Average prices of farmland across Canada rose 10 percent last year as low interest rates and strong income from crops helped retain demand.
The increase in prices is part of a continuous upward trend that started in 1993, Farm Credit Canada said in its report.
The gains, however, are lower than in recent years, and pale in comparison to the 22 per cent increase seen in 2013, and the 14 per cent seen in 2014.The report also said that prices are not evenly increasing across the country and some regional variations are seen. Despite the higher national average, some regions across the country saw steep price declines.
“There appears to be greater volatility with a higher number of locales where values decreased,” FCC said in a release, advising farmers to prepare for a potential softening of the market as lower crop prices have an impact.
Farmers didn’t feel the full effects of lower commodity prices last year because of the significant drop in the Canadian dollar, the group’s chief agricultural economist J.P. Gervais said.
He added that 2016 could see more modest farmland value gains of two to four percent as crop receipts start to be affected.
“The best-case scenario would be for the average value of farmland to reach a point of long-term stability, where any future increases or decreases are modest and incremental,” Gervais said.
Average farmland price increase:
- 12.4% in Manitoba.
- 11.6% in Alberta.
- 9.6% in Quebec.
- 9.4% in Saskatchewan.
- 8.5% in Prince Edward Island.
- 7.7% in Newfoundland and Labrador.
- 6.6% in Ontario.
- 6.5% in British Columbia.
- 6.3% in Nova Scotia.
- 2.6% in New Brunswick.