Farmland values increasing

REM – Real Estate Magazine
11 May, 2011 7:03 AM
by Jim Adair

Farmland values increasing

The average value of farmland in Canada increased by 2.1 per cent during the second half of 2010, following gains of three per cent and 3.6 per cent in the two previous reporting periods, says a new Farm Credit Canada (FCC) Farmland Values Report.

Farmland values remained stable or increased in all provinces, the report says. Prince Edward Island experienced the highest average increase at 3.2 per cent.

The highest average national increase was in 2008 at 7.7 per cent. The last time the average value decreased was in 2000 at -0.6 per cent.

“Canadian land values are strong and, looking at world markets in our current financing environment, there are factors in place that could exert further upward pressure on the price of farmland,” says Jean-Philippe Gervais, FCC senior agriculture economist. “Rising incomes and population growth in emerging countries is increasing the demand for ag commodities at a time when global cereal stocks are low, production conditions in some major grain producing countries could potentially be challenging and the availability of quality farmland worldwide is limited,” says Gervais.

According to a fall FCC Vision Panel survey, 26 per cent of the producers who responded planned to increase capital spending on land in 2011. Crop (33 per cent), poultry (32 per cent) and dairy (28 per cent) producers were more likely to state that they are planning to increase spending on land in the next year compared to other animal (21 per cent), hog (17 per cent) and horticulture (17 per cent) producers. Manitoba, Saskatchewan and Ontario producers are more likely to report that they are planning to increase spending on land compared to British Columbia and Quebec producers. FCC Vision Panel survey findings can be found at www.fccvision.ca/research.

The FCC Farmland Values Report has been published since 1984. It is available at www.farmlandvalues.ca.

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