The rising cost of farmland has become a common topic of discussion in the farming community. Many farmers are aware of and seeing a significant increase in land prices – but each year when the Farmland Values Report is published by Farm Credit Canada (FCC), we get to see the concrete numbers.
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. It shows, by the numbers, why land access is the #1 challenge for new and young farmers. With land prices outpacing the earning potential of farmland, it gets harder and harder for farmers to acquire a mortgage and pay for the land with farm revenues. This also impacts expansion plans for existing farm operations.
The B.C. Land Matching Program delivered by Young Agrarians was launched to address the high cost of land being a significant barrier to new farmers. We connect farmers and farmland holders and support the development of land lease arrangements, all with the goal of helping new and growing farmers build their businesses.
So, what happened with farmland values in 2021?
In 2021, farmland values in B.C. increased 18.1%, the second highest across Canada (Ontario saw the biggest increase of 22.2%). The national average was 8.3%. That is a significant increase from an 8% increase in 2020, and demonstrates that purchasing land as a new farmer is becoming increasingly challenging. The graph below shows farmland value increases since 2012.
When we look at B.C. by the regions, we see a wide range in values: the Peace-Northern region saw average increases of 17.3% with the increase coming from the main areas of Vanderhoof and Rose Prairie. Vancouver Island went up 6.3% with stable demand in the area. The Kootenays saw average increases of 9.8%, with folks moving to the region from more populated areas for more affordable land and space. The Thompson-Nicola saw one of the greatest increases at 32.7 % with strong demand for irrigated land, and the Cariboo-Chilcotin saw a 28.2% increase with land on the east side of the Fraser River being more attractive for land purchases. The Okanagan region saw an increase of 21.6 % – though it’s important to note that orchard and vineyard land is excluded from this calculation – and the South Coast saw an increase of 33.7%.
The highest land values by far are in the South Coast region, far exceeding any other region where the average value per acre is $134,700 , and as high as $197,000, respectively.
According to the Farmland Values Report, “Historically, smaller parcels of land sold at higher per acre prices. The price gap between larger and smaller parcels appears to be getting narrower in many areas. Limited supply and high demand are factors that influenced farmland values in the province.”
What does it all mean?
It’s not a surprise to many that farming in BC is becoming increasingly challenging. As a new entrant and first generation rancher with a young family, I know first hand the difficulties of farm start-up. While it is discouraging, it’s worth considering that owning land may not always be an option, or the best decision, for new farmers.
We encourage all land seekers to look at your vision and needs for your farm business. Creating a business plan can help you do just that! Is it realistic to be purchasing land? What is it about land ownership that seems important as a farm business owner? Does leasing land align with your goals for your business and a more realistic approach for starting out?
Once you’ve identified what your needs are, our B.C Land Matching team of land matchers can help you assess your needs and what would be suitable. Please don’t hesitate to reach out with your questions, whether you’ve just started thinking about farming, or you’re ready to start your land search – we’d love to hear from you! Email email@example.com to get started.
Be sure to check out our 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.
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.