Ontario’s farmland values and rental rates

University of Guelph researchers share survey results on the province’s 2018 figures

By Kate Ayers

Staff Writer
Farms.com

Producers across Ontario participated in a farmland value and rental rate survey examining average monetary values for land in different regions of the province.

In total, 1,769 people voluntarily participated in the online survey between Jan. 21 to Feb. 10, 2019. Respondents answered questions related to Ontario farmland, farmland values and rental rates for 2018, a University of Guelph report said.

Land values and characteristics can vary within regions, so results reflect an average price for average-quality land.

The greatest number of respondents identified as farmland owners and the second-highest category of participants was active farmers. However, the categories are not mutually exclusive.

The survey also collected some information on respondent characteristics. Some of the highlights included:

The report outlined the median typical cash rent and price per tillable acre for average-quality cropland in each provincial region. 

In 2018, cash rent per tillable acre in the province ranged from $50 in five counties, including Renfrew and Prince Edward, to $300 in Huron, Oxford and Perth counties. The price per tillable acre ranged from $3,000 in the United Counties of Leeds and Grenville to $65,000 in Peel Region, the report said. Land values for each region can be found here.

In addition, researchers calculated rent/price ratios, known as the capitalization rate or “cap-rate,” the report said. These ratios are an approximation of net-income divided by property value. Farmers can use these values to compare and assess their returns on farmland.

Most respondents (48.4 per cent) expect that, over the next 12 months, farmland prices will stay the same, while 29.2 per cent of respondents expect prices to increase.

The survey also asked respondents for their perceptions of the percentage of regional farmland sales producers made in the past year. While participants’ opinions varied by region, they reported the median percentage of farmland sales to farmers was 80 per cent. The perceived percentage of farmland sales made by farmers ranged from 5 per cent (Region of Peel) to 100 per cent (Perth County).

The more farmland a producer owns, the more land he or she is likely to rent, lease, cropshare or custom farm, the researchers found.

The full report can be found on the Ontario Federation of Agriculture’s website and results from the past three years are posted on the Ontario Agricultural College’s website.