Manitoba farmland values holding ground

Hey there, time traveller!
This article was published 14/2/2020 (831 days ago), so information in it may no longer be current.

Compared to farmland in B.C.’s Fraser Valley selling for $100,000 an acre, agricultural land in Manitoba is a bargain.

However, land values across the province vary from a high of about $5,000 per acre in the Pembina Valley/ Central Region to less than half of that in the Parkland Region.

The good news, according to Farm Credit Corporation vice-president and chief agricultural economist J.P. Gervais, is that Manitoba farmland is likely to hold its value in the coming year.
"Long-term, there’s a lot of positives there," he said during a presentation at the Keystone Agricultural Producers’ annual general meeting on Feb. 5.

Gervais said data from the first half of 2019 shows that the average increase of 3.5 per cent for Manitoba farmland posted in 2018 has slowed.

"We had a market that still is strong but slowed down a little in terms of an increase."

Gervais said international trade tensions and weather concerns have an effect on Canadian farmland values. It is possible that the current coronavirus pandemic might have an economic impact on Canadian agriculture.

FCC projections show profit margins to be tight for 2020. In comparing the cost of an acre of farmland with the revenue it can generate, there is a gap.

"Manitoba farmland is expensive relative to crop receipts," Gervais said.

On the positive side, he said, interest rates aren’t expected to rise.

"Another thing supportive of land values is the (Canadian) dollar," he said.

The nature of farmland helps retain its value.

"At the end of the day, there’s a limited supply out there," Gervais said.

Stacey Hiebert, with Royal LePage Riverbend farm division, said he’s seen strong demand for Manitoba farmland due to continuing pressure for farmers to increase their land base. However, the price paid varies by region within the province, with well-situated, drained and fertilized land fetching top dollar.

University of Regina associate professor André Magnan shared information collected in a 2019 study of western Canadian farmers’ perceptions relating to farmland. It includes 400 responses, with 66 from Manitobans.

He said more than one-third of participants said they plan on buying more land within the next five years but are hampered by high prices, competition and the inability to find land close by.
Over three-quarters of those surveyed said they rent land with over 400 acres being the average size. Most study participants pay a fixed cash rental rate, and the Manitoba average of $76 an acre is higher than rates in Saskatchewan and B.C.

 

Supporting young farmers
The average age of Manitoba farmers is approximately 55 years, but Keystone Agricultural Producers is working to help out the younger generation.

The organization’s Manitoba Young Farmers program has been reviewed to make sure it is addressing the needs of those under age 40. KAP program manager Thea Green spoke at KAP’s annual general meeting on Feb. 5 about the steps KAP has taken to identify young farmers’ needs.

Two focus groups of young farmers met last November. Participants highlighted issues they feel are of most importance such as having access to an adequate land base, their lack of time due to off-farm jobs, steps to succession planning, and how to be successful without expanding their farms.

A young farmers’ policy committee was formed to take policy issues to the general KAP membership.

Green said KAP will give young farmers the opportunity to network, and is sending five Manitoba delegates to the upcoming Canadian Young Farmers Forum. The desire for training and education can be addressed through webinars and other online content.

She invited Manitoba farmers to attend the first Manitoba Young Farmers conference at Winnipeg’s Victoria Inn (1808 Wellington Ave.) on March 5.

The cost to attend is $50 which includes lunch and two coffee breaks. Visit www.kap.ca/young-farmers-conference for the full agenda and to register.

— Staff