Farmland values are accelerating faster than farmland rental rates, widening the gap between what producers pay to buy land and what they pay to rent it.
A new Farm Credit Canada analysis shows Canadian farmland values rose 9.3% in 2025, matching the increase recorded in 2024. However, rental rates did not keep pace. Canada’s average rent-to-price ratio fell to 2.35% in 2025, down from 2.5% in 2024 and 2.7% in 2020.
The rent-to-price ratio compares the cash rental rate per acre with the value of cultivated farmland per acre. A falling ratio means land values are rising faster than rental rates.
FCC said rental rates often lag land prices because many lease agreements are fixed for multiple years and adjust slowly. Rents are also limited by farm economics, as tenants must still cover production costs and earn a return at a time when commodity prices are weaker and input costs remain elevated.
The Prairies recorded the strongest farmland value gains in Canada, but rent-to-price ratios declined in Alberta, Saskatchewan and Manitoba because rental rates did not rise as quickly as land values. In Ontario and Quebec, where farmland value growth was more modest, rent-to-price ratios were largely unchanged from the previous year. Ratios in the Maritimes also softened.
Despite rising land values, renting remains an important way for farms to expand without taking on the long-term financial commitment of buying land. FCC said the cash-flow advantage of renting over purchasing has generally stabilized over the past three years.
In the Prairies, the advantage of renting was nearly unchanged in Saskatchewan and Manitoba in 2025, while Alberta saw the largest increase in Canada at $5 per acre. Since 2021, the rental advantage has increased by $87 per acre in Alberta, $55 in Saskatchewan and $92 in Manitoba.
Ontario and Quebec producers also continue to see better cash flow from renting than buying, although that advantage slipped slightly in 2025. Since 2021, Ontario’s rent advantage has increased by $442 per acre, while Quebec’s has risen by $255.
The full FCC analysis can be seen here:
https://www.fcc-fac.ca/en/knowledge/economics/2025-farmland-rental-rates
