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The worth of Canadian farmland rose 11.5% in 2023, a brand new report by agriculture lending agency Farm Credit score Canada has discovered.
Chief economist J.P. Gervais mentioned whereas that’s a slight slowdown from the expansion in 2022, it’s nonetheless a speedy tempo given cooling financial circumstances general.
“Farmland costs have continued to extend at a speedy tempo over the past couple of years, even when financial circumstances instructed the expansion ought to gradual,” mentioned Gervais in a launch.
“A restricted provide of accessible farmland mixed with a strong demand from farm operations is driving that development.”
The lender’s newest report on farmland values discovered that they elevated in each province tracked apart from British Columbia.
That province noticed a median decline of three.1%, but it surely nonetheless has the best common farmland values within the nation.
The variety of farmland transactions is estimated to have declined barely final 12 months.
Farmers are at the moment being cautious in relation to investing of their operations, the report mentioned, with anticipated weaker revenues and elevated borrowing and enter prices.
“Buying land within the 12 months forward will include cautious consideration of the worth and timing. Some operations will choose to attend and see the place land values will settle whereas others could transfer extra rapidly ought to adjoining land change into out there, or just because it suits their strategic enterprise plans,” Gervais mentioned.
Younger producers face a difficult atmosphere as farmland turns into much less and fewer reasonably priced, mentioned Gervais. This will likely expose some farm operations to extra threat amid increased rental charges and enter prices, he mentioned.
The very best will increase in common farmland worth final 12 months have been in Saskatchewan, Quebec, Manitoba and Ontario.
This report by The Canadian Press was first printed March 12, 2024.
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