Every province has seen an increase in farmland values in 2021 thus far, according to Farm Credit Canada’s mid-year report. But Ontario has seen the largest increase in the country.
Farmland values increased by an average of 6.1 per cent in Canada in the last year, between July 2020 and the end of June 2021. Ontario saw an astounding 15.4 per cent increase in one year.
The second and third largest increases were in British Columbia (13.6 per cent) and in Quebec (13.7 per cent) in the last year. Other provinces saw increases below seven per cent.
This farmland value increase is a result of high commodity prices in late 2020 and historically low interest rates, FCC reported. High commodity prices resulted in higher farm cash receipts in 2020 and even higher in 2021 so far, and interest rates declined at the start of the pandemic.
Farmland is in strong demand, while in tight supply. All this is driving value up, even in the face of slow economic recovery and drought in Western Canada, as most transactions were negotiated before the dry spells, FCC said.