Ontario farm land prices increase 0.4 % in first six months of 2020

Canadian farmland values have been going up since 1993, and in spite of global pandemic, 2020 is no exception. But in Ontario at least, the increasing value of brown gold is beginning to slow.
Farmland values have gone up in every province in Canada in 2020 except Nova Scotia. Ontario farmland value increased by only 0.4 per cent from January to June. New Brunswick saw the largest increase, going up on average by 6.5 per cent.
Over all of last year, however, Ontario farmland values increased 6.7 per cent.
According to an annual survey by University of Guelph professor Dr. Brady Deaton, Eastern Ontario’s most expensive farmland on average is in Prescott-Russell, where land sells on average for $12,300 per acre. The twin counties also had the largest increase year-over-year in Eastern Ontario, with average land prices increasing by $2,300/acre from 2018 to 2019.
Farmland prices have been steadily climbing in Ontario, with some speculation last year that prices could hit $30,000 an acre in Southwestern Ontario (that happened, hitting $32,000 an acre in Oxford County shortly after that prediction was released). High farmland prices are a boon for producers selling their land and exiting the industry, but have proved a difficult hurdle for succession planning and a growing burden for taxpaying farmers.
The Western Producer argued in August that farmland is a better investment than gold. Despite lower overall increases in value, farmland provides a revenue stream that gold doesn’t and is historically a better investment, said Robert Andjelic, who owns a farmland company in Regina, Sask.
One thing producers don’t have to think about just yet is another hike in valuations. The last round of valuation by the Municipal Property Assessment Corporation in 2016 hiked up farmland valuations (and, consequently, property taxes) significantly. Many regional federations of agriculture asked for relief, largely to little or no avail despite support from the Ontario Federation of Agriculture. Valuations are supposed to happen every four years but the Ford government booted this year’s scheduled assessment down the road.
While some farmers think that land is overpriced and are waiting for the bubble to burst, others are betting it won’t. Joelle Faulkner runs Area One Farms, a Toronto-based farmland investment firm that bases its business model on the premise that farmland prices are just going to keep going up. “To feed people, either prices will have to increase or productivity will have to improve,” he said.