The average value of Canadian farmland increased 5.4% in 2020, reports Farm Credit Canada (FCC) in its annual update of farmland values. The gain notched in 2020 is slightly more than the 5.2% increase reported in 2019.
“This report acknowledges 2020 was a challenging year that will go down in history for the economic disruptions caused by the COVID-19 pandemic,” FCC states. “The consequences, however, were not as prominent in the real estate and agriculture land markets, compared to most other parts of the Canadian economy. Crop sectors have done well, and demand for farmland across Canada remained strong,”
In the first half of 2020, there was a noticeable decrease in the number of sales, mostly in April and May, FCC states. “However, the total number of sales for the entire year was like those of the past few years.”
“Despite a challenging global economic environment, commodity prices increased considerably in the last half of 2020 for many crops, and interest rates have reached historic lows,” FCC observes. “Despite important supply chain disruptions caused by the pandemic, demand for food remains strong. The agriculture land market has generally been stable. However, it’s important to remember that reported numbers are based on averages, and there are often important differences between regions within each province.”
The highest provincial increases in 2020 were recorded in British Columbia and Quebec, with averages of 8% and 7.3%, respectively. Alberta followed with an increase of 6% and Saskatchewan mirrored the national average increase of 5.4%. Ontario and Manitoba both reported increases that were lower than the national average at 4.7% and 3.6%, respectively. The Maritime provinces saw the smallest increases in farmland values for 2020. There was an average increase of 2.3% for Prince Edward Island, 1.6% for Nova Scotia and 1.3% for New Brunswick. For the fifth consecutive year, there was an insufficient number of publicly reported sales in Newfoundland and Labrador to fully assess farmland values.