Farmland most pricey in Perth and Oxford
Farmers Forum staff
PERTH — Southwestern Ontario farmland values surged 51 % between 2020 and 2022 and hit a median value of $23,000 per acre, according to figures compiled by analyst Ryan Parker of Valco Consultants in London.
That whopping percentage is based on back-to-back increases of 25.63 % in 2020-21 and 25.63 % in 2021-22, as tabulated in Parker’s two most recent annual reports on farmland prices in the region’s 11 counties.
You have to go back a decade to see that kind of rise in Southwestern Ontario farmland values. The two-year period of 2011-13 saw prices go up almost 51 % — with single-year increases of 29.7 % in 2011-12 and 20.9 % in 2012-13.
That historical period had similarities with the last two years, 2020-22, in terms of low interest rates and strong commodity prices, Parker points out in the introduction to his latest report. “The correlation between farmland values and the interest rates-crop prices combination is undeniable.”
But the tripling of interest rates since early 2022 has become a key difference between then and now. Land values “have not yet responded to this increased borrowing cost,” he observes, predicting that prices will remain “strong” but won’t increase as much in 2023.
Parker analyzes 400 to 500 property sales to create the annual report, which he’s done since 2010.
As for 2022, Perth and Oxford Counties had the highest median per-acre farmland prices with Perth at almost $35,000 (up 34 %) and Oxford at $31,000 (up 17.7 %). In individual cases, land sold for as much as $44,000 per acre in Perth and $42,000 in Oxford. The lowest-priced land in both counties was about $25,000 per acre, according to the survey.
Both counties are powerhouses in the dairy and swine sectors. Hog production is Perth’s single largest source of farm cash receipts at $303.7 million, with dairy at $277 million (2021 figures). Oxford embraces the mantle as Ontario’s dairy capital: Milk production accounts for $296.7 million in Oxford, with hog production at $221.4 million.
Bruce County, with the highest beef production in Ontario, had the overall lowest median farmland prices, at $17,000 per acre, though this was still up 16.5 % from a year earlier. Greenhouse vegetable-producing powerhouse Essex County previously sat at the bottom of the list but popped almost 36 % to hit a median price of $19,000 per acre in 2022.