In Saskatchewan, average farmland values jumped 10.2 per cent in 2017 after a 7.2% per cent increase in 2016.

This according to Farm Credit Canada's (FCC) 2017 Farmland Values Report.

FCC's Chief Agricultural Economist J.P. Gervais says this is a sign of a strong and stable agriculture economy.

The average value of Canadian farmland increased 8.4 per cent in 2017, following a gain of 7.9 per cent in 2016.

"With the steady climb of farmland values, now is a good time for producers to review and adjust their business plan to reflect variable commodity prices and slightly higher interest rates, assess their overall financial position and focus on increasing productivity,” Gervais said. “It’s also a good idea to have a risk management plan in place to protect your business against unforeseen circumstances and events.”

Gervais notes that some of last year’s average farmland value increase may also be a result of timing as most provinces recorded a faster pace of increase in the first six months of the year while interest rate increases didn’t occur until the latter half of 2017. He says recent increases in borrowing costs and expectations of further increases could cool the farmland market in 2018.

Gervais stressed that every farm operation is unique and there may be a strong business case for buying more land, but not without carefully weighing the risks and rewards.

“Farm operations need to be cautious in regions where the growth rate of farmland values has exceeded that of farm incomes in recent years,” he commented. “The good news is Canadian farms are generally in a strong financial position when it comes to net cash income and their balance sheets.”