Canada’s farmland market remained strong and stable during a year marked by economic turbulence caused by the COVID-19 pandemic, according to the latest Farm Credit Canada (FCC) Farmland Values Report.
The average value of Canadian farmland increased by 5.4 per cent in 2020, slightly more than the 5.2 per cent increase reported in 2019.
In Saskatchewan, average farmland values also increased by 5.4 per cent in 2020, following gains of 6.2 per cent in 2019 and 7.4 per cent in 2018.
The report, which describes changes in Canada’s farmland values from Jan. 1 to Dec. 31, 2020, covers almost an entire year of disruptions caused by the pandemic. For Canadian agriculture, disruptions included temporary food processing plant closures, some displaced exports, sector-specific labour shortages and significantly altered consumer buying habits.
“Since land is the most valuable asset on any farm operation, the agriculture land market is a good barometer for measuring the strength of Canadian agriculture,” said J.P. Gervais, FCC’s chief economist. “Despite having gone through a uniquely volatile year, farm income generally improved and the overall demand for farmland remained strong throughout 2020.”
Despite important supply chain disruptions caused by the pandemic, commodity prices climbed in the last half of 2020 for many crops and interest rates kept close to historic lows. Domestic demand for food remained strong and global supply chains continued to have an appetite for Canadian food and commodity exports, Gervais noted.
The highest average provincial increase for farmland in 2020 was in British Columbia and Quebec, with averages of eight and 7.3 per cent, respectively. Alberta followed with a six-per-cent increase and Saskatchewan was fourth.
Average farmland values have increased every year since 1993; however, increases were more pronounced from 2011 to 2015 in many different regions.
