Brenda O’Farrell
The Advocate

Here are a few highlights from the Farm Financial Health Report 2023-2024 issued by the Canadian Federation of Agriculture:

Farmland values see big jump

The value of farmland across Canada increased significantly in 2022, recording a 12.8-per-cent gain, the highest one-year jump in a decade, according to the report.

According to Farm Credit Canada, Canadian farmland values have increased on average 10 per cent annually over the last 10 years.

The largest jumps in farmland prices were seen in Ontario, where the average value of an acre of farmland hit $17,962 – 52.4 per cent more than the average price of $11,786 recorded in 2019.

In addition, average annual mortgage payments jumped a whopping 41 per cent in 2022, the CFA reports, far outpacing the average annual increase of 9.7 per cent recorded in the last decade.

Vegetable, fruit and pork producers suffering big losses

The growing financial pressures in the agricultural industry are affecting the various sectors in different ways, with some feeling the economic pinch more than others.

For example, Canada’s fruit and vegetable sector reported a 40-per-cent jump in production costs – including a staggering 72-per-cent increase in fertilizer cost since 2020. Increasing labour costs have of about 20 per cent have also had a significant effect, while shipping fees have climbed by as much as 42 per cent, the report claims.

This has resulted in 44 per cent of the country’s fruit and vegetable producers – as of last January – reporting they were selling their crops at a loss.

Also leading the pack of sectors hardest hit are Canada’s pork producers.

Hampered by “decreasing processor capacity and increasing non-tariff barriers to trade,” the report says many producers are suffering from losses of $40 to $50 a head.

Farm debt hits record

The total debt held by Canadian farms hit a new record in 2022  – $138 billion.

The impact of interest rate increases on a capital-sensitive industry can be staggering, the CFA report states. Borrowing rates also have a big influence on spending and investment decisions.

According to the statistics, farmers in Ontario, Alberta and Quebec hold the highest level of debt. Farms in Ontario lead the pack with $35.7 billion in collective debt; followed by producers in Alberta, who hold $29.8 billion in loans; and farmers in Quebec, who have $27.2 billion in loans, according to Statistics Canada.