For generations, owning farmland in Ontario has represented stability, prosperity, and long-term wealth. Unlike stocks or cryptocurrencies, farmland produces something the world needs every day. It’s a retirement fund you can walk on.
But if you’ve tried to buy, expand, or help your kids get started in the last five years, you know the ground has shifted — literally and financially.
So are we in a farmland bubble that’s about to pop, or is this just the new price of admission to farm in Ontario?
The Explosive Run No One Saw Coming
To understand today, you have to remember 2020-2023.
Southwestern Ontario is home to some of Canada’s most productive farmland, and a “perfect storm” of low interest rates, stretches of high commodity prices and relatively good weather drove prices to dizzying heights. In some parts of southwestern Ontario, values jumped by about 60 per cent between 2020 and 2023.
Farm Credit Canada tracked it:
- 2022: Ontario farmland up 19.4%
- 2023: Up almost 11% — cooling to about half the phenomenal rate of 2022
Soils that can support specialty crops like vegetables and ginseng, urban pressure and land purchases for future development also fuelled increases in Ontario farmland values. That baseline period is often quoted, but it’s outdated as a pricing guide today — many AI-generated sites still quote $3,621/acre for northern Ontario to $17,561/acre for the southwest as if they’re 2024 prices, or claim a 20-30% crash in 2024. Neither is true.
If you owned during that run, you felt rich. If you were trying to get in, you felt locked out.
The Plateau: 2024-2025
There has NOT been a crash. There has been a hard plateau.
Here are the real numbers:
2024:
- First half: Ontario recorded a lower increase at 2.1%, with PEI at 1.7%
- Full year: Ontario cultivated farmland increased by 3.1%, after 10.7% in 2023 and 19.4% in 2022
2025:
- First half: Ontario and British Columbia recorded no change, highlighting the uneven nature of the market
- Two numbers you will see quoted that confuse people: Valco Consultants, who appraise 11 counties in deep southwestern Ontario based on verified arm’s-length sales, pegged the average at $27,258 per acre in 2025, up from $26,530 in 2024 — a 2.7% rise. FCC’s reference value for the broader southwestern region was $33,700 per acre in 2024 — about 25% higher. The gap is methodology: Valco is a pure sales average for 11 farm counties, FCC is a modeled reference that includes higher-value parcels near urban fringes and specialty-crop soils (vegetables, ginseng) that trade for $40k-$50k+. Neither is wrong — if you’re buying cash-crop ground near Sarnia-Lambton, use Valco; if you’re buying mixed-use near Hamilton/Niagara, FCC is closer to what you’ll see listed.
The University of Guelph’s annual survey says it even more plainly: steady farmland prices and little change in rental rates, which means no improvement in Ontario’s relatively low rent-to-price ratio.
Bubble Arguments: Why People Think It Should Pop
- Affordability is shot. In 2024, farmland affordability was the worst on record in both Ontario and Quebec. Both provinces had lower farm cash receipts compared to the previous year, accompanied by an increase in farmland values. For every $1 of farm revenue in Ontario, $0.17 now goes toward farmland debt payments — meaning the annual principal + interest on a newly purchased parcel — the most challenged ratio in the country. In other words, 17 cents of every dollar you gross is already spoken for just to service the land loan, before fuel, seed, or taxes.
- Rent doesn’t keep up. In Ontario and Quebec, average farmland value growth was modest in 2025, and rent-to-price ratios remained essentially unchanged. In the Prairies, rental rates did not increase at the same rate as rising land values either. When rent can’t justify the price, that’s classic bubble math.
- Urban money isn’t farm money. A lot of the price pressure around Sarnia, Chatham-Kent, and the GTA commuter belt isn’t coming from farm income at all — it’s development expectation, estate buyers, and investors who reshaped residential real estate now moving into agriculture.
New Normal Arguments: Why It Probably Won’t Crash
- There is almost nothing for sale. FCC’s chief economist J.P. Gervais keeps saying the same thing: “Demand for farmland remained strong in the first half of the year regardless of lower commodity prices”. Limited supply + lower borrowing costs sustain high prices.
- No forced sellers. Unlike 1980s, most Ontario farms aren’t highly leveraged. Owners can sit on land rather than sell at a loss.
- Ontario dirt is world-class. Tile-drained Class 1 land within 2 hours of Toronto will always have a floor under it because you can’t make more of it.
What This Means For You
If you own and farm: Don’t budget on another 20% year. Budget on 0-3%. Your best defense is staying in the Farm Property Class Tax Rate Program — MPAC must assess it as farmland, you must have an active farm business and a valid Farm Business Registration number. That keeps you at 25% of residential tax rate. Lose that, and the tax bill alone will make you feel like it’s a bubble.
If you’re trying to buy your first 100 acres: The new normal price in prime Lambton, Middlesex, Kent is $27k-$34k per acre. That means $2.7M for 100 acres before a shed or a tractor. Most young farmers are now buying 25-50 acres and renting the rest — cashflow advantage of renting over purchasing has stabilized and in many counties, renting wins.
If you’re renting out: You have leverage, but not as much as you think. Rental rates have lagged values, so pushing rent too high just pushes good tenants to another concession.
Final Thought
This isn’t 2008 housing. It’s not going to halve overnight. It’s the shift from a market priced on emotion and cheap money (2020-2022) to a market priced on what the land can actually earn (2024-2026).
For those of us who want our kids to farm around Sarnia, that new normal still feels pretty bubble-like — because when affordability is worst on record, the difference between a bubble and a new normal doesn’t matter much at the bank.
The land isn’t going anywhere. The question is whether the next generation can afford to stay on it.
Sources: FCC Farmland Values Reports 2023-2025, Valco Consultants SW Ontario Land Values Report 2025, University of Guelph Farmland Value and Rental Value Survey, CBC Means & Ways analysis of 60% rise 2020-2023
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