in Canada. Historically, there has been a strong correlation between farm profit margins and land appreciation, with good margins often leading to further price increases the following year, Farm Credit Canada (FCC) reports a recent survey about the land market in the North American country.
In addition to profitability, interest rates also play a major role in the land market. The Bank of Canada began cutting interest rates in June 2024, but financing costs remain relatively high. At the same time, the supply of agricultural land is limited, which, together with strong demand, is further driving up prices.
Grassland also more expensive
Demand for irrigated land remains high, especially in dry regions. Grassland increased at a more leisurely pace. Increases in 2024 were lower than in 2023, with British Columbia (+1,1%) as the outlier downward and Saskatchewan (+8,9%) as the strongest increase. Higher cattle prices played a driving role in pricing, FCC said. The average price per hectare of agricultural land in Canada is approximately $12.000 per hectare, but there are large differences between provinces. In general, land prices in the provinces of Ontario and Alberta are among the highest in the country.
Looking forward
Looking ahead to 2025, the land market may become volatile due to geopolitical uncertainties, such as trade restrictions due to the tariff war between Canada and the US. As a result, arable and livestock farmers are cautious about further investments, partly because land prices are at a record high relative to farm income. The affordability of agricultural land will be a major issue in 2025, FCC expects.
Wouter Job
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