By Lisa Kopochinski
Cultivated farmland across the country rose by more than five per cent in the first half of 2024.
In an article published last October, Farm Credit Canada (FCC) reported a 9.6 per cent increase from July 2023 to June 2024. This represented a slowdown compared to the previous year, likely attributed to lower commodity prices and elevated borrowing costs.
The rate in Alberta settled at 4.6 per cent (between January 2024 and June 2024) while neighbouring province Saskatchewan recorded a higher six-month increase at 7.4 per cent. British Columbia’s rate was five per cent, while Manitoba recorded a growth of 3.9 per cent.
In terms of land values in southern Alberta, FCC senior appraiser Kurri Carlson reported the following farmland value percentage increase for dryland: 9.1 per cent in 2023; 4.4 per cent in 2022; 6.2 per cent in 2021; 2.9 per cent in 2020; and 3.9 per cent in 2019.
“When it comes to provincial trends, FCC reported that in Alberta, the trend has been toward selling smaller parcels of land, as large holdings are divided into smaller groups to attract more buyers. Additionally, land transactions are increasingly occurring through private sales, live auctions and sealed tenders.”
FCC observed a 4.6 per cent rise in land values during the first half of 2024, with the most significant increases noted in the northern parts of the province.
Diane Richardson, a realtor with real estate firm CIR Realty, says the increase in land value in southern Alberta over the past five years averaged out to just under 40 per cent. However, this is dependent upon the type of land.
“Irrigated land has seen a significant increase of over 80 per cent, while cultivated and pastureland has been more modest with closer to 30 per cent increases. Climate change and drought have contributed to the increasing value of irrigated and water-secure land, as well as specialty crops. Strong grain and livestock prices have helped increase the value of cultivated and pastureland, albeit in smaller measure.”
2025 Predictions
When asked her prediction for 2025 in terms of how much southern Alberta land prices will increase, Richardson stresses it’s a tough question to answer.
“If things hold steady in terms of interest rates and commodity prices, we could see an increase of five per cent to 10 per cent with irrigated land gaining the most. However, there are so many things that can impact the value of farmland, including interest rates, commodity prices, climate factors and whether tariffs will be imposed on some or all of the agricultural products Canada exports to the U.S.”
Simon D. Hunt, a licensed realtor at Simon D. Hunt Realty Group in Calgary, says predicting land values is difficult because the final numbers for 2024 won’t be published until this March. He notes there may be some changes happening with a new American president threatening tariffs against Canada and a federal election coming.
“Interest rates that have been declining may start to go back up eventually in the latter part of the year. Also, interesting situations of land conversion throughout Alberta with data centres, solar panel farms and other nontypical agricultural uses are going to make farmland even more precious. In regions around Calgary, we are seeing higher than anticipated values upwards of $30,000 to $50,000 an acre. My prediction is we will see values rise as demand becomes even stronger and the amount of people coming to Alberta is increasing, putting even more pressure on demand.”
FCC senior economist Justin Shepherd predicts purchasing land in the year ahead will come with careful consideration of the price and timing.
“Some operations will prefer to wait and see where land values will settle while others may move more quickly should adjacent land become available, or simply because it fits their strategic business plans.”
While the receipts of grains, oilseeds and pulses in Canada are estimated to have declined 13.1 per cent in 2024, he says the forecast is they will return to a positive growth of 3.4 per cent in 2025.
“Input costs will remain elevated for the new crop and producers must continue to exercise caution in their investment decisions in 2025. The good news is that farmland value increases reflect a positive outlook for the demand of agriculture commodities and the quality food we produce in Canada. Producers have a long track record of making strategic investments in land. These long-term investments in food production have spurred growth and create a bright future for Canada’s agriculture and food industry.”