SOUTHWESTERN ONTARIO LAND VALUES

SOUTHWESTERN ONTARIO LAND VALUES Ryan R. Parker, B.Comm, AACI, P.App, P.Ag, CAFA Cell: (519) 709-3088 Office: (519) 667-9050 ext. 235 rparker@valcoconsultants.com

TABLE OF CONTENTS OVERVIEW... 3 2013 LAND VALUES COUNTIES... 6 2013 LAND VALUES COUNTY DIVISIONS... 7 2010-2013 LAND VALUES COUNTY... 8 2010-2013 LAND VALUES COUNTY DIVISION... 9 INCREASE IN VALUES COUNTY... 10 INCREASE IN VALUES COUNTY DIVISION... 11 HURON COUNTY... 12 PERTH COUNTY... 14 OXFORD COUNTY... 16 MIDDLESEX COUNTY... 18 ELGIN COUNTY... 20 LAMBTON COUNTY... 22 KENT COUNTY... 24 ESSEX COUNTY... 26 BRUCE COUNTY... 28 GREY COUNTY... 30 CONTACT... 32 DISCLAIMER... 32 This report and all the contents of this report are proprietary and cannot be used in or for any type of presentation, appraisal, or separate study without written permission from the author. Any violation of this copyright will be viewed as a direct infringement of the copyright of this report. To view the full Disclaimer for this report please refer to Page 32. Copyright 2014 Page 2

OVERVIEW Parameters The following study has been completed to provide information on agricultural land values in the general Southwestern Ontario region. The Counties of Huron, Perth, Middlesex, Oxford, Elgin, Kent, Lambton, Essex, Bruce and Grey (south part only) have all been analysed in this report. To accurately gather the pertinent data, sales were searched using various systems including but not limited to Geowarehouse, MPAC, RealTrack and MLS. The sales were then grouped into either, north and south groups or east and west groups depending on the County. Only sales that occurred in 2013 were selected for the 2013 study. The majority of the sales chosen had no building improvements (vacant land), with the exceptions being minimally improved properties (i.e. older house and shed) which have had the value of the improvements extrapolated. Also, the sales utilized were considered to be used solely for farming purposes. The sales were analysed on a per total and per tillable acre basis. The per tillable acre rate has been used and quoted in this report, as it is the most accurate reflection of the value of agricultural land. In stating land values in this report, the median unit of measurement was used rather than the mean as the median protects against outliers in the sales data. The same study was completed in 2010, 2011 and 2012, with those results also shown in this report. Results In 2013, agricultural land values continued to increase substantially over 2012 land values, with the average rate of increase across the 10 Counties being approximately 22%-25%. This rate of increase is very similar to the rate of increase on land values since 2010, when land values in Southwestern Ontario began to increase at historic levels. This 20%-30% per year increase since 2010 is extremely significant, given the long term increase in agricultural land values is generally in a range of 3%-7%. The Counties with the largest average annual increases since 2010 are Bruce County, Lambton County and Elgin County in a range of approximately 27%-38% per year. The County Divisions with the largest average annual increases since 2010 are Elgin East, Huron North, and Lambton North in a range of approximately 32%-36%. Some of the highest per acre sales in 2013 were in a range of $20,000 to $25,000 per tillable acre. Changing of the Guard Unlike the 2010-2012 period, land values in 2013 began to show signs of stress, with increases in certain areas beginning to slow down and level off. This noticeable change in some markets provides a glaring contrast to the consistent, extremely rapid increases of the prior three year period. In some areas, the first part of 2013 traded much the same as 2010-2012 with major increases and new highs being set. Conversely in those areas values began to level off in the second part of 2013. Notable examples of this variability would be in areas of Elgin County, Kent County and Lambton County, where the significantly lower commodity prices appear to have had a larger factor in buyer mentality. In these areas mentioned above, as well as various other areas, potential buyers tended to diminish over the year with many potential buyers simply not active in the market, given the high prices and/or they had made recent purchases in prior years and simply could not afford more land. This was seen most clearly in parts of Elgin County (Elgin East in this study) where significant highs were set in the early part of 2013, which was then followed by somewhat lower values in the latter part of the year. Copyright 2014 Page 3

Same Old Story In other areas, values continued to be strong throughout the year with new highs being set in some cases. Two examples of these types of areas would be the typically strong quota/livestock areas of Huron-Perth-Oxford, and maybe the seemingly surprising example of Grey County. In Huron, Perth and Oxford Counties values remained strong throughout the year in most areas. As has almost always been the case, the stabilizing factor of quota and livestock influence in those areas kept land values strong, even in the face of lower commodity prices. Unlike parts of the Counties previously mentioned, there continued to be enough buyers in the market to keep values strong, and in many cases enough buyers to continue bidding wars which has become the norm in many deals in these areas. The second example of Grey County is definitely a different example with the major influence in strong values being Mennonite purchasers moving to Grey County from the Waterloo area (also prevalent in Bruce County). Although Mennonite farmers have been active in parts of Grey since the 1960 s, other parts of the County have not attracted Mennonite farmers until more recently. This continued influx of new farmers to the area have increased land values substantially and very likely could continue to do so for some time. Meet the New Norm = Variability Regardless of the area or the perceived direction of land values in certain areas, the most prominent theme in 2013 was the variability of land values. The range in values widened significantly in many areas providing a mixed conclusion on where land values are heading in the future. This theme of variability is not new to real estate markets, as there is always a certain amount of variability in real estate. However, the change is that in 2010-2012 the upper end of the range and the lower end of the range both continued to increase significantly. However, in 2013 the same was not true with there being many cases where the upper end held or increased, while the lower end decreased providing for a much larger range in land values. Other forms of variability in the 2013 market include the differences between Counties (already discussed), as well as the marketing time for many deals and listings in 2013. With respect to marketing time, the need for marketing in 2010-2012 was minimal for land in most areas as there was very strong demand. Private deals were very common with multi-million dollar deals completed over the fence with a handshake. In 2013, these types of quick private deals still occurred, as did the somewhat pro-vendor tender processes. However, the major change with some properties was that they were now being listed by an agent and were taking much longer to sell, or never sold at all. This increase in inventory and marketing time seems to signal a change in the market and has definitely decreased the volume of transactions. Another factor in the variability was the vast differences for properties in the same area that were either highly desired by various purchasers or had very few interested parties at all. In these cases, some properties would sell at new highs, while others in the same general area have been listed for months and either sold at a perceived discount or not at all. The main story line here is that property specifics are very important and purchasers have become slightly more selective than in prior years. Sales and Listings As eluded to above, the number of sales in the latter part of 2013 were down in comparison to early 2013 and 2010-2012. Properties were not sold with the same ease as came to be prevalent in the prior time period. With fewer properties being sold, listings increased substantially in the latter part of 2013 with many Realtors having much larger inventories coming into 2014. Although fewer sales and more listings seems somewhat alarming, it actually does not necessarily mean that values will change substantially. Having good, qualified agricultural Realtors marketing properties is a healthy transition for a market that has been in overdrive since 2010. Copyright 2014 Page 4

Major Market Factors It is very important to outline the major market factors that went into the 2013 results. These major market factors as they are being dubbed, are factors that are more regional/national/global than area specific (and which have major impacts that can many times be out of primary producer control). The two factors which have had the biggest influence are outlined below. The primary factor in the overall significant increase in land values since 2010, and in many areas in 2013, are interest rates. Interest rates have been at historically low levels and have allowed for substantial expansion by large, progressive agricultural producers. The leverage capabilities these rates have provided farmers have been the most significant factor in the major increase in land values. The secondary factor that has influenced the major increases, as well as the more recent variability, is commodity prices. Commodity prices increased significantly in 2011 and 2012 due to many other factors and this provided a cash flow incentive to pair with the interest rate incentive to purchase more land at higher values. In 2013 the commodity market for corn in particular decreased substantially from the much higher levels of 2011 and 2012. This major change in cash flow for many farmers has resulted in a different outlook on land values. 2014 and Beyond Now the difficult work begins, which is to try and predict and forecast where agricultural land values are likely to go. As with any forecast, various factors must be considered. First and foremost are interest rates and the outlook for interest rates appears to be favourable with regards to the Prime rate, but the long term bond rates may be signalling an increase in long term mortgage rates. This could have an effect, but by all accounts it appears that there will not likely be a significant increase in rates in the short term. This will definitely bode well for land values in the short term. However, it must be noted that any unexpected increase in interest rates would have a very significant impact on land values, with the 1980 s being the most recent illustration of this. Secondly, commodity prices are going to be important in determining cash flow for many producers, whether potential vendor or purchaser. The outlook for commodity prices is always an extremely difficult proposition that should be left to experts in that field. However, the expectation is that the high commodity prices of 2011 and 2012 are not likely returning anytime soon. Overall, in my opinion I believe that variability will be the one constant result in the short term. Expect the range in values to be extreme with 50% ranges likely, and 100% ranges possible. In some areas expect to see new highs made in 2014, and in other areas expect recent highs to be a level of the past. It is very likely that there will be fewer sales and more listings as vendor expectations outpace purchaser willingness. Copyright 2014 Page 5

2013 LAND VALUES COUNTIES The graph below shows the median 2013 land value per County. The X axis shows the County, while the Y axis shows the median land value on a per tillable acre basis. $17,000 $16,000 $15,000 $14,000 $13,000 $11,000 $9,000 $7,000 2013 Median $5,000 $3,000 $1,000 Huron Perth Oxford Middlesex Elgin Lambton Kent Essex Bruce Grey (South) Copyright 2014 Page 6

2013 LAND VALUES COUNTY DIVISIONS The graph below shows the median 2013 land value per County division. The X axis shows the County division, while the Y axis shows the median land value on a per tillable acre basis. $17,000 $16,000 $15,000 $14,000 $13,000 $11,000 $9,000 $7,000 $5,000 $3,000 $1,000 2013 Median Copyright 2014 Page 7

2010-2013 LAND VALUES COUNTY The graph below compares the median land values for each County, in 2010 (blue), 2011 (red), 2012 (green) and 2013 (purple). $17,000 $16,000 $15,000 $14,000 $13,000 $11,000 $9,000 $7,000 2010 Median 2011 Median 2012 Median 2013 Median $5,000 $3,000 $1,000 Huron Perth Oxford Middlesex Elgin Lambton Kent Essex Bruce Grey (South) Copyright 2014 Page 8

2010-2013 LAND VALUES COUNTY DIVISION The graph below compares the median land values for each County division, in 2010 (blue), 2011 (red), 2012 (green), and 2013 (purple). $17,000 $16,000 $15,000 $14,000 $13,000 $11,000 $9,000 $7,000 2010 Median 2011 Median 2012 Median 2013 Median $5,000 $3,000 $1,000 Copyright 2014 Page 9

INCREASE IN VALUES COUNTY County 2010 to 2011 2011 to 2012 2012 to 2013 Average # of 2013 Sales Huron 23.89% 36.88% 20.24% 27.00% 17 Perth 8.72% 34.38% 17.50% 20.20% 21 Oxford 7.81% 18.98% 25.74% 17.51% 18 Middlesex 41.79% 24.25% 5.81% 23.95% 39 Elgin 37.65% 15.38% 29.01% 27.35% 24 Lambton 4.33% 69.19% 36.80% 36.77% 33 Kent 23.43% 14.07% 26.75% 21.42% 37 Essex N/A 11.48% 15.38% 13.43% 20 Bruce 43.91% 29.53% 39.30% 37.58% 22 Grey 1.05% 38.92% 12.29% 17.42% 7 Average 21.40% 29.30% 22.88% 24 Largest Average Increases Since 2010 Bruce 37.58% Lambton 36.77% Elgin 27.35% Copyright 2014 Page 10

INCREASE IN VALUES COUNTY DIVISION County Division 2010 to 2011 2011 to 2012 2012 to 2013 Average # of 2013 Sales Huron - N 30.22% 53.88% 17.87% 33.99% 11 Huron - S 12.19% 29.17% 30.94% 24.10% 6 Perth - N 50.12% 34.57% 4.70% 29.80% 9 Perth - S 2.91% 33.67% 26.55% 21.04% 12 Oxford - N 14.17% 19.52% 9.86% 14.52% 10 Oxford - S 31.33% 24.31% 32.35% 29.33% 8 Middlesex - E 21.40% 18.02% 10.11% 16.51% 22 Middlesex - W 30.11% 38.02% 7.55% 25.22% 17 Elgin - E 23.92% 13.31% 71.01% 36.08% 11 Elgin - W 6.87% 37.28% 27.55% 23.90% 13 Lambton - N 44.45% 29.55% 22.43% 32.14% 16 Lambton - S 6.14% 32.39% 56.88% 31.80% 17 Kent - N 34.27% 14.93% 20.08% 23.09% 13 Kent - S 16.32% 37.55% 20.88% 24.92% 24 Essex - N N/A 14.96% 33.65% 24.31% 6 Essex - S N/A 10.21% 14.18% 12.20% 14 Bruce - N 32.19% 13.90% 35.02% 27.04% 8 Bruce - S 6.78% 36.24% 23.95% 22.32% 14 Grey - S 1.05% 38.92% 12.29% 17.42% 7 Average 21.44% 27.92% 25.15% 13 Largest Average Increases Since 2010 Elgin - E 36.08% Huron - N 33.99% Lambton - N 32.14% Copyright 2014 Page 11

HURON COUNTY Huron County is home to some of the most productive land in the Province and has been one of the Counties that has experienced a very strong increase in land values, especially over the last few years. Huron is a County where most farm types are represented. Livestock is still a predominant sector, as is cash cropping with a large percentage of the Ontario edible bean crop grown in the south part of the County. Excellent crop yields and manure management continue to be important factors in the upward movement in land values. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Huron, highlighting the predominant agricultural sectors in the County. $200 2012 Farm Cash Receipts $150 Millions $100 $50 Source: OMAFRA Copyright 2014 Page 12

The County of Huron was split into North and South regions. The Geographic Townships of Howick, Turnberry, Grey, Morris, Hullett, East Wawanosh, West Wawanosh, Ashfield, Colborne and Goderich were put in the North region. The Geographic Townships of McKillop, Stanley, Tuckersmith, Hay, Stephen and Usborne were put in the South region. The graph below shows the medians for Huron County each year from 2010 to 2013. $16,000 $14,000 Huron County Median 2010 2011 2012 2013 The graph below shows the land values for the north and south parts of Huron County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Huron - North Huron - South Copyright 2014 Page 13

PERTH COUNTY Perth County, like Huron, has very productive agricultural land and is another county which is experiencing a very strong upward movement in land values, especially over the last few years. Perth has a strong livestock component with both swine and dairy being a historically strong component. Cash cropping also helps demand for land in the area with yields in the County at the upper end of the Provincial averages each year. These high yields and manure management continue to be important factors in the upward trend in land values. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Perth, highlighting the predominant agricultural sectors in the County. $250 2012 Farm Cash Reciepts $200 Millions $150 $100 $50 Copyright 2014 Page 14

In Perth, the County was also split into North and South regions. The Geographic Townships of Wallace, Elma and Mornington were put in the North region. The Geographic Townships of Logan, Ellice, North Easthope, South Easthope, Downie, Fullarton, Hibbert and Blanshard were put in the South region. The graph below shows the medians for Perth County each year from 2010 to 2013. $18,000 $16,000 $14,000 2010 2011 2012 2013 Perth County Median The graph below shows the land values for the north and south parts of Perth County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Perth - North Perth - South Copyright 2014 Page 15

OXFORD COUNTY Oxford County, or sometimes better known as the Dairy Capital of Canada, is a highly productive agricultural area with the North region having one of the highest densities of intensive livestock in the Province. Oxford is well known internationally for its dairy farmers but it also is one of the more diverse Counties in the Province with various other types of intensive livestock as well as the South region and its sandy soils home to tobacco and ginseng farmers. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Oxford, highlighting the predominant agricultural sectors in the County. $250 2012 Farm Cash Reciepts $200 Millions $150 $100 $50 Copyright 2014 Page 16

In Oxford, like Huron and Perth, the County was split into North and South regions. The Geographic Townships of East Nissouri, West Zorra, East Zorra, North Oxford, Blandford and Blenheim were placed in the North region. The Geographic Townships of West Oxford, East Oxford, Dereham, North Norwich and South Norwich were placed in the South region. The graph below shows the medians for Oxford County each year from 2010 to 2013. $18,000 $16,000 $14,000 2010 2011 2012 2013 Oxford County Median The graph below shows the land values for the north and south parts of Oxford County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Oxford - North Oxford - South Copyright 2014 Page 17

MIDDLESEX COUNTY Middlesex County, unlike Huron, Perth and Oxford, does not have an abundance of large intensive livestock operations. This is not to say there are none, as there are some of the largest dairy and poultry operations in the Province located in this County. The main influence on land values comes from cash crop farmers. The ongoing urban influence of the City of London also provides constant pressure on land values. The graph shown provides the 2010 Farm Cash Receipts (OMAFRA) for the County of Middlesex, highlighting the predominant agricultural sectors in the County. $200 2012 Farm Cash Receipts $150 Millions $100 $50 Source: OMAFRA Copyright 2014 Page 18

Middlesex was divided into East and West regions. The Geographic Townships of Biddulph, London, West Nissouri, Westminster, North Dorchester, Lobo and McGillivary were put in the East region. The Geographic Townships of West Williams, East Williams, Adelaide, Caradoc, Metcalfe, Mosa, Ekfrid and Delaware were put in the West region. The graph below shows the medians for Middlesex County each year from 2010 to 2013. Middlesex County Median 2010 2011 2012 2013 The graph below shows the land values for the east and west parts of Middlesex County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Middlesex - East Middlesex - West Copyright 2014 Page 19

ELGIN COUNTY Elgin County is a unique County which stretches along the Lake Erie shoreline and as a result has varying weather conditions which tend to differ from the Counties analysed so far. The land in Elgin also has a large variance in topography as well as soil type and its lack of uniformity provides for a number of agricultural uses and usually a wide range in value from area to area. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Elgin, highlighting the predominant agricultural sectors in the County. Millions $120 $100 $80 $60 $40 $20 2012 Farm Cash Receipts Source: OMAFRA Copyright 2014 Page 20

Elgin, like Middlesex, is divided into East and West regions. The Geographic Townships of Southwold, Yarmouth, South Dorchester, Malahide and Bayham are placed in the East region. The Geographic Townships of Aldborough and Dunwich are placed in the West region. The graph below shows the medians for Elgin County each year from 2010 to 2013. Elgin County Median 2010 2011 2012 2013 The graph below shows the land values for the east and west parts of Elgin County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Elgin - East Elgin - West Copyright 2014 Page 21

LAMBTON COUNTY Lambton County is similar to Elgin County in some respects, in that there is a variance in soil types across the County. The productivity of the land in Lambton also varies with the soil type and it is no surprise that the values vary along with the soil type and productivity. The majority of the land in Lambton County is cash cropped with the majority of the intensive livestock farmers in the County being swine producers. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Lambton, highlighting the predominant agricultural sectors in the County. $200 2012 Farm Cash Receipts $150 Millions $100 $50 Soybeans Corn Hogs Cattle & Calves Dairy Eggs Wheat Poultry Source: OMAFRA Copyright 2014 Page 22

Lambton was divided into North and South regions. The Geographic Townships of Sarnia, Plympton, Warwick and Bosanquet were placed in the North region. The Geographic Townships of Moore, Sombra, Dawn, Euphemia, Brooke and Enniskillen were placed in the South. The graph below shows the medians for Lambton County each year from 2010 to 2013. Lambton County Median 2010 2011 2012 2013 The graph below shows the land values for the north and south parts of Lambton County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Lambton - North Lambton - South Copyright 2014 Page 23

KENT COUNTY Kent County has always been well known for its high agricultural productivity as well as its agricultural diversity. Through the decades the land in Kent has always been viewed as some of the best land in the Province. Not only is this attributed to the soil itself, but also to the beneficial climate as a result of being farther south than the majority of the Province, and in fact the majority of the Country. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Kent, highlighting the predominant agricultural sectors in the County. $200 2012 Farm Cash Receipts Millions $150 $100 $50 Source: OMAFRA Copyright 2014 Page 24

Kent County, like Lambton, was divided into North and South regions. The Geographic Townships of Chatham, Camden, Zone, and Dover were placed in the North region. The Geographic Townships of Tilbury East, Harwich, Orford, Howard, Romney and Raleigh were placed in the South region. In Kent, there is such a variance of soil type that this division becomes somewhat misleading. Within each division (North and South), there are large disparities between the bottom and top end of the range, as can be seen below. The graph below shows the medians for Kent County each year from 2010 to 2013. Kent County Median 2010 2011 2012 2013 The graph below shows the land values for the north and south parts of Kent County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. $20,000 $18,000 $16,000 $14,000 High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Kent - North Kent - South Copyright 2014 Page 25

ESSEX COUNTY Essex County is ideally located in the most southern area in all of Canada, and as a result has always been home to a strong cash crop sector. The vast majority of the land in Essex is very level and the majority of the County is heavier clay soil. There is sand and sandy loam soil in the south part of the County, as well as some clay loam in the west section. The largest sector by far in Essex is the greenhouse industry, with Leamington being well known as the Tomato Capital of Canada. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Essex, highlighting the predominant agricultural sectors in the County. Millions $600 $500 $400 $300 $200 $100 2012 Farm Cash Reciepts Copyright 2014 Page 26

Essex County was divided into North and South regions. The Geographic Townships of Tilbury North, Tilbury West, Rochester, Maidstone and Sandwich were placed in the North region. The Geographic Townships of Mersea, Gosfield North, Gosfield South, Colchester North, Colchester South, Malden and Anderdon were placed in the South region. It should be noted, that all greenhouse land sales have been excluded from this study given the industrial/urban nature of the land (i.e. services, location, etc.). The graph below shows the medians for Essex County each year from 2010 to 2013. Essex County Median 2011 2012 2013 The graph below shows the land values for the north and south parts of Essex County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. High Low Median. 2011 2012 2013.. 2011 2012 2013. Essex - North Essex - South Copyright 2014 Page 27

BRUCE COUNTY Bruce County is another County which has experienced a large increase in land values over the last several years as the demand for land from varying types of farmers has increased. Traditionally, Bruce County has been known as the Beef County of Ontario, however much of the pasture land in Bruce has been converted to crop land in the last few years with the rise of land values and commodity prices. Advances in corn and other grain technology have produced crop varieties which can stand a slightly cooler climate and shorter growing season. This has been a big reason for the increase in land values in Bruce County. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Bruce, highlighting the predominant agricultural sectors in the County. $200 2012 Farm Cash Receipts $150 Millions $100 $50 Cattle & Calves Dairy Soybeans Corn Poultry Hogs Wheat Source: OMAFRA Copyright 2014 Page 28

Bruce County was divided into North and South regions. The Geographic Townships of Arran, Elderslie, Saugeen and Bruce were placed in the North region. The Geographic Townships of Kincardine, Huron, Kinloss, Greenlock, Culross, Carrick and Brant were placed in the South region. As can be noted, the Peninsula has not been included in the study. The graph below shows the medians for Bruce County each year from 2010 to 2013. Bruce County Median 2010 2011 2012 2013 The graph below shows the land values for the north and south parts of Bruce County each year from 2010 to 2013. The blue bars represent the high sale in that particular year; the red bars represent the low sale in that particular year; and the green line shows the median in that particular year. High Low Median. 2010 2011 2012 2013.. 2010 2011 2012 2013. Bruce- North Bruce - South Copyright 2014 Page 29

GREY COUNTY Grey County, while sometimes best recognized for recreational activities in all seasons of the year, is home to a strong agricultural sector. Like many of the Counties analysed so far, Grey has a large variance in soil type from the gravelly soils in Glenelg and Egremont to some wetter soils in Proton and Artemesia. Variances can also be seen in the types of farmers in Grey. Like Bruce, Grey has historically not been a large cash crop oriented area, with the majority being mixed farms, as well as various beef producers. Also like Bruce, much of the land which was either in pasture or not being farmed at all, is now being cropped. Much of this is to do with the ever growing Mennonite influence in the area. Most of the livestock groups are represented in Grey, although large scale intensive livestock operations are few. The graph shown provides the 2012 Farm Cash Receipts (OMAFRA) for the County of Grey, highlighting the predominant agricultural sectors in the County. Millions $90 $80 $70 $60 $50 $40 $30 $20 $10 2012 Farm Cash Reciepts Source: OMAFRA Copyright 2014 Page 30

For the purposes of this study, only the South region of Grey County was researched, given the non-agricultural influences in the north part of the County. The Geographic Townships of Bentinck, Glenelg, Artemesia, Osprey, Normanby, Egremont and Proton were placed in the South region. The graph below shows the medians for the south part of Grey County each year from 2010 to 2013. High Low Median. 2010 2011 2012 2013. Grey - South Copyright 2014 Page 31

CONTACT For additional information on the data provided above or any other related inquiries on land values or appraisals, please do not hesitate to contact me at: Ryan R. Parker, B.Comm, AACI, P.App, P.Ag, CAFA Cell: (519) 709-3088 Office: (519) 667-9050 ext. 235 rparker@valcoconsultants.com www.valcoconsultants.com DISCLAIMER The information contained in this report was obtained from sources believed to be reliable. Certain information in this report has been accepted at face value; especially if there is no reason to doubt its accuracy. Certain empirical data required interpretive analysis pursuant to the objective of this report. However, I have not verified its accuracy and make no guarantee, warranty or representation regarding it. The specific sales data provided is subject to the possibility of errors, omissions, mistakes in calculation of total and tillable acre sizes, as well as error in reported sale price and/or sale date. Although an attempt has been made to find every pertinent sale in the areas described, it is not possible to confirm that this is the case. This report and all the contents of this report cannot be relied on for any financing, accounting, litigation, expropriation, and/or any other use which requires a client relationship to be established. This report and the studies were completed as an informative tool, and were completed independently for no particular client. This report and all the contents of this report are proprietary and cannot be used in or for any type of presentation, appraisal, or separate study without written permission from the author. Any violation of this copyright will be viewed as a direct infringement of the copyright of this report. Copyright 2014 Page 32