Rising agricultural commodity values and tight inventory levels have seriously contributed to a significant upswing in the price of Ontario farmland in 2011, according to a report released by RE/MAX Ontario-Atlantic Canada.
What are your thoughts on this, and have you seen a increase in farmland value in your area?
I heard $9,800 offered on 100 acre farm in Elgin County.
COFFEE SHOP CHAT found on Twitter:
Farmland values in Ontario increased 7.2% in the second half of 2011, following gains of 6.6% and 2.4% in the previous two reporting periods.
The average monthly increase was 1.2% in 2011, which is double the average monthly increase the province witnessed in 2010. Farmland values in Ontario have been rising since 1993 and reached a peak increase of 8.2% in the last half of 1996.
Southwestern and eastern Ontario posted the most notable gains in land values, while regions in the rest of the province saw more modest changes. In several areas, demand for farmland significantly outweighed the supply as intensive livestock, crop and vegetable producers all wanted land.
Restrictions limited the ability for dairy producers to expand their quota holdings, fuelling a demand for land instead. Similarly, large intensive livestock enterprises were seeking land to satisfy nutrient management program requirements and to expand their operations.
Strong commodity prices and crop yields continued to stimulate demand by cash crop operations for workable farmland. In southern Ontario, competition for prime vegetable land spurred farmers planning to exit the business to sell their land instead of renting it out to other producers.
Commuters continued to purchase small farms north of the Greater Toronto Area (GTA) for rural residential purposes, as the GO Transit system recently expanded to those areas. This has created greater demand for farmland in this region.