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COVID‐19 and Canadian farmland markets in 2020

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  • Chad Lawley

Abstract

Early evidence suggests that Canadian farmland values increased in 2020. Farming returns were not negatively impacted by COVID‐19 and it appears as though farming returns will be strong into 2021. Low interest rates in 2020 contributed to substantial farmland value increases in the last half of 2020. There is some evidence that the development component of farmland values increased in 2020. The future consequences of COVID‐19 on farmland values are unclear. Some economists suggest that future inflationary risks have increased. A return to inflation rates comparable to those experienced in the 1970s is unlikely, but if increased inflation does materialize it will put upward pressure on farmland values, while increases in nominal and real interest rates will push farmland values down. Les informations disponibles, à ce jour, suggèrent que la valeur des terres agricoles canadiennes a augmenté en 2020. Les rendements agricoles n'ont pas été négativement touchés par la COVID‐19 et il semble que les rendements agricoles seront solides en 2021. Les faibles taux d'intérêt en 2020 ont contribué à des augmentations substantielles de la valeur des terres agricoles au cours du dernier semestre de 2020. Certains éléments indiquent que la composante développement des valeurs des terres agricoles a augmenté en 2020. Les conséquences futures du COVID‐19 sur les valeurs des terres agricoles ne sont pas claires. Certains économistes suggèrent que les risques inflationnistes futurs se sont accrus. Un retour à des taux d'inflation comparables à ceux enregistrés dans les années 1970 est peu probable, mais si une inflation accrue se matérialise, elle exercera une pression à la hausse sur la valeur des terres agricoles, tandis qu'une augmentation des taux d'intérêt nominaux et réels va créer une pression baissière sur la valeur des terres agricoles.

Suggested Citation

  • Chad Lawley, 2021. "COVID‐19 and Canadian farmland markets in 2020," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(2), pages 291-298, June.
    • Handle: RePEc:bla:canjag:v:69:y:2021:i:2:p:291-298
    DOI: 10.1111/cjag.12283
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    References listed on IDEAS

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    9. Chad Lawley, 2020. "Potential impacts of COVID‐19 on Canadian farmland markets," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(2), pages 245-250, June.
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    Cited by:

    1. Alan P. Ker & Ryan Cardwell, 2021. "Introduction to the special issue on COVID‐19 and the Canadian agriculture and food sectors: Thoughts one year into the pandemic," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(2), pages 155-159, June.

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