The above ratios were based upon expectations of producers’ revenues. But in any year, poor yields or weaker prices can raise the value of farmland relative to actual revenues.

Recent weather challenges made farmland more expensive when measured against actual gross revenues. The ratio of the average farmland price to actual revenues per acre in Saskatchewan was 4.4 in 2019 vs. 4.1 when using expected revenues.

Using expectations helps to understand the value buyers and sellers assign to farmland based on earning potential. Consecutive years of lower-than-expected revenues may shift the buyers’ willingness to pay for farmland.