WINNIPEG (MarketsFarm) — Fixed costs on farms continue to rise year-over-year, largely attributed to increasing land values and interest rates.
At the beginning of 2019, Farm Credit Canada reported that farmland values across Canada increased by an average of 6.6 percent during the previous year.
However, that’s not the main driver of fixed costs, according to Dave Sullivan, chief operations officer of Global Ag Risk Solutions. Machinery is the main driver of fixed farmland costs.
However, Sullivan predicted that machinery purchases will decrease in the years to come.
One notable trend is that equipment purchases have slowed down in recent years. Combine sales are down by as much as 27 percent.
FCC plans to release a report on 2019 Canadian farmland values in spring 2020.
