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Values of Canadian farmland rose about 2% in the last half of 2010 as grain prices soared, continuing a steady increase during the past decade, according to a report by Canada’s top farm lender.
The increase, however, was the slowest half-year growth in more than four years, stated the report which was released late Monday.
Some of the same factors that have driven up grain and oilseed prices, such as rising incomes and population growth in developing countries, are also lifting farmland values, according to Jean-Philippe Gervais, senior agriculture economist at Farm Credit Canada (FCC).
Canada is the leading exporter of spring wheat and canola and third-biggest shipper of beef and pork.
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For the full year 2010, the average farmland value rose about 5%.
Among western Prairie provinces, where farmers grow most of Canada’s crops, farmland values rose in the last half of 2010 by 2.7% in Saskatchewan, 1.5% in Alberta and 1.3% in Manitoba.
Saskatchewan, the top crop-growing province, limits farmland direct ownership by foreign investors. Its farm values rose mainly due to strong sales in a couple of southern areas, the FCC said.
Farm Credit Canada uses a system of 245 benchmark farm properties to monitor changes in farm values. The lender does not provide average farmland values in dollars per acre because values vary greatly according to regions of provinces.
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Source: Financial Post