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Southwestern Ontario Land Values 2022 Edition Ryan R. Parker B.Comm, AACI, P.App, P.Ag
Table Of Contents Copyright © 2022 3 - Overview 5 - Change in Values 6 - Huron County 7 - Perth County 8 - Oxford County 9 - Middlesex County 10 - Elgin County 11 - Lambton County 12 - Kent County 13 - Essex County 14 - Bruce County 15 - Grey County 16 - Wellington County 17 - Parameters and Disclaimer 17 - Contact Page 2 4 - Southwestern Ontario Land Values
Overview Figure 1: Average 2021 to 2022 Change among all the Counties This report and all the contents of this report are proprietary and cannot be used in or for any type of presentation, appraisal, or separate study without written permission from the Author. Any violation of this copyright will be viewed as a direct infringement of the copyright of this report. To view the Full Disclaimer please refer to the last page of the Report. 2021 2022 25.65% 2010 2022 13.22% 2022 Median $23,077 T his past year, farmland values across the 11 Counties in Southwestern Ontario increased by 25.65%, which is eerily close to the 25.63% increase from 2020 to 2021. This 2 year period is the highest increase since 2011-2012 when the same area increased by 29.71%. The similarities between 2020-2022 and 2010-2013 remind us of the major factors that inuence farmland values in Southwestern Ontario and beyond. Both timeframes saw rapidly decreasing interest rates, with the 2009 recession being the former catalyst and the 2020-2021 pandemic being the latter. The other common element was signicantly elevated crop prices. Corn prices alone increased from an average of $3.96 per bushel in 2010 to an average of $5.64 per bushel in 2011-2012 (42% increase). Fast forward to recent history and corn prices increased from an average of $4.62 per bushel in 2020 to an average of $7.00 per bushel in 2021-2022 (52% increase) (source: OMAFRA new crop cash weekly prices). The correlation between farmland values and the interest rates-crop prices combination is undeniable. This correlation of course leads us to thinking of our current situation. Crop prices are relatively unchanged, although there has been some minor softening from the 2021-2022 highs. The bigger changes have come from interest rates which have risen rapidly since early 2022. Tripling of interest rates has been a shock to our senses given the relatively low level of interest rates in the last dozen years. However, land values have not yet responded to this increased borrowing cost. Farmland values have remained strong. It is my opinion that they will continue to be strong this year, albeit at a lower annual increase, given good crop prices and prior year surpluses. Perhaps the current inversion of the interest rate market (long-term rates lower than short-term rates) is hinting to a rather short-term elevation of rates. There remains signicant optimism in the sector given the past 10-15 year period of relatively good margins and this is why we see so many young people involved in agriculture. It is this type of environment that has strengthened land values over the same period, and I believe that strength can be sustained as our young producers learn to manage new risks on the way to buying that next perfect farm. Copyright © 2022 Figure 2: Average 2010 to 2022 Change among all the Counties Figure 3: Median 2022 Land Value Page 3 Ryan R. Parker, B.Comm, AACI, P.App, P.Ag
Southwestern Copyright © 2022 Page 4 Ontario Land Values Figure 1: Median 2022 Land Value for each County Figure 2: Median Land Value each year for the 11 Counties
Change in Values 2021 2022 25.65% Figure 3: Average Annual Change among all included Counties Figure 2: Average Annual Change Among All Included Counties Copyright © 2022 Page 5 Figure 1: Average Change from 2021-2022
Huron Figure 1: Median land values for Huron County each year from 2010 to 2022 Figure 2: Low and High land values for Huron County each year from 2010 to 2022 2021 2022 2010 2022 17.74% 11.92% 2021 Top Farm Cash Receipt $307,000,000 Hogs Source: OMAFRA 5 Year Average Crop Yields 171 Corn 52 Soybeans 90 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 6 (bushels/acre)
Perth Figure 1: Median land values for Perth County each year from 2010 to 2022 Figure 2: Low and High land values for Perth County each year from 2010 to 2022 2021 2022 2010 2022 34.01% 12.30% 2021 Top Farm Cash Receipt $303,650,000 Hogs Source: OMAFRA 5 Year Average Crop Yields 175 Corn 54 Soybeans 94 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 7 (bushels/acre)
Oxford Figure 1: Median land values for Oxford County each year from 2010 to 2022 Figure 2: Low and High land values for Oxford County each year from 2010 to 2022 2021 2022 2010 2022 17.66% 10.31% 2021 Top Farm Cash Receipt $296,670,000 Dairy Source: OMAFRA 5 Year Average Crop Yields 180 Corn 54 Soybeans 96 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 8 (bushels/acre)
Middlesex Figure 1: Median land values for Middlesex County each year from 2010 to 2022 Figure 2: Low and High land values for Middlesex County each year from 2010 to 2022 2021 2022 2010 2022 28.55% 13.36% 2021 Top Farm Cash Receipt $221,530,000 Corn Source: OMAFRA 5 Year Average Crop Yields 178 Corn 52 Soybeans 89 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 9 (bushels/acre)
Elgin Figure 1: Median land values for Elgin County each year from 2010 to 2022 Figure 2: Low and High land values for Elgin County each year from 2010 to 2022 2021 2022 2010 2022 36.06% 14.92% 2021 Top Farm Cash Receipt $130,930,000 Corn Source: OMAFRA 5 Year Average Crop Yields 176 Corn 50 Soybeans 88 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 10 (bushels/acre)
Lambton Figure 1: Median land values for Lambton County each year from 2010 to 2022 Figure 2: Low and High land values for Lambton County each year from 2010 to 2022 2021 2022 2010 2022 10.69% 14.69% 2021 Top Farm Cash Receipt $160,970,000 Hogs Source: OMAFRA 5 Year Average Crop Yields 177 Corn 50 Soybeans 80 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 11 (bushels/acre)
Kent Figure 1: Median land values for Kent County each year from 2010 to 2022 Figure 2: Low and High land values for Kent County each year from 2010 to 2022 2021 2022 2010 2022 27.72% 11.11% 2021 Top Farm Cash Receipt $212,130,000 Field Vegetables Source: OMAFRA 5 Year Average Crop Yields 185 Corn 53 Soybeans 92 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 12 (bushels/acre)
Essex Figure 1: Median land values for Essex County each year from 2010 to 2022 Figure 2: Low and High land values for Essex County each year from 2010 to 2022 2021 2022 2010 2022 35.93% 11.69% 2021 Top Farm Cash Receipt $964,120,000 Greenhouse Vegetables Source: OMAFRA 5 Year Average Crop Yields 175 Corn 52 Soybeans 77 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 13 (bushels/acre)
Bruce Figure 1: Median land values for Bruce County each year from 2010 to 2022 Figure 2: Low and High land values for Bruce County each year from 2010 to 2022 2021 2022 2010 2022 16.53% 16.13% 2021 Top Farm Cash Receipt $203,860,000 Beef Source: OMAFRA 5 Year Average Crop Yields 164 Corn 48 Soybeans 87 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 14 (bushels/acre)
Grey Figure 1: Median land values for Grey County each year from 2010 to 2022 Figure 2: Low and High land values for Grey County each year from 2010 to 2022 2021 2022 2010 2022 36.94% 16.62% 2021 Top Farm Cash Receipt $160,630,000 Beef Source: OMAFRA 5 Year Average Crop Yields 155 Corn 46 Soybeans 84 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 15 (bushels/acre)
Wellington Figure 1: Median land values for Wellington County each year from 2010 to 2022 Figure 2: Low and High land values for Wellington County each year from 2010 to 2022 2021 2022 2010 2022 20.32% 12.34% 2021 Top Farm Cash Receipt $223,960,000 Dairy Source: OMAFRA 5 Year Average Crop Yields 167 Corn 50 Soybeans 89 Winter Wheat Source: OMAFRA County Copyright © 2022 Page 16 (bushels/acre)
Parameters This study has been completed to provide information on agricultural land values in the general Southwestern Ontario region. The Counties of Huron, Perth, Oxford, Middlesex, Elgin, Lambton, Kent, Essex, Bruce, Grey and Wellington have all been analysed in this report. Only sales that occurred in 2022 were selected for the 2022 study. The majority of the sales chosen had no building improvements (vacant land), with the exceptions being minimally improved properties (i.e. older house and shed) which have had the value of the improvements extrapolated. Also, the sales utilized were considered to be used solely for farming purposes. The sales have been analysed on a per tillable acre basis, as this rate is believed to be the most accurate reection of the value of agricultural land. In stating land values in this report, the median unit of measurement was used rather than the mean, as the median tends to better protect against outliers in the sales data. The same study was completed from 2010 to 2021, with those results also shown in this report. Disclaimer The information contained in this report was obtained from sources believed to be reliable. Certain information in this report has been accepted at face value; especially if there is no reason to doubt its accuracy. Certain empirical data required interpretive analysis pursuant to the objective of this report. However, I have not veried its accuracy and make no guarantee, warranty or representation regarding it. The specic sales data provided is subject to the possibility of errors, omissions, mistakes in calculation of total and tillable acre sizes, as well as error in reported sale price and/or sale date. Although an attempt has been made to nd every pertinent sale in the areas described, it is not possible to conrm that this is the case. This report and all the contents of this report cannot be relied on for any nancing, accounting, litigation, expropriation, and/or any other use without written permission from the author. This report and the studies were completed as an informative tool and were completed independently for no particular client. This report and all the contents of this report are proprietary and cannot be used in or for any type of presentation, appraisal, or separate study without written permission from the author. Any violation of this copyright will be viewed as a direct infringement of the copyright of this report. Ryan R. Parker, B.Comm, AACI, P.App, P.Ag Partner and Agricultural Appraiser at Valco Consultants Inc. (519) 709-3088 rparker@valcoconsultants.com