Farmland value caution flags

For more than 30 years, farmland values on the Prairies have been steadily increasing, leading to a prevailing attitude that land prices only increase and will never drop. That belief is now being challenged.

Based on the 2025 Farmland Values Report by Farm Credit Canada, cultivated farmland prices nationally increased by 9.3 per cent last year, on par with the previous year, but down from the 11.5 per cent increase in 2023 and the 12.8 per cent increase in 2022.

Farmland has been a tremendous investment and the big picture numbers show continued strength. However, the FCC analysis and numbers also show areas of weakness.

The Prairie region exhibited the country’s most strength last year. Manitoba’s average farmland value led the country with an increase of 12.2 per cent, followed by Alberta at 11.4 per cent and Saskatchewan at 9.4 per cent.

Of the three, Saskatchewan is the only one where the pace of increase has been slowing. In 2023, the average price increase in the province was a whopping 15.7 per cent followed by 13.1 per cent in 2024, ahead of last year’s 9.4 per cent.

Saskatchewan exhibited a lot of variation from one region to another in 2025. The North Western and North Eastern regions increased by 12.1 per, with East Central at 12.0 per cent. However, West Central farmland increased by only 4.8 per cent, which is rather surprising given their strong crop yields.

While there aren’t many caution flags in the Prairie numbers, British Columbia and Ontario are a different story. In B.C, cultivated farmland values increased by 8.0 per cent in 2022, dropped 3.1 per cent in 2023, increased by 11.3 per cent in 2024 and fell 1.7 per cent last year.

The Kootenay region on the southeast side of B.C. saw a huge 21.1 per cent decline in cultivated farmland values. According to the FCC report, efforts to establish fruit production faced ongoing challenges leading many growers to exit the market. “As fruit operations declined, downward pressure extended beyond orchard properties to cultivated land values,” says the report.

The South Coast of B.C. which includes the Fraser Valley saw cultivated farmland values drop by 7.4 per cent “as buyer interest shifted northward in search of more affordable options.” The average value in the South Coast region is listed at an astronomical $104,600 per acre.

In Ontario, cultivated farmland values continued to increase in 2025 but only by 2.2 per cent. FCC says behavior has shifted with buyers paying strong prices for high-quality cultivated land, while avoiding marginal properties.

In two of the eight regions of Ontario, prices showed no increase in 2025. In the southern tip of Ontario, south and west of London, a price drop of 1.0 per cent was appraised. Land there averaged $23,400 per acre, ranging from $15,000 to $34,700.

The areas of the country with price drops lead to a couple of observations. Serious production and therefore income problems can decrease the demand and therefore the price. As well, farmland prices can become too high to be sustainable without demand factors outside of agriculture.

Three months into 2026, the Prairie grain sector appears to be facing significant headwinds – rising input costs, disappointing commodity prices. Anecdotal reports suggest less buoyant land values, particularly for poorer quality land. No one can see the future, but with the current outlook it wouldn’t be surprising to see some different price trends when the 2006 FCC report is released.