Canada's farmland values trend higher

May 25, 2011

Canada's farmland values have increased 2.1 per cent in the last six months of 2010. This follows increases of 3.0 and 3.6 per cent in the previous two reporting periods.

In 1985, FCC established a system of 245 benchmark farm properties to monitor variations in bare land values across Canada. Since 1990, benchmark properties have been appraised twice a year. These selected parcels represent the most prevalent classes of agriculture soil in each census district. Changes in value are weighted based on improved farmland per area.

Canadian farmland values have risen steadily during the last decade. The highest average national increase was in 2008 at 7.7 per cent. The last time the average value decreased was in 2000 at -0.6 per cent.

Cash crop producers lead buyer activity. Strong demand with limited supply made farmland a hot commodity due to its historic performance as a stable investment and its current income generating potential.

Low interest rates also encouraged buyers to seize opportunities and influenced farmland values upward. Although it seems that more people are interested in purchasing farmland, the supply is limited. This continues to fuel competition in the farmland market.

Here is a summary of the farmland value report. Full details are available at:

http://www.fcc-fac.ca

By: Allison Finnamore

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