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Groundswell
Vol. 11 Issue 09
While farmers still struggle to make ends meet, the price of the land under their feet is suddenly soaring â a sign, some say, of a new era for agriculture. Or maybe just a bubble
By Lorne McClinton
Photograph by Jeffrey Lamont Brown
 Rising Alberta farmland prices have made Joe Wecker a happy man. Wecker, his wife Wendy, father Hans, and mother Ernestine, sold their 3,000 acres of farmland near Olds and used the proceeds to buy 8,400 acres near Sedley, Saskatchewan. Their new land had similar productive capacity but its best feature was the price. Saskatchewan land is still selling for a substantial discount to Alberta farmland. Even though the family paid a premium to purchase such a substantial amount of land, the price of an acre of Olds land was still able to buy between four and five acres in Saskatchewan.
“It was the best decision we’ve ever made,” Wecker says. “Land prices are so high in Olds that it was impossible to expand and if you can’t expand you are finished. The people [in Sedley] have been great too. The area is much more laid-back than around Olds. In Alberta, with the oil boom, it’s always go-go-go. Here there is more time to slow down.”
Despite continuing mixed signals on the health of the farming economy, rural land values in Western Canada, particularly Alberta and B.C., have taken a big jump over the past year. Echoing a trend seen in the U.S. where speculation over the mandated demand for biofuels, combined with urban prosperity, has boosted the demand for hobby farms and acreages, farm values in some areas have increased in the order of 30% to 100%.
Prices in Alberta increased by a solid 4.8% province-wide in the second half of 2006, according to Farm Credit Canada’s latest report on farmland values. (Only B.C., at 8.2%, had a stronger growth rate.) Agricultural real estate varies from under $1,000 per acre to more than $30,000 across Alberta. The highest prices are found in areas closest to the cities, in the foothills, along the Highway 2 corridor and in the southern irrigation districts.
“Our farmland values report is historical,” says Gerard Woynarski, acting manager of Farm Credit Canada’s Valuation Business Unit for Saskatchewan, Alberta and B.C. “We’ve got about a six- to 12-month lag when land values go up and anywhere from an 18- to 24-month when land values go down. We’re not totally sure why but perhaps it’s because people have a tough time admitting when the market is going down. But when they see signals the market is going up, they seem to react quicker.”
To continue reading this article, please pick up a copy of the September 2007 issue of Alberta Venture, on newsstands now. Or, contact our subscription department via our subscription page.
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