Will Robbins has been in the process of taking over his family farm southwest of Saskatoon.

The 43-year-old grows organic wheat, oats, lentils, peas and occasionally flax and mustard on 445 hectares of land near Laura, Sask.

In 1996, when he was still a teenager, prices in west-central Saskatchewan were on average $980 per hectare, according to Farm Credit Canada鈥檚 historical farmland values report.

Last year, they were about $7,410 a hectare.

Robbins said the massive price increases, which noticeably began to skyrocket 13 years ago, has given him pause on whether expanding the farm is doable or practical.

鈥淚f you鈥檙e a risk-averse farmer and see other risks increasing, like climate instability, it鈥檚 harder to think through a massive increase in your debt loads to finance land given the land is not likely to pay for itself over 15 years or 20 years,鈥� Robbins said in an interview.

鈥淟and prices haven鈥檛 been the determining factor (for not expanding), but it鈥檚 definitely dissuasive.鈥�

Farmland prices across the Prairies have grown for the past 20 years, but they took a marked jump in Saskatchewan in 2011 and have continued to see huge increases since then.

Prices in the province rose 15.7 per cent in 2023, the highest increase in Canada that year. A hectare sells on average for $6,670 to $16,060 depending on where it鈥檚 located and whether it has irrigation. Values in Manitoba and Alberta also fall within that range or are higher in some cases.

Farmers and analysts say the situation has made it difficult for younger producers to expand their operations and compete with large farms, which have continued to get larger.

Leigh Anderson, an economist with Farm Credit Canada, said it has been a challenge because young farmers tend to not have many assets to finance the purchase of more land.

鈥淚t鈥檚 harder for them to compete against a well-established farm or a farm that鈥檚 been around for multiple generations,鈥� Anderson said.

鈥淭hat asset base helps (big farms) expand because it鈥檚 large enough for them to absorb another section of land.鈥�

He said increasing prices over the last several years are due to strong crop revenues. Supply is also tight, with many parcels being sold before they make it to public listing websites.

The issue is also double-edged. While some young farmers struggle to get a foothold, older producers looking to sell can reap the rewards of higher prices.

鈥淔or producers beginning to talk an exit strategy, it鈥檚 encouraging to know their life鈥檚 work is going to return a good value to them when they do retire,鈥� said Bill Prybylski, who farms in east-central Saskatchewan and is vice-president of the Agricultural Producers Association of Saskatchewan.

鈥淚t鈥檚 both good and bad.鈥�

Prybylski operates on 4,450 hectares near Yorkton, Sask., growing canola, wheat, barley, oats, peas and lentils. He also has a cow-calf herd of 200 head. He said higher prices have been a mixed blessing: it鈥檚 difficult to expand, but the operation now has additional financial leverage.

鈥淚f 10 years ago somebody told me we would be paying the prices we are now, I would have thought them to be somewhat ridiculous. But it鈥檚 the reality,鈥� he said. 鈥淰alues have increased and we need to find ways to deal with it.鈥�

Some speculate how much influence land owned by out-of-province investors is driving up prices. A report from Re/Max Canada has noted large farming corporations have been buying land, causing values to spike.

Andr茅 Magnan, a University of Regina professor who researches investor-owned land, reported in 2018 there were 343,980 hectares owned by large institutions that aren鈥檛 family operated.

He said while it鈥檚 difficult to quantify the effect of investors, having more buyers in the market will cause prices to increase.

鈥淢ost sales are farmer-to-farmer. Investors are a minority,鈥� Magnan said. 鈥�(Investors) are newer players, newer actors Saskatchewan didn鈥檛 have 20 years ago.鈥�

Anderson said young farmers looking to expand can instead rent land, but the rental market is also tight. He said they could also set up purchasing agreements with older farmers, allowing them to eventually take over an operation.

Prybylski said the government could make tax changes that encourage those retiring to sell land to locals.

鈥淭here are farmers who鈥檝e retired who would gladly sell to a local farmer who would raise kids in the community and support local businesses, rather than someone outside the community just farming the land,鈥� he said.

鈥淐onvince retiring farmers (that) that鈥檚 the way to go.鈥�

Robbins said he doesn鈥檛 see today鈥檚 land prices worth the value in crops that would be produced.

鈥淚鈥檓 seeing my neighbours purchase land knowing it鈥檚 not going to pay for itself but feeling obligated to do so,鈥� he said.

鈥淔armers used to think of purchasing land as a capital investment in their farm and now they think of it as a way to rent land.

鈥淚f you own it and pay a mortgage instead of renting from someone else, they can鈥檛 pull the land from you. It鈥檚 a bad bargain but a bargain for stability, I think, for lots of farmers.鈥�

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Jeremy Simes, The Canadian Press