Farm Credit Canada (FCC) released its annual Farmland Values Report. The national average farmland value increased 14% in 2014. This is a large increase over 2013, but lower increase than the 22% increase FCC reported last year. The patterns in farmland values differ across the country: Saskatchewan recorded an average increase of 19%, Ontario was at 12% while BC farmland showed an average gain of 4%.
From the FCC Report: Ontario farmland values increased an average of 12.4% in 2014, following gains of 15.9% in 2013 and 30.1% in 2012. Average farmland values in the province have continued to rise since 1988.
In several areas of the province, demand for farmland significantly outweighed the supply, creating competition for available land. This, coupled with low interest rates, appeared to have played a role in rising values.
Demand came from many sectors, including large intensive livestock enterprises needing land for manure management and cropping requirements.
Non-agricultural buyers in southwestern Ontario continued to purchase farmland in select areas, creating greater overall competition for available land. Farmland in southern and central Ontario continued to be in high demand due to the availability of soil types that support high value crops.
Producers in eastern Ontario continued to expand, purchasing land in the immediate area and in neighbouring locations. Northern and eastern regions also saw prices rise as buyers from high-priced areas in southern and southwestern areas moved north in search of lowerpriced land. Markets in the north appeared to be dominated by a small number of buyers who acquired land, contributing to the increase in price.
However, while most areas saw moderate to significant increases, there were some that saw slight declines or no change in value. Sales in the province were accomplished through a mix of transactions including real estate brokered, property auction and land sold through the tendering process.