Average farmland values continued to rise across the country last year, but Nova Scotia’s numbers were down markedly from the 2013 increase.
According to the most recent Farmland Values Report released by Farm Credit Canada (FCC), the average value of farmland in Nova Scotia increased by 1.9 per cent in 2013.
And while the province’s farmlands have seen a steady increase in value since 2005, last year’s increase took a dive from the 9.8 per cent rise shown in 2012 and the 6.2 per cent increase in 2011.
Across the country, the average value of Canadian farmland increased by 22.1 per cent in 2013, with the majority of the increase occurring in the first half of the year.
“The positive overall health of the agriculture industry during 2013 is reflected in recent land value trends,” Michael Hoffort, FCC's chief risk officer said, in a news release.
“It’s an indicator of the industry’s strength, and it’s good news for producers who hold land as an asset. At the same time, it can be a challenge for those who want to buy farmland to expand their operations. There’s often a limited supply of land available for sale and land that’s offered for sale is strongly pursued.”
Low interest rates, growing world food demand and the resulting strong commodity prices in the first half of the year supported the increase.
The national average represents the largest increase since FCC began reporting in 1985. The second highest increase was 19.5 per cent in 2012.
Farmland values last decreased in 1992, when they dropped by 2.1 per cent.
Average farmland values remained unchanged in Newfoundland and Labrador and increased in all other provinces. Saskatchewan experienced the highest average increase at 28.5 per cent, yet the average land price in Saskatchewan is still less expensive than in the neighbouring provinces.
The two most important drivers of farmland values are crop receipts and interest rates.
To see the FCC Farmland Values Report and video, visit www.farmlandvalues.ca.