Wade Berlinic constantly receives calls from investors and farmers looking to buy farmland in Saskatchewan.
“We have an ag group here and each of us is hearing from somebody new every week that we’ve never heard from before,” said Berlinic, agriculture division director with ReMax in Yorkton, Sask.
“Frankly, we cannot get enough good, quality grain land to sell. The demand is far bigger than the supply.”
The activity at Berlinic’s office reflects a trend in many parts of Saskatchewan.
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Farm Credit Canada found in its most recent report that farmland values jumped 11.6 percent across the province in the first six months of 2011.
The report determined that farmland values increased 7.4 percent across Canada from Jan. 1 to June 30, 2011. Every province saw gains, with Saskatchewan prices increasing the most, followed by Ontario, which gained 6.6 percent.
The 11.6 percent increase represents the largest gain ever for Saskatchewan farmland values, said Cathy Gale, FCC valuation manager in Regina.
“We’ve been tracking this since 1985. It’s the largest six-month increase (for Saskatchewan).”
Farmland values jumped 2.7 percent in the province in the second half of 2010 and 2.9 percent from Jan. 1 to June 30, 2010.
The gains in Saskatchewan over the first six months of 2011 were exceptional when compared to other provinces: values increased 2.4 percent in Manitoba and four percent in Alberta.
Put in absolute dollars, Berlinic said high-quality grain land in the Yorkton area is now selling for $1,000 to $1,200 per acre. In other areas of the province, including the Regina plains, land is going for $1,200 to $1,500 per acre.
However, prices are still low compared to other provinces, which is why Berlinic is a busy man these days.
“We’re seeing local farmers, distant farmers, farmers out of province, people out of country, coming to buy it,” he said. “The same for investors. Not only local investors, but from a distance and out of province as well …. It’s the combination of everything that’s never been seen before …. Right now, every different buyer type is active.”
Gale said the Saskatchewan gains are driven by higher commodity prices and low interest rates. Farmers are also feeling more hopeful, she said.
“We know a lot of people are expanding (their farms),” Gale said.
“We do some of our own surveys … and a significant number of our customers … think that farming is going to be better in five years than it is right now.”
Saskatchewan’s thriving oil and gas industry is another factor.
Gale said more jobs, people and economic activity in places like Estevan and Kindersley put upward pressure on land prices because folks are buying acreages or a quarter-section of land to live on.
“We’ve got the oil and gas influence on both sides of the province now.”
Gale said Saskatchewan land prices might not jump 11 percent or more in future six-month periods, but it’s hard to imagine that prices will drop soon because land in the province remains undervalued compared to the rest of Canada.
“Our dollar per acre isn’t gigantic. That’s why when you look at a percentage change, it looks big,” she said.
“There’s no reason to think, right now, that values won’t (continue to) increase.”
