Farmland values remained stable or increased in all provinces. Prince Edward Island experienced the highest average increase at 3.2 per cent, followed by Saskatchewan at 2.7 per cent.
New Brunswick and Ontario each saw 2.4 per cent growth, followed by Alberta at 1.5 per cent and Manitoba at 1.3 per cent.
Quebec (0.9 per cent), Nova Scotia (0.6 per cent) and British Columbia (0.4 per cent) rounded out the list of provinces that experienced a rise in farmland values.
Values were unchanged in Newfoundland and Labrador.
Canadian farmland values have risen steadily during the last decade. 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.
Cash crop producers lead buyer activity. Strong demand with limited supply made farmland a hot commodity due to its historic performance as a stable investment and its current income generating potential.
Low interest rates also encouraged buyers to seize opportunities and influenced farmland values upward. Although it seems that more people are interested in purchasing farmland, the supply is limited. This continues to fuel competition in the farmland market.
New Brunswick
New Brunswick farmland values increased an average of 2.4 per cent during the second half of 2010. Values were unchanged in the first half of 2010 and increased 2.5 per cent during the previous reporting period. Values increased by an average of 0.4 per cent per month during the past two years. Farmland values have increased or remained stable since reaching a peak increase of 6.3 per cent in the last half of 2008.
Stronger potato prices, competition for available uncommitted potato lots, and a shortage of land available for sale created a favorable selling environment in the Madawaska and Victoria Counties regions. The upward pressure on land values was tempered by a decrease in potato processing contract volumes of between 15 and 25 per cent from the previous year. Farmers exiting the industry accounted for the limited number of farmland sales during the reporting period.
In Kings County, non-typical purchasers were attracted to the area because of the potash mine, and acquired local farmland for lifestyle reasons.
The more typical purchasers from the dairy industry were less active purchasing land but were able to rent land at a reasonable price from former beef enterprises and part-time farmers.
This combined activity and demand for land contributed to the overall increase.
Some sales occurred in the Carleton area but the value of farmland remained the same.
Newfoundland and Labrador
Newfoundland and Labrador farmland values were unchanged during the second half of 2010. This followed a 0.7 per cent increase in the first half of 2010 and no change in the last half of 2009. Farmland values have increased or remained static since 1993.
Dairy and poultry operations continued to be the main drivers of farmland demand in eastern regions. The trend to larger dairy herds fuelled a need for more forage land. The availability of land was limited.
There was less competition for agriculture land in the western part of the province. Dairy farms are the main agriculture industry in this area and most of them had adequate land holdings to support their activities. This resulted in little market activity.
Nova Scotia
Nova Scotia farmland values increased an average of 0.6 per cent during the second half of 2010, following gains of 3.1 and 1.4 per cent in the two previous reporting periods. Values increased by an average of 0.4 per cent per month during the past two years. Since 2001, farmland values in Nova Scotia have remained stable or have risen.
There were a few land sales recorded in the Antigonish area in 2010 and a limited number of bare land sales. Although activity has been more quiet than usual in this region, a slight increase was noted.
Field crops, fruit, and livestock production were steady in the Kentville area of the Annapolis Valley. The low amount of dairy quota available for purchase limited the expansion of dairy farms, reducing pressure on land prices. The value of farmland in the Kentville area was unchanged.
Dairy operations continued to be the main source of farmland demand in the Colchester and East Hants areas. The trend to larger herds increased the demand for the limited supply of forage land. The limited number of sales that occurred did not support a change in values in this region.
Prince Edward Island
Prince Edward Island farmland values increased an average of 3.2 per cent during the second half of 2010, the highest average increase across Canada. Values remained unchanged in the two previous reporting periods. In fact, values have either shown no change or decreased in Prince Edward Island during every semi-annual reporting period since the last half of 2003.
Favorable weather conditions in 2010 paved the way for an abundant potato harvest. Higher potato prices in 2010 helped producers move forward after a poor crop year in 2009. Shipments to offshore markets such as Russia helped keep the PEI potato supply moving. Higher prices and low storage stress also contributed to improved returns.
These factors contributed to a demand for quality farmland, although buyers were selective. More desirable parcels commanded a strong price during the reporting period. This was particularly evident in the Summerside area. Some farmers found it difficult to sell land that did not meet the quality standards sought by purchasers.
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