FARMLAND VALUES KEEP RISING

on April 16 | in Ag News | by | with No Comments

From FFC Farmland Values Report

Farmland values in Ontario increased an average of 11.9% in the second half of 2012, following gains of 16.3% and 7.2% in the previous two reporting periods. Farmland values in Ontario have risen for the past 20 years.

Some cash crop producers leveraged their current land holdings to purchase less expensive land in other locations, such as in Northern Ontario, yet the resulting impact on farmland values was relatively modest. The southwestern, central and southern regions saw significant increases in the second half of 2012. Most areas experienced a high number of private transactions as well as those occurring through the tendering process or property auctions.

In most areas, the demand for farmland outweighed available supply, driving prices higher. Demand was strong from the dairy industry and large intensive livestock enterprises that need land to meet nutrient management and cropping requirements. Cash crop operators also wanted to grow their land base due to higher commodity prices and good crop yields.

With the current strong demand and prices for land, some producers planning to exit the industry chose to liquidate their land holdings instead of collecting rental income.

Nationally, the average value of Canadian farmland increased 10.0% during the second half of 2012, following average increases of 8.6% and 6.9% in the previous two six-month reporting periods.

Farmland values remained stable or increased in all provinces. Quebec experienced the highest average increase at 19.4%, followed by Manitoba at 13.9% and Ontario at 11.9%.

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