Canadian farmland affordability trending down

The average value of Canadian farmland continued its steady ascent in 2024, with an increase of 9.3%, which is slightly lower than the 11.5% bump observed last year. This growth was propelled by the limited availability of farmland for sale coupled with a resilient demand (despite an 11.8% decline in major crop receipts). Slightly lower interest rates also contributed to support demand.

This post provides an update to our initial farmland affordability index released last year, which focused on newly acquired land. The affordability of new purchased farmland continued to deteriorate in 2024. We examine each province individually, considering factors such as unique growing conditions, land prices, crops and livestock raised, and proximity to urban populations, all of which influence changes in farmland value. Furthermore, we assess the annual payments for owned farmland over time in relation to its revenue-generating capacity.

Measuring farmland affordability

For many farm businesses, farmland is a key asset. Trends in farmland prices can affect financial performance and business growth over time. FCC’s farmland affordability index provides information on Canadian farmland prices, assisting farming businesses in making informed decisions about their farmland assets and investments.

The index represents the relationship between the annual payments for newly purchased farmland and the income potential derived from that land. A higher ratio indicates decreased affordability in acquiring farmland, as a larger portion of revenue is required to service the debt. Read last year’s blog for more detailed information on the calculations.

Affordability index for newly purchased farmland in Canada deteriorated last year

Farmland affordability in Canada worsened in 2024, reaching levels not seen since 1983 (Figure 1). The index is mainly influenced by Saskatchewan and the Prairies due to their vast acreage. Reduced affordability was driven by lower farm cash receipts and higher farmland values. Since 2020, farmland values and interest rates have risen faster than farm revenue. While established farmers gained equity, the cost of farmland increased relative to its income potential.


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