Here's what's driving up the cost of Sask. farmland

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Limited land availability is pushing farmland prices up in Saskatchewan more than anywhere else in Canada so far in 2023, a report from Farm Credit Canada (FCC) says.

According to the report, Saskatchewan saw farmland values rise anywhere from seven to 11.4 per cent in the first six months of the year.

The northeast part of the province has been seeing the highest demand, the report said, “leading to above-average growth relative to the rest of the prairie province.”

“Low precipitation has increased the appeal of heavy clay soils for moisture retention,” a news release said.

“Purchasing farmland is a very strategic decision for producers,” FCC’s chief economist J.P. Gervais said in the release. “They need to assess whether they can earn enough from the larger land base they’ve acquired and if not, whether other areas of the operation generate enough income to pay for the land.”

Following Saskatchewan, Quebec has seen the second-highest increase so far in 2023 at 10.6 per cent.

Nationally, farmland values have increased by an average of 7.7 per cent so far in 2023, FCC’s report indicated.

Moving forward, the report said farmland appreciation is expected to slow until current uncertainties surrounding Canada’s economic environment are no longer prevalent.