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By Troy Gillard

Farm Credit Report

Canadian farmland values continue to soften amid uncertainty: FCC

Apr 6, 2020 | 11:43 PM

The average value of Canadian farmland increased by 5.2 per cent in 2019, the smallest increase over the past decade, according to the latest Farmland Values Report from Farm Credit Canada.

FCC says the 2019 increase follows gains of 8.4 and 6.6 per cent in 2017 and 2018, respectively, and becomes part of a five-year trend of softening growth in average farmland values.

In Alberta, average farmland values increased by 3.3 per cent in 2019, following gains of 7.4 per cent in 2018 and 7.3 per cent in 2017.

“The days of sharp increases in farmland values continue to be replaced by more modest growth,” said J.P. Gervais, FCC’s chief agricultural economist. “Changes in commodity prices, uncertainty around global trade and some challenging weather conditions may be tapping the brakes on an otherwise healthy and robust Canadian agriculture industry.”

The average value of Canadian farmland increased by 5.2 per cent in 2019, the smallest increase over the past decade, according to the latest Farmland Values Report from Farm Credit Canada.

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FCC says the 2019 increase follows gains of 8.4 and 6.6 per cent in 2017 and 2018, respectively, and becomes part of a five-year trend of softening growth in average farmland values.

In Alberta, average farmland values increased by 3.3 per cent in 2019, following gains of 7.4 per cent in 2018 and 7.3 per cent in 2017.

“The days of sharp increases in farmland values continue to be replaced by more modest growth,” said J.P. Gervais, FCC’s chief agricultural economist. “Changes in commodity prices, uncertainty around global trade and some challenging weather conditions may be tapping the brakes on an otherwise healthy and robust Canadian agriculture industry.”

The COVID-19 pandemic makes the current economic environment challenging for farm operations and business owners throughout the entire food value chain.

“Given the uncertainty, I expect farmers, ranchers and food processors to continue being careful with their investments,” said Gervais, encouraging producers to have and maintain a risk management plan that considers a broad range of possible economic changes, such as variable production, volatile commodity prices or disruptions to global trade.

This year’s Farmland Values Report reflects factors that influenced average land values and prices in 2019, prior to the COVID-19 pandemic. Any impact from the pandemic will be captured in future reports.