SASKATOON – Farmland prices across the Prairies and most of Canada increased during the first six months of this year.
Crop diversification and higher prices for agricultural products are responsible for the increase, said a Farm Credit Corporation official.
Farmland values in Manitoba increased by three percent from Jan. 1 to July 1, this year. During the same period, Saskatchewan farmland values increased by 4.1 percent and went up four percent in Alberta.
The Alberta growth is “reflecting the optimism that has returned to the agriculture industry,” said Roger Evert, FCC assistant vice-president for Alberta and British Columbia.
Read Also
Agriculture ministers commit to enhancing competitiveness
Canadian ag ministers said they want to ensure farmers, ranchers and processors are competitive through ongoing regulatory reform and business risk management programs that work.
Not a slowing trend
British Columbia’s increase of 3.1 percent is down from the previous six-month high of 8.8 percent. But the decrease should not be seen as a slowing trend, said Evert. In previous years, the value of B.C. farmland was primarily driven by growing cities purchasing neighboring farmland, he said.
“We are just seeing it moving back to being reflective of a normal economy,” said Evert.
As of July, the average price for B.C. farmland was $1,184 per acre, according to FCC reports. Manitoba followed with the next highest value at $430 per acre, followed by Alberta at $368 per acre and Saskatchewan at $249 per acre.
University of Manitoba agriculture economics professor Daryl Kraft is cautious about suggestions FCC farmland value percentages represent concrete changes to farmland prices in Manitoba.
“What we have seen for five, six years now is a pretty flat market. An observation that the average is three percent more than last year doesn’t convince me that it’s still not pretty flat.”
Steady growth
Kraft said he would have more confidence that prices are increasing if farmland value percentages jumped six or seven percent over the next year, or if farmland value percentages showed a steady growth over the next two to three years.
Kraft’s reservation is based on 10 years of below average farmland sales across the Prairies. With a lot of willing sellers around, Kraft said farmland prices will be stable until the excess land is purchased.
High canola and high grain prices “will have to continue for the next three to four years for that backlog of sales to clear,” said Kraft.
Nationwide, Prince Edward Island recorded the highest provincial increase in farmland prices at 9.7 percent. Nova Scotia and New Brunswick remained unchanged. Both areas have not seen an increase in land values since 1991. Ontario farmland recorded a 2.3 percent increase and Quebec saw a 3.3 percent increase in value.
