As I mentioned in an earlier post, it is spring break here at the U of S and a few of our faculty are away from Saskatoon. As my luck would have it, yesterday I received an email from the graduate secretary asking if I would like to conduct an interview with one of the local TV stations on an Ag Canada report that stated that farmers were going to be eating rainbow stew as farm incomes are projected to be higher in Canada for the next 5-10 years. You can find the segment with my interview here.
I tried to temper the analysis by stating that these are aggregate numbers and individual returns may vary while demand is increasing due to structural changes such as population growth that farmers in SK have little control over (at least in a global sense). A conversation with a former colleague at Illinois also got me thinking that the farmland market in Saskatchewan is not nearly as crazy as the one in the Corn Belt. The economist in me thinks that something has going to happen if farm incomes continue to increase. I think ultimately, even with greater production risk in the Prairies, costs for land (both opportunity and real) and increased energy and input costs will likely erode some of the projected gains in farm incomes.