Farm Credit Canada's Farmland Values Report shows the average national value of cultivated farmland increased by 12.8 per cent in 2022.
Farmland values saw the highest increase since 2014 and follow gains of 8.3 per cent in 2021, and 5.4 per cent in 2020.
FCC's chief economist J.P. Gervais says it's all about supply and demand as higher farm revenues are driving the demand for farmland.
Stats show that receipts of grains, oilseeds and pulses increased 18.3 per cent in 2022, and are projected to grow 9.4 per cent in 2023.
The highest average provincial increases in farmland values were in Ontario (19.4%), Prince Edward Island (18.7%) and New Brunswick (17.1%).
2022 cultivated land values in Saskatchewan increased by 14.2 per cent, 11.2 per cent in Manitoba and 10 per cent in Alberta.
The most significant increase in pastureland values occurred in Manitoba, with an average increase of 18.5%. Alberta recorded an increase of 5.5%, followed by British Columbia at 3.7% and Saskatchewan at 2.8%.
In Manitoba, the largest increase in cultivated land values was 16.1 per cent in the Central Plains-Pembina Valley area with prices ranging from $2900 to $11,900 per acre for an average of $5800. Irrigated land in the Westman and Central Plains-Pembina Valley ranged from $6000 to $12,800 for an average price of $10,600 per acre. Eastman increased by 11.2 per cent with prices ranging from $3000 to $7000 for an average of $5300 per acre, while Westman increased by 9.2 per cent with prices ranging from $1700 to $4600 for an average of $3400 per acre, Interlake land values increased by 9.3 per cent with prices ranging from $1100 to $4900 for an average of $3500 per acre.
The largest increase in pastureland value in Manitoba was in the Westman region at 29.8 per cent, this is also the region with the most pastureland and highest value per acre at around $700 per acre.
In Saskatchewan, a lack of available farmland to meet the demand led to higher market values, with cultivated land values increasing by 14.2 per cent.
Land values in the Northeast saw the highest market value increase of 24 per cent with prices ranging from $1400 to $4200 per acre for an average of $3000 per acre. In the Northwest land values increased 9 per cent with prices ranging from $1300 to $4100 per acre for an average of $2500 per acre. In the Southeast land values increased by 13.3 per cent with prices ranging from $1300 to $5200 per acre, for an average of $2500 per acre. In the East Central area of the province, land values increased 13.4 per cent with prices ranging from $1300 to $3600 per acre for an average of $2200 per acre. West Central land values increasing by 17.2 per cent with prices ranging from $1300 to $6000 per acre for an average price of $2800 per acre. Cultivated land prices in the Southwest were up 11 per cent ranging from $1000 to $3400 per acre, for an average of $2200 per acre.
Irrigated land in the West Central and Southwest increased by 26 per cent ranging from $5700 to $8000 per acre, for an average price of $6300 per acre.
The most significant increase in pastureland values in Saskatchewan occurred in the Southeast region, with a growth of 11.9 per cent. This was also the area with the highest value per acre at $1,000/acre.
In Alberta, the highest increase in cultivated land was reported in the Peace region at 13.6 per cent with prices ranging from $1500 to $4300 per acre for an average of $2700 per acre. The southern area of the Peace posted a 35 per cent increase while other areas remained stable. The report notes that areas that experienced a wet spring that negatively affected yields saw lower increases in value, while areas with above-average yields showed larger increases.
Northern Alberta farmland values increased 11.5 per cent with prices ranging from $1700 to $7600 for an average price of $4000 per acre. Central Alberta farmland increased 11.5% with prices ranging from $2400 to $10,900 for an average price of $5500 per acre. Southern Alberta saw a 4.4 per cent increase in farmland values ranging from $2200 to $9000 per acre for an average of $4600.
Like other provinces irrigated farmland has higher overall value than cultivated or pastureland. Irrigated land in southern Alberta had a record-high increase of $29.9 percent with land values ranging from $8100 to $20,200 per acre for an average of $14,900 per acre. According to the report the increase was attributed to larger contracts for specialty growers, mainly potatoes, and to land coming for sale near major growers and storage sites.
Pastureland values in Alberta increased by 5.5 per cent in 2022. The most notable increases occurred in the Northern region with an 11.8 per cent increase, followed by the Peace region at 8.4 per cent. The Southern region saw the lowest increase in pastureland values but held the highest value in the province at $3500 per acre.
Overall, Gervais says the good news in the report is that farmland value increases reflect a positive outlook for the demand for agricultural commodities.
To see FCC's 2022 Farmland Values Report click here.