The Canadian farmland market continues to show resilience and growth despite rising costs and market uncertainty. According to the latest report from Farm Credit Canada (FCC), Canadian farmland values rose by an average of 9.3% in 2024. This growth, although slightly slower than in 2023, exceeded the five- and ten-year averages, indicating a strong market performance.

Saskatchewan led the nation with a 13.1% increase in average farmland values, driven by its vast cultivated acreage. British Columbia and New Brunswick followed closely with increases of 11.3% and 9.0% respectively. Provinces like Ontario and Prince Edward Island also saw modest gains in farmland values. Despite challenges such as elevated borrowing costs and narrowing profit margins, producers continue to invest in land, supported by the tight supply of farmland.

Demand for irrigated land, particularly in drier regions, saw significant growth. Saskatchewan reported a notable 25.8% increase, while Alberta experienced an 8.6% rise in values. British Columbia and Manitoba also saw smaller increases in irrigated land values. Projects like the Westside Irrigation Rehabilitation Project highlight the growing importance of water infrastructure in agricultural development.

Pastureland values also saw an increase, albeit more modestly. Saskatchewan led the way with an 8.9% rise, partly fueled by higher cattle receipts. However, FCC cautions that profitability in the cattle sector is slowing, which could temper further growth in pastureland values.

While the Bank of Canada’s interest rate cuts in 2024 provided some relief, borrowing costs for farmers remained relatively high. Looking ahead, FCC analyst Corbin Chau warns of potential challenges in 2025, particularly related to trade risks at the US-Canada border. Despite these uncertainties, the long-term fundamentals of Canadian farmland remain strong, supported by productivity gains, technology adoption, and economies of scale in farming operations.

Overall, the Canadian farmland market continues to demonstrate resilience and growth in the face of various challenges. Producers remain optimistic and continue to invest in land, driven by tight supply conditions and strong demand for agricultural properties. While market volatility and uncertainties persist, the fundamentals of the Canadian farmland market remain solid, positioning the sector for long-term success and sustainability.