Canada Markets

DTN's latest 360 poll asked how farmland cash rent values have changed since last year. With no transparency or record of cash rent data available across the country, feedback from this unscientific poll may provide a glimpse into the actions of producers given the current low-interest environment, last year's land price increases to record highs along with the year-over-year decline in commodity prices.

In total, 67% of respondents indicated that cash rent values will be largely unchanged from last year. A further 24% suggested that cash rent will be higher than year-ago levels, 6% felt that land rent would be as much as 10% below year-ago levels and 3% of those responding felt that land rental rates would be between 11% and 20% below year-ago levels.

Looking at responses from the prairies, responses from both Manitoba and Alberta were consistent with the overall response, with roughly two-thirds of respondents feeling that rates would continue unchanged in 2014, with the remaining response largely suggesting that rates will be higher. Saskatchewan respondents proved more reserved, with 43% of responses suggesting that rates will remain unchanged, while the balance of responses was split evenly between 1) the possibility of higher rates and 2) up to a 10% decline. Ontario responses indicated that rental rates in 2014 would remain unchanged.

This data comes on the heels of Farm Credit Canada's annual 2013 Farmland Values Report. In 2013, Canada's farmland was reported to increase by 22.1%, the largest one-year increase on record. The prairies experienced strong regional growth, with Saskatchewan farmland up 28.5%, Manitoba up 25.6% and Alberta up 12.9%. Quebec posted the third-strongest increase at 24.7%, while Ontario's farmland increased 15.9% on average, the fourth-largest increase.

The prior week's poll focused on whether respondents felt that the federal government's Order in Council that threatens railways with a daily fine of $100,000 for failure of each railway to meet their respective 500,000 metric tonne target would be sufficient to inspire railway performance. This poll attracted keen interest along with a wide range of responses. Bear in mind that this survey precedes recent developments such as potential legislation which included increased competition from increased interswitching limits.

Seven percent of the respondents felt that the fine was significant and that the railways should meet their respective targets starting in April as required. Twelve percent of respondents felt that the financial penalty was a significant threat, although felt that the railways will face difficulty meeting the proposed shipping target over time.

The largest response, or 47% of respondents, supported the proposals made by the Saskatchewan and Alberta governments, with the weekly target increased to 13,000 cars per week between the two railroads and the penalty increased to $250,000 per day. Note that the 13,000-cars-per-week shipping target is also preferred by the Western Canadian Wheat Growers Association as a means of addressing the significant backlog of nearly 70,000 cars.

A further 26% of respondents suggested that the fines discussed are simply too low in relation to overall railway earnings in order to act as an incentive for increased performance, while 8% answered that they are undecided.

This week's poll focuses on recent CWB announcements surrounding the construction of two grain-handling facilities on the prairies. Will this move help solidify the CWB's presence in the western Canadian grain markets? You can weigh in on this topic on DTN's 360 poll found at the lower right of your DTN Home Page. We thank you for your participation, and written feedback or further thoughts on the issues discussed in the polls are always welcome!

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(AG)

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