After gains of more than four per cent in 2009, the average value of farmland in Alberta increased by 2.9 per cent in the first half of 2010, according to Farm Credit Canada’s (FCC) farmland values report.
Values increased by an average of 0.4 per cent per month between Jan.1 and June 30, which mirrored the same average monthly increase during 2009. Farmland values in Alberta have been rising since 1993.
Overall, the average value of Canadian farmland increased three per cent during the first six months of 2010. Farmland values remained the same or increased in each province except British Columbia. Ontario experienced the highest average increase at 4.3 per cent.
“The prices paid for farmland today often reflect the conditions and events experienced by producers over the past six to 12 months,” said Michael Hoffort, FCC senior vice-president of portfolio and credit risk. “It’s important for buyers to consider those things in determining whether to purchase and what price to pay.”
Hoffort said the report shows that each province and region has a unique set of factors that help determine its land values.
“Competition for highly productive farmland is strong in parts of the country,” said Jean-Philippe Gervais, FCC senior agriculture economist.“We are seeing various types of land ownership, which provides farmers with a choice about how they want to operate their business.”
According to Gervais, some producers choose to rent, rather than own, land to keep capital costs in check or to have access to better quality land.
