Well, the numbers are in – and farmland gets more expensive every year! Farm Credit Canada (FCC) just released the 2018 Farmland Values Report, highlighting the high cost of land in B.C. The average value of Canadian farmland increased 6.6% in 2018, and our fair province is just above the national average at 6.7% – compare that to a 2.7% increase in B.C. in 2017. For new farmers trying to break into the sector, steep land prices effectively shut them out of the farmland real estate market. This means that alternative land access models such as leasing are more important than ever in helping the next generation of farmers access land.
FCC identifies market failure for agriculture when the cost per acre hits $80,000, which we’re seeing in some regions, such as Metro Vancouver, Vancouver Island, and the Okanagan. Another consideration is that smaller acreages tend to sell at a higher cost per acre than large properties, which results in an outsized impact on small scale farmers. Having a strong understanding of the costs of production of your operation, as well as keeping a close eye on the value of your land can help ready yourself for unforeseen market fluctuations.
Highlights from across B.C.
- Overall, farm expansion drives the value of BC’s farmland in 2018.
- On Vancouver Island, average farmland values across the island have risen a shocking 21.7% this year, the highest regional increase in Canada. The increase is partly driven from previous years boom in the South Coast region. The average cost per acre was $50,858, with a range of $21,500 – $79,300.
- The Okanagan holds the record for the highest average farmland values across Canada at $97,903 per acre. The main economic driver behind the cost of farmland in the region is the wine industry, and the regional conversation is all about vineyard establishment and expansion. Combined sales from BC breweries, wineries, and distilleries amounted to $1.3 billion in 2016.
- The South Coast region, which includes Metro Vancouver and the Fraser Valley, showed an overall 6.7% average increase in farmland value. There was a higher demand from the eastern Fraser Valley which tends to have lower value than the West.
- The Cariboo-Chilcotin region saw a 12.8% increase in farmland values, while the Peace Region-Northern B.C. had a 6.6% increase, with the highest quality land going for a premium. Increases in farmland values in Central and Northern B.C. reflect what we’re hearing on the ground from young farmers – while a few years ago new farmers could reliably relocate north to purchase land and escape from Southern B.C. real estate hotspots, they are now finding themselves priced out of the market all across the province.
- The Kootenays (Columbia Basin) did not experience any change in farmland value in 2018, with the average dollar value per acre sitting at $45,073. The value per acre ranges from $4,400 – $23,900 when considering 90% of sales made with the exception of the lowest and highest 5 per cent. The report links this to limited farmland sales in the region, especially for orchard properties.
Be sure to check out the interactive map over at FCC, and zoom into your region!
Farming on leased land is a wonderful collaborative approach to farming, and a much more affordable way to start a farm business. If you would like to start a farm business and buying farmland is out of reach, or if you have land you would like to lease for farming, get in touch with a YA Land Matcher today! We have an abundance of land opportunities available across B.C., and not all of those opportunities are publicly listed on the YA UMAP.
YA Land Matchers help landowners assess their land opportunity, support farmers through the business planning process, match farmers with the most suitable land opportunities, and facilitate conversations between farmers and landowners to develop agreements. Folks we’ve matched through the B.C. Land Matching Program tell us how much they appreciate having a Land Matcher there as a neutral third party to help guide them through the process – and we’d love to help you.
Reach out to firstname.lastname@example.org, or to your regional Land Matcher, to start a conversation. To learn more about leasing land and the B.C. Land Matching Program, visit youngagrarians.org/tools/land/
The B.C. Land Matching Program is funded provincially by the B.C. Ministry of Agriculture. Funding is also provided to support regional programming by: Columbia Basin Trust, Cowichan Valley Regional District, Metro Vancouver, Vancity, and the North Okanagan Regional District.