Farmland values continue to thrive

Farmland in Alberta — and Canada — continues to appreciate, according to a report issued by Farm Credit Canada on Monday.

Farmland in Alberta — and Canada — continues to appreciate, according to a report issued by Farm Credit Canada on Monday.

The agricultural lending agency calculated that the average value of farmland in Alberta increased by 4.5 per cent in the second half of 2011. That followed a four per cent rise during the first six months of last year.

The average across Canada for the July-to-December period was 6.9 per cent, and 7.4 per cent for the six months preceding that. Provincial figures ranged from a high of 10.1 per cent in Saskatchewan, which has 40 per cent of the country’s arable land, to zero per cent in Newfoundland and Labrador.

The increase in Ontario was 7.2 per cent, followed by Alberta, Quebec at 4.3 per cent, Nova Scotia at 3.2 per cent, Manitoba at 1.9 per cent, Prince Edward Island at 1.5 per cent, New Brunswick at 1.3 per cent and British Columbia at 0.2 per cent.

“Low interest rates, in relation to inflation, and higher farm income levels have recently led to significant increases in farmland values in some provinces,” said Michael Hoffort, FCC’s senior vice-president of portfolio and credit risk.

FCC said in its report that oilfield activity in Alberta also influenced land prices here by helping spur confidence in the economy.

Farm values in Alberta have risen continuously since 1993. The increase was 1.5 per cent in the second half of 2010 and 2.9 per cent in the first half.

FCC’s farmland values report looks at 245 benchmark farm properties across Canada.