Western Canada farmland values soar as growers expand
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - Western Canadian farmland is soaring in value, as farmers expand their lands and look to cash in on high crop prices, a report by real estate organization RE/MAX said on Monday.
The price of high-end grain-producing land in southern Saskatchewan has jumped 20 percent on average from last year to a range of C$1,200 to C$1,800 per acre, while the average price in central Alberta is up 20-25 percent to between C$2,000 and C$4,500 per acre of non-irrigated land.
"(With) the strong pricing in cereal grains and beef, a lot of Alberta farmers are looking to expand and (are) buying Saskatchewan farmland - that has really increased the price," said Elton Ash, regional executive vice-president of RE/MAX in Western Canada, from Kelowna, British Columbia.
"And in the rest of Alberta, Saskatchewan, Manitoba, the largest demand is from local farmers wanting to expand their own operation."
Canada is the world's biggest producer of canola and the sixth-largest wheat grower.
The average Canadian farm grew to a record size in 2011, and the number of farms shrank to a record low, according to Canada's census. Improving machinery has made it possible to farm larger areas, and size also gives farmers negotiating power for selling their crops.
Grain prices have touched historic highs in recent years on growing demand for food in developing countries like China and India, as well as the usage of corn, wheat and oilseeds in production of biofuels.
This year, severe drought in the U.S. Midwest has raised concerns about supplies falling well short of demand. Continued...