British Columbia farmland values increase

Report. values decreased 0.9 per cent during the first half of 2010 over 2009 and were unchanged in the second half of 2009. The report provides important information about changes in land values across Canada and is available at:

www.farmlandvalues.ca.

“FCC is committed to advancing the business of agriculture and one of the ways to do this is by providing producers with our market based observations twice a year to help them make timely management decisions,” says Michael Hoffort, FCC Senior Vice-President, Portfolio and Credit Risk.

The last time British Columbia saw an increase in its farmland values was during the second half of 2008.

Comparatively, the average value of Canadian farmland increased 2.1 per cent during the last six months of 2010 and continued the steady increase reported during the last decade. Farmland values remained stable or increased in all provinces. Prince Edward Island experienced the highest average increase at 3.2 per cent.

In the last three semi-annual reporting periods, farmland values in Canada increased by an average of 3.6 per cent in spring 2010, 3.0 per cent in fall 2010 and 2.1 per cent in spring 2011. The highest average national increase was in 2008 at 7.7 per cent. The last time the average value decreased was in 2000 at -0.6 per cent.

“Canadian land values are strong and, looking at world markets in our current financing environment, there are factors in place that could exert further upward pressure on the price of farmland” says Jean-Philippe Gervais, FCC Senior Agriculture Economist. “Rising incomes and population growth in emerging countries is increasing the demand for ag commodities at a time when global cereal stocks are low, production conditions in some major grain producing countries could potentially be challenging and the availability of quality farmland worldwide is limited,” says Gervais.

According to a fall FCC Vision Panel survey, 26 per cent of the producers who responded planned to increase capital spending on land in 2011. Crop (33 per cent), poultry (32 per cent) and dairy (28 per cent) producers were more likely to state that they are planning to increase spending on land in the next year compared to other animal (21  per cent), hog (17 per cent) and horticulture (17 per cent) producers. Manitoba (30 per cent), Saskatchewan (30 per cent) and Ontario (28 per cent) producers are more likely to report that they are planning to increase spending on land compared to British Columbia (17 per cent) and Quebec (21 per cent) producers. FCC Vision Panel survey findings can be found at:

 

www.fccvision.ca/research.