Buyers are looking beyond current uncertainties in the quest for farmland this spring, but many are taking a closer look at deals to ensure they’re getting the best value for their money.
“These are long-term investors, really resilient, and they tend not to get caught up in the short-term issues like tariffs,” said Roy Carter, founder and CEO of CLHBid.com, an auction site specializing in farm properties. “Good land is just as strong as ever.”
Buyers no longer feel the pressure they did three years ago, and are taking a closer look at deals.
Meanwhile, some owners are thinking twice about selling given the uncertainties affecting other investments both from U.S. tariff announcements and potential tax regime changes following the federal election in Canada.
“In the post-Trump period and the tariff chaos, and also the Canadian election, we did notice a slowdown in sellers going to market,” Carter said, noting that many didn’t need to sell and began to see an upside in holding onto their properties.
“We saw sellers not bringing property to market, but if it was brought, the sales were great,” he said.
In early April, an assemblage of eight parcels totalling 1,311 acres in Kipling, Saskatchewan, sold through CLHBid.com for double the appraised value. An estate sale, the parcels fetched $3.8 million, or approximately $2,933 an acre.
“Because they’re travelling quite a few miles from their home base, they want to make sure they get it all or none,” Carter explained of the buyers, who purchased it to expand their own farming operation. “They’ll pay a premium to get that assemblage because it then becomes cost-effective.”
Similarly, an assemblage of 11 parcels totalling 1,018 acres east of Edmonton near Lamont sold the same week for an average of $4,685 an acre, a new benchmark for the area.
“Most of it went to a retired farmer to invest,” Carter said. “To some extent [he] was tired of the stock market and looking to park money back into farmland.”
The strong pricing reflects the ongoing strength of farmland values as reported this spring by Farm Credit Canada (FCC), the federally backed farm lender.
FCC’s annual report estimated that Saskatchewan farmland increased 13.1 per cent last year, firmly above the national rise of 9.3 per cent.
It was also firmly above the gains posted by its neighbours Alberta (up 7.1 per cent) and Manitoba (up 6.5 per cent).
Saskatchewan remains relatively affordable versus other regions, however. Values range from $2,600 per acre to $8,200, versus $3,100 to $18,000 per acre in Alberta and $3,300 to $12,900 an acre in Manitoba.
But marginal land is a tough sell.
“The grain guys, they’re seeing tight, tight margins and high input costs,” Carter said.
While they’re willing to buy, they want parcels that keep revenues well ahead of input costs, ensuring strong margins.
This is a key issue in B.C.’s Fraser Valley, where financial issues have pushed several large dairy and berry farms to sell.
“Deals are still happening, but it’s definitely a lot slower,” said Rajin Gill of B.C. Farm & Ranch Realty Corp. in Abbotsford. “The deals we’re doing now are more need-based – a roof over your head or a shop for your business.”
Pure land deals for production are trickier, he said, pointing to a 67-acre blueberry farm that sold at the peak of the market for $6.7 million, but sold this spring after FCC called its loan for just over $5 million.
“A blueberry farm doesn’t necessarily cash flow for the purchase price, even though it’s a decreased purchase price,” Gill said.
By the same token, well-located properties priced to market are selling.
Gill recently listed Langley’s Driediger Farms Ltd., a well-known berry grower with a total of 157.5 acres. The operation had been attracting unsolicited interest from buyers, and the owners eventually made the call to go to market with a total price, including the processing facilities, of $39 million.
“There are really good opportunities for people with money,” Gill said. “Nice product, good location, priced well – that sort of stuff will still move.”
