Farm Credit Canada (FCC) says average farmland values in Canada are showing only modest increases for the first half of 2019.
The national average for farmland values fell from a 6.6-per-cent increase in 2018 to a three-per-cent increase in the first half this year. If this increase holds steady for the remainder of this year, it will be part of a five-year trend of softening growth in average farmland values.
“There might be some minor market adjustments along the way, but the days of sharp increases in farmland values have been replaced by more modest growth,” said J.P. Gervais, FCC’s chief agricultural economist.
FCC’s review showed lower increases from 2018 in British Columbia (2.7%), Alberta (1.6%), Saskatchewan (2.9%), Ontario (3.3%) and Quebec (2.8%), while Manitoba (6.2%) showed a slightly higher increase. Publicly reported transactions in four Atlantic provinces have yet to be reviewed and assessed.
Average farmland values have increased every year since 1993; however, increases were more pronounced from 2011 to 2015 in many different regions. In 2015, the average increase was 10 per cent, and since that year, Canada has seen more moderate single-digit increases in average farmland values.
“Now we appear to be moving into a time of cautious buying, where producers are focusing more on improving productivity and building resilience in their operations,” commented Gervais.
FCC says most Canadian farms continue to be in a good financial position and the overall farm debt-to-asset ratio remains lower than the 15-year average.
Source : FCC