LethbridgeNewsNOW.com

By Dori Modney with files from Farm Credit Canada

Farmland - they're not making more of it!

Wide range of farmland prices across Alberta in 2018

May 3, 2019 | 3:34 PM

LETHBRIDGE — A new report from Farm Credit Canada (FCC) found the average value of Canadian farmland rose nearly seven per cent last year.

But the agricultural lender says that growth rate is likely to be cut in half over 2019 amid ongoing canola trade issues with China.

Values have increased ever year since 1993, but recent rises are lower than those during 2011 to 2015, according to the report.

Looking just at Alberta, there were variables across the province. The average price of an acre of land in northern Alberta is $3,371, while in southern Alberta, the average price is $6,157.

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Several factors explain variations across the province: In southern Alberta, there was strong demand for farmland, mostly for irrigated land suited for potato production.

However, Alberta’s overall farmland values increased 7.4 per cent on average in 2018.

The FCC notes that farm income and land prices are joined-at-the-hip and it’s expected that trade issues will bring volatility to commodity prices, putting pressure on farm income. The biggest issue right now revolves around China’s suspension of licences of two major exporters of canola seed, citing concerns about pests, and Chinese companies stopped buying the product from Canadian producers.

The China issue has left farmers in a quandary about what crops to put in the ground this year. The trade issue is likely to impact land prices in 2019.

On the up-side, interest rates are not expected increase.

A comprehensive view of the FCC Farmland Report can be found on the FCC website