(Changes second-last paragraph to state some Ontario farms grew
in value faster than west, others flat)
* Farmers expanding with better machinery
* Funds snapping up acres for long-term value
By Rod Nickel
WINNIPEG, Manitoba, Sept 10 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
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.
As in Western Canada, farmland values in the United States
have risen sharply over the past several years, and not even
this year's drought could keep prices from climbing in the
Along with farmers scooping up more land, funds are steadily
amassing large areas of the Western Canadian crop belt, then
leasing fields back to farmers to work.
"Certainly we don't influence the price because we're not
big enough to do that," said Doug Emsley, president of
Saskatchewan-based Assiniboia Capital Corp, which owns 120,000
acres of farmland in the province. "But what does start to move
the dial is when farmers start to buy land on the basis of
Chinese investors are also buying Western Canadian farmland,
Ash said, although Saskatchewan, the top wheat- and
canola-growing province, restricts purchases by foreign
interests to 10 acres.
Land in the eastern province of Ontario is generally more
valuable than land in the west, due in part to greenhouses and
the supply-managed dairy and poultry sectors. Ontario land
values grew more rapidly in some areas than on western farms,
but prices in other regions were flat, according to RE/MAX.
The highest-value farmland in the 16 Canadian markets
studied by RE/MAX is found in British Columbia's Fraser Valley,
where land that produces fruit and vegetables fetches on average
C$40,000 to C$60,000 per acre.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by