The average value of farmland in Alberta increased by 6.7 per cent in the first half of 2008, according to Farm Credit Canada’s (FCC) fall 2008 Farmland Values Report.
Rémi Lemoine, FCC senior vice-president, portfolio and credit risk says “The values in this report reflect Canadian agriculture trends at the beginning of 2008. Crop producers were optimistic about long-term profitability. Commodity prices for grains and oilseeds were stimulated by the growing demand for food and biofuels. Land prices also are being driven by increased commodity prices and interest from non-farm investors.”
There is growing interest in farmland as an investment. When investors compare buying farmland, residential properties or stocks, farmland is looking much more attractive. “We’ve noticed this particularly in Western Canada. It appears to be more attractive to investors due in part to the oil and gas industry, potash resources and relatively low land prices compared to parts of Eastern Canada,” says Lemoine.
In the last three semi-annual reporting periods, farmland values in Alberta have increased by 6.4, 10.3 and now 6.7 per cent.
Overall, Canadian land values increased by 5.8 per cent in the first six months of 2008. The complete Farmland Values Report is available at www.FarmlandValues.ca