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Agriculture Report

Farm Values and Debt Connected

Fadi

By Fadi Didi

One economist says that may be because farming has become more profitable.


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Farm Credit Canada's Outlook for Farm Assets and Debt show farmland values and farm debt are highly connected.

In the report, FCC says the value of farmland and buildings appreciated by 50.1 per cent between 2011 and 2016.
Meanwhile, outstanding farm debt went up by 32 per cent over the same period of time.

Chief economist J.P. Gervais says this correlation could be due to the fact that over the past decade, farming has become more of a profitable industry.

He says with a combination of improved farm profitability, low interest rates and strong asset appreciation, many producers have made big investments in their operation to improve the efficiency.

That Gervais says has also resulted in many farmers taking on additional debt, adding farmland currently makes up about 70 per cent of total farm assets.

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With Manitoba farmers starting to bring in their early-maturing soybeans between intermittent rains, they may start to see the toll from the dry summer.

Many crop analysts see soybean yields below what farmers have enjoyed for the past couple of years, but they stress that fields are variable and that longer-season varieties may give different results once harvesting begins.

A specialist with Manitoba Pulse and Soybean Growers says she is seeing smaller seeds and a wide range of yields from 20 to 50 bushels per acre.



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