Alberta no longer tops Canada in total farm property value, StatsCan says

Alberta no longer has the most valuable total farm real estate in Canada, Statistics Canada figures show.

The value of Canada’s total farmland – including farmland and buildings – will grow to $652 billion by 2022, according to agricultural balances from StatsCan published last month.

The figures show that in 2020, Alberta’s total farm real estate was valued at $146 billion, higher than any other province. Ontario was second with $141 billion.

By 2022, the total real estate value in Alberta had increased to $167 billion, compared to $201 billion for Ontario.

“If you look at Ontario, the demand for land, farmland around urban areas… has been very, very strong,” said Farm Credit Canada chief economist JP Gervais.

“I really think it’s been a trend since the start of the pandemic in 2020.”

Growing conditions are also a factor, Gervais said.

“In the Canadian prairies it was very difficult for growers, [with] big drought and bad yields,” he said. “While yields in Ontario were pretty good.”

Data from Farm Credit Canada indicates that Alberta’s farmland is the most expensive south of Calgary, with costs as high as $20,200 per acre by 2022.

In Ontario, agricultural land is most expensive in the southwestern part of the province, where the value reached about $39,000 per hectare in the same year.

While total property values ​​in Alberta are no longer the highest in Canada, Gervais says Albertans can be optimistic about the future of local agriculture.

“[Land values] reflect the positive side of the industry,” he said. “Demand for what we grow in Canada continues to grow.”

While Ontario has seen more dramatic increases, rising land prices in Alberta pose a challenge to young Alberta farmers building their businesses, according to Gervais.

Companies have sprung up to help farmers with rising expansion costs.

Area One Farms partners with farmers, giving them more capital to invest and expand.

“I say build the farm you want to farm in 10 years, but build it now when the opportunity arises,” said company founder Joelle Faulkner.

Matt Hamill, co-owner of Red Shed Malting — which produces malt on a farm near Penhold and sells it to craft breweries in Alberta — says his company exists because of the high price of farmland.

“When you’re a first-generation farmer, the cost of land is so prohibitive,” Hamill said. “We didn’t know if we could buy additional farmland to cultivate.”

Instead of expanding his family’s business, Hamill shifted focus and began converting his grain crop into malt for brewing.

“There are a lot of young farmers, the next generation to take over the farm, who are looking for more creative ways to…make small-scale farming more sustainable,” he said.

Red Shed Malting sells to several breweries in Edmonton, including Alley Kat Brewing and Polyrhythm Brewing.

Hamill said as his business expands, he will likely buy grains from neighboring farmers before considering buying additional land.

Gervais, meanwhile, said higher interest rates should slow the rise in farm real estate costs.

On Wednesday, the Bank of Canada raised its benchmark interest rate to five percent in its latest bid to curb inflation.

However, Gervais does not expect prices to fall.

“The farmland market itself will remain very strong.”