The graph shows that the group that believes farmland prices are too high are primarily in the upper income category. Photo Courtesy of OFA
SOUTH DUNDAS – The Ontario Federation of Agriculture (OFA) held one of their regular “Lunch and Learn” webinars on Wed., Feb. 25, and the topic this time around was their annual Business Confidence survey. The results of the survey were presented by OFA economist Ben Lefort.
The survey seems to indicate that farmers across Ontario are holding steady rather than forging ahead, as rising input costs, tax concerns and ongoing economic uncertainty weigh on the sector. It examined a number of different factors.
While machinery purchases remain the most common investment among respondents, overall spending in key areas has fallen sharply compared to two years ago.
According to the survey, in 2023, 48 per cent of respondents reported buying new or used machinery. In 2025, that number dropped to 41.5 per cent. Similar declines were recorded in spending on precision agriculture technologies and new farm structures.
Younger farmers, those under 35 years, are leading adoption of advanced technologies such as precision agriculture, but the biggest investors are large, higher-income operations with the scale to justify returns on those investments.
Expansion activity also reflects that divide. Farmers in the highest income bracket were more than twice as likely to expand their operations in 2025 compared to lower-income groups. For most others, growth came through renting additional acres rather than purchasing land outright.
For the third year of the survey, more respondents reported their operations stayed the same rather than expanding or downsizing. Nearly three-quarters said their business held steady in 2025, up from about 68 per cent in 2023.
“That reflects the uncertainty of the business environment,” Lefort said, pointing to subdued investment and tempered expectations for growth heading into 2026.
Confidence in both the sector and individual operations remains below levels seen two years ago. However, farmers consistently express greater confidence in their own businesses than in the broader industry.
For 2026, 76 per cent of respondents said they were at least somewhat confident in their own operations, compared to 57 per cent who said the same about Ontario’s agricultural sector overall.
Lefort noted last year’s sharp dip in industry confidence coincided with trade uncertainty, including U.S. tariff threats following statements by President Donald Trump. While confidence edged up slightly this year, it remains below 2023 levels.
“There is a lot of concern about the current business environment,” Lefort said, “but operators have a high degree of confidence in their ability to weather the uncertainty.”
A strong majority of respondents, particularly those in the highest income bracket, believe farmland prices are too high relative to the income the land can generate. More than 90 per cent of farms earning over $500,000 annually said land prices in their area are too high.
Despite that, higher-income farmers are the most active buyers, while smaller operations are more likely to rent land if expanding.
For the third consecutive year, reducing farm taxes was the runaway top policy priority identified by members. Nearly 70 per cent selected it, far ahead of other issues.
Among specific tax concerns, property tax ranked first by a wide margin. Three-quarters of those who flagged taxation cited property taxes as their primary worry.
Lefort said OFA advocacy over the past decade has focused heavily on municipal farm tax ratios, particularly following sharp increases in farmland assessments. While assessments have been frozen at 2016 levels in recent years, he cautioned that a future reassessment could reignite pressure on farm property taxes.
Other top five policy priorities for 2026 include encouraging Ontarians to buy local food, addressing energy costs, supporting succession planning and reducing interprovincial trade barriers.
Beyond policy asks, the biggest day-to-day concern remains rising input costs. Nearly 80 per cent of respondents selected it as a top issue — consistent with the past three years.
Total farm expenses in Ontario have climbed nearly 54 per cent between 2018 and 2024, with the sharpest jump occurring between 2021 and 2022.
Commodity prices and insurance costs ranked second and third among concerns. Insurance in particular has risen steadily as an issue, with nearly half of respondents citing it in 2025. In Northern Ontario, insurance ranked as the second-highest concern, even ahead of tariffs and trade access.
Several notable differences were revealed in regional breakdowns. Northern Ontario farmers, for example, reported the highest levels of confidence in both their own businesses and the sector overall. They were also significantly more likely to engage in direct-to-consumer marketing and identified encouraging consumers to buy local food as a top priority, edging out tax concerns in that region.
However, northern producers are less likely to adopt digital agriculture technologies, largely due to limited broadband infrastructure. Lefort said survey data show a strong link between access to reliable internet and adoption of precision agriculture tools, and, in turn, business expansion.
Farmers who invested in digital technologies were more than twice as likely to be expanding compared to those who did not.
Lefort emphasized that the survey plays a direct role in shaping OFA’s advocacy priorities, from pushing for changes to the federal Advance Payments Program to addressing insurance coverage gaps and municipal tax ratios.
“The results of this survey really do matter,” he said. “It’s your chance to tell us what the most important issues are, and that directly reflects the work we do.”
The 2026 survey is expected to launch later this year, with OFA encouraging broad participation to ensure strong regional and commodity representation.
