Farmland prices are skyrocketing in Sask. How will that impact the province's family farmers?

Third-generation family farmer Darren Kress is struggling to expand his 2,000-hectare (roughly 5,000-acre) grain and cattle operation just outside of Odessa, Sask.

That's because farmland is becoming more expensive to buy or rent, he says.

"Since my brother and I have started farming, it has been about 12 years now, and right from the start, it was always tough, [but] the price of farmland has gone up every year since then," Kress said. 

"What you once thought was a high price, it only got higher."

This past year was especially tough for farmers looking to buy new land in Saskatchewan.

According to Farm Credit Canada's 2023 report, the average price of farmland in the province shot up 15.7 per cent last year, with the strongest uptick reported in the east-central Saskatchewan, where the increase was 20.8 per cent. 

Prices were highest for irrigated land in west-central and southwest Saskatchewan, averaging $6,500 per acre (or more than $16,000 per hectare), according to the report.

Kress said he isn't alone in feeling the impacts of the increased cost to run a family farm. 

In talking to other small farm owners, "the consensus is … land prices are high and we can't afford them," Kress said. 

He has mixed feelings about the value of farmland increasing at such a rapid rate. He learned how to farm from his father — who will benefit from selling his land while prices are high — but he thinks about whether those prices will deter his kids from continuing the family tradition. 

"Since we started farming, the land that my dad owns here has gone up 10 times the value since he bought it," Kress said. "Will we see it 10 times the value of that in another generation? I don't know."

Corporations buying up land: report

According to Re/Max Canada's 2024 commercial real estate report, values are being driven to new heights as large farming corporations buy up more land.

But Ian Boxall, president of the Agricultural Producers Association of Saskatchewan, said there's confusion around corporate farms in the province. 

"I don't think we can dictate or put parameters around what the size of a farm looks like. I have neighbours that are family farms that farm 20,000 to 30,000 acres," Boxall said. 

"They're still a family farm, they're still a neighbour. They've had the opportunity and the ability to expand, and it's good for them, right?"

Boxall said he's comfortable with farmland being more expensive, as long as Saskatchewan farmers are the ones driving up the price. He encouraged older farmers who are selling land to consider selling it to a younger farmer, rather than the highest bidder. 

"My issue is if it ends up being outside Saskatchewan money that's coming in to buy this farmland," Boxall said.

"I think we have a lot of great young farmers of every size coming up in this province, and I would like to see it stay within the borders of our province."

Jeff Chapple, the owner of Re/Max Revolution Realty, said increased farmland prices will help strengthen the province's economy.

"I think it creates healthy competition in the marketplace," Chapple said. "Saskatchewan has been very undervalued as far as farmland prices for a very long time."

The province is "in a catch-up mode right now, just to get back on base with the rest of the country," he said.

The increased land values will help retiring farmers cash in on their land, Chapple added.

"You're definitely going to get a higher price than you would have 10 years ago. That's without a doubt."

Limited farmland on the market

Cost isn't the only thing holding Kress back from expanding his operation. There is also no land for sale around his farm in Odessa.

According to the Re/Max report, looking at the first quarter of this year, the supply of farmland is exceptionally tight in Saskatchewan, with the lowest number of properties listed for sale in years. 

Despite farmland becoming harder to buy, Kress remains optimistic his family farm can continue to prosper.

That's because of the mixed operation he runs, growing different crops and using technology to help him make the most of the land he does have.

"We're able to produce more for the world on less land, and I think that's one of the things you can do to help out for the next generation [of farmers]."

Kress said he won't be selling any of his farmland anytime soon.

"I feel that the future of farming is great. If I didn't think it was great, I wouldn't be farming right now. I'd be doing something else."