Farm Credit Canada's Chief Economist J.P. Gervais says the average value of Canadian farmland increased by 5.4 per cent, slightly ahead of 2019's average of 5.2 per cent.
The highest average provincial increase for farmland in 2020 was in British Columbia and Quebec, with averages of eight and 7.3 per cent, respectively. Alberta followed with a six--per-cent increase and Saskatchewan mirrored the national average increase of 5.4 per cent, while Manitoba's farmland prices were up 3.6 percent in 2020.
He notes some underlying factors include strong income from the grains sector with an 8 per cent gain in farm cash income for 2020.
"It's a result of strong prices, especially in the second half of the year. That's one of the drivers that applies coast to coast, the second one is low interest rates, as well, historical lows. If we look at the average borrowing costs in Canada in 2020, it came down all the way down to 2.25 per cent."
He says we saw some positive movement and strength in commodity prices.
"So just Saskatchewan for example, for the entire province, you know 18% gain in cash receipts. Alberta being a little bit more diversified so to speak in terms of the sectors or enterprise types that are the province but still very, very strong increases when it comes to grains and oil seeds, for sure. Yet you know when you think of the pandemic, it did hit the livestock sector more than any other sector. You know, especially the cattle sector."
He says if you look at income numbers for a province like Alberta, even to some extent, Manitoba, that has quite a significant share of hogs. Hog receipts in the overall provincial receipts, well that is going to show up with some numbers on an income basis that are a little bit less positive than you know in a province like Saskatchewan, which is mostly grains, oilseeds.
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