Farmland price gap

Farm Credit Canada has come out with its latest farmland values report. In the second half of 2009, Saskatchewan farmland increased in value by an estimated 3.4 per cent. For the entire year, the increase was 6.8 per cent. This actually represents a slower rate of increase than in the previous couple years. In 2008, Saskatchewan farmland shot up by over 14 per cent, while the increase in 2007 was nearly 11 per cent. Over the past three years, the annual rate of increase has been over 10 per cent – much better than a lot of investments. The land market was hot in Manitoba in 2009, while it was comparatively cool in Alberta. However, it you look at the past three years, all three provinces have had similar increases – in excess of 10 per cent a year. Farmland has always been less expensive in Saskatchewan than in the neighbouring provinces. Observers say that makes Saskatchewan dirt a better investment since it has more upside potential. Looking at the numbers for the last three years, that isn’t what you see. Saskatchewan has kept pace on a percentage basis, but with less expensive land to start with, the price gap has actually widened. I’m Kevin Hursh.