The average value of Canadian farmland rose nearly seven per cent last year, according to a new report, but that growth rate is likely to be cut in half over 2019 amid ongoing canola trade issues with China.
The 6.6 per cent gain for 2018 comes after an 8.4 per cent jump for 2017 and 7.9 per cent for 2016, according to an annual report released Sunday evening by Farm Credit Canada, an agricultural lender.
Values have increased ever year since 1993, but recent rises are lower than those during 2011 to 2015, according to the report. In those years, average worth spiked between 10.1 per cent and 22.1 per cent.
The group estimates values will still grow over 2019, but more slowly.
“I think we’re going to see the rate of increase that we’ve had in the past, we’re gonna see them slow down,” said Jean-Philippe Gervais, vice-president and chief agricultural economist, during a media briefing Friday.
About half of 2018’s growth rate or about 3.3 per cent would be “a fair estimate given some of the trade issues and some of the farm income pressures that we’re seeing right now in the marketplace,” he said.
In March, China suspended the licences of two major exporters of canola seed, citing concerns about pests, and Chinese companies stopped buying the product from Canadian producers.
The Canola Council of Canada and others have called on the federal government to send a Canadian delegation to China to sort out the issue. While the government appears willing to send a delegation, it has not yet happened despite a federal minister saying they’ve sent a letter to their Chinese counterpart with that request.
China’s been a major market for Canadian canola and accounts for about 40 per cent of all seed, oil and meal exports, according to the council.
The dispute comes after Canadian authorities arrested Chinese tech executive, Meng Wanzhou, in Vancouver in December.
That and other market issues could get resolved soon or take some time, said Gervais, but regardless he doesn’t yet anticipate a drop in the average value of Canadian farmland this year.
In 2018, all provinces but Nova Scotia, and Newfoundland and Labrador, saw average farmland values increase, according to the report.
Quebec saw the highest gains at 8.3 per cent, while New Brunswick experienced the lowest at 1.8 per cent.
Nova Scotia saw a 4.9 per cent decrease, and Newfoundland and Labrador did not have enough publicly recorded transactions to fully assess the situation.
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Aleksandra Sagan, The Canadian Press