Farm Credit Canada’s chief economist JP Gervais says the average value of cultivated farmland recorded a “robust” increase in 2024, even though the numbers are lower than they were in 2023.
FCC released its annual Farmland Values Report this morning. The national number showed a 9.3 percent increase in average farmland values—compared to 11.5 percent the previous year.
Saskatchewan maintained its top spot among the provinces at 13.1 percent, which was a bit below the 15.7 percent in 2023. Looking at other provinces, BC saw farmland values rise by an average of 11.3 percent, Alberta 7.1 percent, Manitoba 6.5 percent, Ontario only 3.1 percent and Quebec 7.7 percent.
Doing a deeper dive on the Saskatchewan statistics, FCC provides numbers for cultivated land and pastureland. The province is broken into six geographical areas with a value range calculated based on 90 percent of sales, excluding the top and bottom five percent.
Starting with cultivated land, the northwest has the largest average in increase at 19.9 percent for an average land value in the region of $3,500 an acre. The value range in the northwest was $1,700 at the bottom and $5,000 an acre on the top. The northeast continues to have the highest average land value in the province at $4,200 per acre—on a range of $2,000 to $6,200. The average farmland value in the northeast was 17.9 percent higher last year.
Moving to West Central, the average increase there was 17.8 percent. Average farmland value was $3,500 on a range of $1,900 to $5,300 per acre. East Central was up 17 percent last year for an average of $3,200 per acre. The range was $1,500 to $5,000 an acre.
Irrigated land in west-central and southwest regions jumped nearly 26 percent last year. The average value of irrigated land $8,200, on a range of $6,800 to $9,500 per acres.
Farmland value increases across the south were lower than the northern and central regions. The Southeast was up 11.1 percent to average $3,200 an acre, with a range of $1,900 to $5,800 per acre. Dry conditions in the southwest continued to impact cultivated farmland values, which only saw a 4.1 percent increase last year. The average value in the southwest was $2,600 an acre on a range of $1,400 to $4,100 per acre.
Moving on to pastureland, the provincial average increase was 8.9 percent. There was only 1 to 2 percent movement in the eastern half of Saskatchewan. The southwest had the highest increase for pastureland at 15.9 percent, followed by the northwest at 5.7 percent and west central at 2.8 percent.
FCC Chief Economist JP Gervais says a few ranchers took advantage of the record high beef prices to purchase some additional pasture.
“Bottom line is that from a profitability standpoint, cost of feed and so forth, conditions have been challenging,” said Gervais.
What is ahead for 2025?
Gervais says uncertainty makes predictions challenging—but based on current information—it is not promising for farmland values. He says tariffs on agricultural products by the United States and China are big concerns.
“Uncertainty is one thing, the longer it lasts, the more its going to have an impact on the ability of farm operations to buy farmland and if there’s less demand, there is going to be less impact on the price,” he said, adding instability and uncertainty are “big impediments” to investment.
Tariffs for any length of time could create a second year-in-a-row double digit decline in revenue for grain, oilseed, and pulse crop producers, which will impact demand for farmland, said Gervais.
Asked about the purchase of farmland by so-called “non-traditional” buyers, who are people who buy farmland with no intent of farming it themselves, Gervais says there has been more instances of that but it remains a small percentage of land transactions overall. He says they don’t deal with those transactions, so its difficult to get a sense of what that market really is.
Gervais is confident about the long-term market for agricultural land, but the short-term is less clear.
“The world needs more of what we grow, so that doesn’t change, but it’s the short term and the extent to which these disruptions are going to last that’s going to have an impact, and your crystal ball is as good as mine – I can’t say anything other than what the markets are telling me today and the numbers that I’m quoting are based off of what the markets are tell us…tomorrow the markets might be telling us something else because of a tweet somewhere or it’s just that uncertain.
The longer it lasts, the more impactful it will be and if it stops tomorrow, its going to be a blip, its going to be a blip and we’re all going to say ‘oh my god, we didn’t like the last couple of months but it’s all done.'”
You can check out the detailed land values report on the Farm Credit Canada website.
(with files from Neil Billinger, CJWW)