Crop sharing an alternative to high priced farmland

Farmland values at mid-year continued to trend higher even amid tight profitability. While farmland value appreciation rates are slowing, affordability continues to deteriorate. For many operations looking to grow including young farmers, indigenous producers and new entrants to Canada the cost of purchasing land is prohibitive. The cash flow difference to rent compared to purchasing has been historically more attractive, and less risky.

It’s not only the high cost of farmland impacting young farmers’ ability to grow their land base. Strong competition in the rental market has also elevated rental rates. Moreover, lower grain and oilseed prices and elevated input costs imply 2025 could be the third consecutive year of negative margins accounting for all variable and fixed costs under a cash rent arrangement in Saskatchewan (Figure 1)...

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