Farmland in the west central region, and across the province, saw another increase in the average value per acre in 2018.
According to Farm Credit Canada 2018 Farmland Value Report Saskatchewan’s farmland value increased by 7.4 per cent in 2018. The average price per acre was reportedly $1985/acre with values coming in between $900 and $3300 per acre, excluding the top and bottom 5 per cent sold in the province.
Last year the province saw a 10.2 per cent increase with 2016 showing a 7.5 per cent increase and J.P. Gervais, chief agricultural economist for FCC, said with the continual increase in farmland, producers are making more strategic investments, “Whether it means paying a higher price for land that has potential to become more productive or buying in blocks to improve efficiency of their operations, producers are sharpening their pencils with an eye on variable commodity prices”.
Gervais added that fewer land transactions last year is consistent with a tight supply of land available for sale and a softening in demand, which is a reflection of farm income levelling off, variable commodity prices and rising borrowing costs. He suggested operators need to exercise caution, especially in regions where the growth rate of farmland values significantly exceeded that of farm income in recent years.
Additionally, he stated another strategic investment is search out lower-valued land, “It can pay off if the operation is able to extract more from that land and improve its overall efficiency,” said Gervais.
Saskatchewan was tied with Alberta at 7.4 per cent, for the second highest increase across Canada with Quebec seeing the most significant increase at 8.4 per cent.