In This IssueOverall Market Trends In This Issue

Strong commodity prices, record yields and low interest rates have created a strong demand for agricultural arable (cultivated) land throughout the province over the last three years. This has resulted in record prices per acre in much of Manitoba, which continued their steady increase in market value during 2013.

The cattle producing areas of the province such as the Interlake and parts of the Parkland and Midwestern districts, which consist mainly of non-arable land types such as bush and pasture, have not yet experienced these increases. This is due to the repercussions in the cattle industry following BSE, which resulted in depressed cattle prices from 2003 until recently.

The recent recovery in cattle prices due to low North American cattle herd numbers may start to put upwards pressure on non-arable land, but so far the values per acre have remained flat and relatively unchanged, continuing the trend of the last decade.

District Analysis

The Association of Manitoba Municipalities districts were used to determine which district a municipality was in. This was chosen because the AMM districts accurately reflects through their groups of municipalities, areas of Manitoba which are similar in geography and agricultural capability. More information about the AMM can be found on their website, http://www.amm.mb.ca/

Spring 2014

AgrIculTurAl NewsleTTerMArkeT OvervIew

Table of Contents1. Overall2. Arable Land Market Trends3. Non-Arable Market Trends4. Improved Farm Sales5. Profile

Spring 2014 Arable land Market TrendsArable cultivated land in the most productive cropping areas of Manitoba continues to have strong upward pressure on its market value, continuing into 2014. The Central district, which has the most productive agricultural regions in Manitoba, continues to lead in both sale price per acre and volume of sales in 2013.

All districts display a continuing upward trend throughout 2013. The Interlake district’s average, which is higher than the Eastern, Parkland, Midwestern, and Western districts in the last quarter of 2013, is driven up by sales which have occurred in the south end of the district, where the land is more productive and similar in agricultural capability to the Red River Valley municipalities located in the Central district. All districts display an average sale price per acre upward trend throughout 2013.

Sales with minimal buildings (determined by the building assessment as related to total assessment – 5% or less) were treated as unimproved agricultural bare land sales. Sales which appeared have some influence due to location near urban centres or commercial industry, were excluded from analysis. Sales with a sale price per acre of $400 per acre or less were assumed to be non-arable farm land sales.

Q1-2013 Q2-2013 Q3-2013 Q4-2013Central $2,495 $2,550 $2,926 $3,045Eastern $1,577 $1,853 $1,525 $1,527Interlake $1,314 $1,037 $1,264 $1,686Midwestern $975 $1,011 $942 $1,223Parkland $1,021 $1,067 $959 $1,177Western $1,464 $1,536 $1,369 $1,548

$700$800$900

$1,000$1,100$1,200$1,300$1,400$1,500$1,600$1,700$1,800$1,900$2,000$2,100$2,200$2,300$2,400$2,500$2,600$2,700$2,800$2,900$3,000$3,100$3,200

2013-Average Arable Land Sale Price per Acre by AMM District

AMM District 2013-Number of Arable Farmland Sales

2013-Lowest Sale Price per Acre Arable Farmland

2013-Highest Sale Price per Acre Arable Farmland

2013-Average Sale Price per Acre Arable Farmland

Central 303 $472 $6,381 $2,729Eastern 223 $406 $6,500 $1,613Interlake 132 $409 $6,000 $1,328Midwestern 169 $405 $3,463 $1,057Parkland 148 $403 $2,900 $1,053Western 254 $438 $6,572 $1,499Grand Total 1,229 $403 $6,572 $1,690

Spring 2014 Arable lands Market Trends (continued)

This graph shows the distribution of sale price per acre for arable farmland throughout Manitoba. The majority of arable land is selling for $500 to $1,999 per acre, although there have been more sales over $3,000 per acre than ever before, in some cases, ranging up to almost $7,000. The higher end of the range represents sales of land used for special crops such as potatoes, vegetables, and other special crops.

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350

Central Eastern Interlake Midwestern Parkland WesternQ4-2013 87 68 40 50 27 87Q3-2013 43 65 23 18 28 36Q2-2013 84 54 43 58 50 71Q1-2013 89 36 26 43 43 60

2013- Number of Arable Farmland Sales by AMM District

$0-499 $500-999 $1,000-1,499

$1,500-1,999

$2,000-2,499

$2,500-2,999

$3,000-3,499

$3,500-3,999

$4,000-4,499

$4,500-4,999

$5,000-5,499

$5,500-5,999

$6,000-6,499

$6,500-7,000

Total 82 353 247 157 108 100 73 38 27 13 16 9 3 3

2013-Provincial Distribution of Arable Farmland Sale Price per Acre

Spring 2014 Non-Arable Market Trends

The Interlake, Parkland, and the Eastern districts have the highest volume of sales in 2013. The provincial average is $252 per acre, and the Eastern district surpasses that, at $289. The greater value in the Eastern district is most likely partially driven by the demand for recreational land in its natural state, due to its proximity to larger centres in the Capital Region. The Parkland district has the lowest average at $206 per acre.

Overall, the average sale price per acre shows the trend in market value for non-arable land remains flat, with not much change between the first and last quarter averages. Increased cattle prices may influence this trend upwards in 2014, but confidence in this price stability has to first be regained for ranchers to start expanding their existing land holdings. Time is needed for cattle producers to regain a positive financial position after the last decade of poor cattle prices.

Q1-2013 Q2-2013 Q3-2013 Q4-2013Central $264 $275 $268 $312Eastern $281 $303 $272 $315Interlake $254 $230 $228 $248Midwestern $282 $308 $225 $250Parkland $214 $260 $197 $173Western $324 $333 $189 $312

$100

$150

$200

$250

$300

$350

2013-Average Sale Price per Acre for Non-Arable Land by District

AMM District 2013 - Number of Non-Arable Farmland Sales

2013-Lowest Sale Price per Acre Non-Arable Farmland

2013-Highest Sale Price per Acre Non-Arable Farmland

2013-Average Sale Price per Acre Non-Arable Farmland

Central 13 $50 $391 $278Eastern 69 $94 $399 $289Interlake 94 $63 $388 $238Midwestern 36 $64 $400 $275Parkland 79 $43 $398 $206Western 19 $189 $391 $317Grand Total 310 $43 $400 $252

Spring 2014 Non-Arable Market Trends (cont’d)

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Central Eastern Interlake Midwestern Parkland WesternQ4-2013 3 14 19 6 23 4Q3-2013 4 23 24 5 24 1Q2-2013 2 13 31 9 16 6Q1-2013 4 19 20 16 16 8

2013-Number of Non-Arable Land Sales by District

$0-$49 $50-$99 $100-$149 $150-$199 $200-$249 $250-$299 $300-$349 $350-$400Total 1 29 16 34 56 64 61 49

2013-Provincial Distribution of Non-Arable Farmland Sale Price per Acre

This graph shows that the distribution of non-arable market values throughout Manitoba. The majority of non-arable land sold from $200 to $400 in 2013.

Spring 2014 Improved Farm sales Market TrendsImproved farm sales include sales of agricultural land improved with farm residential and agricultural buildings. Sales of land & buildings, had to have a parcel size of 80.00 acres and up, in order to be included in this analysis. The size restriction was to try and exclude rural residential properties from the analysis.

The Eastern district had the highest sales volume, with the Central district having the highest average sale price in 2013.

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Central Eastern Interlake Midwestern Parkland WesternQ4 2013 25 34 21 15 24 20Q3 2013 7 30 29 16 15 16Q2 2013 22 17 18 31 18 19Q1 2013 17 9 9 21 14 23

2013 - Number of Improved Farm Sales (80 acres & up) by District

AMM District 2013 Improved Farm Sales - Average Size in

Acres

2013 Improved Farm Sales -Lowest Sale Price

2013 Improved Farm Sales - Highest Sale Price

2013 Improved Farm Sales - Average of Sale

Price

Central 317.58 $48,000 $3,493,360 $809,929Eastern 213.67 $30,000 $3,900,000 $412,277Interlake 269.35 $25,000 $2,995,000 $349,678Midwestern 441.84 $50,000 $2,793,600 $450,098Parkland 467.41 $37,000 $10,695,000 $433,724Western 336.10 $21,000 $4,039,250 $460,911Grand Total 337.43 $21,000 $10,695,000 $480,082

Spring 2014 Improved Farm sales Market Trends (cont’d)

The majority of improved farm sales are under $499,999.

There have been some sales of large farming units, but these appear to be the exception rather than the rule.

0-160 160-320 320-480 480-640 640-800 800-960 960-1,120 1,120-1,280

1,280-1,440

1,440-1,600

1,600-1,760

1,760-1,920

1,920-2,080

2,080-2,240

2,400-2,560

10,560-10,720

Total 183 155 56 24 16 10 7 2 1 3 3 3 2 3 1 1

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2013 -Size in Acres of Improved Farm Sales - Entire Province

The distribution by size shown on this graph demonstrates that the majority of sales appear to be farmers adding to their existing farms, rather than the purchase of entire farming units.

214

150

35

2315

83 3 1 3 2 4 3 2 1 1 1 1

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2013 -SALE PRICE OF IMPROVED FARM SALES - ENTIRE PROVINCE

www.stevenson.mb.ca

For specialized agricultural market analysis,appraisal or consulting related inquiries, please contact:DeBBIe PIeTerseStevenson Advisors Ltd.200 - 260 St. Mary AvenueWinnipeg, MB R3C 0M6Phone: (204) 934-6247email: dpieterse@stevenson.mb.cawww.stevenson.mb.ca/advisors

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The agricultural sales data as analysed in this newsletter is sourced from the Province of Manitoba - Department of Municipal Government, Assessment Services Branch sales report. This report is published six times per year for the use of subscribers. The sales information was collected from these reports, but no investigation was done of the sales to determine whether or not they were valid armslength sales.

This document has been prepared for general information only. Stevenson Advisors makes no guarantees, representations or warranties of any kind, express or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Stevenson Advisors exclude unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising therefrom.

Debbie Pieterse, B.sc. Agric. AAM Dule

Debbie Pieterse has been an Appraisal Consultant with Stevenson Advisors Ltd since 2013. She specializes in agricultural appraisals and rural properties, expropriations, real estate consulting, valuation, and market analysis.

Debbie grew up on a cattle farm in the Ashern area, which started her lifelong interest in the agricultural industry. She attended the University of Manitoba and graduated with a Bachelor of Science in Agriculture with an Animal Science major. After university, Debbie embarked on a long career with the Province of Manitoba, mainly with the Assessment Services Branch. Throughout her time at assessment, she held the positions of Assessment Officer, District Supervisor (Dauphin) and Provincial Sales Manager. She valued properties throughout rural Manitoba, working in the Souris, Portage la Prairie, Dauphin and Brandon District Assessment Offices.

While employed with Crown Lands & Property Agency as a property appraiser, she prepared valuations for expropriations, acquisitions and disposal of Crown Property throughout rural Manitoba. She became an Accredited Assessor of Manitoba in 1994.

Debbie is currently enrolled in the Appraisal Institute of Canada (AIC) Education Program through the University of British Columbia program and was awarded the Certificate Real Property Assessment and Diploma of Urban Land Economics (Assessment Specialization) in 2012. Debbie was the recipient of the 2012 BC Assessment Valuation Award, with the highest standing in Foundations of Appraisal and Statistical and Computer Applications in Valuation.