Farm Credit Canada

Farm Credit Canada

May 09, 2011 04:30 ET

Canadian farmland values rise again

REGINA, SASKATCHEWAN--(Marketwire - May 9, 2011) - The average value of farmland in Canada increased by 2.1 per cent during the second half of 2010, following gains of 3.0 and 3.6 per cent in the two previous reporting periods, according to the new Farm Credit Canada (FCC) Farmland Values Report. The report provides important information about changes in land values across Canada and is available at www.farmlandvalues.ca.

Farmland values remained stable or increased in all provinces. Prince Edward Island experienced the highest average increase at 3.2 per cent. To view the provincial news releases, visit: http://www.fcc-fac.ca/en/AboutUs/Media/newsreleases_e.asp.

"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 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%), poultry (32%) and dairy (28%) producers were more likely to state that they are planning to increase spending on land in the next year compared to other animal (21%), hog (17%) and horticulture (17%) producers. Manitoba (30%), Saskatchewan (30%) and Ontario (28%) producers are more likely to report that they are planning to increase spending on land compared to British Columbia (17%) and Quebec (21%) producers. FCC Vision Panel survey findings can be found at www.fccvision.ca/research.

The FCC Farmland Values Report has been published since 1984. To view previous reports, visit Farm Credit Canada - Publications.

As Canada's leading agriculture lender, FCC is advancing the business of agriculture. With a healthy portfolio of more than $20 billion and 17 consecutive years of portfolio growth, FCC is strong and stable – committed to serving the industry through all cycles. FCC provides financing, insurance, software, learning programs and other business services to producers, agribusinesses and agri-food operations. FCC employees are passionate about agriculture and committed to the success of customers and the industry. For more information, visit www.fcc.ca.

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