For most of the last decade, farmland conversations have focused on prices. Yields. Commodity cycles. Input costs. Land values moving steadily upward.
But lately, a different question has been gaining traction in agriculture: What happens if credit, not prices, becomes the constraint?
That question was at the heart of a recent discussion featuring Robert Andjelic, Canada’s largest farmland owner, who has been meeting directly with major lenders and financial institutions across the country. If you missed that conversation, you can watch it HERE.
The message wasn’t alarmist. It was observational.
And worth paying attention to.
The pressure isn’t coming from farms
One of the most important points to understand is this: Canadian banks aren’t tightening because agriculture is failing.
They’re tightening because risk is building elsewhere. A major theme raised was pressure coming from commercial real estate, where some lenders have been managing struggling loans by extending terms and adjusting payments, sometimes called “extend and pretend.” Whether or not you love that phrase, the concept is simple: When risk piles up in one sector, lenders often become more conservative elsewhere.
When banks adjust, they don’t always do it loudly.
They do it through:
bigger down payments (lower loan-to-value)
more conservative appraisals
longer financing conditions
more scrutiny of margins and cash flow
These changes often show up before stress appears in farm balance sheets.
Agriculture is resilient, but not immune
There’s no question agriculture is structurally different from many asset classes.
People need to eat. Productive land is finite. Farmland income resets annually. People don’t postpone food the way they postpone a vehicle purchase. And farm supply/demand adjusts annually as yields swing in different regions.
Those fundamentals help agriculture hold up during downturns. But resilience doesn’t eliminate risk, it just changes where the risk lives.
When capital becomes more selective, the market doesn’t stop functioning, it becomes more discerning about who can transact and how.
In plain language: the buyer pool doesn’t disappear, but buying power changes. That can slow the market, shift negotiating dynamics, and create bigger differences between well-capitalized buyers and financing-dependent buyers.
What this means for sellers
For landowners considering a sale, this doesn’t mean demand disappears. It means the buyer pool may become more segmented. Well-capitalized farmers, family operations with manageable debt, and investors using patient capital remain active.
Serious demand still exists, but financing-dependent buyers may be more sensitive to timing, structure and possession dates.
In this environment, preparation matters. So does strategy.
have lease and possession details clear
expect more financing conditions and lender involvement
consider whether broad exposure or targeted marketing best fits your goals
What this means for buyers
For buyers, especially farmers, the real risk right now isn’t land itself. It’s over-extension.
This is a good moment for clear-eyed math:
run your numbers on today’s interest rates
protect working capital
consider appraisal risk and financing timelines
prioritize purchases that strengthen the operation, not just expand it
If you’re investing in farmland
Farmland remains a compelling long-term asset. But like all real assets, outcomes depend on:
Entry price
Cost of capital
Time horizon
In periods like this, liquidity and discipline often create opportunity, not through distress, but through differentiation.
This isn’t panic. It’s positioning.
History shows that markets rarely change direction overnight. They shift gradually, through behaviour, not headlines.
Credit conditions tightening doesn’t mean agriculture is broken. It means assumptions deserve another look.
Clear eyes.
Good math.
Thoughtful decisions.
That’s how strong operators, and long-term landowners, navigate cycles like this.
The window for good decisions doesn’t close overnight, but it does narrow. In periods when capital becomes more selective, the advantage usually goes to those who ask questions early, not those who wait for certainty.
Understanding where you stand financially, structurally, and strategically, puts you in a stronger position no matter how the market unfolds.
If you’re considering a land purchase, sale, or transition, Murdoch Farm Team can help you evaluate your options with clear eyes and grounded market insight. No pressure, just perspective. We’re always available for a no-obligation conversation about your land, your timing and your goals.