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Average Farmland Prices Up 10.1% Last Year

Apr 11, 2016 | 4:18 PM

CANADA – A new report says the average price of farmland across Canada increased 10.1 per cent last year as low interest rates and strong crop income helped maintain demand.

The report by Farm Credit Canada says last year’s gains are part of a continuous upward trend that started in 1993.

The gains, however, are lower than in recent years, with the average price increasing 14.3 per cent in 2014 and 22.1 per cent in 2013.

The chief agricultural economist at Farm Credit Canada says farmers have to prepare for a potential softening of the market as lower crop prices have already increased volatility.

J.P. Gervais says farmers didn’t feel the full effects of lower commodity prices last year because of the significant drop in the Canadian dollar.

But looking ahead, Gervais says 2016 could see more modest farmland value gains of two to four per cent as farmer income, known as crop receipts, start to be affected.