Rosy outlook for Canada's farm sector reflects farmland values says farm leader

Friday, June 21, 2013

by DAVE PINK

A Statistics Canada report released this week confirms the overall health of the agricultural industry across Canada.

The balance sheet of the Canadian agricultural sector, up to Dec. 31, “was no surprise,” said Mark Wales, president of the Ontario Federation of Agriculture. “It’s really a reflection of farmland values, and in Ontario those prices have shown their largest increase in years. That has renewed optimism.”

And if there’s any downside to the higher prices for grain that are being paid to farmers across the country it is in the livestock sector, where feed is now more costly, said Wales. “If anything, I’d like to see more balance in the industry,” he added.

But, he said the economic growth in both China and India should result in a continuing high demand for Canadian-produced protein, and a reason for long-term buoyancy in Canadian agriculture.

In all, equity in Canada’s farm sector totalled $341.4 billion at the end of the year, up 7.7 per cent from the previous year. Strong gains in the value of assets outpaced a rise in liabilities. In Ontario, there was a net gain in equity of 10.3 per cent, to $93 billion.

The report also pointed out that the total value of farm assets rose nationally by 7.5 per cent of $408.1 billion in 2012, while total liabilities rose 6.4 per cent to $66.7 billion. The largest increase among asset categories came in the value of farm real estate, up 9.7 per cent to $32.9 billion. That is the largest annual percentage increase since Statistics Canada began tracking farmland prices in 1981.

The debt-to-asset ratio, which measures the dependence of farm business on debt, was 16.3 per cent in 2012, down slightly from the previous year, and the lowest since 1999. BF