Farmland prices plateau after explosive run

Описание: After years of dramatic gains, southwestern Ontario farmland values have settled into a more level market, according to the latest Valco Consultants land values report.

Valco partner Ryan Parker has been compiling the Southwestern Ontario Land Values report annually since 2010. He says the recent slowdown was almost inevitable given shrinking margins on the crop side of the business. In 2025, farmland prices rose an average of 2.7 per cent, with the average acre in southwestern Ontario closing out the year around $27,258 — a modest climb compared with the rapid appreciation of previous years.

In this interview, Parker points to two core forces shaping the market: interest rates and commodity prices. “Any downward movement in rates always helps out land values,” he explains. However, weak commodity margins and broader macroeconomic pressures — including trade tariffs and U.S. protectionism — have tempered buyer enthusiasm, slowing growth.

The report also highlights distinct regional dynamics. Livestock-intensive counties such as Bruce and Grey maintained tighter values and stronger demand, buoyed by active livestock sectors and migration northward. In contrast, more crop-oriented areas such as Lambton saw downward pressure, with prices falling roughly 3.8 per cent in that county, reflecting softer demand and greater inventory.

Parker also sees market psychology at play: sellers who grew accustomed to fast-moving, high-bid markets in recent years may be pricing farms outside the range buyers are currently willing to pay.

Looking ahead, his outlook for 2026 is cautious. “I really do think we’re going to be level again.” With commodity prices expected to remain flat and interest rates the key swing factor, the farmland market — while no longer overheated — may be returning to something closer to its historical norms.

Website: https://www.realagriculture.com/
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