Investors reshaped Canadian home real estate. Something similar is happening in agriculture
CBC
When asked if young, aspiring farmers ever inquired about buying his farm, Marcus Collinson just laughs.
"No young farmers are buying farms," he said, adding it's why he sold his four properties southwest of London, Ont., to an investor in May and June 2020.
The Toronto-based company that bought them is Bonnefield, Canada's first and largest farm real estate investment corporation. It holds more than $1.4 billion in assets across seven provinces, representing 140,000 acres (nearly 56,656 hectares) of farmland, according to its website.
The number, however, could be far higher.
According to Ontario land registry records, Bonnefield owns 464 farms across Ontario alone, including the four London-area farms Collinson sold to the company in 2020, along with the house he lives in, which he now leases back from the company.
Collinson, 64, wouldn't say why he sold to Bonnefield, but many farmers are confronted with tough decisions about their operations as the industry reaches a critical juncture.
As a whole, farmers skew older than the general population and the sector carried $146 billion worth of debt last year, according to Statistics Canada. That's placing immense pressure on those who till the land to confront the practical implications of their choices and the emotional weight of preserving a way of life that has defined generations.
"It's nice to own your own land. Of course it is," Collinson said. "Everybody wants to own their own home. Every farmer wants his own farm. Not everybody can afford their own farm. That's just the way it is."
If that sounds familiar, it is.
Experts say the economic forces now reshaping agriculture are similar to ones that have transformed residential real estate over the last two decades, with investors — from pension plans to well-to-do urban families — fuelling speculation and driving up real estate prices.
"Any time you increase the amount of buyers and increase the demand, it's definitely going to contribute to the increases in values," said Ryan Parker, an agricultural real estate appraiser with London-based, Valco Consultants.
In the 11 counties Parker monitors in southwestern Ontario, farmland values have risen 60 per cent from 2020 to 2023, to an average of about $35,000 an acre — a price that puts land acquisition out of reach for many.
"It's extremely difficult in our market right now for the small guys, for the new producer to be able to buy land. There's no doubt about that."
Parker said it might explain why a growing number of farmers are willing to sell to institutional investors like Bonnefield. Farmland values are high, some farm budgets are stretched and many farmers are looking to unlock equity in order to expand or even get out of the business altogether.
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