Ontario farmland prices cool down after years of double-digit jumps

Though the recent year-over-year increases in farm prices are levelling off in southwestern Ontario, good land remains too pricey for many people with dreams of becoming an owner.

"Anything like 100 acres, you're just not going to find it for under $5 million," said Crispin Colvin, a farmer and area director of the Ontario Federation of Agriculture for Lambton and Middlesex counties. "There isn't really any cheap location to get into farming." 

A report released this week by Farm Credit Canada, a Crown corporation that provides financing to the agriculture industry, said the average price of a farm in the southwestern Ontario region rose by 3.2 per cent in 2024, reaching an average per-acre price of $33,700. 

That rate of increase is down considerably from recent years, which have seen double-digit increases in average farm prices:

• 2021: 22.2 per cent. 
• 2022: 19.4 per cent. 
• 2023: 0.7 per cent.  

Colvin said he's seen prices well above what's laid out in the Farm Credit Canada report. He said the high prices remain a significant barrier to young people interested in getting started in agriculture. 

"Prices have maybe tapered off or levelled a little bit, but it's still really hard, especially for young people who want to get in," he said. "It's at the stage where you can either buy the equipment or buy the land, but you can't buy both." 

Ryan Parker, an agricultural real estate appraiser with Valco Consultants, said slightly lower interest rates and commodity prices are the two biggest factors that have led to the slight cooling in farm prices last year. 

"It's not really a decrease in land values; it's a decrease in the increase of land values," he said. 

Parker said it's too early to tell how the Canada-U.S. trade war will affect farm prices. However. he said anything that reduces the price farmers can get for their meat and crops will show up in farm values.

"Right now, what we're seeing is a lot of uncertainty," he said. "Some farmers are buying another farm, but others are putting the brakes on and saying, 'You know what, let's just hang back and not overspend on anything until we have more clarity on what's going to go on here.'" 

Colvin said another factor keeping prices high is the pressure created by urban expansion. As farms get sold, some are turned into subdivisions.

"Because we're on the Highway 401 corridor, it's still a sought-after area from a development point of view," said Colvin. "And we're losing the land so as you lose it, that pushes up the price."