FCC’s team of ag economists, led by chief agricultural economist J.P. Gervais, outlined three key takeaways from the recent report.
1) Despite the average increase on a national scale, values aren’t up everywhere.
“Nearly half of Saskatchewan recorded either little or no increases in farmland values in 2015,” they write. “Much of the increased farmland values in the Prairies occurred in regions where there’s ample pulse production.”
In a video interview, Gervais said that 40 per cent of Ontario reported little or no increases in farmland value.
2) Crop receipts impact farmland values
“The drivers behind the overall increase can be summarized by strong crop receipts and low interest rates,” Gervais said. He also outlined the low Canadian dollar as a factor because it makes Canadian exports more attractive and can give producers an advantage because their crops are marketed in American dollars.
The third takeaway from the report is that farmland valuation differs across the country.
Gervais said good business judgment must be exercised when deciding to purchase farmland.
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