New research from Omnigence Asset Management has highlighted a significant link between Canadian farmland investment performance and long-term real interest rates. The study, titled “Real Rates and Canadian Farmland Returns: The Market versus Veripath Across Rate Regimes,” evaluates national farmland data from 1970 to 2025, offering insights into how different interest rate environments impact farmland valuation.
The analysis reveals that Canadian farmland appreciates at varying rates depending on the real interest rate. Notably, during periods when real rates were negative, average annual appreciation of farmland reached 15.2%. In contrast, appreciation fell to 9.7% with real rates between 0% and 4%, and plummeted to 1.2% when rates exceeded 4%. The study also points out that negative farmland price years only occurred when real rates were positive, with significant market downturns, notably between 1983 and 1992, happening during the highest-rate environments.
Omnigence’s research further compares the Veripath strategy’s returns with the broader market performance from 2008 to 2025, a period marked by real interest rates fluctuating from negative 4.0% to positive 3.1%. The Veripath strategy outperformed the market most significantly when real rates were between 0% and 4%, which Omnigence attributes to strategic asset selection and purchasing farmland below average productivity-adjusted prices. With current real rates around 1%, the market fits into this middle category.
Stephen Johnston, a director at Omnigence and the lead author of the study, emphasized the importance of long-term real interest rates as a framework for evaluating farmland performance, potentially offering more insight than inflation metrics alone. The findings aim to guide investment allocators in understanding how changes in rate environments can affect returns and the role of asset selection in performance outcomes.
This research provides historical context for investors looking to assess Canadian farmland opportunities under the current financial conditions. The comprehensive analysis is available upon request from Omnigence Asset Management, offering valuable insights for those interested in the intersection of real interest rates and farmland investments.
About Omnigence
Omnigence is a Canadian alternative investment platform focused on farmland, operational private equity, and secondaries with partner funds managing over $1.2 billion. The firm targets fragmented, unfinancialized investment theses where scale, operational complexity, or size constraints limit participation from larger participants and therefore value is more compelling.
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