FCC review suggests modest increase in farmland values for 2019

Changes in commodity prices and uncertainty around global trade may have also taken some of the steam out of values

  • Oct. 8, 2019 1:00 p.m.

Average farmland values in Canada are showing only modest increases for the first half of 2019, according to a review by Farm Credit Canada.

The national average for farmland values fell from a 6.6-per-cent increase in 2018 to a three-per-cent increase in the first half this year.

If this increase holds steady for the remainder of this year, it will be part of a five-year trend of softening growth in average farmland values.

“There might be some minor market adjustments along the way, but the days of sharp increases in farmland values have been replaced by more modest growth,” said J.P. Gervais, FCC’s chief agricultural economist.

FCC’s review showed lower increases from 2018 in British Columbia (2.7%), Alberta (1.6%), Saskatchewan (2.9%), Ontario (3.3%) and Quebec (2.8%), while Manitoba (6.2%) showed a slightly higher increase. Publicly reported transactions in four Atlantic provinces have yet to be reviewed and assessed.

Average farmland values have increased every year since 1993; however, increases were more pronounced from 2011 to 2015 in many different regions.

In 2015, the average increase was 10 per cent, and since that year, Canada has seen more moderate single-digit increases in average farmland values.

“Now we appear to be moving into a time of cautious buying, where producers are focusing more on improving productivity and building resilience in their operations,” Gervais said.

Most Canadian farms continue to be in a good financial position and the overall farm debt-to-asset ratio remains lower than the 15-year average, so many producers are in a position to purchase land if it’s part of their business plan.

“The balance sheet is still strong, but uncertainty in markets and the fact that farmland values have climbed rapidly in the past may be giving some producers reason to pause,” Gervais said. “Others may have already expanded their operations and are now exploring other strategic investments.”

Changes in commodity prices, uncertainty around global trade and some challenging weather conditions may have also taken some of the steam out of farmland values. Producers can prepare for these unpredictable circumstances by maintaining a risk management plan while remaining focused on the big picture, according to Gervais.

“Demand for Canadian agricultural products is projected to remain strong at home and abroad in 2019-20, so there is a long-term positive future in agriculture,” he said.

– Submitted by Farm Credit Canada

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Stettler County awaits Summer Village responses on possible amendment to Buffalo Lake development plan

Amendment could allow for more lots at the controversial Buffalo Lake RV Resort

Atom Stars play it even in home tournament

Bashaw doesn’t make the final after finishing at 2-2

Flush truck partnership updated

Agreement between Bashaw and two other municipalities renewed

Governor general says multiple solutions needed for ‘complicated’ overdose issue

Julie Payette met at a fire hall with firefighters and police officers as well as politicians and health experts

Blockades remain in place as Wet’suwet’en hereditary chiefs returning to B.C.

Hereditary Chief Woos said they are ready to engage in nation-to-nation talks with the B.C.

Two goals by Ben King pushes Rebels over Tri-city

7-5 game a high-scoring, runaway according to Rebels forward Chris Douglas

‘Nothing surprises us anymore:’ U.S. border officials find brain in package

U.S. Customs and Border Protection agents found the brain packed in a glass mason jar in a Canada Post shipment

Eyes on police after Trudeau orders blockades torn down, injunctions enforced

The RCMP in B.C. have sent a letter to the traditional leaders of the Wet’suwet’en Nation

Alberta doctors getting ready for court fight against new pay, benefits deal

United Conservative government says Alberta doctors make more than physicians in other provinces

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

Trudeau: Time for blockades to end and Indigenous leaders to work with government

Prime minister says situation in Coastal GasLink pipeline dispute is ‘unacceptable and untenable’

Canadians released from coronavirus-ridden cruise ship in Japan fly home

Those who were cleared to travel are to be screened again at Canadian Forces Base Trenton

Most Read