Canadian producers are now dedicating a larger share of their grain and oilseed revenue to owned land payments than their U.S. counterparts, erasing what had long been a key affordability advantage for domestic farmers, according to a Farm Credit Canada analysis.
Authored by FCC senior economist Justin Shepherd, the analysis showed that in 2025, owned cultivated farmland payments in Canada accounted for 39% of grain and oilseed farm cash receipts. That compares with 33% in the U.S., reflecting how sharply Canadian land values have climbed in recent years.
(Although the calculation doesn’t include income from livestock or other sectors, it demonstrates that land costs as a percentage of grain revenues are comparable between Canadian and U.S. farmers, the FCC analysis said).
The shift comes even though Canadian cultivated farmland still sells for less on average than comparable U.S. land. The national average for Canadian cultivated farmland reached $6,900 per acre in 2025, versus $8,150 per acre in the U.S. But while U.S. cropland continues to trade at a premium, Canadian values have been rising more steadily and, in recent years, more quickly. Over the last decade, Canadian cultivated farmland appreciated by an average of 8.7% annually, compared with 5.6% in the U.S.
Canadian farmland values overall rose 9.3% in 2025, matching the national increase recorded in 2024. The makeup of those gains shifted by region, with Alberta, Manitoba, New Brunswick and Prince Edward Island posting stronger growth than a year earlier, while British Columbia showed the biggest slowdown. Land values continued to find support from limited farmland available for sale, slightly lower interest rates and the strong farm margins generated from 2021 through 2023.
The analysis argues that farmland appreciation remains closely linked to grain and oilseed margins from the previous season. When producers enjoy stronger margins and cash flow, they are typically in a better position to bid for land the following year. That relationship helps explain why land values continued to rise in 2025, even though margins in 2024 had already tightened from the highs of the previous three years. Tight land supply also helped keep values firm.
To measure affordability, the analysis used a formula based on mortgage costs for the financed portion of land and an opportunity cost applied to producer equity. It found that newly purchased cultivated farmland in Canada averaged $367/acre in 2025, while owned land costs were estimated at $143/acre. In the U.S., those figures were $381 and $127, respectively.
Despite the heavier payment burden, the analysis said most producers have so far maintained enough cash flow to meet their obligations, supported by strong equity positions and profits built in earlier years.
Still, with grain and oilseed margins tightening further in 2025, the outlook suggests slower growth in farmland values this year could actually help restore some long-term affordability in the Canadian farm sector.
Read the full analysis here:
https://www.fcc-fac.ca/en/knowledge/economics/farmland-values-anything-but-dirt-cheap
