The value of farmland across Canada for the first six months of 2024 increased by 5.5 per cent.

That’s according to a mid-year farmland values review done by Farm Credit Canada, which cited elevated borrowing costs and lower commodity prices as factors.

FCC says over the last 12 months from July 2023 to June 2024 there was a 9.6 per cent increase in values, which is a slower rate compared to the previous 12 month period of January to December 2023.

Saskatchewan had the largest average increase in the first half of this year among the provinces at 7.4 per cent. Comparing the other prairie provinces, farmland values in B.C. increased 4.6 per cent, Manitoba had a growth rate of 3.9 per cent, and Alberta at 5 per cent.

FCC believes the increased prices of farmland won’t deter buyers. Looking ahead, FCC expects declining borrowing costs and a limited supply of available farmland should sustain the current high prices for farmland.

“The continued rise in farmland values highlights a positive and robust long-term outlook for the agriculture sector. As we move into the latter half of 2024, the trends in farm revenues and interest rates will be key indicators of where farmland values might head next,” said FCC Chief Economist J.P. Gervais.

Gervais noted that farm cash receipts are projected to decline this year by 3.3 per cent “as commodity prices show few signs of a quick rebound, possibly limiting farmers’ willingness and capacity to assign higher valuations to farmland.”

“Understanding economic and financial trends is essential for making informed decisions. FCC is committed to providing the industry with data-driven insights that can help producers and investors navigate the current economic headwinds,” added Gervais.