Ontario Grain Farmer June/July 2021

possible, it cannot capture every transaction and so it is difficult to say how much farmland sold in each region. Who bought it or for what purpose is not examined in the FCC analysis. Wilks can say, however, that based on historical data, trends would suggest that farmers will continue to fuel the demand for farmland. Among many drivers for the increase in farmland value are weather conditions, commodity and livestock prices, interest rates, and intended land use. Supply, Wilks notes, continues to be a particular factor in Ontario. “In some regions,” she says, “supply of available farmland on the market does not meet the demand.” l Ontario farmland regions Region % change Value $/acre* Value range** Northern Eastern Mid Western Central East South West Central West Southern South East 3.2% 6.4% 8.9% 8.9% 1.7% 8.2% 0.0% 5.5% $3,700 $8,700 $11,200 $8,200 $19,100 $19,600 $13,600 $12,200 $2,000 – $5,000 $3,200 – $14,200 $7,300 – $20,300 $3,300 – $18,000 $12,000 – $25,800 $11,200 – $32,900 $8,200 – $20,000 $7,900 – $20,700 *FCC reference value $/acre. **The value range represents 90% of the sales in each area and excludes the top and bottom 5%. Ottawa ONTARIO GRAIN FARMER 23 JUNE/JULY 2021 Farmland on the outskirts of urban centres or within close commuting distance to larger urban areas also drew more demand. International real estate company Savills notes in a 2019 report that since 2002, global growth in farmland values was strong and in many parts of the world, it continues to increase. From 2002 to 2018, the firm’s Global Farmland Index recorded an average annualised value rise of 12 per cent for farmland, and “the emerging markets of Central Europe and South America witnessed the strongest growth over this time.” Savills’ experts note that North American farmland values witnessed an annualised increase of 6.1 per cent over that period, but with only a 1.6 per cent rise over the most-recent five years (2013 to 2018). Western Europe has seen a softening in average annualised values from 2013 to 2018, with the exception of Germany which showed an increase of 5.4 per cent over that period. Australia and New Zealand have recorded lower rates of growth in recent years, states the Savill report. However, Alex Evans, corporate communications manager at Dairy Australia notes that land values in that country “are currently very strong, driven by high returns in beef, sheep, and horticulture industries that compete for the same resources.” Savills states in the report that “with a rising global population and a new urgency on climate change responses in some developed economies, the long-term importance of food and energy security is not expected to abate. Globally, we expect the demand for productive farmland to increase.” FARMLAND VALUES – A GLOBAL LOOK