After trending lower over the last four years, the rate of appreciation in farmland values regained momentum in 2017, based on Farm Credit Canada’s annual farmland values report.
After rising by 7.9 percent in 2016, FCC says the national average increased by 8.4 percent in 2017.
“I have to say I was a little bit surprised,” says FCC’s chief economist J.P. Gervais in the interview below. “I honestly did expect this number at the national level would be coming down — not farmland values decreasing, but the rate of appreciation decreasing.”
While that’s the average, he says the change in land values in 2017 was uneven across the country, and within provinces.
In Saskatchewan for example, the northeast and east-central regions only saw a 1.5-2.2 percent increase, while land values on the western side of the province rose by 14.2-16.6 percent.
As part of his analysis, Gervais pays close attention to the pace in the increase of land values relative to the pace of increase in crop receipts.
“That ratio is getting a little bit away from the historical average, so that’s one thing to keep in mind,” he says.
Gervais joined Shaun Haney on Friday to discuss the new farmland price data, breaking down the numbers across the country: