LONDON — Two years ago there was speculation that farmland in Oxford County would hit $30,000 an acre in 2019. It did. Now analysts are saying Oxford County farmland could hit $40,000 an acre this year.
Farmland prices seem to have nowhere to go but up. Ryan Parker of Valco Consultants at London, tracks 400 to 500 land sales in 11 counties in Western and Southwestern Ontario each year. He said farmers in Oxford will likely see $40,000/acre land, if not this spring then by spring 2022.
“There’s that much demand out there,” he said, adding that even the decent but not amazing land is started to break $30,000 an acre.
The latest survey, released last month in the Southwestern Ontario Land Values survey, covers Huron, Perth, Oxford, Middlesex, Elgin, Lambton. Kent, Essex, Bruce, Grey, and Wellington Counties.
The survey captured prices hitting a high of $35,000 in Oxford County but Parker cautioned that the survey didn’t capture sales after commodity prices started taking off in the fall. Producers across Southwestern Ontario should only expect to see prices get higher and the market to intensify, he said.
Across the board, it was another year of strong growth. The 2020 prices hit a median of $15,000, up 5.33 per cent over 2019’s price median of around $14,000.
And prices have been trending upward for some time. From 2010 to 2020, the average annual growth rate of median farmland prices was 10.72 per cent. In other words, your farmland investment appreciated by over 10 per cent every year. Back in 2010, the average median farmland price in Southwestern Ontario was just under $6,000. It had nearly tripled to $15,000 by 2020.
Oxford and Perth counties remained the top two in the region for median land prices. In Oxford both the peaks and troughs climbed, with price highs hitting $35,000/acre and lows at or above $15,000/acre. In Perth the price bottoms climbed but the peaks fell. A high of $32,000 in 2019 fell to a high of $28,000 in 2020, but the bottom-end prices broke $15,000/acre. Both are dairy-rich regions: Oxford is Ontario’s top county for milk production and pumped out $276 million in farm cash receipts for dairy in 2019. Perth was close behind at $258 million.
Essex County, with the most intense greenhouse production in Ontario, had the overall lowest median farmland prices, with an average of $10,000/acre. That’s despite the region doing a roaring business in fruits and vegetables: in 2019 Essex County pumped out a whopping $745 million in cash receipts for field tomatoes, peaches, apples and more.
It might seem that something has to give. Parker said the thing to watch are interest rates. Low interest rates and high commodity prices will keep upward pressure on farmland, but because most farmers are highly averse to selling farmland at a discount, consistently-high interest rates will be the key to bringing farmland prices down, he said.
LONDON — Two years ago there was speculation that farmland in Oxford County would hit $30,000 an acre in 2019. It did. Now analysts are saying Oxford County farmland could hit $40,000 an acre this year.
Farmland prices seem to have nowhere to go but up. Ryan Parker of Valco Consultants at London, tracks 400 to 500 land sales in 11 counties in Western and Southwestern Ontario each year. He said farmers in Oxford will likely see $40,000/acre land, if not this spring then by spring 2022.
“There’s that much demand out there,” he said, adding that even the decent but not amazing land is started to break $30,000 an acre.
The latest survey, released last month in the Southwestern Ontario Land Values survey, covers Huron, Perth, Oxford, Middlesex, Elgin, Lambton. Kent, Essex, Bruce, Grey, and Wellington Counties.
The survey captured prices hitting a high of $35,000 in Oxford County but Parker cautioned that the survey didn’t capture sales after commodity prices started taking off in the fall. Producers across Southwestern Ontario should only expect to see prices get higher and the market to intensify, he said.
Across the board, it was another year of strong growth. The 2020 prices hit a median of $15,000, up 5.33 per cent over 2019’s price median of around $14,000.
And prices have been trending upward for some time. From 2010 to 2020, the average annual growth rate of median farmland prices was 10.72 per cent. In other words, your farmland investment appreciated by over 10 per cent every year. Back in 2010, the average median farmland price in Southwestern Ontario was just under $6,000. It had nearly tripled to $15,000 by 2020.
Oxford and Perth counties remained the top two in the region for median land prices. In Oxford both the peaks and troughs climbed, with price highs hitting $35,000/acre and lows at or above $15,000/acre. In Perth the price bottoms climbed but the peaks fell. A high of $32,000 in 2019 fell to a high of $28,000 in 2020, but the bottom-end prices broke $15,000/acre. Both are dairy-rich regions: Oxford is Ontario’s top county for milk production and pumped out $276 million in farm cash receipts for dairy in 2019. Perth was close behind at $258 million.
Essex County, with the most intense greenhouse production in Ontario, had the overall lowest median farmland prices, with an average of $10,000/acre. That’s despite the region doing a roaring business in fruits and vegetables: in 2019 Essex County pumped out a whopping $745 million in cash receipts for field tomatoes, peaches, apples and more.
It might seem that something has to give. Parker said the thing to watch are interest rates. Low interest rates and high commodity prices will keep upward pressure on farmland, but because most farmers are highly averse to selling farmland at a discount, consistently-high interest rates will be the key to bringing farmland prices down, he said.
