After years of dramatic gains, southwestern Ontario farmland values have settled into a more level market, according to the latest Valco Consultants land values report.
Valco partner Ryan Parker has been compiling the Southwestern Ontario Land Values report annually since 2010. He says the recent slowdown was almost inevitable given shrinking margins on the crop side of the business. In 2025, farmland prices rose an average of 2.7 per cent, with the average acre in southwestern Ontario closing out the year around $27,258 — a modest climb compared with the rapid appreciation of previous years.
In this interview, Parker points to two core forces shaping the market: interest rates and commodity prices. “Any downward movement in rates always helps out land values,” he explains. However, weak commodity margins and broader macroeconomic pressures — including trade tariffs and U.S. protectionism — have tempered buyer enthusiasm, slowing growth.
The report also highlights distinct regional dynamics. Livestock-intensive counties such as Bruce and Grey maintained tighter values and stronger demand, buoyed by active livestock sectors and migration northward. In contrast, more crop-oriented areas such as Lambton saw downward pressure, with prices falling roughly 3.8 per cent in that county, reflecting softer demand and greater inventory.
Parker also sees market psychology at play: sellers who grew accustomed to fast-moving, high-bid markets in recent years may be pricing farms outside the range buyers are currently willing to pay.
Looking ahead, his outlook for 2026 is cautious. “I really do think we’re going to be level again.” With commodity prices expected to remain flat and interest rates the key swing factor, the farmland market — while no longer overheated — may be returning to something closer to its historical norms.
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Hi, I'm Bernard Tobin. Welcome to Real Agriculture. Today we're going to talk about land prices, specifically farmland in southwestern Ontario. We'll take a look at the latest southwestern Ontario land values report from Valco Consultants to get some insights on what happened to land prices in 2025 and what might be in store for farmland values in 2026. For more perspective, I'm joined now by Valco's Ryan Parker. Hi, Ryan. Hey, thanks for joining me.
Hey, no problem, Bernard. Thanks a lot for having me.
Hey, now, before we dig into the trends and the numbers, tell me about the report. You know, how does it come together?
Yeah, so I put this study together since 2010. You know, time flies, but it's, it's been a lot of fun to put together. It feeds right into my kind of daily work of appraising farms across Ontario and kind of started out as an idea from a client, colleague and kind of sprung from there. And it's been something from a high level to be able to keep an eye on land values across southwestern Ontario, get an idea of the trends. And it does give a little perspective, too, of if you see this factor or that factor, how's that going to play into things in the future as well? Right.
Right now, hey, from a price perspective, you know, what's the key takeaways from 2025? We saw some pockets of interesting activity, but overall it looks pretty flat.
Yeah, pretty level, you know, and I think that's really what we expected, too. We've had the last two years, three years now, we've had, you know, pretty slim margins in the crop side of things. And so, you know, that was bound to slow our increases down and to kind of, you know, take us back a little bit. You know, that 2020-2022 area in there was, was absolutely explosive increases every year. And so there was, there was going to be an end to that. It was just a matter of, a matter of time. And we're into that now where we're kind of just, just kind of levelling out, which again, makes, makes a lot of good sense for, for purchasers, for sure.
Yeah. Now overall up 2.7% average per acre, $27,200. $258. You know, Ryan, what were the key drivers from the market in 2025? Trade tariffs, US protection, commodity prices, I guess they all had to weigh pretty much pretty heavily on the market, for sure.
Yeah, I think, you know, you start with the two main things, or at least I start with the two main things, which are interest rates and commodity prices. Right. And so on the interest rate side, you know, again, we had a little bit of benefit here in 2025 with rates sliding down just a little bit. Any downward movement in rates always helps out land values because, you know, these farms are being purchased almost primarily by a debt facility. And so that helps us now on the commodity prices end of things. You know, wasn't a real pretty year following up a year before that. That wasn't that great either. And going into 2026 doesn't look that good as well. But that's really what probably has as big a reason as any as why we've. We've levelled out, you know, on the. Some of the bigger macro issues. Those, you know, tariff and US Protectionism, you know, they're there. And I think there is a worry for sure in some people's minds with regards to that as far as effect in single individual purchases across southwestern Ontario, you know, we got to keep an eye on it, but I don't know how much effect they've really had yet. You know, those types of macro items, if they affect interest rates, if they affect the exchange, if they affect commodity prices, then that'll affect land values. They don't usually just do it on their own because, you know, politicians are chattering about it.
Yeah, exactly. Hey, in southwestern Ontario, we, you know, we have counties that have a lot of intensive livestock versus, you know, counties that are primarily cash crop. What do you see from a livestock versus cash crop perspective?
Yeah, so the study this year too, I was actually a little bit surprised that we might see a bigger disparity between some of those core livestock areas and some of the straight crop areas. Just because what we've seen the last couple of years especially is a big divide on margins in those two sectors. Right. So generally our livestock producers have had some fairly decent years here, being able to put a few years back to back together. And usually when that happens, which we did see, you know, in those core livestock areas, that, that really helps demand for farmland. Right. And so. And some of those straight crop areas, which they tend to be in the very deep southwest, you know, southwest of London, along Lake Erie, where we don't have as much livestock down in there, you could definitely see it in the demand in the last two years, you know, definitely a little bit Longer to sell farms, some farms not selling, and more inventory available, obviously. But as we head north from London, you get up into that main livestock area, you know, things were still fairly tight values level, but I would say we had still a pretty good demand.
Yeah, speaking of demand, in the report, you note the number of land offerings and listings was up significantly, but the number of farms that did not sell was also way up. What's happening with demand? It sounds like buyers aren't willing to pay the price.
Yeah, I think maybe as big a part of that puzzle is anything is vendor expectations. Right. During COVID especially when land values were flying up, there was almost, it seem, seemed like no number that a vendor could, could list that wouldn't get matched by, by a buyer. Right. And so I think vendors quickly got used to that and thought, well, you know, what if somebody tells me it's worth 30 an acre, I'm gonna ask 40 and that's the way it's gonna go. And so, you know, with some of that, I think we do have some vendor expectations that are maybe, maybe a little bit out to lunch and are gonna have to readjust here. And I think, you know, the, the guys that are, the guys and gals that are selling these farms, you know, if they're, if they're pricing them right, I think a lot of times they are selling. But, but there is a fair bit of inventory out there right now. More inventory, I would say. Well, there definitely is more inventory in the, in the straight crop areas than there is in the livestock spots, but the farm's got to be priced right to sell. And honestly, you know, we're probably back. You know, you so quickly get used to that. Again, that Covid situation where we had land, you know, everything was just flying off the market within days over asking price, you know, 30 day closes, you know, that, that was not normal, but we get used to that fairly quickly. You know, I think back, we're back now to probably the same type of situation we would have had 15, 20 years ago with, you know, farms got. If it's going to get listed, maybe it's going to take three months to sell. So some of that, I think we're going to be back to a bit.
Of a normal now. It always, it's always interesting to look at specific pockets of farmland and specific counties. In your survey, a couple of things jumped out to me, ones that looked a little different than 2.7 average bump. You saw a 6% increase in prices in Bruce County. Would the livestock situation be driving that?
Yeah, There definitely would be a fair bit of that in Bruce county. That would be driving it. There's quite a bit of livestock up in there. All kind of different sectors of the livestock industry are up there. That would be one. The other thing is Bruce County, Grey and Bruce especially, they have been the fastest growing counties in southwestern Ontario here the last 15 years. You could probably go back the last 20. And a big reason for that is we have so much movement to the north. Right. So so many of the, of the farmers that are south of Grey Bruce, you know, looking for a place to go because they can't, you know, they're in, they're in pretty livestock dense areas now. Tough to get new farms, tough to expand, very pricey. Right. We have some values not all that far south of Grey Bruce, you know, that are 30, 40, 50,000 an acre. Right. So that, that land in Bruce county and Grey county, you know, very attractive to people of the south. And as we get a little warmer, we get a little better on varieties. You know, we can grow pretty good crops up there too. So some of that is the livestock sector. Some of it is just I guess an overall trend of the areas to the north catching up to the areas to the south.
Now on the flip side, we saw a 3.8% drop in the price for land in Lambton County. What's happening here?
Yeah, so a big thing in Lambton, I would say it kind of a bit of a bit a of of a window into what's going on in some of those straight crop areas. You know, in North Lampton we do have a fair bit of livestock up in there and values have just kind of been steady. But in South Lambton, you know, we got some soil type in there, a little inferior to the north for sure and a little harder than a lot of areas. And so down in there again, we have straight crop guys down in that neck of the woods. Just been under pressure from a demand side, right. Just farms available, but you know, it's got to be the right one to sell. And so that's had a little pressure on values.
Hey, final question for you about the year ahead. It looks like a tough year for farm profitability, especially on the cropping side. Are you seeing another flat year for the market ahead?
I really do, yeah. You know, I don't know. You know, my crystal ball has never been always perfectly clear, but that will be my guess is that we're going to be level again. You know, I think keeping an eye on the, on the two main things that are the easiest to focus on or the two main drivers to focus on anyways would be interest rates and commodity prices. It sure looks like commodity prices are going to be flat or stack and change. And on the interest rate side, maybe we get some help. Right. If the economy falters a little bit, maybe there is a little bit of a drop in interest rates. But I don't know if it's going to be enough to really shove us up, you know, really fast in land value increases. But again, that's maybe a good thing. Yeah.
Hey Ryan, where can farmers go if they want to cheque out more of the 2025 Vylco report?
Yeah. So we're gonna get it up on our website here shortly. So www.velcoconsultants.com or you're also more than willing to or more than more than able to email me directly. I can get you on the in the email list every year. So that's rparkerelcoconsultants.com and I get you on the list and then you'll get the year comes out.
Awesome. Well, Ryan, hey, appreciate you taking the time. Always great to have you on Real Agriculture.
Thanks a lot, Bernard, for the latest.
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