Saskatchewan farmland values are showing modest increases this year, mainly due to drought.

Regina-based Farm Credit Canada says farmland values in Saskatchewan rose 1.8 percent in the first six months of the year, about half the national rate of 3.8 percent.

In the 12 months ending in June, Saskatchewan farmland values rose 3.5 percent, compared to the national rate of 6.1 percent.

The Saskatchewan increase is the lowest in 15 years.

There is a mixed trend in the province, with Eastern Saskatchewan showing increases while the Western areas values reflect drier conditions and remain stable.

FCC’s chief economist, J.P. Gervais, says the Saskatchewan rate is no big surprise.

Favorable commodity prices and interest rates are fueling Canadian farmland values in Ontario, Quebec and B.C., where values rose 13 to 15 percent.

Gervais says weather and rising interest rates may have an impact on farmland values in the coming year but he still expects good growth in the coming year.

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