75 / 96
FA R M F I N A N C E 2 0 1 7
FarmFinance
February 2017
Promotional Supplement
75
It’s no surprise that Farmland accounts for the biggest proportion of a farm’s assets. Experts say that in 1981, land made up 54% of the value of total farm assets, but that by 2015, the value of land assets had increased to 67% of total assets. Where is real estate going in 2017 in Ontario? In September, Farm Credit Canada (FCC) released its Ag Economics Outlook for Farm Assets and Debt 2016-17. The report notes three important takeaways that are relevant to farmers that are thinking of buying or selling farmland in 2017. First, FCC believes “Canadian agriculture remains in a strong financial position.” The report notes that the industry is healthy, but acknowledges that it “could face some challenges as farm income flattens and land appre- ciation slows.“ Second, FCC is predicting that increases in farmland values will slow down. Third, total farm asset values are in line with recent trends in farm cash income, according to FCC. This means that “Farmland values have appreciated faster than crop receipts in the last five years. Yet, financial risks remain manageable as the outlook for interest rates and net cash income are supportive of the balance sheet. “ FCC contin- ues by saying it “remains prudent for agricultural opera- tions to be flexible enough to amend business plans if the outlook for borrowing costs and/or profitability moves in a different direction.” The FCC report says that land was less affordable in 2015 than in previous years, “not just because value went up across the country, but also because appreciation in land values has outpaced increases in total farm revenue.” In Ontario, the affordability of land was identified as being “meaningfully different” than its historical average. Farmers looking to buy or sell farm property should look for real estate agents who specialize in farm and rural properties in Ontario. Visit Farms.com/RealEstate to find a real estate agent in your area that specializes in farm properties. The Farms.com/RealEstate site also allows farmers to search for farms for sale by farm type – there are plenty of farms for sale to choose from. The site welcomes 7,500 visitors to the site each month -- 7,500 farmers who are considering farm property.