Farmland Value Rising, Farmers Happy
By Elli Davis, November 3, 2011
Farm on the Edge of Chesapeake Bay
by Ben Longstaff
Do you have your portfolio of condos, lofts, and luxury houses but still want to include more properties? Maybe it is time to consider investing in farmland, as Farm Credit Canada suggests.
According to FCC, farmland value has been rising steadily all across Canada, led by Prince Edward Island, followed by Saskatchewan and Ontario. Farmland prices have increased by 2.1% per year on average. In the most expensive area, Holland Marsh/Bradford (north of Toronto), you can be asked to pay over $20,000 per acre, while the cheapest farmland can be purchased in New Liskeard in Northern Ontario, with prices starting around $1,300 per acre.
The reason for such a price increase is mainly the rising price of commodities and a tight inventory. While the average farm size tripled in the last 50 years, the overall number of farms is falling: there were 2,500 fewer farmers in 2006 than in 2001, in Ontario alone.
Farmers account for only 5 per cent of farm owners, so there is a large potential. Investors are active in the Western Canadian market, but the Ontario market is slowly awakening from its long sleep.
Some investors may even decide eventually to become real farmers. According to the FCC survey, 80 per cent of current farmers would recommend a farming career to a friend or family member.