Average farmland values have increased every year since 1993 in the Keystone Province
According to a recent report by Farm Credit Canada (FCC), the average farmland value in Manitoba increased 2.3 percent in the first half of 2020, continuing a trend that has seen average farmland values in the province increase every year since 1993.
The upward trend in farmland value in 2020 is in line with mid-year results over the past five years, and FCC says low interest rates, limited farmland supply in the market as well as producer confidence appear to be the main driving factors behind the mid-year increase in 2020.
“Given the global economic situation during the first half of 2020, Canada’s farmland market is showing remarkable resilience in the face of adversity and uncertain times,” said J.P. Gervais, FCC’s chief agricultural economist. “Changes to production and marketing plans induced by the pandemic have had a definite influence on profitability, yet the demand for farmland remained robust.”
Other prairie provinces have also seen positive increases in farmland value between January 2020 and June 2020, with average Alberta farmland values climbing 4.9 per cent, and Saskatchewan close behind with a 4.2 per cent increase.
“Despite supply chain disruptions that have impacted some sectors, such as red meat, the pandemic has so far not significantly affected the agriculture land market,” added Gervais. “In fact, the grain, oilseed and pulse sectors have performed well in the first half of 2020, supporting the slightly higher rate of increase in western Canada.”
Nationally, New Brunswick leads the country in farmland value increases for the first half of 2020, with a solid 6.5 per cent increase, which is below the incredible 17.2 per cent increase in average farmland value that province saw in the first half of 2019. The only province with no growth in farmland value for the first half of 2020 was Nova Scotia at 0.0 per cent, while both Ontario and P.E.I. only increased 0.4 per cent each. Interestingly, P.E.I. had the largest farmland value increase out of all the provinces in the first half of last year (2019) at a staggering 22.6 per cent increase in average farmland value.