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Are farmland prices too high? Exploring the rent‐to‐price ratio and farmer perceptions

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Listed:
  • Nicholas Bannon
  • B. James Deaton
  • Jamie Naylor
  • Alexander Scholz

Abstract

Approximately 50% of the farmer respondents to the 2023 Ontario Farmland Value and Rental Value Survey (OFVRVS) indicate that farmland prices are “too high” relative to fundamentals. The survey also asks respondents about rent and price information for a familiar parcel of farmland. We use this information to construct a rent‐to‐price ratio and then apply regression analysis to data collected from the 2023 OFVRVS. We find that the respondents in the lowest quartile of the rent‐to‐price ratio are associated with a 17% increase in the probability of indicating farmland prices are “too high.” Environ 50 % des agriculteurs ayant répondu à l'enquête de 2023 sur la valeur des terres agricoles et la valeur locative en Ontario estiment que les prix des terres agricoles sont “trop élevés” par rapport aux fondamentaux. L'enquête demande également aux répondants des informations sur le loyer et le prix d'une parcelle de terres agricoles qu'ils connaissent. Nous utilisons ces informations pour calculer un ratio loyer/prix, puis nous appliquons une analyse de régression aux données recueillies dans l'enquête de 2023 sur la valeur des terres agricoles et la valeur locative en Ontario. Nous constatons que les répondants du quartile inférieur du ratio loyer/prix sont associés à une augmentation de 17 % de la probabilité de juger que les prix des terres agricoles sont “trop élevés”.

Suggested Citation

  • Nicholas Bannon & B. James Deaton & Jamie Naylor & Alexander Scholz, 2025. "Are farmland prices too high? Exploring the rent‐to‐price ratio and farmer perceptions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 73(2), pages 147-154, June.
    • Handle: RePEc:bla:canjag:v:73:y:2025:i:2:p:147-154
    DOI: 10.1111/cjag.12387
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    References listed on IDEAS

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