Farm Credit Canada (FCC) reports national farmland values rose 7.9 per cent in 2016, compared to 10.1 per cent in 2015 and 14.3 per cent in 2014.
"Levelling out of commodity prices and some challenging weather conditions may have taken some of the steam out of farmland values and hopefully this moderating effect will turn into a trend," said J.P. Gervais, FCC's chief agricultural economist.
Saskatchewan followed the national trend with higher overall values, but at a lower level than previous five years.
Provincial farmland values were up 7.5 per cent last year, which is down from 9.4 per cent in 2015, 18.7 per cent in 2014 and 28.5 per cent in 2013.
"It's not surprising that the increase in farmland values has slowed somewhat," said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan. "I think it's probably a healthy thing. Everybody can catch their breath a bit and see what the future brings."
There was quite a bit of variability within the province. FCC reports a robust gain of 16.6 percent in the southwest region. This is where a significant percentage of lentils are grown and the pulse crop had record prices in late 2015 and early 2016.
The flip side occurred in southeast and east-central regions where surplus moisture and a downturn in off-farm income were factors.
"Especially if you go in that southeast corner around Estevan and the impact of the oil industry. A lot of off-farm income in that energy sector does support some of the agriculture too. Moving north of that, we see things like even potash mining---off-farm jobs that are maybe not as strong as they were in the past."
Here is the annual percentage chance in farmland values by region:
North Western up 10.3 per cent North Eastern up 9.3 per cent West Central up 7.8 per cent East Central unchanged South Western up 16.6 per cent South Eastern unchanged