Farmland values released

Farm Credit Canada has released its Farmland Value Report, highlighting average changes in land values for each province and nationally.

The report, which looks at land values for the last six months of 2009, found that across the nation, farmland increased 3.6 per cent between July and December. This follows increases of 2.9 and 5.6 per cent in the previous two reporting periods.

In 1985, FCC established a system of 245 benchmark farm properties to monitor variations in bare land values across Canada. Since 1990, benchmark properties have been appraised twice a year. These selected parcels represent the most prevalent classes of agriculture soil in each census district. Changes in value are weighted based on improved farmland per area.

Farmland values remained the same or increased in each province. Manitoba experienced the highest average increase at 5.9 per cent.

Three provinces experienced similar average increases: Alberta with a 3.8 per cent increase, Saskatchewan with a 3.4 per cent increase and Ontario with a 3.3 per cent increase. New Brunswick followed with an increase of 2.5 per cent in farmland values, Nova Scotia with a 1.4 per cent increase and Quebec seeing a 1.3 per cent increase.

Farmland values remained steady in British Columbia, Prince Edward Island and Newfoundland and Labrador.

Here is a summary of the farmland values report. Full details are available at http://www.fcc-fac.ca/en/AboutUs/Media/news20100412_e.asp.

British Columbia

British Columbia farmland values remained stable over the last six months of 2009.

The unchanged value of farmland in the last half of 2009 was due to limited market activity throughout the province, partially due to the economic crisis on the forestry and oil industries, usually major sources of income for investment in B.C. agriculture. Agri-tourism has also dropped. The result slowed market activity since vendors are accustomed to several years of rising prices and aren't willing to lower prices, and buyers are cautious.

Central Canada

In Ontario, farmland values increased an average of 3.3 per cent during the second half of 2009. Farmland values in Ontario have been rising since 1993.

Land demand was fuelled by cash crop operations. Worldwide supply, demand for grains and strong growth in the biofuels sector contributed to increased crop prices. Local livestock farmers and international buyers also had land demands.

Relocating urban dwellers purchasing or developing hobby farms continued to have a marked effect on land values in southern Ontario. This trend is expected to continue in the foreseeable future. Land rental rates also increased as land owners seek a share of the cash crop revenue increases.

Quebec farmland values increased an average of 1.3 per cent during the second half of 2009. Quebec is the only province where farmland values have remained stable or have risen since 1985.

Significant gains were reported around Montreal and the Montérégie areas, where grain production is prevalent. Quality land put up for sale in these areas quickly found buyers. Values around the rest of the province remained relatively stable.