April 27, 2009

REGINA — The average value of farmland in Saskatchewan increased by 8.8 percent —the highest in Canada —in the second half of 2008, according to Farm Credit Canada (FCC).

This follows increases of 5.6 and 7.8 percent in the previous two reporting periods, said FCC's semi-annual farmland values report released Monday.

"Saskatchewan led the pack with regards to the increase,'' said Gerard Woynarski, senior appraiser with FCC in Regina.

Next highest was New Brunswick at 6.3 percent and Quebec at 5.9 percent. Overall, the average value of Canadian farmland increased 5.6 percent during the last six months of 2008.

This is the third-highest percentage increase since 1997 and it is nearly the same as the 5.8-percent increase noted in the fall 2008 report.

Woynarski said land values are closely related to commodity prices. "These larger increases in land value (during the last 18 months) started with the increase in commodity prices that we saw rise dramatically in 2007 and into 2008.

"More recently, they're moderated. This past reporting period has the leftovers from that previous (commodity price) period.''

But other factors, including out-of-province demand and crop production, are also driving up land prices in Saskatchewan.

"If we get good quality (crops), good production and good prices, those are the three dimensions that fit well together in 2007.'' Last year, Saskatchewan had a record crop, which should also support land prices.

Across the country, despite persistent problems in the livestock industry, land prices have been moving steadily upwards or holding their own.

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