Rising livestock receipts more than compensated for a decline in crop receipts as well as a drop in direct payments.

Every province saw an overall increase, except Saskatchewan, where the crop sector is much larger than livestock.

Total farm cash receipts in Canada were $101 billion last year, up from $98 billion in 2024. However, crop receipts declined from $52 billion to $51 billion, the lowest level in five years.

Livestock surges from $30B to $45B in four years

Total livestock receipts more than made up the difference, going from about $40 billion to $45 billion. In 2021, livestock receipts totalled only $30 billion and have been rising each year since, fueled largely by rising cattle prices.

The other aspect of farm cash receipts is direct payments from governments and various private insurance programs. Those have been declining.

Total direct payments in 2022 were $7.3 billion, with crop insurance being the largest source. With better crops and fewer claims, total direct payments in 2025 were down to $4.8 billion.

Crop insurance payments drop with better harvests

While crop insurance is the largest portion of direct payments, the numbers are a bit deceiving unless you consider the premiums producers pay into the program.

In Saskatchewan for 2025, the StatCan numbers show roughly $725 million in gross crop insurance payments. However, producer premiums were about $469 million. Therefore, net crop insurance payments were $255 million.

That’s down substantially from 2024 when net crop insurance payments in Saskatchewan were $886 million.

Calendar year payments won’t exactly align with growing seasons because some payments are carried beyond the end of the year. However, Saskatchewan had a lot better crop in 2025, with most claims restricted to the southwestern corner of the province.

Alberta did not fare as well. Crop insurance net payments in 2024 were $868 million, while 2025 still hit $615 million.

Net crop insurance payments in Manitoba were $66 million in 2024 and $42 million in 2025.

AgriStability payments nearly double to $905M

AgriStability payments, on the other hand, have been rising, going from $399 million in 2023 to $601 million in 2024 and $905 million last year. Long criticized as ineffectual, more financial advisers now promote the program.

The recent change to allow pasture-related feed costs as an eligible expense should make the program more relevant for livestock producers. As well, improving returns for cow-calf producers should translate into better reference margins in the event of a future downturn.

Payments from AgriInvest accounted for $305 million last year, with $38 million paid in Manitoba, $67 million in Alberta and $99 million in Saskatchewan.

Critics question AgriInvest’s value as research funding shrinks

Since government support is based on one per cent of eligible net sales, total government contributions don’t change drastically from one year to the next.

An increasing number of academics and industry observers are questioning whether the money spent on AgriInvest could be better deployed elsewhere. It’s really a government subsidy of up to $10,000 per farm whether it made money that year or it didn’t.

The forerunner to AgriInvest was the Net Income Stabilization Account, established with somewhat different trigger mechanisms in the early 1990s.

Free money with few strings attached is always popular, but is this the best use of government resources?

Public plant breeding is in jeopardy due to the large government funding cuts to research at Agriculture Canada.

Investment in plant breeding would pay greater dividends to the crop sector than the paltry interest rates achieved on the money accumulating in AgriInvest accounts.

The post Livestock receipts drive farm cash to $101B despite crop decline appeared first on Alberta Farmer Express.

Yes, the federal government must find ways to cut spending and yes, the number of civil service employees has ballooned over the years.

However, that expansion has bypassed Agriculture Canada research for many decades. Instead, research programs have long been cut and employment levels have dwindled.

This has occurred despite ever-increasing research dollars from producer check-off programs.

Now, 665 positions, 12 per cent of the employee base, will be cut along with the complete closure of many research facilities across the country.

Keith Downey, one of the co-founders of canola, recently had his 99th birthday. His work in the 1960s and 1970s at Agriculture Canada in Saskatoon was instrumental in turning rapeseed into canola, which has become Canada’s most important crop.

Downey’s work occurred well before the establishment of farm commodity groups with producer check-off funds contributing to research.

Some research programs proceed for years or even decades without much to show for the effort, but the mega success of canola shows why investment in research can pay off handsomely.

Analysts point to the slow growth of productivity in Canadian industries, including agriculture. You don’t increase productivity by cutting research programs.

As the axe falls on Agriculture Canada, big questions need to be resolved:

• What programs are being entirely eliminated?

• What will happen to the land base at closed facilities such as Lacombe, Alta., Scott and Indian Head in Saskatchewan and Portage la Prairie, Man.?

• Will applied research institutions separate from Agriculture Canada continue to have access to the land and any equipment they may have shared?

• What about all the research agreements with farm commodity groups, the Western Grains Research Foundation and even provincial governments?

• Will widespread crop variety trials still be possible to get enough data for registration?

Considering the bureaucracy that governs Agriculture Canada, answers to all these questions will likely be slow to materialize.

While farm organizations are raising the alarm and the cuts are receiving attention in agricultural media, this isn’t a story that resonates with mainstream media outlets.

Mainstream media eventually caught on to the importance of removing Chinese tariffs on canola, but they won’t pay much attention to research cuts with all the other news happening in Canada and around the world.

Farmers will quickly move on as well.

Producers involved with commodity groups and those who take an active interest in the research programs will continue to decry the malaise created at Agriculture Canada, but the cuts don’t affect the day-to-day lives of most farmers in the near term.

Farm commodity groups commit most of their dollars to research, but they don’t have the additional resources to counter what the government is cutting.

If a significant portion of government money currently devoted to business risk management programs was diverted to research, the Agriculture Canada cuts could be nullified. In the long term, this would probably prove to be a superior investment.

However, most farmers would not accept less government money and therefore reduced support under AgriInsurance (crop insurance), AgriInvest and AgriStability, so that idea isn’t even on the table.

Consultations have started for the next federal-provincial ag policy framework, and farm organizations will be pushing for safety net improvements.

The Agriculture Canada cuts are a bad policy decision, but there won’t be much of a political cost for the federal Liberal government.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.

The post Deep cuts to ag research jeopardize Canada’s farming future appeared first on Alberta Farmer Express.

Major manufacturers, as well as short-line operations, are feeling the pinch, reducing production and laying off workers.

Ben Voss is an engineer who has worked in various capacities for a number of farm equipment manufacturers over the course of his career. He also farms in Saskatchewan.

He says farm equipment sales have been declining each year since 2021-22 and that this is one of the tougher times in the industry over the past 20 years.

While it’s natural to blame soft grain prices and the drop in farm income, Voss believes structural changes in agriculture are a big contributor to this downturn.

Others in the industry may be coming to the same conclusions, but insiders tied to a firm may be hesitant to talk about this elephant in the room.

Voss has gone public with his analysis, posting a couple in-depth articles on LinkedIn.

Manufacturers tend to target the sale of large, high-tech equipment to large farmers. That’s where the demand has been for new equipment.

In the past, a ready market has existed for two-or- three-year-old used equipment as those large farmers ungraded to newer and better.

Voss argues that large operations now farm a big percentage of the total land base, and the number of second-tier buyers isn’t large enough to maintain good prices on used equipment.

Therefore, prices are soft and dropping in many used equipment categories. This is especially true in combines.

Voss points to a situation where a large, new John Deere combine with only a couple hours on it sold for auction at $400,000 less than new price. While this is an extreme example, it illustrates the magnitude of the issue.

In a market saturated with big equipment just a few years old, sale prices drop, and that has wide-ranging implications.

When you figure out what equipment costs you per acre, you typically assume a salvage value — the value you get when you trade off the machine. As salvage values drop, the cost per acre for a machine rises dramatically.

This also has a big impact on the equipment leasing market.

All the equations change when equipment depreciates much faster than anticipated.

Large farms calculating their costs are less likely to trade machines as quickly. Low-hour used equipment increasingly looks like a bargain compared to buying new.

Another pertinent aspect to the discussion is technology and whether the increasing software and computers on new equipment will stand the test of time.

Voss and others worry that the technology may become obsolete or unserviceable long before the mechanical aspects of the machine are worn out. Manufacturers are only required to provide parts for 10 years.

What good is a sprayer if the monitor fails and can’t be fixed or replaced?

Voss argues that equipment should come with a “manual” mode so it can still be functional without some of the precision agriculture technology.

Farm equipment sales have always seen ups and downs through the years, but this downturn may not be solved by an uptick in farm income.

Look at how much excess equipment capacity is sitting on dealer lots. How many new units will be sold if the depreciation rate is going to be so extreme?

Voss makes compelling arguments for why this is a structural change for which the industry will need to adapt.

The post Farm equipment sales sector sees significant structural changes appeared first on Alberta Farmer Express.

For hundreds of millions of people who earn only a dollar or two a day, increasing prices for staple foods like grains, pulses, rice and cooking oil is a big deal.

Canadians spend only about 11 per cent of their disposable income on food. If the price of a loaf of bread goes up by a nickel or a dime, there won’t be people rioting in the streets.

But food prices are causing riots in developing nations and have been linked to the uprisings in Egypt, Tunisia and Libya.

The latest farm income projections from Statistics Canada show record farm income levels for Saskatchewan. The realized net farm income, which takes into account depreciation costs, but not changes in farm inventory, shows $1.6 billion for 2009 and more than $1.7 billion for 2010.

By comparison, Alberta’s realized net farm income was only $264 million in 2009 and a dismal $64 million for 2010. The numbers for Manitoba are $553 million and $404 million.

However, if you take a look at the projection for realized net farm income in 2011, Saskatchewan is down to $592 million. The drop is caused by rising costs as well as declining government support. In fact, without the government support (programs like Crop Insurance and AgriStability) the realized net farm income projection would be zero.

While the $1.6 and $1.7 billion of the past couple of years is the best we’ve ever seen, it just compensates for previous lean years. (Adjusted for inflation, grain prices were much higher back in the early 70s. So was farm profitability.)

The ethanol industry is a prime target of those who worry about food prices. About 39 per cent of the U.S. corn crop goes to making ethanol. Cancelling the ethanol incentives is seen as a way to increase the food supply and drop prices.

There are faults with that logic. Less ethanol means even more upward pressure on oil prices, which in turn increases food costs. High fuel costs add significantly to the cost of food processing and transportation.

Besides that, if you cut ethanol production and grain prices drop, grain production will also decline. As production becomes unprofitable, there’s no incentive to spend money on new varieties and extra fertilizer.

So while it might be a short-term fix, cutting American ethanol production wouldn’t likely have a long-term dampening effect on food prices in poorer nations. It should also be noted that many of those poor people are rural poor trying to eke out a living from the land. Trying to keep grain prices low hurts them and also decreases their incentive to grow food locally.

It’s an interrelated world. You can’t have cheap food and elevated oil prices, at least not for the long term.

KevinHurshisaconsultingagrologistandfarmerbasedinSaskatoon.Hecanbereachedat kevin@hursh.ca

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Sowhileitmightbea short-termfix,cutting Americanethanol productionwouldn’t likelyhavealong-term dampeningeffectonfood pricesinpoorernations.

The post Cheap Food Versus Expensive Oil appeared first on Alberta Farmer Express.

“Don’t talk about it because you’ll just jinx it,” some will say. Certainly, there have been many occasions in the past when analysts predicted a return to the golden years in the grain business, but the good times didn’t last.

The longest spell of sustained profitability ran from about 1972 to the early 80s. There was a short blip in the mid-90s that got people excited and things got interesting in 2007-08 before cooling off in 2009.

In total, there have been many more years of surpluses than shortages and there have been lots of years with producers looking to government for assistance.

If the analysts are right and if world demand doesn’t get side-swiped by another severe economic downturn, the years ahead could be a great time to be a farmer. However, not all the consequences will be positive.

If grain prices go too high too fast, watch out for food riots in less-developed nations. This happened in 2008 and has been reported again recently in countries such as Algeria.

The Russian drought last summer prompted a grain-export ban. Countries like India routinely change policies in order to maintain an adequate food supply. If grain becomes critically short, it could prompt all sorts of international nastiness, even wars.

About 30 years ago, Canada actually had a two-price system for wheat. The price for domestic users was set at a higher level. This was a method by which Canadian consumers could support farmers.

The policy became impractical in a world with freer trade, but you could see countries try to implement the policy in reverse should grain prices get out of hand. The domestic price could be held lower than the world price to subsidize consumers.

In recent years, there has been a push for sustainable agriculture systems. Buyers, particularly in Europe, are asking questions on how food products are produced. On this continent, Walmart has been leading the sustainable food charge. The local food movement has become a force in the marketplace.

In a world of relative food scarcity, will buyers be so discerning? Will they care as much about how and where the food is produced?

Maybe the irrational fear over genetically modified crops will fade. In fact, the technology might finally be heralded for helping to feed the world while decreasing the need to bring ecologically sensitive land into production.

Sky-high grain prices will reignite the food versus fuel debate over ethanol production. The U.S. ethanol policy gets more difficult to defend as corn rises above $7 a bushel. Nearly 40 per cent of the American corn crop goes to ethanol production.

High grain prices inevitably lead to higher prices for inputs. While this cuts into profitability, there’s little doubt that high grain prices also provide an opportunity for strong returns for producers.

In the past, that has caused farmland prices to escalate. Corporate farms have always been a bogeyman, but the worry has been largely groundless. Many, if not most family farms are incorporated entities, but large outside corporations have not jumped into farming in a major way. They have been content to sell inputs and buy grain. If grain farming becomes lucrative for an extended period, might that change?

If the market analysts are even close with their projections, a lot of paradigms are going to shift in the years ahead.

KevinHurshisaconsulting agrologistandfarmerbasedin Saskatoon.Hecanbereachedat kevin@hursh.ca

The post Could A Paradigm Shift Could Be Coming? appeared first on Alberta Farmer Express.

Unfortunately, the big improvement in prices doesn’t necessarily mean that profitability has arrived.

The Western Beef Development Centre has been doing an extensive cost-of-production analysis and has just published results for 2008.

When the WBDC held cost-of-production workshops last winter, 40 producers attended. When incomplete or inaccurate data sets were removed from the study, 18 Saskatchewan producers ended up in the analysis.

The average herd size was 241 cows with an average of 214 calves weaned (89 per cent). The average weaning weight was 545 pounds and the average price back in 2008 was only 97 cents a pound.

It should be noted that many of the producers in the study retained their calves after weaning and fed them to a heavier weight before selling. Since the purpose was a cost-of-production analysis on cow-calf production, all the calves were valued at weaning time even if they weren’t sold.

After considering all the costs including a value for unpaid labour, the breakeven point was $1.21 a pound, generating an average loss of $110 per cow. Taking unpaid labour out of the mix, the loss per cow was still over $70.

You can check out the cost-of-production analysis on the website of the Western Beef Development Centre (www.wbdc.sk.ca).

The average herd in the province is much smaller at somewhere between 70 and 80 head. It seems likely that a lot of smaller herds would have a higher cost of production and therefore even higher losses.

Prices this fall are substantially better than they were in 2008, but assuming the costs are similar, producers are on average making a profit of only a few cents per pound. Highercost producers will still be losing money.

Lack of scale

It’s an industry that suffers from a lack of scale.

Consider a grain operation that grows 30 bushels per acre of wheat with the wheat worth $5.50 a bushel. It takes about 1,500 acres to have a gross return of $250,000.

On canola, assuming a value of $10.50 a bushel and a 30-bushel per acre crop, a gross return of $250,000 is reached with only 800 acres.

Whether wheat or canola, those are small acreages compared to what most producers are farming.

In a cow-calf operation, let’s assume weaned calves at 550 pounds and a price of $1.25 per pound. To reach a gross return of $250,000, you’d need to sell more than 360 calves, which implies a cow herd of about 400.

If you’re running 400 cows, you’re considered a pretty big cattle producer. If you have 1,000 to 1,500 crop acres, you’re considered small fry.

Gross returns and profitability are very different measurements, but they are related. A profit of $100 per cow might seem like a dream come true and maybe we’ll get there in the years ahead with the contraction that the North American beef herd has seen. But $100 per cow profit is only $40,000 on 400 cows. It’s only $10,000 on 100 cows.

While there’s a perception that the economic situation for cow-calf producers is again rosy, the truth is that producers need far better prices to be sustainable.

Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached atkevin@hursh.ca.

The post Cow-Calf Producers Need Economies Of Scale appeared first on Alberta Farmer Express.

Usually farm groups concentrate their lobby efforts on more money for safety net programs or some ad hoc assistance to meet the particular farm crisis du jour. The suggestions by the Grain Growers take a more business-oriented approach.

The Grain Growers of Canada claims to represent the interests of 80,000 Canadian grain, pulse and oilseed producers. Farm groups such as the Western Canadian Wheat Growers are members, giving the organization a more right-wing perspective than other umbrella farm groups such as the Canadian Federation of Agriculture.

Invest in public research, say the Grain Growers. On this point, they echo what many other farm organizations are also saying, but they are giving it more emphasis and providing more specifics.

They point out that real government dollars for basic agronomic research have fallen dramatically since 1994. If you need evidence, just consider that Agriculture and Agri-Food Canada has far fewer plant scientists and breeders than it once did.

The GGC recommends doubling of the research budget in AAFC to $560 million, along with a succession plan to replace retiring scientists.

While private research has an important role in the industry, there’s no clear return on investment in areas like cereal crop breeding or basic agronomic research. Those are areas where publicly funded research must continue to play a role.

The GGC also advocates a certified-seed tax incentive. The idea is to encourage the use of more certified seed, especially on cereal crops, so that private industry has a reason to invest in cereal breeding.

On cereal crops, most producers save their own seed, only buying certified seed if they want a new or different variety. A tax incentive would make it more attractive to buy certified seed more often.

Another recommendation is to adjust capital cost allowance (depreciation rates for tax purposes) to spur investments by farmers in three categories – on farm fertilizer storage, farm machinery upgrades for precision applications, and improved on-farm grain storage that helps preserve crop quality.

The encouragement for on-farm fertilizer storage would enable producers to buy more fertilizer in the off-season when it should be cheaper. The rational for improvements to grain storage is the increased testing for mycotoxins which can grow within stored grain. To limit this problem, it would be a great strategy to have aeration systems as an integral part of more grain bins.

The argument for adjusted capital cost allowance for precision application farm machinery is tougher to justify since cost sharing for much of this is already available through environment farm planning.

The recommendation is to increase the lifetime capital gains exemption on the sale of farm assets from the current $750,000 to a million dollars. The GGC argues that farm retirement savings are mostly tied up in farm equity for many producers.

It further argues that if retiring farmers could retain more of their life savings (in other words, pay less tax), it would help them pass on their farm to the next generation at a lower price, thereby increasing success for many young farmers.

As a farmer, it would be great to have an increase in the lifetime capital gains exemption, but there’s little evidence for how much benefit would actually trickle down to the next generation.

Still, it’s refreshing to see federal budget requests that treat farming as a business rather than a welfare case.

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It’srefreshingtosee federalbudgetrequests thattreatfarmingasa businessratherthana welfarecase.

The post A Different Perspective For Budget Consultations – for Aug. 30, 2010 appeared first on Alberta Farmer Express.

Interestingly, the federal-provincial flood assistance is targeted at only crop producers. Livestock producers with flooded pasture and hay are not included.

Amazingly, last month’s annual meeting of federal and provincial agriculture ministers concluded with a detailed program announcement for flooded Prairie farmland. Usually the closing news conference to these meetings is short on tangible action and long on bafflegab.

Rarely do governments act so quickly and decisively, but the flood aid still leaves a lot of troubling questions.

There is no perfect program to deal with the widespread flooding problems and the announced program does strike a reasonable balance. The $30 an acre in compensation applies to both unseeded land as well as cropland that’s been flooded – a much more equitable approach than only providing compensation for unseeded ground.

It will provide some significant money without completely upsetting the balance between flooded land and the crop insurance coverage on crops that have survived.

The assistance will be relatively easy to calculate and money will be able to flow quickly to compliment the regular unseeded acreage payments and establishment benefits available through crop insurance.

Prairie-wide, the program will deliver about $450 million. There will always be some who says the assistance should have been greater. That’s the stance being taken by Saskatchewan NDP Leader Dwain Lingenfelter, who calls it a slap in the face.

It’s interesting to note that past NDP governments were reluctant to cost-share even the existing farm safety nets and their response to disasters was to beat up on Ottawa for not fixing problems as they arose.

Still, Lingenfelter’s comments do echo the sentiments of a core group of producers who seem to believe that government assistance should provide farmers with an ironclad guarantee that they can’t experience a loss. No other business has the safety net protection of crop producers, but some still expect more.

Officially, this new money is an AgriRecovery program with the money justified by saying it’s to rehabilitate the flooded land. In reality, what they’ve done is augment the existing crop insurance programming.

Crop insurance inadequate

That leads to another question. Why should governments top up crop insurance coverage in a year where there’s a widespread disaster when they wouldn’t likely have the same response if the problem was regional?

Shouldn’t crop insurance be adequate to start with, providing protection to individual producers no matter how many are affected?

The Western Canadian Wheat Growers Association says the experience this spring shows that Saskatchewan Crop Insurance needs to be strengthened. The group notes that Manitoba producers have the option to purchase unseeded acreage coverage at higher levels, while in Alberta coverage ranges from $25 to $70 an acre depending upon whether certain inputs such as fertilizer have already been applied.

In Saskatchewan, the coverage is a flat $50 an acre. With the deductible and the formula for seeding and insurance intensity, the payment typically comes to a lot less than $50.

Interestingly, the federal-provincial flood assistance is targeted at only crop producers. Livestock producers with flooded pasture and hay are not included.

The livestock industry has been suffering with low market prices and large losses for years, but government assistance has been meagre.

There was a belated AgriRecovery response to last year’s drought in Alberta and northwestern Saskatchewan with per head payments now being made to producers in a designated counties and rural municipalities.

The criteria used for picking the drought region are not transparent and producers in some other regions say they should have also qualified.

By comparison, the flood response on cropland is far more equitable and timely. Crop producers have more safety net protection than livestock producers to start with, but they’re also much more likely to command additional money.

Farm support continues to be highly political. In addition to need, the size and strength of the lobby effort plays a big role.

Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached atkevin@hursh.ca

The post Quick Action On Flooded Land, But… appeared first on Alberta Farmer Express.

There’s been a lot to talk about this spring, with a big low pressure system often following close on the heels of the last. There’s been an amazing amount of precipitation. Areas that were bone dry are now saturated.

Not surprisingly, Saskatchewan seeding progress is far behind normal and there’s a significant danger of many acres going unseeded. The provincial agriculture department estimates that 28 per cent of the provincial crop was seeded as of May 18, versus a five-year average of 60 per cent. At no time in the past 10 years has seeding been so late.

Within the northeast and east central regions of the grain belt, there are crop districts with very little seed in the ground.

As farmers gather and commiserate about seeding delays, they quote from the latest Environment Canada forecasts and what they’ve seen and heard on The Weather Network.

Increasingly, producers are also discussing what World Weather Inc. is predicting. Based in Kansas, this private forecasting company is quickly gaining a loyal following.

For the past few years, Larry Weber of Weber Commodities in Saskatoon has raved about Drew Lerner of World Weather Inc. Now, many producers are paying the fee to subscribe to Lerner’s daily report.

I’m a subscriber and I’ve been impressed. In most cases, Lerner has been days ahead of Environment Canada in predicting major precipitation events. With these last big rains, World Weather Inc. was predicting significant rainfall when Environment Canada was still forecasting a probability of showers.

Lerner provides a description of where the systems are tracking and what they’re likely to do. With Environment Canada, you get little of the background. Some say it doesn’t matter. The weather is going to happen and as a farmer you just have to adjust. I disagree. Increasing the reliability of seven and 10-day forecasts helps with all kinds of growing season management decisions.

It would be great to have even longer-range forecasts with reasonable accuracy, but I’m not convinced that is possible.

The people who count 90 days after major fogs to predict rainfall events may beg to differ. This year, there were heavy fogs in the late winter that have corresponded to big rains a certain number of days later. However, there are other years when fogs and precipitation events seem largely uncorrelated.

The fog theories are more believable than the Farmers’ Almanac or dissecting pig spleens, but long-range forecasting still seems to be a shot in the dark, whether you’re using science or folklore.

Medium-term forecasts in the seven-to 10-day range have typically had limited reliability too, but the track record for World Weather Inc. is impressive. Perhaps Environment Canada could be providing a similar level of accuracy without a subscription fee if they weren’t so starved for funding and people.

Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached atkevin@hursh.ca

The post Wanted: Accurate Weather Forecasts appeared first on Alberta Farmer Express.

The purchase price on most of the land is in the range of $900 to $1,000 an acre. That’s a bargain compared to what most comparable land is worth in Alberta.

Here in Saskatchewan, here’s a lot of talk about a big land deal around Conquest, just west of Outlook. In the last couple of months, approximately 85 parcels of land have been purchased by Van Raay Land Inc. and Van Raay Land Inc. et al. The total is around 10,500 acres for a price tag of roughly $9.5 million.

Cor Van Raay Farms Ltd. is one of the Alberta’s largest cattle feeders.

No word on the plan behind the sizable Saskatchewan purchase. Some wonder if the land will be used as a base to produce grain and forage for a large cattle feedlot. Others wonder if the land is just a long-term investment.

Since Saskatchewan’s farmland ownership laws changed in 2003, there’s been an influx of investors from outside the province. Saskatchewan land prices remain the lowest in North America, leading investors to conclude that our prices have a great likelihood of appreciating.

For 2008 (the last year available), Statistics Canada pegged the average price of Saskatchewan farmland at $435 an acre. This includes both grain land and grazing land in all parts of the province. By comparison, the number for Alberta was $1,392 an acre, Manitoba was $772 and Ontario led the nation with an average of $4,593.

Relative bargain

The land purchased by Van Raay is generally good cultivated land in a key lentil-growing region. The purchase price on most of the land is in the range of $900 to $1,000 an acre. That’s a bargain compared to what most comparable land is worth in Alberta.

Alberta prices have been pushed upwards for many years by all the wannabe cowboys wanting to live on acreages. There is also a much higher population and a lot more business development than in Saskatchewan.

However, in the last couple of years, Saskatchewan has seen significant development in the Highway 11 corridor from Regina to Saskatoon and up to Prince Alberta. The land north of Saskatoon is now some of the highest priced in the province.

The area between Saskatoon and Rosthern also has the province’s highest concentration of dairy farms. The supply-managed dairy industry has the cash flow and net returns to bid aggressively for land. It’s quite common to see quarter sections sell for more than $200,000.

In 2008, the grain industry did amazingly well. In 2009, despite declining grain prices, many grain producers still had good returns. The upcoming year is a big question mark with cereal crop prices expected to languish at disappointing levels.

In the previous couple of years, a lot of land changed hands. With returns now less certain, there appear to be fewer deals. However, prices seem to be remaining strong.

In the part of the world where I farm (down in the southwest near Cabri), the recent sale of a particular section of land has raised some eyebrows. The four quarters went for about $800,000, an average price of $1,250 an acre.

That’s way above what the market price has been in the area, but if you get a couple of motivated buyers, it’s surprising what can happen.

Land prices don’t always increase, as evidenced by what happened in the high-interest rate era of the early to mid-1980s. However, over the long term, many observers believe farmland is a sound investment. It earns annual income and it’s a lot more tangible than a piece of paper.

Kevin Hursh is a consulting agrologist and farmer based in Saskatoon. He can be reached at kevin@hursh.ca

The post Albertans looking east to Saskatchewan for farmland appeared first on Alberta Farmer Express.