Farmland values in Canada increased 7.4 per cent during the first six months of 2011, a report that tracks the prices of the rural properties has found.

Farm Credit Canada released its Farmland Value Report for the first six months of 2011 earlier this week. It states farmland values are continuing their upward rise of the last decade.

Saskatchewan saw the highest average increase of 11.6 per cent, followed by Ontario with a 6.6 per cent increase in farmland values. Quebec and Alberta experienced a 4.4 and 4.0 per cent average increase respectively, followed by Nova Scotia at 2.9 per cent and Manitoba at 2.4 per cent. Farmland values were unchanged in British Columbia, New Brunswick, Newfoundland and Labrador and Prince Edward Island.

FCC has been studying farmland values since 1990 through a network of 245 benchmark farm properties. The properties are appraised in January and July using recent comparable arm's-length sales. Sales are selected, reviewed, analyzed and adjusted to the benchmark properties.

Highlights are below and full details of the report, including findings for each province, are located at www.farmlandvalues.ca.

Saskatchewan
Saskatchewan farmland values' average increase of 11.6 per cent during the first half of 2011 was the highest in the country.

FCC states that strong commodity and cattle prices were the primary reasons for the increase. It's becoming more common for owners to accept rental agreements on their land instead of selling.

The largest increases occurred in the northwest and southeast areas of the province, which experienced good crops and strong commodity prices in the fall of 2010.

Rural municipalities in the southwest and northeast areas of the province were hit hardest with flooding in 2010, which caused potential land purchasers to be more cautious. Consequently, land values did not increase as much during this period.

Ontario
Ontario farmland values followed Saskatchewan for highest increase, rising average of 6.6 per cent during the first half of 2011.

The most significant increases were in southwestern and northern Ontario. Modest changes were recorded across other areas of the province, with limited or no change in farmland values. Strong demand for land was fuelled by dairy farmers as they continued to purchase additional land instead of dairy quota, which has restrictions placed on it.

Profitability of specialty crops, such as ginseng and vegetables, continued to drive up the price of land in southern Ontario. Dairy operations and cash crop operations increased demand and prices for land in northern Ontario. Large intensive livestock operations continued to seek land for expansion and to satisfy nutrient management program requirements.

Rural residential demand increased in select areas throughout southwestern Ontario and on the outskirts of the Greater Toronto Area. As a result, smaller farms are sometimes purchased by non-traditional buyers. This contributes to increased competition for farmland.

Quebec
Quebec farmland values increased an average of 4.4 per cent during the first half of 2011. Farmland values have remained stable or increased in the province since FCC began making these reports.

The western part of the province, Lanaudière and Centre-du-Québec, showed a significant increase. Demand exceeded supply, attracting a wide variety of buyers.

The farmland market in sectors located east of the Centre-du-Québec region remained stable, despite challenges facing the pork industry. The number of potential buyers was limited, due to a declining number of producers in areas where pork is the main industry.

In recent months, the Montérégie region was affected by flooding. As limited market information on properties affected by flooding was available at the time of reporting, the value impact on flooded lands was unknown.

Alberta
Alberta farmland values showed an average increase of 4.0 per cent during the first half of 2011.

Strong demand for good cultivated farmland was observed in southern Alberta. Large producers competed for land, which pushed demand up. Irrigated land suitable for specialty crops continued to be in high demand, with associated significant increases in value. Marginal land suitable for hay and cattle production also saw an increase in demand. Farmland was generally considered to be a sound investment.

Nova Scotia
In Nova Scotia, farmland values increased an average of 2.9 per cent during the first half of 2011.

Land in the East Hants and Colchester counties experienced upward pressure, mainly from successful dairy farms and commuters in the Metro Halifax area competing for land. Some high prices were paid for good quality agricultural land and demand was steady from part-time farmers and horse operators.

Dominated by dairy operations, a few sales were recorded in the Antigonish area at existing or slightly higher prices for small parcels. Milk quota was unavailable for purchase, which indirectly slowed down land sales.

In the Kentville area, rising prices were observed due to competition within and among various sectors. Supply-managed sectors were confident, particularly the broiler industry and vineyards continued to expand.

Manitoba
Manitoba farmland values increased an average of 2.4 per cent during the first half of 2011.

The most significant farmland values increases were observed in areas where grain farming is the main enterprise. High commodity prices, low interest rates and viewing land as a safer investment all fuelled land prices, even with the late spring, wet conditions and cold summer in 2010.

Despite excessively wet conditions in the Interlake region and in the southwest part of the province last fall, land values remained unchanged in this area.

Acres of unused pasture land in the Interlake region, with open and well-fenced parcels, commanded premium prices as this land can be used for cash cropping, forages or improved pasture. In the Steinbach area, supply-managed dairy and poultry producers bought available land for spreading manure.

British Columbia
British Columbia farmland values remained unchanged during the first half of 2011. The last report showed an average increase of 0.4 per cent.

There was an increase in the value of the best quality land in the Dawson Creek area, primarily due to strong demand from producers hoping to expand with top quality land. In addition, income from the natural resource sector continued to drive demand for land closer to urban areas, which acted as competition for producers looking to expand.

New Brunswick
In New Brunswick, farmland values were unchanged during the first half of 2011. This followed a 2.4 per cent increase in the second half of 2010, and no change in the first half of 2010. Values increased or remained static in New Brunswick since reaching a peak increase of 6.3 per cent in the last half of 2008.

In Madawaska and Victoria counties, land sales were for average to above-average quality potato production lands, sold by growers exiting the industry. There was strong competition between area contract growers, especially where land sales were tied to a processing contract volume. However, there was no change in value because the impact of strong competition was offset by reduced disposable income related to challenging input costs.

In the Sussex area, many large acreage properties or former farms were purchased, mostly by non-typical buyers for rural residential or part-time farming purposes.

Newfoundland and Labrador
Newfoundland and Labrador farmland values remained unchanged during the first half of 2011. Values showed no change in the second half of 2010 and an increase of 0.7 per cent in the first half of 2010. Farmland values have increased or remained static since 1993.

Dairy farms are the main agriculture industry in this area and most had adequate land holdings to support their activities. This resulted in little market activity.

Prince Edward Island
In Prince Edward Island, farmland values were unchanged during the first half of 2011. This followed a 3.2 per cent increase in the second half of 2010, and no change in the first half of 2010.

Competition for land in the Summerside area was primarily between contract potato growers, who invested in land and buildings for better product storage and refrigeration. Input costs remained a concern and potato growers continued to focus on improving margins through management practices. Meanwhile, the Charlottetown area showed a limited number of bare land sales during the first half of 2011. Competition for land was between various types of farm operations.

This video explores the highlights of FCC's Fall 2011 Farmland Values Report, including how land is valued, the factors that go into changes and a breakdown of values across the country.

Watch more FCC learning videos on our multimedia page 

The Beef InfoXchange System or BIXS has moved to the next development stage with the announcement of two system components. These include the successful nationwide launch of the cow-calf producer module as well as an online cattle sales listing service.

Cow-calf producers from across the country now have access to the system following more than two years of intensive stakeholder consultation and testing to resolve technical issues and ensure system functionality.

The cow-calf full-system rollout was timed to coincide with this fall's calf run, says Larry Thomas, BIXS national co-ordinator. He anticipates the bulk of new members will be recruited through BIXS partners such as Pfizer Gold and BeefBooster Inc.

These groups have teamed up with BIXS in an initiative recognizing the potential value added to producer herds as information is shared along the chain from cow-calf producers to feedlots to packers.

Producers who register for the voluntary program must supply the RFID tag numbers, birth dates and confirmation of participation in the verified beef program. All remaining information is optional and confidential, including a choice of up to 30 different value attributes to be tracked for individual animals.

The BIXS has also added an online cattle sales listing service for registered participants. It allows program members to advertise upcoming auction market or private sales for no fee. Viewers can sort by birth date, weight, breed, location and other information provided by the seller.

Thomas notes the service provides just one more tool for producers to establish business relationships and boost their BIXS cattle marketing program. He admits the timing was probably off to hit the top of the sales season, but says, "We launched it anyways. We wanted it out there so people know what it will do and to get familiar with it."

Thomas says work continues on the feedlot and packer components of the system with a target introduction date of late 2011 or early 2012.

Once these are functional, producers will have a powerful tool that can track everything from vaccination and weaning dates to genetic information and carcass grading scores.

For more information check www.bixs.cattle.ca.

Manitoba farm leaders say hundreds of farms in the province will have to change their heating systems within two years when a provincial ban on burning coal takes effect.

Manitoba will ban the use of coal for heating as an environmental measure, effective Jan. 1, 2014. The Manitoba Pork Council says a recent survey of its members shows more farms heat with coal than previously thought.

The pork council considers the 2014 deadline unattainable and wants it extended to 2019, says general manager Andrew Dickson.

The 2011-12 provincial budget contains measures encouraging coal users to apply energy sources that produce fewer greenhouse gas emissions. Those include an emissions tax and incentives to switch from coal to biomass fuel.

The tax, which takes effect Jan. 1, 2012, corresponds to $10 per tonne of carbon dioxide equivalent emissions. The province will also ban the use of coal for space and water heating, starting in 2014.

However, the province's two largest coal users — a Manitoba hydro generating plant in Brandon and a limestone processor north of Winnipeg — are exempt from the ban, although they will continue paying the emissions tax.

Farms most directly affected by the ban are Hutterite colonies, a number of which burn coal for hot-water systems to heat hog barns.

But Dickson says scores of other individual farms also have small coal-fired boilers to heat their barns, workshops and homes.

Doug Chorney, Keystone Agricultural Producers president, says his group and the Manitoba Pork Council met with government officials Nov. 2 to voice concerns about the coal ban.

KAP does not object to the ban in principle, but it wants the province to increase funding to help farmers convert to biomass heating systems, Chorney says.

"It's a big adjustment to make from a financial point of view, and also an operational point of view, because you may need special equipment."

KAP fears farmers, who burn only 10 per cent of the coal used in Manitoba, will bear the brunt of the new regulations, Chorney says.

Daryl Domitruk, agri-food innovation director for Manitoba Agriculture, Food and Rural Initiatives, says all the money from the emissions tax will go toward helping coal users convert to biomass or alternative energy sources. The estimated revenue is $1.6 million annually.

A new industry-led science and technology program is aiming at bridging the gap between ideas, products and the marketplace.

The federal Agricultural Innovation Program will make innovative value-added products, technologies, processes and services commercially available through a $50 million investment. The federal government states its program will help the Canadian agri-based sector increase employment and revenues and reduce production costs.

"Investing in innovation helps the agriculture sector exploit new, emerging opportunities and secure an increasing share in the marketplace," says Jacques Gourde, Member of Parliament for Lotbinière-Chutes-de-la-Chaudière in Quebec. "Support for local initiatives will help bring innovative solutions directly to producers and communities."

The federal government says AIP is a national program that will provide support for local initiatives to help address specific pre-commercialization issues or opportunities. The program will run to March 31, 2013 and provide funding through two streams:

- Knowledge Creation and Transfer. This will fund projects that accelerate the research and development, application and transfer of knowledge and technologies in the sector.

- Commercialization. This will fund projects that support the competitiveness, sustainability and adaptability of the sector by increasing the rate of successful commercialization and adoption of agri-based innovations in Canada.

The Knowledge Creation and Transfer Stream targets agri-entrepreneurs, firms and organizations to give them greater access to government, university and other resources required to support successful transformation of innovative ideas into viable business ventures. The non-repayable funding will support knowledge creation and transfer and faster pre-commercialization development of new agri-practices, products and processes.

The Commercialization Stream will provide for-profit companies, co-operatives and organizations with repayable funding for agri-based projects.

Full details of the AIP are at www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1320767853009&lang=eng.

Robert Bourgeois owns and operates Belliveau Orchard in southern New Brunswick. He says not a day goes by that he doesn’t use a skill learned while taking the Atlantic Agricultural Leadership Program between 2000 and 2002.

As an alumnus of the 18-month-long program’s fourth class, Bourgeois says the greatest benefits he received was the opportunity to learn from others and get a better understanding of his role in the farming community as well as on his own farm.

“I learned that to be a good leader, you need to move ideas into action by convincing others and stakeholders that you need to try new ways,” he says. “I learned to embrace change and try to adjust.

“The program also broadens your knowledge of agri-business locally, nationally and internationally.”

Established in 1994 in New Brunswick, the Atlantic Agricultural Leadership Program was incorporated as a not-for-profit organization in 2004 and expanded to accept candidates from the four Atlantic Provinces. To date, 128 participants have successfully completed the course which helps develop emerging leaders through a series of seminars and North American and international study tours.

A similar program is available to Ontarians in primary production agriculture, the agri-business and agri-food sector as well as municipal, provincial and federal governments and their agencies. Established in 1984, the Advanced Agricultural Leadership Program has graduated over 380 leaders. Its 14th class of 30 began the program in late September, when they met for their first seminar.

During the 19 months of the program, they will learn more about leadership and organizational development theories and practices, government and political processes, economics, trade policy, global affairs, sector and industry related issues in Ontario and globally through North American and international study travel components.

One of those participants is Wes Wiens, a grapevine propagator in Niagara-on-the-Lake, who sells grapevines to wineries and vineyards across Canada.

“I wanted to participate in the AALP program in order to broaden my perspective on agriculture both nationally and internationally as well as to grow and be challenged as a leader,” he says. “I hope to gain a greater understanding of global agriculture and its impact on the world’s economy while learning more about my potential involvement in this.”

One seminar into the program, Wiens says he's extremely impressed by the level of professionalism of the program and the scope of what he and the other participants are learning and being challenged in.

“I think it is important to continue to challenge and better ourselves and this is a great opportunity to do that,” says Wiens. “Agriculture is something that has drastically changed over the last 30 years, and there is so much more involved in providing leadership to this essential sector."

“AALP provides the tools and empowers leaders in a variety of agricultural sectors to better understand agriculture and what it takes to be a leader in it.”

For more information on the Advanced Agricultural Leadership Program, visit www.aalp.on.ca.

The Atlantic Agriculture Leadership Program is accepting applications for its eighth class into mid-December. For more information, visit www.agleaders.ca.

To start this week and into the time of writing on Nov. 16, Winnipeg canola futures were trading higher, but only modestly recovering from a steady decline experienced through the fall season which sent prices to their lowest levels of calendar year 2011.

Talk of fresh canola export business with China this week and advances in the Chicago Board of Trade soybean complex led to a bounce in canola futures. The new export business was in combination with an already aggressive export line-up at Canada’s West Coast. Activity was described as being on the heavy side, although market participants continue to keep a close eye on the financial problems in Europe.

A short-term turn higher in the CBOT soy complex was likely key to the canola market’s strength so far this week, where US bean sales to China were also confirmed.

But let’s reiterated a piece of news coming out of Chicago: the $12 mark in soybean futures is believed to be China's "value" line. China’s buying agency, Sinograin, says it will not buy when prices are above that level, but could increase purchases below that price. Is that believable? Who knows in the sometimes deceptive world of grain trading.

But without a South American weather concern, I suspect it will remain difficult to build sustained upward price momentum for oilseed markets at this time. Seasonally, though, this is usually a good time for markets to rise.

For now, grain markets continue to operate in an environment where little news seems to have any direct or continual impact on daily price action. Market trends are choppy.

In such cases, technical trading and/or outside market influences dominate. Short-term technical corrective rally targets were achieved by midweek at the time of writing. We may manage to spend some time up here, but it will remain difficult to build multi-day upward momentum. Overall conditions warn of declining price trends during the next several weeks.

It is also worth noting that the American dollar appears to be rolling higher and may be confirming ideas of a period of trending higher U.S. dollar values. If true, this is not a supportive feature for commodities.

From the start of the calendar year 2011 to the end of summer, Winnipeg’s canola futures market traded within a very broad range, oscillating generally between $600-$610 a tonne on the topside and about $550 a tonne on the bottom-end. But since the peak in futures trade at the very end of August, the canola price chart going into the autumn season has taken a distinctly bearish turn.

Speculative and chart-based long liquidation has steadily eroded canola futures pricing through September and October, and now into the first half of November. The activation of sell-stop orders, on the way down, amplified the losses seen in canola.

Canola is getting some support from a declining Canadian dollar and still firm vegetable oil prices. Regardless — and maybe I’m wrong — but I’m just not convinced we have a lot of upside potential in the oilseeds at this time.

Fortunately, we have seen some rather impressive improvement in cash basis opportunities, which have offset some portion of the futures decline. In many places, cash bids might only be 50 cents a bushel below the peaks we saw two months ago.

Daily trading volume picked up this week, but looking at the charts, since May and for sure since the August peak, futures have used 20 to 30 day moving averages as a price ceiling, spending only a couple of days above before turning down again to make a new low.

Maybe this time is different, who knows, but with $12 a bushel or near to it again attainable on a deferred delivery basis, growers need to decide if that is enough to act on some portion of cash sales.

Price rallies, short-term in nature, during this period of time are to be sold. And that is the program PFCanada intends to continue following. We’ll hear periodic reports of expanded Asian food demand, such as we have heard this week, which will be price supportive. But in this kind of environment, Asian buyers are not inclined to chase markets higher.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call 204-654-4290 or visit www.pfcanada.com to find out more about his services.