By Tom Collins
Farmland prices in Eastern Ontario stagnated in 2018, according to Farm Credit Canada’s annual farmland values report.
The April 29 report says the average sale price of Eastern Ontario farmland in 2018 was $9,686 per acre (up slightly from $9,624 per acre in 2017) with a range of $2,400 to $16,800. The reported average price excludes the top five and bottom five per cent of sales. Northern Ontario was the only other region that saw no change in the average price.
FCC chief agricultural economist, J.P. Gervais, said the stagnant prices can be chalked up to what’s happening in the dairy industry. Dairy, which has a strong influence in Eastern Ontario, didn’t see a milk price increase until the end of 2018. Flat dairy farm income for most of 2018 created a weaker demand for farmland, he said.
Overall, Ontario farmland prices were up 3.6 per cent in 2018, compared to 2017, the lowest increase for Ontario in the last 10 years. Gervais said there were fewer transactions in 2018 as supply was low but demand was high despite lower crop prices and uncertainty in the dairy industry.
“There are landowners that are quite reluctant to sell, and I think that speaks to the future of ag,” he said, adding that farmers have a positive long-term outlook on agriculture.
He said prices are flat at the top end of the market but the lower-valued land has seen an increase in price that is driving provincial and regional prices.
Ontario’s 3.6 per cent increase in 2018 is the lowest farmland price increase in Canada outside of the Atlantic provinces. The Canadian average increase for 2018 was a 6.6 per cent increase. Gervais said a small increase in percentage in Ontario would still be more dollars per acre than a larger increase in other provinces. Farmland prices in the Prairies range from $1,475 to $6,157 per acre. Every region in Ontario except for Northern Ontario saw average farmland prices of at least $7,100.
