A new report by Farm Credit Canada (FCC) shows the national average for farmland values increased an average of 3.7 per cent for the first half this year.

The increase is in line with mid-year results over the past five years, which showed single-digit increases for the full year.

“Given the global economic situation during the first half of 2020, Canada’s farmland market is showing remarkable resilience in the face of adversity and uncertain times,” said J.P. Gervais, FCC’s chief agricultural economist. “Changes to production and marketing plans induced by the pandemic have had a definite influence on profitability, yet the demand for farmland remained robust.”

Alberta had the strongest increase at 4.9 per cent while Saskatchewan showed an increase of 4.2 per cent for the first half of 2020. Average farmland values have increased every year since 1993.

FCC says low-interest rates, the limited supply of farmland in the market and confidence among producers in the farmland market appear to be the main drivers behind the 2020 mid-year increase.

“Despite supply chain disruptions that have impacted some sectors, such as red meat, the pandemic has so far not significantly affected the agriculture land market,” added Gervais. “In fact, the grain, oilseed and pulse sectors have performed well in the first half of 2020, supporting the slightly higher rate of increase in Western Canada.”

Crop receipts (excluding cannabis) for the first six months of 2020 are 1.6 per cent higher than for the same period last year.