Strong demand for good cultivated land in Central Alberta helped push farmland values up four per cent across the province in the first half of 2011, according to the latest Farmland Values Report released by Farm Credit Canada.That was better than the 1.5 per cent increase in values the province saw in the last six months of 2010.The supply and demand of land, commodity and livestock prices, weather conditions, interest rates and current economic conditions all play a role in farmland values, said Bruce Gordon, senior appraiser for FCC.ìThat would also apply to Central Alberta,î he said, noting there is some regional variation across the province. ìYou're certainly going to find areas that maybe had poor weather or harvesting or crop conditions where they maybe didn't experience as good a year as maybe someone that had Ö excellent yield, excellent prices.îOne of the other factors that affect land prices is the location of land, and Central Alberta, being situated in the Calgary-Edmonton corridor, is in a prime spot in the province.A cold, wet spring in 2011 had a moderating effect on the price of land as farmers were unable to seed crops until later in the spring. Gordon suggested prices moderated because farmers weren't as optimistic about the outlook of the crop, causing some softening on the valuation of land.Gordon said development on a neighbouring piece of property and agricultural factors such as weather and commodity prices would both influence land prices.ìWhen (producing parcels of land) are right next to the City of Red Deer, City of Calgary, Town of Olds they are subject to those other demands for land. So any time you have a strength in demand, no matter what the source, you're going to probably have a stronger price,î he said.Over the last 10 reporting periods dating back to January 2007, farmland values across Alberta have fluctuated from an increase of one per cent in the first half of 2009 to a 10.3 per cent increase between July of 2007 and January 2008.Nationally, Alberta ranked in the middle of the pack for the January to July 2011 farmland value increase. Several provinces experienced no growth in farmland values while Saskatchewan led the pack with an increase of 11.6 per cent. Strong commodity and cattle prices were the main reasons for the increase in the Land of Living Skies.The valuation of farmland is calculated every six months and is based on sales of land during that particular period.
