Higher commodity prices have been written into the values of farmland across much of Canada in the first half of 2007, leading to the country’s biggest overall increase in ag land values in five years, Farm Credit Canada reported Monday.
The federal farm lending agency said in its farmland values report that the value of farmland in Canada rose 3.6 per cent on average during the first half of this year, beating the 2.5 per cent increase in the last half of 2006 and continuing along the upward trend line from 2000 onward.
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A statistic likely to surprise no one shows Alberta’s farmland values on the fastest track, increasing 6.4 per cent since the beginning of the year, followed by British Columbia at 3.7 per cent. FCC cites optimism in the grain sector and relative post-BSE stability in the cattle sector for Alberta’s increases, along with the prosperous oil and gas industry and the resulting demand for land among purchasers with “strong off-farm income.”
B.C. is seeing strong demand for more land among blueberry, grape and crop growers; “strong demand for rural acreages” in the north; and demand for land “for recreational use” within two or three hours of larger urban centres.
Following are Newfoundland and Saskatchewan at 3.3 and 3.0 per cent, driven respectively by livestock operators seeking forage land in the former and “higher grain prices, expanding farms, competition between local farmers, and demand from out-of-province investors” in the latter.
Further down the list of average price increases are Ontario (2.7 per cent), New Brunswick (2.0), Manitoba (1.7) and Quebec (1.2). Values were flat in Prince Edward Island and Nova Scotia.
Urban buyers drove land prices in some cases, especially near some provinces’ larger centres. FCC also noted that manure management demands have driven increased values for less fertile land in areas of Manitoba devoted mostly to livestock.
