You’re richer than you think — and you owe more, too.

That could be the theme of StatsCan’s latest snapshot of farm equity, the number you get when subtracting farm debts from the value of assets.

If you had put all of the assets of every farm in Canada on the auction block at the end of 2020, you would have expected them to sell for a total of $679 billion, according to the federal agency’s estimates. That’s a $30-billion (4.6 per cent) rise from 2019.

And there’s no surprise where most of that increase came from.

“Farm real estate values, the largest component of farm assets, increased by $25.4 billion,” StatsCan said in its annual “balance sheet” report released in late June.

“Significantly higher commodity prices in the latter half of 2020, combined with strong demand for agricultural products and low interest rates all contributed to the increased value of farm real estate.”

In Alberta, total farm assets rose by just over $8 billion (to $183 billion) and virtually all of it, $7.6 billion, was from a jump in the value of land (now collectively worth nearly $146 billion).

But the liability side of the ledger also had some big-number increases.

Nationally, farmers collectively added $6.3 billion to their debt pile of $116 billion at the end of last year. Three provinces — Alberta, Ontario and Quebec — accounted for four-fifths of that, StatsCan said.

The total liabilities of Alberta farmers rose 6.3 per cent (to $26.5 billion) versus the national average of 5.8 per cent. Still that was the smallest increase since 2014 (on a national basis) and a couple of key measures of financial health showed improvements.

“Strong growth in net income in 2020 pushed the return on assets and return on equity up to near 10-year averages, following recent lows in 2018,” the agency’s report said.

However, the country’s leading ag lender put an asterisk on StatsCan’s report.

“The potential for higher interest rates is the darkest cloud shading recent news that farm debt in Canada recorded the smallest increase in six years,” Farm Credit Canada said in a release.

“We are now projecting record-high farm revenue in 2021, outpacing expected growth in farm debt outstanding of around six per cent,” said J.P. Gervais, FCC’s chief economist

But a sharp and sudden rise in interest rates could have “a significant impact on the ability of farm operations to service debt,” the FCC release said.

“With the level of debt in the farm economy, producers must be aware of the potential for higher interest rates and factor that into their risk management plans,” Gervais said. “While current low short-term rates are attractive, it may be appealing to lock in long-term rates at the current low levels.”

A sustained rise in inflation would push interest rates higher, but there’s a lot of discussion in economic circles these days about whether recent price rises are a one-off or a sign of what lies ahead. Gervais said the crystal ball is murky.

“On the one hand, current supply chain bottlenecks and strong consumer spending causing inflation could subside in the second half of 2021,” he said. “On the other hand, accumulated savings in the economy could further increase consumer spending and unleash permanent price increases that warrant higher interest rates.”

But farmers, at least on the grain and oilseeds side, are in a good place — demand is strong and “the overall balance sheet for Canadian agriculture remains healthy, despite the current uncertain times,” Gervais said.

“But producers need to understand their financial situation and build resilience into their business plans.”