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Manitoba was a different story with a year-over-year pastureland price increase averaging 18.5 per cent.

The full report is available on the FCC website. Also available is a document showing historical farmland values dating back to 1985. That report shows that farmland values actually decreased in most of the years from 1985 to 1992 in each of the three Prairie provinces. The FCC numbers show three more years of small declines in Saskatchewan from 1999 to 2001. From then on, the increases have been steady and often substantial.

Alberta’s biggest percentage increase was 17.4 per cent in 2007. Saskatchewan’s biggest year-over-year increase came in 2013 at a whopping 28.5 per cent. In both 2012 and 2013, the annual increase in Manitoba was 25.6 per cent.

If you bought land in northeastern Saskatchewan back in 2002, the average price in the region was $438 an acre. Twenty years later, the average land price was $3,000 an acre. In 2022 alone, that region saw a price increase of 24.2 per cent.

Not many investments have seen such a significant and sustained return. Only recently have GICs started to provide a respectable return and the best rates are still only around five per cent. If your mutual fund investments over the past year performed like mine, the money would have been better off stuffed in a mattress.

Let’s look at farmland from a landlord’s point of view. Cash rental rates are all over the map and are not publicly reported, but let’s assume the aforementioned $3,000 an acre land in northeastern Saskatchewan is earning a cash rent somewhere between $70 and $120 an acre. Even if farmland values cool down a bit to only a 10 per cent annual increase, that’s $300 an acre.

For most farmers, the majority and often the vast majority of their net worth has come from farmland. The farm is hopefully profitable, but the net worth increase is coming mainly from the real estate rather than the farming.

Canada Pension Plan exited its 100,000 acres plus of Saskatchewan farmland ownership in 2021/22. Some of the approximately 100,000 acres was sold to tenants or other farmers, but most was picked up by other investment companies. Some tenants feel they weren’t given a fair chance at the land.

No one can foresee the future with much accuracy, but so far, land prices have defied the rapid rise in interest rates, high input costs and the major drought of 2021. There’s tremendous pent-up demand from farmers wanting to expand their operations.

For anyone buying farmland over the past 20 years, it’s been a good investment. Over the foreseeable future, barring catastrophic economic events, most observers predict the continuation of a bullish land market.

Scott Shiels

Scott grew up in Killarney, Man. and has been in the grain industry for 30 years. He has worked with Grain Millers Canada for 10 years and manages procurement for both conventional and organic oats for their Canadian operation. Scott is a newly elected board member for Farm and Food Care Saskatchewan and sits on several other committees on both the organic and conventional sides of the oat industry. Scott and his wife Jenn live on an acreage near Yorkton, Sask. Find out more at www.grainmillers.com.