A Farm Credit Canada analysis has revealed a slight increase in the national rent-to-price ratio for cultivated farmland in 2022.
The national rent-to-price (RP) ratio in 2022 was 2.55%, compared to 2.5% in 2021, FCC said in a release Monday. A ratio trending lower suggests that cash rental rates are appreciating at a slower pace than land values, while an increase in the ratio indicates that rental rates are increasing faster than land values. Obtained by crossing cash rental rates and the Farmland Values Report data, the rent-to-price ratio can help producers make decisions around buying versus renting land.
The RP ratio decreased from last year in almost all provinces, except for Alberta and Saskatchewan, where it increased to 2.6% from 2.2% and 3.1% from 3.0%, respestively. On the other hand, the RP ratio for Manitoba eased to 2.4% from 2.5%, and fell to 1.4% from 1.45% in Ontario.
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