It is interesting to step back from the extremely strong land market in the US Grain Belt and see what is happening elsewhere. The prairie provinces of Canada are a good place to look for farmland price trends, since agricultural production there is focused on grains, oilseeds, and livestock, albeit mostly different crops and economics.
The information reported here concerning land value trends in Alberta and Saskatchewan is provided by Serecon, an appraisal and valuation firm in Edmonton, Alberta.
Whereas US grain belt states saw a 12-31% increase in cropland values in 2021, Alberta and Saskatchewan increases were much more moderate at 4.75-6.5%. For the states closest to the provinces, US northern plains states had increases of 20-30%. The western provinces of Canada experienced a major drought that did hold buying activity and prices down in places. Otherwise, the value of good cropland was shown in Alberta by the fact that good irrigated cropland increased 12% during 2021 compared to flat or small increases for dryland.
Saskatchewan had the larger overall increase of 6.5% due to somewhat better weather and a limited supply of land for sale.
The land market in the two provinces reacted differently than in the US during the time period of 2018-2021. Over the past four years, Alberta farmland values increased from 3.5% to 9.25% a year and Saskatchewan 6.5% to 8.5%. Canadian values did not see a large increase in 2021 like in the US but had steady gains each year.
One reason Canadian farmland values may not react the same as in the US is that the Canadian and provincial governments handle the taxation of capital gains and estates differently than in the US. Another reason would be the different economic and risk factors in Canadian agriculture.