Prairie farmland values continue to increase

Even when it’s blanketed in snow and ice, prairie farmland continues to be a hot commodity among investors.

Farm Credit Canada said in its latest report of farmland values that the average value of Canadian farmland rose by 10 percent in the last half of 2012.

The 10 percent increase comes on the heels of two similar FCC reports — one for late 2011 and the other for early 2012 — that suggested average increases in those periods of 8.6 and 6.9 percent, respectively.

If those figures are accurate, an average parcel of Canadian farmland purchased for $100,000 in July 2011 was worth nearly $128,000 as of Jan. 1, 2013.

Cathy Gale, FCC’s Saskatchewan valuations manager, said the continued strength in farmland prices reflects a general sense of optimism in the Canadian agriculture sector.

“It’s strongly related to commodity prices and just the generally positive attitude toward agriculture right now,” she said.

A sense of optimism is also evident in the United States, she added.

Prairie farmland values posted solid gains in the last half of 2012, although two of the three prairie provinces — Saskatchewan and Alberta — saw increases below the Canadian average.

Saskatchewan and Alberta experienced increases of 9.7 and 7.2 percent, respectively.

Manitoba gains were calculated at 13.9 percent, the second highest of any province in Canada.

Only Quebec saw a greater six month increase at 19.4 percent.

No province registered a decrease in average farmland values during the last half of 2012.

Values in New Brunswick and Newfoundland were unchanged. Values in British Columbia were up marginally by 0.4 percent.

FCC derives its average farmland values by monitoring the values of 245 benchmark properties based on comparable parcels of farmland located nearby.

Beginning this year, FCC will report farmland values on an annual basis rather than every six months.

Gale said moving to annual valuations will reduce costs and manpower requirements and result in valuations that are more easily understood.

Prairie farmland values continue to increase Agriculture  Saskatchewan   via The Western Producer

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