2019 Farmland Values Report Recap

Posted by Darcy Smith on April 08, 2020

Each spring, while farmers are waiting for seeds to germinate, I eagerly anticipate the Farmland Values Report published by Farm Credit Canada (FCC). Anyone who’s come out to one of our land linking events will know what a sucker I am for good data – along with the rest of our land matching team!

Resources like the Farmland Values Report help us keep up to date on the challenges farmers are facing, and how we can best support. The Farmland Values Report tracks changes in the price of farmland across Canada, as well as by province and region. Increasingly, the cost of land outpaces the production value of that land and creates an environment in which new entrants simply could not qualify for and pay a mortgage with farm revenues.

The B.C. Land Matching Program delivered by Young Agrarians launched in large part as a response to the high cost of farmland. When buying land is out of reach, we can help connect farmers and farmland owners through lease arrangements. This way, new farmers can get on the land, existing farmers can grow their businesses, and farmland owners can ensure their land is well-utilized.

So, what do the numbers say this year?

In 2019, farmland values in B.C. increased 5.4%, which is very close to the national average of 5.2%. If you zoom in regionally, though, you find a huge range in values: the Peace region saw average increases of 4%, while the average on Vancouver Island went up 13.1%. The Kootenays saw average increases of 8%, with big demand for orchards and irrigated land – similarly, Thompson-Nicola saw a 9.1% average, and Cariboo-Chilcotin, 6.4%, driven by irrigated and cultivated land. The South Coast saw average increases of 7.8%. In the Okanagan, some orchards are being sold and converted to vineyards, leading to an increase of 5.5%.

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Image credit: Farm Credit Canada’s 2019 Farmland Values Report

The highest land values by far are in the South Coast and Okanagan regions, where the average value per acre is $102,067 and $103,288, and as high as $186,000 and $163,800, respectively. While the rise in farmland values seems to be slowing down, FCC does not anticipate that prices will decrease in our future.

B.C. is unique in that there are 200 different commodities being produced, and many farms are small-scale and diversified. According to the Farmland Values Report, “smaller parcels are more sensitive to market fluctuations since they attract both farmers and rural residential buyers.”

What does it all mean?

Since land prices are still going up, it doesn’t seem likely that it’s going to get any easier for new farmers to get into the market and buy land. While that seems discouraging, let’s look at it in a different light! It’s worth considering that owning land may not always be the wisest strategy for new farmers. Slower growth of farmland values could make buying land a riskier investment, and launching a business while also suddenly juggling an expensive mortgage puts additional pressure on a new farm. As well, the impacts of COVID-19 also won’t be apparent until next year’s report, so there’s a lot of uncertainty in the market right now.

We encourage all land seekers to take a deep dive into your vision and needs. What is it that owning land offers you? It could be that you see owning land as a path to security, both personal and business, retirement planning and wealth management, access to capital, or even flexibility to sell and move on. There might be other pathways to get there.

Once you’ve identified what your needs are, you can start looking at solutions outside of owning land that can meet those needs. For example, maybe you’re worried about having long-term access to land that you don’t own. A registered lease that runs with the land could provide you with the security of knowing even if the land gets sold, you’ll still be able to farm it.

Our B.C. Land Matching Program team can help you work through your vision and support you on your journey to finding land. Please don’t hesitate to reach out with your questions, whether you’ve just started thinking about farming, or you’re ready to get on the land tomorrow – we’d love to hear from you! Email land@youngagrarians.org to get started.

We’ve also got a collection of online land access resources, including our Land Access Guide and agreement templates – the Land Access Guide is a great place to start, and includes stories of other young farmers getting on the land. Our Land Blog highlights land opportunities as well as stories from farmers matched through the B.C. Land Matching Program, and the YA UMAP highlights land opportunities as well as farmers looking for land.

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The B.C. Land Matching Program is funded by the Province of British Columbia, with support from Columbia Basin Trust, Cowichan Valley Regional District, Real Estate Foundation of B.C., Bullitt Foundation, and Patagonia.