It seems Alberta is no longer immune to the forces that have been flattening farmland prices in the other prairie provinces for the past few years.
Figures released by Farm Credit Corp. in the week ending March 31 show that land values in the province increased by just 1.5 percent in the last six months of 2000.
That’s a marked slowdown from the two previous six-month periods, during which prices increased by 2.8 and 3.5 percent respectively.
“Some of the same things that are affecting Saskatchewan in terms of high inputs and energy costs are affecting Alberta as well,” said Roy Hjelte, land market analyst for FCC.
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Those higher costs, combined with low grain prices, appear to be reducing optimism among farmers in the province, he said. Even though the number of listings is up, land is remaining on the market for longer periods and fewer sales are being made.
There are still pockets of buoyant prices, including areas where strong beef prices are generating demand for forage and pastureland, areas with lots of off-farm employment and parts of northern Alberta.
Hjelte said it’s not surprising that the steady growth experienced in Alberta farmland values would be showing signs of slowing down.
“They’ve had a pretty good run.”
He said land values in the province have been rising since 1994.
During that seven-year period, farmland values in Alberta as measured by FCC increased by a little more than 66 percent. Meanwhile, land values rose by 45 percent in Manitoba and 38 percent in Saskatchewan.
While the increase in Alberta farmland values slowed down in the last six months of 2000, the province still fared better than its sister prairie provinces.
In Saskatchewan, prices were down by 1.2 percent, marking the fourth straight period of declining values.
Hjelte said a significant amount of land is on the market, but not much is changing hands.
Buyers are being cautious given low commodity prices and higher input costs, while sellers are reluctant to sell for less than what they consider to be the going price.
“It’s a bit of a stand-off.”
One factor supporting prices is interest from buyers from outside the province, who can buy more land for the same amount of money elsewhere.
That includes Alberta farmers looking for pastureland.
“They can buy the same grazing capacity for considerably less money.”
Values down in Manitoba
In Manitoba, where prices have remained flat for the past two years, values declined by 0.3 percent. Demand was strong in areas where livestock expansion is under way, along with areas with special crops, close to irrigation and suitable for potato production.
Sales have been slow in grain producing areas.
In British Columbia, prices were up by 3.7 percent. In the lower mainland, land suitable for berry farms is increasing in value. Cropland in the Fraser Valley is stable, while grapeland prices are strong.
The market is slow in the northern interior, while in the Peace River area prices are stable to slightly higher.
Nationally, farmland values were 0.2 percent higher. Prices were up .2 percent in Quebec, 1.1 percent in Ontario, 4.4 percent in New Brunswick, 2.7 percent in Prince Edward Island, 1.6 percent in Nova Scotia and 3.6 percent in Newfoundland.
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The FCC analysis is based on a semi-annual appraisal of 245 benchmark properties across the country. The land parcels represent the prevalent class of agricultural soil in each census district. FCC appraisers estimate the market value using recent comparable arm’s-length sales.
