Demand for farmland in Western Canada is running very strong, with real estate agents reporting difficulty finding enough willing sellers to meet that demand in the current climate.
"We continue to have low supply and lots of demand," said Chris Classens of Signature Service Real Estate at Coaldale in southern Alberta. Previously, he said, a farm would come up for sale and all of the effort on the part of the agent would be in advertising and finding a buyer.
"Now, we have all kinds of buyers and are having trouble finding people willing to part with their land," he said.
"There are certainly a lot of people in the market to buy good grain land," added real estate agent Grant Tweed of Century 21 West-Man Realty at Brandon, Man.
Interest, he said, primarily comes from local farmers expanding their operations, with an increase in younger farmers also looking to enter the business.
"I’ve had more calls this fall… than I’ve had for a couple years," said Tweed.
Good commodity prices were behind some of the interest in acquiring agricultural land, he said. The looming end of the Canadian Wheat Board’s single desk for wheat and barley marketing was cited as a positive sign by some of his customers looking to get into the grain business.
"There doesn’t seem to be any area where if you had a parcel of good grain land you wouldn’t have enough buyers to make it pretty competitive," he said.
"People are prepared to pay more, and what seemed difficult to achieve a year ago is now easier."
On the other side, many potential sellers are hesitant. The uncertain global economic situation was likely limiting some of the selling interest, Tweed said, as land is a secure investment and promises to provide a steady return.
"Throughout the recession and the economic turmoil, farmland continues to show more value and it’s the best investment you could have," said Classens.
In addition to producers expanding their operations, investors are also putting more money into farmland in Alberta and Saskatchewan, he said.
"Commodity prices are very strong and interest rates are very low, and as long as those two (factors) are there the demand will continue to be very high."