2020 REAL ESTATE UPDATE

Feb 01, 2020 | Phil Spoelstra, Broker, The Farm Ontario Team


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2020 brings about a new decade, and a sharp reminder it was already 20 years ago that we rang in the new century! Now that I have aged you, why not double down and remind you just how different things were before Y2K almost ended the world

2020 brings about a new decade, and a sharp reminder it was already 20 years ago that we rang in the new century! Now that I have aged you, why not double down and remind you just how different things were before Y2K almost ended the world.

Back in the year 2000….

  • an Ontario acre of land sold for an average of under $3000/acre
  • you had to milk your own cows
  • you had to drive your own tractor
  • your phone had real buttons (sorry if it still does)
  • fuel was $.68 per litre
  • $40 per unit of Broiler quota
  • no social media farm groups!
  • and lastly… hamburgers were made with…. hamburger


Times have definitely changed and much of it is good! Our real estate markets have clearly underwent some major moves since $3000 per acre averages in this province. Here are our thoughts for 2020, looking at a few of the major markets we work in regularly.

Hog:

2019 was one of the most volatile years for the hog market in some time. The 2020 outlook appears to be much better as relations improve with China regarding the import of hog products. The jury is still out as to whether that is because the Chinese like us again or are just plumb out of pigs! China imposed a ban in June 2019 on Canadian pork which was lifted again in November as the Chinese market is reportedly short between 20-30 million tonnes of pork on their annual demand of 50 million tonnes. The shortage in China along with the African Swine Flu is expected to last up to 3 years and could mean a strong market for Ontario producers during this period.

Dairy:

At the moment there is a shortage of ongoing dairy operations available on the market. There also remains a significant number of farmers looking for ongoing dairy farms for a variety of reasons, which should result in 2020 being a sellers’ market for dairy farmers. Strong demand for dairy farms may also drive the prices for quota on these ongoing farms higher than it has been in the past two years. One major market factor that is still somewhat unknown is the result of the United States–Mexico–Canada Agreement (USMCA) deal and how that will impact our milk production, as well as how the government will distribute the $1.31 billion that it plans to spend on compensating dairy producers. All in all it looks like a strong year for selling ongoing dairy farms.

Chicken:

2020 is predicted to experience more moderate growth in chicken consumption (2%) after more significant growth in 2017 and 2018. The spillover from the past few years is still evident, as demand remains strong for both ongoing chicken farms with quota as well as farms with functional one-and two-storey barns that buyers can fill with their own quota. Sellers are able to sell empty facilities and still get paid well for their chicken barns, providing they are in good repair and will comply with modular loading without too many renovations. 2020 should be another strong year for demand for ongoing chicken farms, as well as farms with empty facilities that could be used for chicken production.

Crop

Land in Ontario will no doubt remain relatively stable if livestock markets mentioned above are strong. We expect the aforementioned markets to remain stable and recent sales in the goat industry continue to point to a recovery in that market as well. We don’t expect any substantial increases in farm prices though. The last two to three years have offered moderate increases in land prices but our experience has been that the majority of markets in Ontario have seen prices hold steady rather than increase or decrease. We expect this to continue in 2020 with a few exceptions here and there. There remains a demand for land and we anticipate sales will remain strong, however, cash crop farms may take slightly longer to sell than they did in the past few years, depending on location.

Wishing you all the best in your 2020 and hope you have a safe and productive year!

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