• • • FCC’s chief agricultural economist J.P. Gervais suspects average land values will continue to rise

• • • FCC’s chief agricultural economist J.P. Gervais suspects average land values will continue to rise

At the end of April, Farm Credit Canada (FCC) released its annual Farmland Values Report. No our readers will be surprised to hear that buying land has paid off over the past decade. Canada-wide, FCC reports that farmland values increased by 6.6 per cent on average in 2018 (after increases of 8.4 per cent in 2017 and 7.9 per cent in 2016).

While land prices have been going up, not all farm incomes have been following. In Saskatchewan the rate of increase in land prices “has been exceeding the rate of increase in farm income.” Generally, Saskatchewan is a province where the ratio of the price of land to farm income is close to its long-term average. This year, the ratio increased, with higher land prices and lower incomes.

For next year, FCC’s chief agricultural economist J.P. Gervais suspects average land values will continue to rise, but likely at a slower rate (maybe half of this year’s increase) thanks to income uncertainty, coming mainly from price decreases due to trade problems and a decrease in canola demand in the wake of African swine fever.

Source: https://www.grainews.ca/2019/05/15/things-are-looking-up-land-prices-that-is/?module=carousel&pgtype=homepage&i=2

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