Farmland Values Hold Up in Spite of Weather Challenges

Mar 14, 2022

When it comes to buying farmland, it does not appear that Canadian producers are put off by natural disasters such as floods or droughts.

As part of its annual Farmland Values Report on Monday, Farm Credit Canada did a quick look back in history to try and determine whether farmland values actually suffered in the aftermath of a such a disaster. The short answer is no, with farmers more likely to consider the longer-term revenue stream attached to a parcel of land, rather than the negative impact of any shorter-term weather problems.

“While it’s difficult to isolate the impact of a natural disaster on land values from all the other farmland supply and demand drivers, it seems large floods or extremely dry conditions have had no large detectable impacts on land values,” the farm lender said.

Much of Western Canada baked under unrelenting dryness and heat this past summer, which slashed yields of most crops by at least one-third. And while FCC said the drought may have tempered the upside in 2021 Prairie land values, its report showed average values still increased by 9.9% in Manitoba, 7.4% in Saskatchewan and 3.6% in Alberta.

FCC also found that Manitoba farmland values continued to advance in the wake of previous severe flooding. In 1997, the southern part of the province experienced one of its worst floods, the Red River flood. The same area was also affected by flooding along with the Assiniboine River area in 2009 and 2011. However, average farmland values in the affected areas all went up in the following years. FCC reported higher Manitoba values for 1997 and 1998 (11.7% and 3.4%, respectively). For 2009 and the next few years, FCC reported increases of 11.7%, 4.7%, 4.4% and 25.6%.

As for Saskatchewan, significant dry weather conditions hit certain areas of the province from 2001 to 2003, and then again in 2009. FCC reported a small decline in average farmland values for the province in 2001 (-1.5%). But that was followed by a 3.9% increase in 2002, a 3.1% increase in 2003 and a 1.9% increase in 2004. In 2009, FCC estimated a gain of 6.9%, followed by a 5.7% increase in 2010 and a 22.9% increase in 2011.

The same dry weather conditions experienced in areas of Saskatchewan in 2001-2003 and 2009, were also present in areas of Alberta. Despite those adverse weather conditions, values continued to rise in the affected areas (mostly in the Central region). FCC reported average increases of 4.8%, 4.4% and 8.7% in 2009 to 2011, respectively for the province.

FCC cautioned that higher commodity prices can also sometimes offset yield declines and mitigate the revenue impact from challenging weather. But that does not imply however that revenue expectations aren’t or won’t be affected by changing weather patterns, it said.

“More research is needed to understand the influence of climate change on farmland values,” FCC concluded.

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Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”