The data, released in an Oct. 3 Farm Credit Canada (FCC) report, shows the province following the national trend. Analysts say the rate of increase is starting to ease.

“When you look at the average increases, the increases are higher for the lower-priced land value areas, and when you look at the higher-priced lands, you’re seeing less of an increase when measured in percentage terms,” said FCC chief economist J.P. Gervais.

Why it matters: There’s no relief on land prices, although slowing rates of growth suggest that appetite has dropped in higher-priced areas.

That state of affairs is reflected locally. In comparing land price and increases across the province, eastern Manitoba and the central Manitoba-Pembina Valley have both highest average prices and the lowest growth. That also holds true if numbers are run for the last year rather than just the last six-month period.

However, Manitoba bucked trends in another area of the financial analysis. Gervais singled out Manitoba as one of only two provinces (the other being Saskatchewan) that saw a significantly higher price increase in the last 12 months (July 2022–June 2023) compared to the last calendar year.

Gervais said that is a function of the lower starting point for land values compared with other provinces, combined with a positive outlook for farm income.

“Values are still going up as a function of the limited available supply and a positive, confident outlook for the long term,” he said. “We had this rebound in 2022 production after a difficult 2021 year and that’s pushed up revenues at the end of 2022, early 2023.”

Overall cash receipts for the province were up 11 per cent in the first six months of the year, compared to the first six months of 2022, with grains and oilseeds up 23 per cent.

“A year ago, that was roughly flat because we had challenges with the 2021 crop that was marketed in the first six months of 2022,” said Gervais.

He also cited relief in the input markets, as those prices have softened since the astronomical highs of last year.

“Combined, I think that’s the reason why we have the increase that we have in Manitoba,” said Gervais.

The rest of the West

Alberta is where the data best matches Gervais’s economic intuition.

Farmland values in that province increased by three per cent over the first half of 2023 and six per cent over the last 12 months. That’s down significantly from 2022, when values jumped 10 per cent throughout the year.

“The pace of increase definitely seems to be slowing down in Alberta,” Gervais said.

However, FCC only looks at dry land in Alberta for its mid-year report.

“We don’t have enough transactions to accurately assess and measure the irrigated land markets,” Gervais said.

Alberta has roughly the same projected income increases as Manitoba.

“Cattle receipts are high, which is a positive given all the challenges with regards to drought, but if you look at cash receipts for grains and oilseeds, it is up 24 per cent,” said Gervais.

That increase, combined with a shortage of available land, has kept demand up, and high land prices have dampened the rate of rise.

“Land values still continue to go up, but at a slower rate of increase,” said Gervais.

Saskatchewan had the highest land value jump of any province in the last six months at 11.4 per cent. It had similar growing conditions and income levels to the rest of the Prairies, but its proximity to Alberta makes it an outlier in the region, according to FCC.

“At the end of the day, Saskatchewan, in some areas, is still priced lower than it is in Alberta,” Gervais said. “I think buyers from outside the province might explain why demand seems to be a little bit higher.”

Ontario

Ontario’s 6.9 per cent increase in land values so far in 2023 was in line with the national average, and only slightly higher than Manitoba, but the reasons are starkly different, says Gervais.

“In Ontario, there are definitely fewer transactions. It’s one of the critical aspects we’ve seen. There’s no way for us to be aware of 100 per cent of the transactions, but the bottom line is that there is a significant decline.”

Another contrast with its western neighbours is that Ontario has seen a decline rather than a significant year-over-year increase in farm incomes.

“For the first six months, grain and oilseed producers have seen a decline of three per cent in income,” said Gervais. “But that’s because the previous year was a really good year.”

In terms of farm income, Ontario had healthy years in 2021 and 2022, particularly for grains and oilseeds, but it also dodged the production challenges experienced on the drought-riddled Prairies.

“Higher interest rates and somewhat flat income for the first six months of 2023 explain why we’re seeing lower numbers for Ontario compared to what it was the previous 12 months,” Gervais said.

There is a wide range of pricing across the province, with the southwest, central west and southeast regions leading in price per acre.

The wider view

British Columbia had no increase in farmland values in the first six months of the year. Again, FCC cited the already high cost of agricultural real estate in the province.

Farther east, at 10.6 per cent, Quebec saw the second highest growth rate in Canada over the last six months, with a high degree of variability across its regions.

FCC did not provide data for the Atlantic region due to limited sales in its database.

The ever-decreasing supply of available land seems to be a common theme nationwide.

“Supply stands out to me as one of the things that we don’t talk about nearly enough and document nearly enough,” said Gervais. “When there is limited supply, there are limited options.

“A buyer looking at something available now might pull the trigger because it may not come back on the market for 40 years or so.”

Measuring interest

Interest rates are another repeat topic in the FCC analysis.

Canada has seen several increases in the Bank of Canada rate over the past year, and Gervais said farmers shouldn’t expect any decrease in the short term.

“We’ve changed our forecast a bit recently. We pushed it later into 2024. We think there’s not going to be any relief from the Bank of Canada until very late in 2024. The battle against inflation isn’t over.”

Gervais said he expects the central bank to raise its overnight policy rate by another 25 basis points either later this year or early in the new year.

“[Rates] might not go much higher than they are now, but they will certainly stay where they are for a while,” he said. “There’s more that needs to be done here to bring inflation down to two per cent.”

The post Farmland values still rising, but slower appeared first on Manitoba Co-operator.

One advertisement of Henan-based Central China Real Estate that had “swap wheat for house” in the title says buyers can use the crop, priced at two yuan per catty, a Chinese unit of mass equal to roughly 500 grams, to offset as much as 160,000 yuan (US$23,900.22) of down payment in one of its developments.

A Central China Real Estate sales agent who answered the phone number on the advertisement said the promotion, aimed mainly at farmers in the region, started on June 20 and will end on July 10. The development in the central province of Henan offers houses for around 600,000 to 900,000 yuan, said the agent who declined to give her name.

Central China Real Estate did not respond to a Reuters request for comment.

Late last month, another Central China advertisement said buyers of houses in another development could make down payments in garlic at five yuan per catty.

The garlic promotion attracted 852 visits and 30 transactions involving 860,000 catties of garlic during the 16 days it was available, the advertisement said.

The wholesale market price for both garlic and wheat is 1.5 yuan per 500 grams.

Property developers are scrambling to boost sales after a nose-dive in transactions in January to May, as China’s strict COVID-19 curbs combined with worries about a deeper property correction cloud Beijing’s 2022 economic growth target of 5.5 per cent.

More common promotions by developers include free parking lots or renovations after purchase.

Cities across China have introduced hundreds of property easing measures this year to revive a sector that accounts for a quarter of the world’s second-largest economy’s overall output.

Such steps include smaller down payments, subsidies and better terms for households with more than one child.

Property agents said buyer sentiment is starting to improve but it was too early to call a turning point because of the many economic uncertainties China was facing.

“Some developments are selling quite well. Those are the ones offering price cuts or promotions,” said Andy Lee, chief executive officer at realtor Centaline China.

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“In the winter it’s so sweet it’s like candy,” he says, examining the small yield in his palm.

For the past four years, Thorpe and his family have built a reputation among Silicon Valley restaurateurs and farmers’ markets for the rich, organic produce they grow at Spade & Plow.

But as the business grows, the land itself is shrinking. A few months ago the owner reduced Spade & Plow’s plot from 33 acres to just 16.

The same owner also just sold another farmland parcel to developers, leading Thorpe and his family to think hard before planting any long-term crops.

“Even though the property we’re farming on doesn’t face immediate threat of development, we’re still feeling the (pressure),” said Thorpe.

To help farmers like him, Santa Clara County — home of tech haven Silicon Valley — is purchasing local farmland at market rates to ensure its future in agriculture, a process known as the agricultural easement.

The new initiative, so far involving just a handful of landowners, is part of a larger countywide agricultural preservation program partially funded by greenhouse gas taxes from the state.

Similar easements have helped preserve more than five million acres nationwide. Sacramento County, home to California’s capital, has included agricultural easements in its general plan since at least the early 1990s.

Thorpe and his family have wanted to purchase farmland in Silicon Valley since they started in 2015.

“We’re really looking for something long term, and we wouldn’t be able to afford something in the area without an agricultural easement,” he explained.

County officials say it could take up to $500 million to preserve 12,000 acres of farmland in one of the country’s priciest real estate markets.

“We’re talking about Silicon Valley,” noted Keali’i Bright, a deputy director at the California Department of Conservation, addressing the area’s vast wealth.

“Development pressures are extremely high, and anybody could develop their farm or ranch pretty quickly,” he said of the area best known as home to major tech companies like Apple and Facebook.

Santa Clara Valley agriculture still supports 8,100 jobs, adding $830 million annually to the region’s economy. But in 30 years, the county has lost more than 21,100 farmland acres to non-agricultural uses like buildings and housing.

Jenny Li, whose family has farmed here for 40 years, has struggled to find land that is both high quality and affordable.

Once the lease on her family’s 20-acre farm ends in February, the future is uncertain.

“Is he (the landowner) going to increase the rent? Or is he deciding to just sell it?” Li wondered. “If that is the case, we don’t know if the business will continue.”

Protect farmland, prevent sprawl

The Sustainable Agricultural Lands Conservation program — the state initiative helping fund Santa Clara County’s effort — has provided grant money to protect 90,700 acres of fertile land since starting in 2014.

Potential benefits of the program extend beyond land preservation, including cutting greenhouse gas emissions.

“You protect farmland and that prevents sprawl, and the prevention of sprawl takes more cars off the road or at least has them driving less,” said Michael Meehan, a Santa Clara County planner.

By purchasing the rights to farmland and designating it for agricultural use, its development potential drops, along with its value. Meehan likens it to constructing an apartment building and designating it for affordable housing.

Officials expect the benefits to reach all farmers, not just those who participate, by virtue of deregulation of agricultural employee housing and incentives for carbon-neutral farming, plus other eco-conscious services.

David Cortese, a member of the Santa Clara County Board of Supervisors, said startup funds are in place, but with about US$20 million needed each year the future is uncertain.

One model they may look at is taking a few cents from each dollar of property tax, the county’s main revenue source, to fund a trust – a move which voters would need to approve.

“You literally take US$20 million right off the top of property tax,” Cortese explained.

Tom Daniels, a land management professor at the University of Pennsylvania, said Santa Clara County is on the right path.

Its efforts are in line with what Suffolk County in New York did to preserve nearly 20,000 farm acres, he added: partner with local governments and non-governmental organizations like land trusts, which can collect private donations.

Despite the steep tab to preserve Santa Clara County land, “you also have an awful lot of wealth there,” Daniels said.

Federal officials are also keen on the program.

“There’s only so many conservation dollars to go around and really if we can focus that in specific areas to kind of build these ag reserves, you’re better off in the long run,” said Dean Kwasny, a U.S. Department of Agriculture easement specialist.

“The last thing we want to see is that we purchase 250 acres in (a county and) it ends up being developed all around it.”

Finding the right price

Chris Borello, who with his family owns a cherry grove in Morgan Hill and other properties, is both hopeful and skeptical about the program, for which he is applying.

He does not think the market rate is the appropriate price.

“If the county as a whole says ‘agricultural land is important to us and we want to keep farmers here and we want to buy their development rights,’ then they need to pony up and pay an amount that motivates people,” said Borello.

The county should factor in what he could make selling to a developer, he added.

“This is really a business that I enjoy doing, but I need to be profitable,” said Borello, whose family recently sold 120 acres of farmland to housing developers.

Cortese said the county is willing to negotiate with landowners.

If funds come through and negotiations succeed, the promise of Silicon Valley that first attracted Avery Ruzicka, head baker at Manresa Bread, could be preserved.

Ruzicka is launching a series of dining events at her locations in the county to showcase the produce of Spade & Plow and other local organic farmers, “to say, ‘look at this, this is incredible.’”

“Look at this beautiful bounty,” Ruzicka enthused, adding, “This is not necessarily what you’d find in the rest of the country.”

The post In the heart of the U.S. high tech sector, farmers fight for land appeared first on Manitoba Co-operator.

Green Party leader Andrew Weaver on Thursday introduced the Property Law Amendment Act as a private member’s bill, which he said “would prohibit foreign entities from purchasing ALR land over five acres.”

The new bill is a reintroduction of a bill which Weaver proposed, and which died after first reading, in February last year. With three MLAs, the Greens are now supporting an NDP government tied with the opposition Liberals at 41 seats.

“One of the key reasons why young people are unable to pursue farming is due to the cost of land,” Weaver said in a release. “By allowing ALR land to be subject to international real estate speculation, we are limiting their opportunities to get into this vital, sustainable industry.”

Furthermore, he said, the province today imports about 70 per cent of its vegetables from the U.S., particularly from California, and “with these regions increasingly experiencing extreme weather events such as droughts and floods, it is more important than ever that B.C. take the future of our food security seriously.”

Alberta, Manitoba, Saskatchewan, Quebec and Prince Edward Island have set up similar laws to protect agricultural land, leaving B.C. as “the only western province without such a law,” he added.

In Alberta, a foreign entity can’t own or control more than two parcels of more than 20 acres in total, while in Saskatchewan, non-Canadian citizens can own no more than 10 acres. Manitoba’s rule limits foreign interest at 40 acres.

In B.C., meanwhile, Vancouver commercial real estate newspaper Western Investor on Thursday quoted Weaver as saying foreign buyers have been looking elsewhere, including farms, for investment properties since the previous Liberal government set up a tax on foreign investment in Metro Vancouver property last year.

The paper cited a survey last year, conducted by credit union Vancity, which showed farmland in B.C.’s Lower Mainland running for between $150,000 and $350,000 per acre on parcels of less than five acres.

The same survey showed Metro Vancouver farmland running around $110,000-$120,000 per acre for farms around 20 acres, and $50,000-$80,000 per acre for parcels over 40 acres. It also showed almost a third of actively farmed Metro Vancouver ALR farmland is leased by farmers from non-farmer landowners.

While ALR land’s usage is limited to farming, each property is entitled to a single-family dwelling and owners can apply for exemptions to building and land-use restrictions, Western Investor noted, citing an application submitted in 2016 in Richmond to build a nearly 40,000-square-foot house.

Weaver told the newspaper his bill’s restrictions wouldn’t apply to anyone who pays taxes in Canada.

“We want to encourage people to come live here, work here, pay taxes here. What we don’t want is third-party, offshore interests using our land, our homes, as tools for speculative investment,” he said. — AGCanada.com Network

The post B.C. Greens seek limits on foreign ownership of farmland appeared first on Manitoba Co-operator.

The scaled-up, multi-family house later this year will become home to a mix of couples and individuals moving from their farms and outlying areas into this small southeastern Manitoba village.

They’ll be the first residents of a first-of-its-kind Abbeyfield House to be built in Manitoba, a form of housing for older persons increasingly popular across North America and Europe.

The Abbeyfield House model began in the 1950s in Britain, after a retired British major bought and converted a house to share with others and served as its housekeeper. Today more than 1,100 Abbeyfield Houses have been built around the world. There are 21 in Canada, including at High River, Alberta, and Prince Albert and Saskatoon, Sask.

The concept behind Abbeyfield Houses is that by sharing a well-designed home together, seniors can enjoy both privacy and companionship, security and independence.

Manitoba Housing is contributing to the construction of the $1.6-million assisted-living facility, which will have 10 private suites with a shared living area for dining and recreation. It’s being built on $100,000 worth of land donated by the Emerson-Franklin municipality.

“We just want to keep our senior residents living here,” said Reeve Greg Janzen. Emerson-Franklin’s municipality has about 2,600 voting residents, but only about 250 people live in Dominion City itself.

Building an Abbeyfield House in such a small community is what makes this project so exciting, says the project’s consultant Gordon Daman, who has worked with other Manitoba towns to build seniors’ housing including Niverville.

Communities this small typically can’t hope to build housing offering assisted living service packages, he said, adding that the model until now has typically required at least 40 to 60 suites to keep rents affordable.

“For many smaller communities in Manitoba that are 1,500 or under in population, realistically, to develop an assisted-living facility is very difficult,” he said. “The Abbeyfield House model provides a wonderful example where a community builds this and still provides all of those services, but in a smaller setting. You can have it as small as 10 suites and be sustainable on that basis.”

The suites which vary in size but are no bigger than 500 sq. ft. include a bedroom, sitting room, and full bathroom, but no kitchen, except for a small fridge and sink area because residents share staff-prepared meals in a common dining room. They also have access to recreational programming, use of a shared woodworking room and a crafting room. There’s room for gardens, laundry and housekeeping services are provided under the direction of a house manager, and home care is also available.

Rents, which include utilities, vary from $414 per month for a studio suite to $587 for a one-bedroom suite. Plus two units will be available on a rent-geared-to-income basis. In addition to rent, residents will purchase the monthly $1,200 service package.

Emerson-Franklin Heritage Holdings Inc. (HH) which helps develop and manage capital projects in the municipality is the first Manitoba affiliated member of the Abbeyfield Society of Canada. Its board chair said they built this hoping to stem the outflow of longtime residents.

“For too many years, the elders of our region have had to leave the place they have called home all their lives,” said Bryan Nichols, adding he hopes their Abbeyfield House will be replicated elsewhere in Manitoba.

“All small communities are facing a similar problem in rural Manitoba.”

That is having a major impact on our small towns, adds Daman. When older residents leave town, a downward spiral begins because it signals to younger residents that they can’t expect to live their whole lives there either.

“Those age 55 and 60 see they have no option long term to stay, and so if they have the opportunity, will sell their home and exit even earlier. That affects all aspects of community life.”

A quick count tells Daman there are at least a half-dozen other places in the province where Abbeyfield Houses would fill the bill.

Making it happen requires supportive municipal governments working with citizens who are keen to have one built in their community, he added.

The province and federal governments announced last week they will contribute over $566,000 towards the cost of the project. It will have benefits for residents beyond providing an affordable, comfortable, safe place to live, said Manitoba’s Minister of Manitoba Housing and Community Development Mohinder Saran in a news release. “We know that feeling at home and being part of a community are essential for the continued health and well-being of seniors,” he said. “We are pleased to be a part of the first seniors’ housing project in Manitoba that follows the Abbeyfield housing model, which has been successfully implemented elsewhere in Canada and around the world.”

Helpful links to learn more

• Municipality of Emerson/Franklin: Abbeyfield House
• Abbeyfield Canada

The post House rising in Dominion City a new concept for seniors’ housing in small towns appeared first on Manitoba Co-operator.

Last year, China consumed more coal than the rest of the world combined and imported 70 per cent of the world’s seaborne iron ore. In 2012, China accounted for half of the global growth in oil demand.

It’s a commodity behemoth and the recent slowdown in the Chinese economy is a big reason for weakness in prices for this sector. Should we be worried?

China’s economic growth is definitely slowing, but the real concern is that official estimates of China’s GDP growth are overestimated. Economists are scratching their heads and coming up with widely varying estimates.

Why all this guessing? China’s growth numbers are always suspiciously consistent and always within 0.2 per cent of the government forecast. Moreover, skeptical analysts see hard data, such as industrial production, energy consumption and construction, which are much weaker than GDP, and are using it to create their own estimates of what is going on. But it’s not just the data that is worrying.

The big question is China’s real estate. Property prices in 70 Chinese cities have fallen for more than a year, and 60 million empty apartments await buyers.

The Chinese government is well aware of the risk and has taken action. The Central Bank has lowered interest rates three times and it has twice reduced the amount of reserves that banks must hold, while easing mortgage rules. Still, new construction starts have fallen 16 per cent in the first five months of 2015, a significant hit to the economy.

The challenge is that China is trying to shift the focus of its economy away from exports towards domestic growth, all while gently deflating a housing bubble.

China has lots of resources, $4 trillion of reserves and its tight control of the banking sector gives it policy levers that other governments could only dream of. The Chinese government can intervene to stimulate demand, but China’s economy will grow at a slower pace.

What does it all mean for commodity prices?

The above graph shows China’s demand growth for oil, which has been massively volatile, oscillating from 16 per cent growth to two per cent. And that was during times of smooth sailing.

We believe commodity prices should improve in 2015, but producers should brace themselves for more volatility as the world’s biggest consumer of natural resources has a bumpy road ahead.

The post Brace for more commodity volatility due to China appeared first on Manitoba Co-operator.

Residents opposed to the project say the developer behind a proposed 96-acre housing development east of Carberry failed to disclose in his rezoning application that there are livestock operations nearby. The land is close to three long-standing livestock feedlots.

“On the subdivision application, Section 5-D asks if there are any of the following within 1.6 kilometres or one mile of the proposed lots — livestock feedlots or waste disposal grounds. The developer neglected to check off livestock operations and waste disposal ground active or inactive,” said local resident, Judy Harder during the bylaw’s second reading, held in Carberry on May 11.

Along with an inactive waste site that has been at the same location for the past 30 years, the proposed subdivision is within a half-mile of a 250-plus-head cattle operation owned by Aaron Holliday, 1.5 miles west of Graham Farms’ 100-head-plus feedlot and within two miles of Peter and Donna Pingert’s 1,500-head feedlot operation.

Yet the RM of North Cypress-Langford and the Cypress District Planning Board are on the verge of amending a zoning bylaw that would see the land east of Carberry, rezoned from Agricultural General Rural District to Rural Residential for the development of 16, five- to six-acre lots.

Even though final approval has not yet been granted, development and sale of the lots has already started, leaving residents to further question the process.

“I am currently running 250-plus-head of cattle and if the development is approved, I won’t be able to expand,” said Holliday, who farms half a mile from the proposed subdivision. “This is a well-designed facility that is capable of handling many more cattle than I am running now. If this subdivision happens, my options will be restricted.”

He was among local residents who have attended public hearings to oppose the development.

Stuart Olmstead, chairman of the Cypress Planning District and Carberry mayor, downplayed the concerns. “Some people get a little caught up on the fact that this may cause a stress on farming in the area. I think that people need to be a little calmer about that. It is just a change to the area that people might not be used to,” Olmstead said.

“We work under the development plan itself so if someone didn’t catch the application error when it happened, I have no real answer for that besides, who knows? A clerical error?” said Olmstead. “If it was unchecked, I don’t believe there was any malicious intent there. This is a simple rezoning change — but some people are just bound and determined not to have new neighbours.”

Property owners and subdivision applicants, Dave and Donna Loewen say they believed the livestock operations were located an acceptable distance away from the property and that it was unnecessary to check the appropriate box.

“Now we find out that we are just on the border of being over that. And that was a surprise to me,” Dave said.

“But, these borders and boundaries are so close to the proper distance, only a few feet away, we don’t believe that this will interfere with the cattle operations at all,” he said.

MAFRD’s role

Harder’s presentation to the May 11 hearing noted the subdivision proposal was submitted to Cypress Planning in February of 2012.

“Upon receipt, it is the development officer’s job to notify the proper government agencies of any conflicting issues,” said Harder. “The planning board failed to notify Manitoba Agriculture, Food and Rural Development (MAFRD) about these livestock operations.”

A letter between MAFRD and the planning board, dated August 2012, states that MAFRD land use specialists would have no issue with this proposed subdivision as the land was of poor quality for cultivation and cropping — provided there are no livestock operations located within the higher mutual separation distances required for designated rural residential areas.

“No one was given a chance to read this letter other than the planning board members,” said Harold Tolton, councillor with the RM of North Cypress-Langford. “I have come to the conclusion that the planning board has taken upon itself to act as a facilitator for this development, not a governor.”

While local governments are responsible for creating, administering and enforcing their land use policies, MAFRD participates in local land use planning across the province with the goal of protecting agricultural operations from encroachment by incompatible land uses.

“I was under the impression that MAFRD was here to help producers with issues like this, but in my opinion, it has done very little in the way of helping us to secure our operations,” said Holliday.

Sheri Grift, land use specialist with MAFRD said the department’s role is to make local governments aware of potential issues. Grift said the development plan was passed on to her for review from the Community and Regional Planning Department.

“We generally do not do site visits for these kinds of issues. We look at an aerial photo of the area and determine if there is anything of concern,” said Grift.

“I continued to ask council how it was able to pass this through provincial planning and the answer I kept getting was that MAFRD approved it,” said Tolton. “But when speaking with Grift, it turns out it didn’t. All that she had done was look at a map in Winnipeg and said that the land was not suitable for cultivation and had asked if there were any livestock operations in the area that needed to be looked at. The planning district never responded, but rather pushed forward using the aforementioned letter as a form of approval.”

Opposing residents want the planning district to send the development proposal to the provincial planning department for review.

“It is our firm belief that if the application had been truthful and MAFRD had been made aware of the livestock operations at the designation stage, we wouldn’t be here today,” said Harder.

Violating buffer zones

“It is concerning that our municipal government is in fact developing this area that would contradict the RM’s own bylaw by impeding on the buffer zone requirements. It makes no sense to have a buffer zone bylaw and then to approve and build a subdivision within those same boundaries,” said Harder.

Mutual separation distances between livestock operations and residential or recreational uses are established through a municipal zoning bylaw. Minimum requirements are set out by the Provincial Land Use Policy Regulation but can be adjusted by local authorities.

“The Cypress area’s mutual separation distance is actually 25 per cent higher than the provincial standard, which is something that was decided on by the local government a number of years ago,” said Grift.

Derek Alders, who owns 28 acres on the edge of the proposed redesignation area, also presented his objections at the recent hearing, noting that if the development is to proceed, a number of surrounding residents will be seeking legal counsel and will be forwarding their concerns to the attorney general.

“These farmers have lives, they have families and businesses of their own to run. Most do not have the time, nor should they have to, attend meetings and object to subdivision proposals when laws are already put in place to protect these interests for them,“ said Alders.

Moving forward despite opposition

Dave Loewen told the May 11 hearing he was unaware of the opposition the development would receive. But he continues to push forward as he has seen interest from contractors.

“I still think it is a very positive and a good thing for our municipality. I think that there is a need for small acreages,” said Loewen. “This is one of those things that you look at and for us it weighs out in favour of the subdivision as opposed to growing and expanding cattle operations in the area.”

Following the second reading of the rezoning bylaw, the planning district board will make its decision by mid-June.

Cattle producers say they need assurances their future ability to operate and expand won’t be compromised.

“I am hoping to gather reassurance that it will not impact my operation and livelihood but it is not proving to be an easy task,” said Holliday.

“Once this area becomes developed and people are living on these properties, who’s to say the residents won’t seek a ‘no-fly zone’ that would affect area farmers’ spraying options? Maybe once this impacts the potato growers in the region, this community will care but by then it will be too late.”

The post Cattle producers seek protection from residential neighbours appeared first on Manitoba Co-operator.

Recent developments in the grain market make one wonder if we’ll soon be hearing the term “captive grain,” but it doesn’t seem likely that the U.S. government or anyone else will be able to do anything about it.

The international grain business has been dominated by large players for a long time, but now they’re becoming fewer and larger.

And if you think that the era of the state trading agency ended with the end of the wheat board monopoly, think again. COFCO is reportedly set to play a much bigger role.

Who’s COFCO? It’s the China National Cereals, Oils and Foodstuffs Corporation, which used to be known as Ceroilfood back when it was mainly the agency responsible for imports. It’s now a diversified conglomerate, involving farming, milling, soy processing, hog production, finance, transportation, port facilities, hotels and real estate, and is now listed as a Fortune 500 company.

Through a joint venture with China Investment Corp. — also state owned — COFCO has acquired majority interest in two Dutch trading companies to form COFCO International Holdings. It reportedly intends to become a major competitor to the “Big Four” global agribusiness giants — ADM, Bunge, Cargill and Louis Dreyfus, though perhaps that should be “Big Five” now that Glencore is in the picture. It owns 675,000 acres of farmland in the former Soviet Union, and 200,000 acres in Australia. You can imagine that as with captive cattle, controlling production from that much land would give Glencore a bit of influence in the market.

But Glencore is a piker compared to China. In 2013 it announced a long-term lease of three million hectares (seven million acres) in Ukraine. How much farmland China has acquired in Africa is not clear, but one estimate in 2013 put it at 4.9 million hectares (12.3 million acres). Others put the figure much higher.

Concentration of ownership across the supply chain is not new — Cargill, Bunge, Dreyfus and ADM own elevators and processing facilities in both importing and exporting countries. But COFCO won’t be only in those businesses — it will be the main player in the world’s largest importing country and a major exporter from multiple origins, including its own farmland. Imagine the power it will have to manipulate the futures market, or to avoid using futures altogether.

Former ADM CEO Dwayne Andreas (ADM has now completely absorbed the former giant trading company Toepfer) used to say that waiting for a free market in grain was like leaving the porch light on for Jimmy Hoffa. It seems that’s more true than ever.

The post Editorial: Captive grain, and captive farmers? appeared first on Manitoba Co-operator.

2. Provincial governments should monitor farmland ownership and report changes annually and also consider legislating the maximum amount of farmland an individual or incorporated family farm can own.

3. Use differential taxation to encourage farmland ownership by farm families and local citizens and discourage investors and large corporations. Investments in farmland investment companies should not be eligible for the Registered Retirement Savings Plan.

4. Government incentives to encourage land stewardship and penalties for abusing farmland.

5. Government programs to assist the intergenerational transfer of family farms and reduce the debt young farmers face. Ideas include land banks, community-based financing, government guarantees to backstop self-financing arrangements between buyers and sellers, income assurance programs for beginning farmers and retirement programs to make farmers less reliant on land sales for retirement income.

6. Restrict the conversion of farmland to non-farm use, including prohibiting Class 1, 2 or 3 land for any use other than agriculture.

7. Ban farm input suppliers from tying credit on inputs to delivery opportunities.

8. Government must deal with the “debt bomb” planted under Canadian farmers by:

• Preparing an honest analysis of farm debt and net income;
• Designing support programs to help manage the debt;
• Reducing the cap on farm support programs to encourage small and medium farmers;
• Responding to the market power imbalance so farmers can earn a living from the marketplace;
• Directing Farm Credit Canada to provide more support to small and medium-size farms and ban it from lending to farmland investment companies or large export-oriented food processors.

The post NFU recommendations to protect farmland, tackle farm debt appeared first on Manitoba Co-operator.

But with the drop in commodity prices and changing markets, it seems that prices may have peaked.

“I think we’re at the top of the cycle,” said Merle Good, a former tax specialist from Alberta Agriculture, and a speaker at Ag Days in Brandon last week.

“The increase in farming profitability, that’s been the big driver,” he said. “We’ve also had a successful run of good prices… it’s very rare in agriculture that you get six years in a row of substantial revenue increases, that in my view has been capitalized into the land value and I believe we are at the top.”

What happens next remains up for debate, but farmers who bought land over the last few years shouldn’t waste time wringing their hands if prices fall.

“The real question is, based on what you just paid, can you afford to maintain your payments?” said Good.

Interest rates

Producers with heavy debt loads could be seriously impacted when interest rates rise, but that’s not likely to happen in the near future. Just last week the Bank of Canada once again lowered its overnight lending rate to .75 per cent from an already low rate of one per cent.

“Yes, always a word of caution on interest rates,” said Roy Arnott, a business management specialist with Manitoba Agriculture, Food and Rural Development. “But I think you’ve got time before some level of increase, interest rates have been fairly stable, I don’t think they’re going to go up.”

But he said now is the time to plan for when interest rates do eventually increase.

Variable or locked in?

Good advised those with variable-rate loans to begin thinking about when might be the best time to lock in a rate, and ensure they are going to be paying what their business can afford in the long run.

“Because right now a lot of young guys are saying, oh, wow, I’m going to stay on the variable rate ’cause it’s four per cent and I can’t afford to pay more than that,” Good explained. “Which is fine, but you should, in my view, perhaps look at the flexibility with some lenders where you do have it, to actually say, I want to lock in 30 per cent of that mortgage, and let 70 per cent float.”

Those who rent land are also facing tough decisions and changing prospects.

“So have prices peaked? Are they on the decline? Are they going to go down? I don’t know, but I think they almost have to. We’re in a situation where land rental rates are quite significantly high, and when you look at the commodities that we can grow… we’re not going to make as much as we did over the last two years,” said Lance Stockbrugger, a farmer and chartered accountant from Saskatchewan.

“From September 2012 to September 2014, corn has gone down 51 per cent gross value, canola has gone down 41 per cent, wheat 31 per cent, and soybeans to a lesser extent have gone down by 22 per cent,” he said. “That’s straight out of the profit, that’s the money that you get to take home, that’s the money you get to use to pay your bills and your principal/interest payments, that’s gone.”

That means producers with rental agreements are going to have to look at renegotiating those agreements. Something that underlines the importance of having a good working relationship with the landowner you’re renting from, Stockbrugger said.

That sentiment was shared by Good, who said, “you have to get creative, if you’re going to rent the majority of your land, you’ve got to really make sure you’ve got a good relationship with the landowner.”

In the past, renters had to choose between a share crop model or paying straight cash rent, he noted. But today it’s better to have something in between, such as “flexible cash rent with a guaranteed floor,” said Good.

Buy or rent?

All this still leaves producers who want to expand with their biggest decision — whether to buy or rent.

“Land purchase is a long-term investment decision specific to you farm’s current cash and equity position, long-term enterprise cash flow, profitability and your view of land values in the future,” said Arnott. “Land value planning is not easy, simple or straightforward, this is challenging stuff, definitely makes my head hurt for sure, but I definitely think it’s worth the work if you’re going to move your farm forward in a positive direction.”

The first step is knowing exactly what your farm is making and what it’s costing, making sure margins are known and gross revenue is understood.

Good suggested producers look at their operations as two separate businesses.

“The real reason I like the idea of two separate businesses is primarily for succession, because the transferring of the farm is not transferring one bundle of assets, the farm to me is the operating business, the cattle, machinery, inventory and that structure, the land is a separate issue, because I can be a successful farmer with not inheriting every acre,” Good said. “So when we have that separation of land versus the operations, we can then understand what our business is making, versus what our real estate investment is making or costing us.”

But perhaps before producers even think about acquiring more land they need to be asking if they can increase their profit margins using the land base they already have at their disposal.

First step

Before buying more land, Good suggested farmers look at ways of increasing their returns from existing land through improvements such as tile drainage, or increasing productivity through strategies such as variable-rate seeding, or improving their bottom line through better marketing.

He also noted that new challenges are on the way that will impact what farmland becomes available. As existing landholders, many of them retired farmers, pass on, more farmland is being inherited by children who don’t farm.

“When they get that land, what are they going to do with it? And I think our role as educators of agriculture is trying to convince a girl in Calgary or in Brandon that if she inherits farmland from her parents, maybe she should hang on to it, and not flip it the next day,” Good said, noting that over the long haul, land still proves to be profitable regardless of ups and downs along the way.

“Over the 30-year cycle, land from 1983 has increased approximately twice as much as the TSX,” Good said. “In addition the bull run has continued from 1992 which is the last year in Canada that farmland year over year had a negative change in value.”

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