by GREG NIKKEL of the Weyburn Review
Farmland values in the Weyburn region are fairly stable this year, in keeping with the average level of land values in the province, but they are in danger of falling if grain prices remain low.
Local appraisers and brokers of farm land sales agree with a report issued by the Farm Credit Corporation, which tracks farmland values across the country, with one predicting that land prices will begin to fall if grain prices stay low.
For Saskatchewan as a whole, the FCC said land prices have remained largely unchanged since the beginning of this year, as prices have levelled off somewhat. For the period from January to July of this year, prices only rose an average of 0.3 per cent across the province.
Larry Henheffer, broker and appraiser for Anchor Realty, said land prices will remain stable or most likely go down a bit, depending on how grain prices go.
"It's directly related to commodity prices, and when commodity prices are down so land values will follow," he said, predicting that based on current grain prices, land prices could go down between three and five per cent.
"When the prices are low and input costs are high, the bottom line is to make a dollar in your business," said Henheffer, adding this will mean producers will be more cautious or hesitant in buying land now.
Local appraiser and broker Kevin Lackey said the stability of land prices has held so far this year, but upcoming land sales in November and December will tell the tale if prices will stay that way or go down.
"There's very little land that sells between when the crop goes in and harvest ends. Three-quarters of the relevant sales (for the period in the FCC report) would've been between January and when the crop went in," he said, noting his first land sale of the fall will be on Nov. 16, followed by one on Dec. 9.
"Indications are that the prices will be stable. With the land I have for sale right now, there's a lot of interest in there right now," said Lackey.
The FCC report said province-wide there has been little change in land prices since January because of lower grain prices, slowing down activity in the land market. Saskatchewan's trend differs from that of its neighbours, Alberta and Manitoba, which reported land price increases of 4.9 and 2.7 per cent respectively for the same time period. Nationally, Canadian farmland values rose by 2.2 per cent in this time period.
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