The rate of average farmland price increases has been cut in half this year.
Prices increased a modest three per cent in the first half of 2019, according to a Farm Credit Canada (FCC) review. Last year farmland increased 6.6 per cent in value on average.
“There might be some market adjustments along the way but the days of sharp increases in farmland prices have been replaced by more modest growth,” commented FCC chief agricultural economist J.P. Gervais.
Changes in grain prices, global trade war threats and weather could be responsible for the lower rate of growth.
The slower rate of increase is part of a five-year trend in farmland values.
Average farmland prices have increased every year since 1993 with a number of double digit hikes between 2011 and 2015.
Most farms seem to be in a good financial position with the average debt-to-asset ratio below the 15-year average.
In Western Canada first half price increases ranged from 1.6 per cent in Alberta to 2.9 per cent in Saskatchewan, 6.2 per cent in Manitoba and 2.7 per cent in B.C.
Ontario posted a 3.3 per cent gain with Quebec at 2.8 per cent. Transactions for the Atlantic provinces have yet to be reviewed.
Ron Walter can be reached at [email protected]
