Land prices and cash rents

What’s happening with the price of farmland? What about cash rental rates? I put those questions recently to Brad Farquhar of Assiniboia Capital Corp. which now owns more than 110,000 acres in Saskatchewan. A number of companies are using investor money to buy land and rent it back to farmers. Assiniboia Capital Corp is the largest on the Prairies, with about $75 million in assets. Farquhar says land prices in general continue to appreciate. He thinks Saskatchewan values are up about three per cent in each of the last two six-month periods, which is the estimate published by Farm Credit Canada. However, he says some land in east central Saskatchewan is selling for less than its municipal assessment, while other areas are more than two times assessment. The province-wide average is about $515 an acre, but he is seeing prices in the $1,200 to $1,400 an acre range on Regina heavy clay. In Farquhar’s judgment, land values are rising a bit faster than cash rents. Rents are more affected by wetness concerns. While sale prices for farmland are a matter of public record, determining land rents in an area requires talking to a bunch of landlords and tenants since there’s no published data. I’m Kevin Hursh.