Ag Economist Topics
The most recent annual increase in U.S. farmland values is much lower than the double-digit annual gains recorded between 2010 and 2012.
There are very few inputs producers have the ability to negotiate and as a result, there is increased attention towards the potential for cash rental rates to decline.
Meat prices have been one of the contributors to higher overall inflation in Canada. Consumer beef prices have increased almost 13 per cent and pork prices almost 17 per cent in one year.
What are the economic drivers of farmland values? In short, crop receipts and interest rates. It’s no surprise then, that with receipts being as high as they’ve been and interest rates as low as they’ve been recently, that farmland has seen large increases in its value.
Although crop prices have rebounded from their recent lows, the drivers of this recovery may be short term.
U.S. crop production and acreage are not likely to fall, even in an environment in which crop prices are declining.
The combination of a lower Canadian dollar and an improving world economy should strengthen the position of Canada’s food and beverage manufacturing sector.