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Comparing the farmland rental market to ownership

Reference: FCC

The 2020 FCC farmland rental rate analysis revealed that cash rental rates averaged 2.7% of farmland values in Canada. We also know that farmland affordability declined over time when measured against farm revenues.

In this post, we further our analysis on farmland affordability by analyzing rental rates relative to farm revenues. This relationship can be of assistance in the decision between renting versus buying farmland.

Cost comparisons of rental vs buying
The Canadian average proportion of farm revenue required to cover land rent derived from a standard grain and oilseed rotation is 20% (Table 1). This is lower than the estimated 32% of revenues required to cover ownership costs... Read More