Farm Credit Canada has released its mid-year dryland farmland values report for 2023.
Leigh Anderson, a senior economist with FCC says dryland farmland values were up 7.7 per cent nationally.
Saskatchewan led the country with dryland farmland values up 11.4 per cent, Manitoba came in at 6.4 per cent while Alberta only saw a 3 per cent increase.
Anderson says there are a number of factors influencing prices but a key issue is the growing conditions.
"It's been a little bit drier in Alberta and that is probably showing up in the farmland markets. Now, if you head into Saskatchewan, we saw the highest appreciation through the first six months. A lot of that was driven by strong production the last few years and of course, strong commodity prices. Manitoba, there were some regions that had some strong appreciation the last several years, so maybe we're starting to see some of that settle down into Manitoba."
The report details the provincial trends - here's the information for the prairie region.
Farmland values in Alberta have increased at an average moderate rate in the first 6 months (3%), resulting in a year-over-year increase of 6.0%. It’s important to note that this increase applies to dryland, and the most recent 12-month increase is lower than the previous 12-month increase from January 2022 to December 2022. The availability of farmland for sale remains low in this province.
Saskatchewan leads the country in the average farmland value increases for this first half of the year at 11.4%. Most regions saw increases in the 7-11% range, indicating relatively steady demand province-wide. The North East region stood out with the strongest demand, leading to above-average growth relative to the rest of the province. Low precipitation has led lately to an increased demand in heavy clay soils, where moisture retention has been rewarded with higher prices.
In Manitoba, we are seeing a shift in growth away from the higher-priced land. The Eastman and Central Plains – Pembina Valley regions have the highest average prices and the lowest growth recorded in the last 6 months and the last 12 months."
Results from other provinces, B.C. showed no change in farmland values, Ontario came in at 6.9 per cent, Quebec at 10.6 per cent while average estimates for the Maritimes were not available for this report but will be included in the yearend report.
Overall, farmers are taking a long hard look before expanding their operations given the current environment of high interest rates, elevated farm input costs, and uncertainty regarding future commodity prices.
You can find FCC's Mid-year Farmland Value Report here.