Despite continued challenges from proposed tariffs by China and the United States that have impacted the Peace Region’s agricultural sector competitiveness, a promising trend has emerged.
Strong demand and lower borrowing costs have driven up farmland values significantly over the past year.
According to Farm Credit Canada’s (FCC) 2024 report, farmland values in the region rose by 16.1%, reflecting demand for agricultural land. The average price of cultivated land has climbed to $2,400 per acre in the Peace-Northern region, while the price of pastureland increased by 3%, now averaging $1,800 per acre.
FCC notes that, despite the limited availability of farmland and unsuitable conditions in some areas, land near the Alberta border has been steadily closing the price gap with the neighbouring province.
British Columbia, one of only three provinces to record higher farmland values last year, saw an overall price increase of 11.2%, in contrast to the 3.1% decline reported in 2023.
“The increase in Canadian farmland values in 2024 reflects an enduring strength in demand for farmland amid some pressures on commodity prices,” said J.P. Gervais, FCC’s chief economist in a release.
In 2024, Canada’s total principal field crop production is projected to reach 94.6 million tonnes, marking a 2.7% increase compared to 2023 and exceeding the five-year average by 3.3%. However, lower prices for grains, oilseeds, and pulses have led to an estimated 11.8% drop in main field crop receipts for the year.
“The profitability pressures combined with the current uncertainty with regards to trade disruptions create significant headwinds for farm operations looking to invest,” adds Gervais.