IMPACT ANALYSIS OF INTENSIVE LIVESTOCK ... ANALYSIS OF INTENSIVE LIVESTOCK OPERATIONS ON MANITOBA...

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IMPACT ANALYSIS OF INTENSIVE LIVESTOCK OPERATIONS ON MANITOBA RURAL RESIDENTIAL PROPERTY VALUES FIVE CASE STUDY LOCATIONS Prepared for: Manitoba Pork Council Prepared by: Royal LePage Stevenson Advisors Spring 2004 Stevenson Advisors Ltd. 276-A Colony Street Winnipeg, Manitoba R3C 1W3 www.stevenson.mb.ca ILO IMPACT ANALYSIS – RURAL MANITOBA Our File#03-9038

Transcript of IMPACT ANALYSIS OF INTENSIVE LIVESTOCK ... ANALYSIS OF INTENSIVE LIVESTOCK OPERATIONS ON MANITOBA...

Page 1: IMPACT ANALYSIS OF INTENSIVE LIVESTOCK ... ANALYSIS OF INTENSIVE LIVESTOCK OPERATIONS ON MANITOBA RURAL RESIDENTIAL PROPERTY VALUES FIVE CASE STUDY LOCATIONS Prepared for: Manitoba

IMPACT ANALYSIS OF INTENSIVE LIVESTOCK OPERATIONS ON MANITOBA RURAL RESIDENTIAL PROPERTY VALUES FIVE CASE STUDY LOCATIONS

Prepared for: Manitoba Pork Council Prepared by: Royal LePage Stevenson Advisors Spring 2004

Stevenson Advisors Ltd. 276-A Colony Street Winnipeg, Manitoba R3C 1W3 www.stevenson.mb.ca

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Table of Contents

S E C T I O N 1 I N T R O D U C T I O N

Purpose of the Study 1 Study Process Outline 1 Methodology 2

S E C T I O N 2 B R O A D M A R K E T A N D D E V E L O P M E N T F A C T O R S

Introduction 5 Exports as a Key to Growth in Pig Production 5 Pork Processing Capacity in Manitoba, and Market Destinations 6 Growth in the Manitoba Pig Industry 7 Current Environmental and Land-Use Regulation 8 ProposedChanges to the Planning Act in 2004 10 Summary 12

S E C T I O N 3 C A S E S T U D Y N O . O N E – R M O F F R A N K L I N ( S T . M A L O )

RM of Franklin 14 Analysis of Sales Data 18 Summary of Findings 24

S E C T I O N 4 C A S E S T U D Y N O . T W O – R M O F R H I N E L A N D ( G R E T N A )

RM of Rhineland 25 Analysis of Sales Data 27 Summary of Findings 31

S E C T I O N 5 C A S E S T U D Y N O . T H R E E – R M O F B L A N S H A R D ( C A R D A L E )

RM of Blanshard 32 Analysis of Sales Data 35 Summary of Findings 39

S E C T I O N 6 C A S E S T U D Y N O . F O U R – R M O F G L E N W O O D ( S O U R I S )

RM of Glenwood 40 Analysis of Sales Data 42 Summary of Findings 47

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S E C T I O N 7 C A S E S T U D Y N O . F I V E – R M O F R O C K W O O D ( G U N T O N )

RM of Rockwood 48 Analysis of Sales Data 51 Summary of Findings 56

S E C T I O N 8 S U M M A R Y D I S C U S S I O N A N D C O N C L U S I O N S

Summary 57 Conclusions 58

S E C T I O N 9 L I M I T I N G C O N D I T I O N S

Limiting Conditions 59

A P P E N D I X I C A S E S T U D Y S A L E S D A T A

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Section 1 - Introduction

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STEVENSON ADVISORS LTD. 1

I N T R O D U C T I O N

P U R P O S E O F T H E S T U D Y

In January 2004, the Manitoba Pork Council commissioned Royal LePage Stevenson Advisors Ltd. to undertake a study to define the impact of intensive livestock operations (ILO’s) on surrounding rural residential property values. In particular, the analysis will focus on five case study sites of existing hog barn operations, distributed geographically throughout southern Manitoba.

In planning the analysis, case study sites were selected from a fairly large universe of hog operations, based on characteristics including location and intensity of operations. The intent was to allow for an analysis that examined the impact of operations both on a geographical basis and to observe impacts from operations of varying intensities.

S T U D Y P R O C E S S O U T L I N E

The primary objective of this study is to ascertain, in a rational and unbiased approach, the impact that hog ILO’s (intensive livestock operations) have on surrounding real estate values. To accomplish this task, we have split our study into two components.

Firstly, a review of broad market factors and historical background pertinent to the hog industry in Manitoba, is carried out. The purpose of this study component is to provide high level and longer term context for the assignment. The pork industry, as with other livestock and poultry sectors, has gone through a major transformation over the past decade, both in terms of its size in the province and the level of technological sophistication. Government policy supports the expansion of the pork sector and the creation of appropriate processing capacity in Manitoba. An understanding of the future state of the pork industry, particularly environmental management practices, will provide a better foundation for further technical analysis. An understanding of current and proposed land-use planning policies of both the Province and municipalities will facilitate the analysis of specific property value impacts.

Secondly, we have carried out an analysis of five test case sites of existing hog barn operations in rural Manitoba. Sales activity of vacant land and improved properties were collected and an analyzed, in an attempt to determine the relationships that exist between the location of the operations and the sale prices of properties in surrounding areas.

In support of our analysis and to provide a means of comparison with other ILO operations, we have included an analysis of the impact of different ILO operations (one poultry operation, one cattle feedlot) in two of our test case locations.

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STEVENSON ADVISORS LTD. 2

M E T H O D O L O G Y

The methodology of our study was influenced by the objectives to provide an analysis that would not be focused on any one particular region or geographic area, and which would capture ILO operations of varying intensities. The budget and scope of the study, limits the analysis to five test case sites.

Hog ILO locations were initially identified using a manure permit map of the province. Five test case study locations were selected based on the following criteria:

o The ILO had to be an active operation.

o Locations of the five case study ILO’s had to be distributed geographically, so as to present a cross-section of rural Manitoba.

o The selection of test case sites would consider the intensity of operations (i.e. the number of animal units) and would attempt to include ILO’s of varying intensities.

o Information on the test case site had to be available; many ILO’s were excluded from consideration based solely on a lack of data regarding the operation.

o The location of the ILO had to be conducive to our analysis. That is, development of the surrounding area could not include a high density of other ILO’s or urban development that would prevent the establishment of typical impact zones for the test site.

o Problematic or controversial sites would be considered for selection, if they met the additional criteria as specified.

o Given the purpose of the study, it was necessary to identify ILO’s with surrounding rural residential development; it is generally understood that opposition of ILO’s arises in areas where interactions or proximities of residents and operations is greatest. Selection of test case sites in strictly agricultural regions with large land holdings and low population densities would be of no benefit to our study.

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STEVENSON ADVISORS LTD. 3

Once test case sites were selected and identified, an “impact ring” radius area of up to five miles was identified and plotted on a map of the local geographic area (the rural municipality in which the test case site is located, and possibly portions of neighbouring municipalities). The local municipality or municipalities therefore became the universe for the test case data collection.

Once the geographic boundaries were set, data collection was undertaken. A comprehensive review and analysis of all pertinent small-acreage residential and bare land property sales (as recorded by the Province of Manitoba - Rural Assessment) from the identified geographic area, for five previous years (1998 – 2003), were gathered and plotted base maps, and entered into a master database. The data was collected based on the following criteria:

o Identification of all single family home and vacant land sales in the identified geographic area, occurring between July 1998 and December 2003.

o From the data set identified, we eliminated the following sales:

• Seasonal cottages

• Mobile homes

• Properties selling for amounts far below the current assessed values

• Sales under $10,000

• Sales located within villages or towns

• Vacant land sales with significant farm improvements

• Sales between family members

Once the appropriate sales were identified, an attempt was made to collect additional information on the properties.

For property sales with dwellings, the following information was compiled from records maintained by Rural Assessment:

o Sale price and sale date

o Assessed value of the land

o Dwelling type (as classified by the Assessment department)

o Dwelling style (i.e. bungalow, two storey, etc.) and gross floor area above grade

o Original date of construction

o Presence and type of garages/auxiliary buildings on the property

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STEVENSON ADVISORS LTD. 4

Once data was collected and compiled, visits to each test case site area were carried out, with the objective of gathering local market information and carrying out interviews with local experts (i.e. realtors, assessors, appraisers, etc.).

Once data collection and site visits were completed, the data analysis phase was undertaken. Firstly, sales information from the larger geographic region were analyzed, developing unit price indicators (i.e. sale price per square foot for dwellings and sale price per acre for bare land) which could in turn be used to identify market trends (eg. price relationships to time or location). After the database for the geographic region was established and price trends and relationships were identified, the sales within the target market “impact rings” were analyzed in the same manner and results compared to the larger universe.

To allow for comparative analysis, sale prices for improved properties (i.e. properties with houses) were adjusted firstly by deducting the assessed value for land from the sale price. Therefore, the adjusted sale price reflects an approximation of the value for the dwelling only. Adjustment factors, derived from analysis of the data universe, were also used to equate the differences between dwelling styles (bungalow, bi-level, 1 ½ storey, 1 ¾ storey and two storey), dwelling conditions (low, fair and average) and date of sale.

A similar process, although requiring much less in the way of adjustment, was carried out for vacant land sales in the case study areas. Vacant land sale parcels of 40 to 160 acres were collected and adjusted for the date-of-sale, based on identified trends. The resulting adjusted sale prices was then calculated on a per acre basis.

Once adjusted sale prices were derived for improved and vacant land sales, and plotted on base maps of the identified geographic areas, calculations of distances between ILO’s and property sale locations were made and analyzed. The relationship between the distance from ILO’s and adjusted sale prices per square foot for houses, or adjusted sale price per acre for vacant land, formed the basis for our conclusions regarding the impact of hog ILO’s on market values of surrounding properties.

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B R O A D M A R K E T A N D D E V E L O P M E N T F A C T O R S

I N T R O D U C T I O N

The purpose of this study component is to provide high level and longer term context for this current assignment. The pork industry in Manitoba, as with most other livestock and poultry sectors in North America, has gone through a major transformation over the past decade; both in terms of its size and its intensity in the province, and the level of technological sophistication. Provincial government policy supports the current competitive economic advantages of the pork sector, and the creation of appropriate processing capacity in Manitoba as a means of keeping more of the supply chain within the Manitoba economy (and therefore more economic prosperity in the province). An understanding of the past, present and future state of the pork industry, particularly planning and environmental management practices, will provide a better foundation for further property valuation analysis.

Tensions between modern agricultural uses and residential uses in rural areas are a common problem throughout North America. The increasing intensification of agriculture associated with value-added production and diversification may contribute to a greater incidence of conflict. Further expansion of ex urban residential development in predominantly agriculturally based municipalities has added to the population base and the potential for conflicts. This new population has different values and expectations of the rural lifestyle. As well, this population shift is occurring at the same time when the size of the more traditional farm-based population is declining. The probability of conflicts and complaints has therefore increased where the nature of agriculture has intensified, and concurrently where the adjacent rural population is less directly connected to this new farm economy.

E X P O R T S A S A K E Y T O G R O W T H I N P I G P R O D U C T I O N

The following points are sourced from a paper prepared by the George Morris Centre entitled “Commentary on Exchange Rate Impacts on Hog/Pork Competitiveness”. The paper breaks down the export issue into both a long term and short-term perspective. This is necessary in order to differentiate between the “normal” export factors and those that might be unique to the current situation in 2003 and 2004. It is also helpful to look at the long term or big picture factors in order to understand the underlying drivers of trade between Canada and the United States. The following are the key long term factors and conclusions:

• The Canadian and U.S. hog production and pork processing sectors are two parts of one North American hog and pork industry.

• Canadian slaughter hog exports have been gradually decreasing.

• Canadian feeder/weanling hog exports have been rapidly increasing.

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• Canada has a competitive advantage in the production of weanling pigs.

• The American “corn belt” currently has a competitive advantage in finishing hogs.

• American hog finishers in Iowa and the “corn belt” have demonstrated strong demand for Canadian weanlings.

• Canadian herd growth has been driven by sows, not by market/slaughter hogs.

• The U.S. hog price differential in favour of American producers has been declining over time.

• Canadian slaughter and slaughter capacity has been rapidly accelerating and has more than kept pace with market hog production.

• Canadian slaughter has not kept pace with the growth of the weanling production sector in Canada and that is where the growth in exports has occurred.

• Long term Canadian dollar depreciation favours weanling production and weanling exports.

The conclusion to be reached regarding long-term export issues for Manitoba is that the comparative advantage in weanling production in Canada and finishing in the U.S., coupled with exchange rate factors can explain a large measure of the growth in the Canadian herd. Those factors can also be held to explain the growth in weanling/feeder exports. The slaughter hog or finishing hog sector has not seen the same growth and is more in balance with slaughtering capacities in Canada.

P O R K P R O C E S S I N G C A P A C I T Y I N M A N I T O B A , A N D M A R K E T D E S T I N A T I O N S

Manitoba has a growing pork processing sector. Only meat products originating from federally registered and inspected plants can be exported outside of Canada. The pork industry has adopted the Canadian Quality Assurance Program for pork producers.

Maple Leaf Foods Ltd. built a state-of-the-art processing plant that opened in 1999 in Brandon. This plant can process 45,000 pigs per week in one shift and has the capacity to double that production by adding a second shift. When combined with the other processing plants in the province, the slaughter capacity in Manitoba is about 6.9 million head per year.

Based on the market conditions previously stated, Manitoba has become a major exporter of weanling pigs to the United States. Approximately 1.93 million pigs weighing less than 23-kilograms, live-weight, were exported to the United States in 2002. In effect, Manitoba is establishing two pig industries: an industry to supply slaughter animals both locally and internationally, and a weanling industry to supply grower-finisher barns in the United States.

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Manitoba is the largest exporter of live pigs in Canada and is the second largest pork-exporting province after Quebec. The majority of live slaughter pigs were exported to processing plants in South Dakota, Wisconsin and Iowa. Most weanlings were sold to feeding operations in Iowa, Minnesota, Nebraska and South Dakota. Combined, these exports of live animals were worth about $246.1 million.

Manitobans only consumed about eight per cent of the total pork produced in the province. In addition, about 192 million kilograms of pork and pork products, valued at $491.4 million, were sold directly to 36 countries. The United States is Manitoba’s largest export market for both pork and exports of live weanling pigs. Manitoba also exports large quantities of pork and pork products to Pacific Rim markets such as Japan, Korea, and Hong Kong.

G R O W T H I N T H E M A N I T O B A P I G I N D U S T R Y

Pig production in Manitoba had increased more than sevenfold from 870,000 in 1975 to 6.7 million in 2003. Production has been increasing at 13 per cent per year in recent years. Manitoba is now Canada’s third largest pork-producing province with about 24 per cent of national production and about six per cent of North American production. Pig production is the most valuable agricultural commodity in Manitoba, worth about $760 million (Canadian dollars) in 2002. This is more than one-fifth of the total value of all agricultural production in the province. There are 16,000 to 17,000 people employed by the pig industry in Manitoba. Economic spin-off to the provincial economy has been estimated at $2 billion.

Along with the growth, Manitoba’s pig industry has seen changes in overall structure. As in many parts of the world, pig farms are generally fewer in number and larger in size. Manitoba’s pork industry is built on a base of 1,668 commercial pig operations (Statistics Canada 2001.)

Of the 1,379 farms with more than 20 pigs per farm, only 456, or about 33 per cent are traditional “farrow to finish” facilities. However, these farms still house more than 50 per cent of the pigs in the province. Of the 1379 pig farms in Manitoba, 854 farms in Manitoba or 51.2 per cent raised sows. Farms containing 500 sows or more now represent more than 80 per cent of the Manitoba sow herd. The trend toward larger operations is expected to continue. There are still many small farms with fewer than 100 sows but these farms had only 4.3 per cent of Manitoba’s sows. Conversely, the 75 farms with more than 1,000 sows each averaged 2,170 sows per unit and accounted for 56.4 per cent of the sows in the province and 29.7 per cent of the total pigs in the province. The sow herd continues to increase with the most recent estimate at more than 325,000 (Manitoba Agriculture and Food, July 2002.)

Pig production continues to increase in all regions of rural Manitoba. Data collected by Manitoba Agriculture and Food indicates that, for the past eight years, an average of 27,475 sow places and 101,530 feeder pig places were built each year.

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C U R R E N T E N V I R O N M E N T A L A N D L A N D - U S E R E G U L A T I O N

The pork industry in Manitoba has experienced the same public concerns about large-scale pig production as those encountered in other regions of the world. Concerns about odour, food safety, animal welfare and environmental degradation continue to be expressed; and research and training efforts continue to be pursued in an attempt to ensure these issues are addressed. The Government of Manitoba is responsible for enabling legislation and the subsequent regulatory framework for the management of livestock operations within the province. Pig operations are required to adhere to the Manitoba Environment Act (particularly, the Livestock Manure and Mortalities Regulation), the Water Rights Act, the Planning Act, the Animal Care Act, and the Farm Practices Protection Act.

Through legislation, land-use control is essentially the responsibility of municipal governments. The Manitoba Planning Act provides for the establishment of provincial land-use policies which have been enacted as Regulation 184/94. The Planning Act also enables municipalities or planning districts to prepare and adopt development plans.

Section 25(1) of the Planning Act defines the purposes of a development plan as follows:

(a) to serve as a framework whereby the planning district or the municipality and the community

as a whole may be guided in formulating development policies and decisions;

(b) to identify the factors relevant to the use and development of land;

(c) to identify the critical problems and opportunities concerning the development of land and

the social, environmental and economic effects thereof;

(d) to set forth the desired timing, patterns and characteristics of future development of land and

to determine the probable social, environmental and economic consequences thereof;

(e) to establish and specify the programs and actions necessary for the implementation of the

development plan;

(f) to outline the methods whereby the best use and development of land and other resources in

adjacent municipalities, districts, or affected areas immediately abutting thereto, may be co-

ordinated; and

(g) to identify those matters of government concern which affect the use and development of

land and other resources within the district or the municipality.

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The Planning Act further provides that a municipal council may enact a zoning by-law that conforms to a development plan. Section 40(1) of the Planning Act prescribes general development standards as follows:

40(1) In a zoning by-law, the council of a municipality shall prescribe general development standards for each zone having regard to any permitted or conditional use for the zone, and in prescribing those standards council shall have due regard to

(a) the character of the zone;

(b) the nature of the existing or proposed uses of land and buildings in the zone; and

(c) the suitability of the zone for particular uses in relation to what are, in the opinion of the council, the most appropriate uses of land within the municipality.

The Planning Act goes on to enable the listing of conditional uses in the zoning by-law which would require a public hearing and the imposition of conditions by the municipality that would be considered necessary to meet the objectives of its development plan and zoning by-law. There are currently special conditional use provisions in the Planning Act for livestock operations in excess of 400 animal units. In such cases, a conditional use application shall be sent to the Minister of Intergovernmental Affairs. The Minister shall in turn refer the application to the appropriate regional Technical Review Committee to prepare a report and make recommendations to the council on the matter.

Generally speaking, it appears that there is less conflict and acrimony regarding the expansion or establishment of intensive livestock operations where there is a longstanding municipal tradition in land-use planning and development control. The more deep rooted tradition for comprehensive planning and land-use regulation, the greater the likelihood that land values appear to be more stable, even when there is a preponderance of “intensive livestock operations” in the agricultural landscape. There also appears to be less impact on adjacent property values, particularly where proper separation from residential uses is maintained. Of note is the responsible approach being taken by the Rural Municipality of Hanover in its 2002 development plan. Hanover has recognized that it cannot sustain unlimited growth in livestock production and therefore will limit such development by:

a. Giving preference to the expansion of existing operations over establishing new ones.

b. Establishing limits on the size of each livestock production operation in the municipality.

c. Establishing standards in the zoning by-law regarding the size and location of the operations, and the storage and disposal of manure.

On the other hand, a significant number of rural municipalities have neither a development plan nor a zoning by-law in place. And there are also those municipalities that might have a plan or a zoning by-law

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in place, but do not have sufficient administrative capacity to adequately enforce the adopted development standards. This situation has led to unplanned and unregulated development in certain circumstances, which has resulted in land-use conflicts and local acrimony. Where development plans or zoning are not in place, conflicts can only be addressed after the fact as a matter of “nuisance” or concern for public health. In turn these unplanned circumstances have created uncertainties in the real estate marketplace, based on both real and perceived threats to land values.

P R O P O S E D C H A N G E S T O T H E P L A N N I N G A C T I N 2 0 0 4

In March 2000, the Government of Manitoba formally announced its Livestock Stewardship Initiative (LSI) with the aim of ensuring the sustainable development of Manitoba’s livestock industry. A Livestock Stewardship Panel was appointed by the Government of Manitoba on June 7, 2000 with a mandate to seek the views of Manitobans on the expansion of the livestock industry in Manitoba, and to present these to government in a report along with recommendations.

After the release of Livestock Stewardship 2000: A Public Discussion Paper in June 2000, and an extensive public consultation process and four research roundtables, the Panel’s final report laid out a number of key themes:

• Public apprehension about intensive livestock operations (ILOs) is being driven by several factors: experiences in other jurisdictions, declining familiarity with what is happening on farms, the occasional local “horror story”, and the perception of insufficient monitoring of intensive livestock operations.

• The government is seen as the custodian of public interest in the environment. The public needs to be confident that government is ensuring that “things are being done right”, and must have access to information to be assured of this.

• Current regulations and guidelines for intensive livestock operations, for the most part, are adequate; however, monitoring and enforcement are not.

• Progress towards sustainable livestock development in Manitoba must be based on reliable information, and not emotion. This information should be drawn from research and practical experience, and must be relevant to the Manitoba situation.

• It is important to recognize that there are two broad types of farms: large commercial farms that produce primarily for export, and farms that derive limited income from agriculture, or are in transition. The same policies and regulations will not work for both groups.

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• Although much of the Panel’s focus has been on hogs, it believes that beef production in Manitoba is sustainable, providing the issues of riparian management and processing capacity are addressed.

• Manure is a valuable product, capable of replacing expensive inorganic fertilizer and improving the soil, and should not be treated as a waste.

• The Panel believes that expansion of intensive livestock operations can be sustainable in Manitoba, provided that government follows the recommendations contained in this report.

The Panel also identified four key recommendations that are considered critical to achieving sustainable livestock development in Manitoba. (A series of supporting recommendations are contained in the body of the report.)

1. Role of Provincial Government in Sustainable Livestock Development

The overarching recommendation from the Panel stresses the need for the commitment of staff and financial resources to be devoted to two tasks: first, to gain a full understanding of the present situation of such operations in the overall milieu of agriculture in the province, and secondly, to provide a regulatory framework and a monitoring and enforcement effort in which expansion can take place without damage to Manitoba’s people or environment.

2. Publicly Available Information

Reliable information must be available not only to government and industry, but also to the concerned public. The Government of Manitoba should accumulate all relevant data concerning livestock operations in a central openly available information system in a geographic information (GIS) format.

3. Role of intensive livestock operations in Rural Development

The provincial government is challenged to promote rural development in a sustainable manner. The Panel believes that intensive livestock operations can play an important role in rural development through generation of employment and income, but they should not be seen as the only option. Farmers who wish to produce and market animals without going the intensive livestock operations route should be assisted.

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4. Decision Process for Siting of Intensive Livestock Operations

The Panel regards a carefully considered decision on the siting of intensive livestock operations to be of prime importance in sustainable livestock development, particularly in protecting the environment. It is essential that local circumstances, especially as pertaining to land use, be very thoroughly thought through. It is also essential that the province, being in a better position to assess environmental factors on a larger area basis in depth, have a say in the siting of intensive livestock operations.

In March 2004, the Minister of Intergovernmental Affairs and Trade, as part of the ongoing Livestock Stewardship Initiative and in partial response to the Panel’s recommendations, introduced Bill 40 as proposed changes to the Planning Act with the intent of improving the process by which municipalities evaluate proposed livestock operations.

All municipalities will be required to adopt development plans with accompanying maps that clearly set out ‘no go’ zones for livestock operations and also indicate where they may be considered. Through development plans, municipalities would be expected to determine if, where and under what conditions livestock operations will be considered. This provides both the public and the industry with greater predictability.

Public hearings would be required for the adoption of development plans and related zoning by-laws. The new process would also require enhanced public notice and hearings for livestock operation applications over 300 units, ensuring neighbouring municipalities, planning districts and residents are notified of livestock operation applications. Manure management shall be the responsibility of the Province.

Through province–wide land use regulations, the Province would provide direction on minimum siting and setback standards as a guide to municipalities. Through zoning by-laws, rural municipalities would be able to substitute the provincial regulation with stricter location standards.

S U M M A R Y

Intensive livestock operations will continue to be a mainstay of the rural farm economy for many years to come. So long as Manitoba has natural economic advantages in the production of pigs, the sector will expand to meet global market demand. The pork industry in Manitoba has experienced the same public concerns about large-scale pig production as those encountered in other regions of the world. Locally however, planning and land-use tools continue to be more responsive to the need to manage competing interests in rural Manitoba.

Proper separation of intensive livestock operations and residential development is the first step toward co-existence. And the economies of scale inherently necessary in intensive livestock operations make

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STEVENSON ADVISORS LTD. 13

modern environmentally sustainable farm practices much more viable. As local municipalities become increasingly adept at managing local land use issues associated with intensive livestock operations, conflicts and local acrimony will be expected to fade.

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STEVENSON ADVISORS LTD. 14

C A S E S T U D Y N U M B E R O N E – R M O F F R A N K L I N

A site located at SE 32-3-4E in the Rural Municipality of Franklin was chosen as the first case study for impact analysis. The hog operation on the site is known as “Portec Swine” and is located approximately five miles south-west of the village of St. Malo. The operation is reported to have an 1120 animal unit (AU) equivalent and consists of four 2000 head feeder barns, each with their own lagoons.

The subject site is located at the northern boundary of the Rural Municipality of Franklin, adjacent to the southern boundary of the Rural Municipality of De Salaberry. Therefore, in establishing the case study area, it was decided to include both municipalities for sales data collection. Maps, including locations for the case study site, other ILO’s in the region, and comparable sales, are presented on the following pages.

The subject site is fairly well isolated from other ILO’s (all types), except for one large hog ILO, located approximately one-half mile to the north. Therefore, the approach that we have taken is to monitor distances and potential impacts from both of these ILO’s. Sales in a five mile ring around these two operations were in the geographic area.

During our inspections it was determined that two poultry operations were present in the case study area; one at SE 14-5-3E and one at NW 26-5-3E. The poultry ILO’s were removed from other ILO operations and it was decided that they would be included in our analysis for comparative purposes. We were unable to determine the intensity of operations for these locations, but the local assessment department indicated that the operations were quite large.

Roadside inspections of 33 hog ILO’s and two poultry ILO’s in the identified municipalities were carried out on February 28, 2004. It was found that the ILO’s were fairly well delineated by size and location within the municipalities. Smaller operations tended to be on the east side of Highway 218, where inferior quality land is found and agricultural land uses were primarily pasture. Residences in this area tended to be hobby farm type, with small acreages. On the east side of Highway 218 the land was mostly in use for grain farming. ILOs observed, including hog and poultry, tended to be much larger than the opposite side of the highway. Residences tended to be clustered in small communities, with most ILO’s being at least one mile from houses.

Based on a random sample review of property sales, it is believed that assessment data is reliable in terms of describing the style and relative condition of dwellings. As well, assessment data is reliable in terms of land value; in years of examining land values estimated by provincial assessors, most of their conclusions have been very strong in regard to land value.

A total of 197 rural residential sale transactions were identified in the case study area during the period 1998 to 2003. In addition, 57 sales of vacant land holdings were identified in the case study area over the same time period, with parcel sizes ranging from 56 to 943 acres.

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STEVENSON ADVISORS LTD. 15

Based upon the criteria we had set forth for property sales, the sample of sales was reduced to a total of 83 property sales in the two municipalities (A table including reference to all sales is included in the appropriate section of the addenda). Based upon an analysis of the 83 sales, overall adjustment factors for time of sale, dwelling condition and dwelling type, were formulated.

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STEVENSON ADVISORS LTD. 16

Map Number 3-1

Case Study Site

Legend ILO D Dwelling Sale V Vacant Land Sale

D D

D

D D

D

D

D D

D

D D

D D D

D

D

D

V

V

V V

V

V

V

V

V

V

V

V

V

V

V

V

V

V V

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STEVENSON ADVISORS LTD. 17

Map Number 3-2

Legend

Hog ILO

P Poultry ILO

D Dwelling Sale

V Vacant Land Sale

Case Study Site

D

D

D

D

DD

D

DD

DD

D

D

D

D

DD D D

D

D D

D D

D

D

V

V

V V

VV

V

V

V

V

VV

VV

V

V V

V

V

V

V

V

V

VV

V

V VV

V

V

D

D

P

P

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STEVENSON ADVISORS LTD. 18

A N A L Y S I S O F S A L E S D A T A

Dwelling Sales As previously discussed, the sample of sale transactions for the case study area totalled 83. Based on our analysis of these sale transactions, the following observations were noted:

o Property prices observed in the RM of Franklin are considerably lower than in the RM of De

Salaberry.

o Dwellings located in villages or towns (Dominion City, St. Malo, Tolstoi) tended to sell for much below the value of homes in a completely rural setting.

o Very few property sales were located within a two mile radius from any ILO in the case study area.

o The overall trend for sale prices in the municipalities between July 1998 and December 2003 is an increase, on average, of 3.8% per year.

After adjustments were made to account for differences in date of sale, dwelling styles and classifications, the overall relationship between the adjusted sale price per square foot of dwellings and the distance from ILO’s was plotted for interpretation. Figure 3-1 represents the overall relationship between prices and proximity to hog ILO’s, based on the 83 sale transactions in the case study area.

Figure 3-1

Adjusted Sales vs Distance to Hog ILO

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60.00

80.00

100.00

120.00

0 1 2 3 4 5

Distance from ILO

Adju

sted

Pric

e pe

r SF

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STEVENSON ADVISORS LTD. 19

Figure 3-2

Based on the sales data collected from the rural municipalities of Franklin and De Salaberry, the data trend line for dwelling price per square foot versus distance from Hog ILO’s (Figure 3-1), indicates that price generally decreases as you travel further from the ILO. This data reflects the distances from ILO’s in general, in the municipalities – not the distance from the case study site. The small number of sales in the poultry ILO sample renders the results of the analysis as inconclusive.

If the case study site is examined, we find a total of eleven property sales occurring within a five mile radius, between 1998 and 2003. Using the same methodology, the relationship between adjusted sale price per square foot and distance from the subject ILO is indicated by Figure 3-3. It is apparent from an observation of both the data points and the trend line produced, that there is no significant relationship between the price per square foot of dwellings, and the distance from the subject ILO.

Figure 3-3

Adjusted sales vs. distance to Subject ILO

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60.00

70.00

80.00

90.00

100.00

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Distance from ILO (miles)

Adju

sted

Pric

e / S

F

Adjusted Sales vs. Distance to Poultry ILO

0.00

10.00

20.00

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40.00

50.00

60.00

70.00

0 0.5 1 1.5 2 2.5 3 3.5Distance from ILO

Adju

sted

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e pe

r SF

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STEVENSON ADVISORS LTD. 20

Comments The following comments are offered, to be considered in conjunction with the analysis of dwelling prices and proximity to the case study ILO.

o During the course of our investigations, interviews were conducted with a number of sources,

including the chief assessor for this region. In our discussions, it was confirmed that assessments for properties in the region received no adjustments for proximity to an ILO.

o Based on year of sale, all years except 1998/9 and 2003 demonstrated a decrease in value associated with an increase in distance from an ILO. In 2003 the sales demonstrated an increase in value associated with an increase in distance from the ILO. The sample sizes are as follows:

o 1998/9 – 11

o 2000 – 11

o 2001 – 21

o 2002 – 24

o 2003 – 17

o Regardless of any method of adjustment, including date of sale, condition, type of home, there was no perceivable decline in value associated with proximity to any Hog ILO. In fact, the data suggests the opposite - a slight increase in value associated with proximity to a hog ILO. This may also be due to other intangible factors (such as remoteness) not captured or reflected in our analysis.

o Analysis of prices, in relation to proximity to poultry operations, proved inconclusive due to a shortage of sales data.

o All mass studies of sale will include some anomalies. In this study, this does not appear to have affected the outcome.

o Although the sample size is small, the indication is clear that there is no significant relationship apparent between dwelling prices, on a square foot basis, and proximity to the subject case study site.

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STEVENSON ADVISORS LTD. 21

L A N D S A L E S

The analysis of vacant land sales in the case study area included a total of 56 land sales which occurred during the period July 1998 to December 2003. Of the 56 sales transactions, 13 fell within the five mile radius surrounding our case study site. The average size for the land holdings in the larger sample was 207.3 acres; in the smaller sample, 183.6 acres.

An analysis of the sales suggested that time adjustments were not warranted. Therefore, based on the sales collected, the relationship between the unadjusted sale price per acre of the vacant land, to the proximity to hog and poultry ILO’s in the general case study area, are exhibited in Figures 3-4 and 3-5.

Figure 3-5

Land Value Impact - Distance to Hog ILO (Case Study Area)

0200400600800

1000120014001600

0 1 2 3 4 5Distance (miles)

Pric

e Pe

r Acr

e ($

).

Land Value Impact - Distance to Poultry ILO

0

100

200

300

400

500

600

700

800

900

0 0.5 1 1.5 2 2.5 3 3.5

Distance

Pric

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er A

cre

Figure 3-4

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STEVENSON ADVISORS LTD. 22

The analysis of vacant land sales in the case study area suggests increases in per acre land prices as distance increases from ILO’s.

With respect to the case study site, a total of 13 sale transactions of vacant land parcels were identified from 1998 to 2003. The relationship of per acre land prices and proximity to the case study subject ILO is identified in Figure 3-6. In this small sample, the relationship between per acre land prices and distance from the case study ILO, as indicated by the trend line derived from the dataset, is somewhat more pronounced.

Figure 3-6 Based on the larger case study area, with 56 sale transactions represented, the impact on value per acre by distance from an ILO is examined in Table 3-1. The average sale price for vacant land in the case study area, determined from compiled data, is $686 per acre.

Distance from Hog ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 13 $654 -4.70% 1.0 10 $656 -4.35% 1.5 11 $675 -1.53% 2.0 10 $743 +8.33% 2.5 1 $750 +9.36% 3.0 6 $653 -4.74% 3.5 3 $561 -18.14% 4.0 1 $843 +22.92% 4.5 1 $850 +23.94%

Table 3-1

Land Value Impact - Distance to Subject ILO

0200400600800

1000120014001600

0 0.5 1 1.5 2 2.5 3 3.5

Distance (miles)

Pric

e Pe

r Acr

e ($

).

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STEVENSON ADVISORS LTD. 23

The trend indicated by the analysis is fairly consistent, with average values generally increasing as distance from the ILO increases. The anomaly noted at the 3.5 mile distance ($561 average SP/acre) is due to the sale of a 160 acre parcel at an unadjusted rate of $363 per acre. If the sale transaction is excluded, the resulting average price per acre of the remaining two observations at the 3.5 mile range is $661.

Table 3-2 indicates the data distribution for land sales in proximity to poultry ILO’s in our case study area. The average price per acre for land included in this sample is $633. Again, the data consistently suggests an increase in average sale price per acre as distance increases from the ILO.

Distance from Poultry ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 2 $469 -25.92% 1.0 4 $637 +0.59% 1.5 2 $647 +2.28% 2.0 1 $800 +26.41% 2.5 0 - - 3.0 1 $750 +18.51%

Table 3-2

If the case study subject site and the impact on land prices within its five mile radius is observed, the impact on average value per acre by distance from the ILO is illustrated in Table 3-3, on the following page.

Distance from Case Study ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 4 $738 +7.67% 1.0 3 $628 -8.36% 1.5 1 $1,250 +82.27% 2.0 3 $806 +17.50% 2.5 0 - - 3.0 2 $946 +37.96% 3.5 0 - - 4.0 0 - - 4.5 0 - -

Table 3-3

As in the case of the larger sample taken from the general case study area, the data from the case study site impact area suggests that average per acre values increase as distance from the ILO increases. However, the data also suggests that the greatest impact on prices occurs within 1.0 to 1.5 miles of the ILO.

As in the analysis of dwelling sales, the reader is cautioned from drawing any definitive conclusions from the results of a relatively small sampling of vacant land sale data. Land prices can be affected by many factors, including soil types, cultivation, topography, etc. The data collected for our analysis does not

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STEVENSON ADVISORS LTD. 24

recognize or account for these factors, but rather provides a general indication of average values and trends for collective vacant land sales in the study area.

Summary of Findings

The data collected for analysis represents a summation of relevant market activity for the five year period 1998 – 2003. Based on the methodology outlined previously, the data has been adjusted and culled to enable a fair and consistent analysis.

In our analysis of the impact of proximity of ILO’s on house prices, we have based the analysis on the residual value of the dwelling, after deducting the land component from the sale price. Our analysis of 83 sale transactions in the Rural Municipalities of Franklin and De Salaberry suggests that, in this particular area, the overall trend for house prices on a square foot basis, is to decrease as distance from ILO’s increases. Within the case study site impact area, the analysis of a small sample of eleven sales suggests that there is no correlation between proximity to the ILO and house price. Although there may be factors influencing prices that have not been accounted for in our analysis, there certainly did not appear to be a strong identifiable impact on surrounding house prices in the case study area, due to the presence of an ILO.

If the impact of proximity to ILO’s on vacant land values in the case study area is examined, the results are again inconclusive. Again based on a relatively small sample size (56 sale transactions), the data represents land sales activity in the case study area over the same five year period. Both the data representing the general case study area, and the data representing the case study site, indicate increases in land values on a per acre basis, as distance from ILO’s increases.

Overall, the data suggests that the average land value in the study area is $686 per acre. Based on average land values in the case study area, the data suggests that the potential impact on prices due to proximity to an ILO, is greatest within 1.5 miles of the operation. Observed impacts within this distance ranged from –25.92 percent (poultry operation) to +7.7 percent.

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STEVENSON ADVISORS LTD. 25

C A S E S T U D Y N U M B E R T W O – R M O F R H I N E L A N D

A site located at NW 6-1-1E in the Rural Municipality of Rhineland was selected to represent our second case study. The site is located approximately five miles east of the village of Gretna. The operation is reported to have a 1,500 animal unit (AU) equivalent and consists of a U-shaped barn and a manure reservoir.

The subject site is located in the southeast sector of the municipality, within one mile of the Canada-United States border. Although properties on the U.S. side of the border fall within the impact area of our study, we have not included any data from the United States in our analysis. Difficulties in collecting data and comparing the two distinctly different markets were obstacles that we did not want to introduce into our analysis. Therefore, data collection for this case study focussed on property sales activity occurring only within the municipality of Rhineland. A map, including locations for the case study site, other ILO’s in the region, and comparable sales, is presented on the following page.

The subject site is well isolated from other ILO’s (all types), the nearest being approximately three miles north. Roadside inspections of both the subject site and local area ILO’s were carried out on April 3, 2004. All local ILO’s were found to be in existence prior to 1999. In general, it was observed that many ILO’s in the area also have residences/homes on the site.

Based on our observations of the local market area, the decision was made to define our case study area as the southeast corner of the municipality, including the lands falling within the Ranges 1East and 1 West (as defined under the Dominion Lands Survey System), and Townships 1 and 2. In general, this area lies south of PTH 14 and east of PTH 30.

A total of 530 rural residential sale transactions were identified in the Municipality of Rhineland, during the period 1998 to 2003. Based upon the criteria we had set forth for property sales, along with locational constraints, 43 appropriate sales were identified as falling within our case study area. In addition, 55 sales of vacant land holdings were identified in the case study area over the same time period, with parcel sizes ranging from 39 to 877 acres.

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STEVENSON ADVISORS LTD. 26

Map Number 4-1

Legend O ILO D Dwelling Sale V Vacant Land Sale

O O O D

D D D

D

D

D O

D D D

D

D

D D D D D

D D O

D D

D

D D

D

D D D D

D

D D

D D D D

SubjectSite

D

V V

V V

V V V

V V V V

V V V

V V V V

V V V V

V

V

V V V V V

V V

V V V

V V

V V VV

V V V

V

V V V

V VV V

V V

V V V

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STEVENSON ADVISORS LTD. 27

A N A L Y S I S O F S A L E S D A T A

Dwelling Sales As previously stated, the sample of sale transactions for the case study area totalled 43, a relatively small sample. Based on our analysis of these sale transactions, the following observations were noted:

o Sales in the RM of Rhineland generally are associated with agriculture; that is, most properties

have an agricultural component rather than being simply a rural residence.

o Very few sales were located in villages or towns.

o No improved (i.e. with dwellings) sales occurred within a two mile radius from the subject ILO.

o The overall trend for sale prices in rural municipalities between July 1998 and December 2003 is an increase, on average, of 3.8% per year.

After adjustments were made to account for differences in date of sale, dwelling styles and classifications, the overall relationship between the adjusted sale price per square foot of dwellings and the distance from ILO’s was plotted for interpretation. Figure 4-1 represents the overall relationship based on the 43 sale transactions in the case study area.

Figure 4-1

Adjusted Sales vs. Distance to ILO

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Distance from ILO (miles)

Adj

uste

d P

rice/

SF

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STEVENSON ADVISORS LTD. 28

Based on the sales data collected, the data trend line for dwelling price per square foot versus distance from ILO’s, indicates that price generally decreases as you travel further from the ILO. This data reflects the distances from ILO’s in general, in the municipalities – not the distance from the case study site.

If the case study site is examined, we find a total of six property sales occurring within a five mile radius, between 1998 and 2003. Using the same methodology, the relationship between adjusted sale price per square foot and distance from the case study ILO is indicated by Figure 4-2. It is apparent from an observation of both the data points and the trendline produced, that there is no significant relationship between the price per square foot of dwellings, and the distance from the subject ILO.

Figure 4-2 Comments The following comments are offered, to be considered in conjunction with the analysis of dwelling prices and proximity to the case study ILO.

o During the course of our investigations, interviews were conducted with a number of sources,

including an assessor for this region. In our discussions, it was confirmed that assessments for properties in the region received no adjustments for proximity to an ILO.

o Based on the results of our analysis, there was no perceivable decline in value associated with proximity to hog ILO’s. In fact, the data suggests the opposite – dwelling prices, on a square foot basis, increased with closer proximity to hog ILO’s. This may be due to intangible factors (such as remoteness) not captured or reflected in our analysis.

o All mass studies of sale will include some anomalies. In this study, this does not appear to have affected the outcome.

Adjusted Sales vs. distance to Subject ILO

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Distance from ILO (miles)

Adj

uste

d P

rice/

SF

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STEVENSON ADVISORS LTD. 29

o Although the sample size is small, the indication is clear that there is no significant relationship apparent between dwelling prices, on a square foot basis, and proximity to the subject case study site.

o Due to the small sample size, the reader is cautioned to refrain from drawing definitive conclusions from the data.

Land Sales

The analysis of vacant land sales in the case study area included a total of 55 land sales which occurred during the period July 1998 to December 2003. Of the 55 sales transactions, 10 fell within the five mile radius surrounding our case study site. The average size for the land holdings in the larger sample was 115.3 acres; in the smaller sample, 188.5 acres.

An analysis of the sales suggested that time adjustments were not warranted. Therefore, based on the sales collected, the relationship between the unadjusted sale price per acre of the vacant land, to the proximity to ILO’s in the general case study area, is exhibited in Figure 4-3.

Figure 4-3

The analysis of vacant land sales in the case study area suggests slight increases in per acre land prices as distance increases from ILO’s.

Land Value Impact - Distance to Hog ILO (Case Study Area)

0200400600800

1000120014001600

0 1 2 3 4 5Distance (miles)

Pric

e P

er A

cre

($)

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STEVENSON ADVISORS LTD. 30

With respect to the case study site, a total of 10 sale transactions of vacant land parcels were identified from 1998 to 2003. The relationship of per acre land prices and proximity to the case study ILO is identified in Figure 4-4. In this small sample, the relationship between per acre land prices and distance from the case study ILO, as indicated by the trend line derived from the dataset, is opposite of the general trend indicated for the municipality. For vacant land sales within the five mile radius, the indication is that per acre prices are higher in closer proximity to the subject ILO.

Figure 4-4

Based on the larger case study area, with 55 sale transactions represented, the impact on value per acre by distance from an ILO is examined in Table 4-1. The average sale price for vacant in the case study area, determined from compiled data, is $831 per acre.

Distance from ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 26 $837 +0.74% 1.0 12 $874 +5.13% 1.5 9 $859 +3.37% 2.0 5 $748 -10.02% 2.5 2 $750 -9.73% 3.0 1 $797 -4.09% 3.5 0 - - 4.0 0 - - 4.5 0 - -

Table 4-1

It is interesting to note that the highest average land values, based on distance were found within 1.5 miles of ILO’s.

If the case study site and the impact on land prices within its five mile radius is observed, the impact on average value per acre by distance from the subject ILO is illustrated in Table 4-2.

Land Value Impact - Distance to Subject ILO

0

200

400

600

800

1000

1200

1400

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

Distance (miles)

Pric

e pe

r Acr

e ($

)

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STEVENSON ADVISORS LTD. 31

Distance from Case Study ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 2 $775 -8.26% 1.0 2 $1,038 +22.82% 1.5 3 $976 +15.55% 2.0 1 $559 -33.80% 2.5 1 $750 -11.22 3.0 1 $797 -5.66% 3.5 0 - - 4.0 0 - - 4.5 0 - -

Table 4-2

Unlike the larger general case study area, the data from the case study subject site impact area is not consistent in identifying a trend in land values, based on distance from the subject ILO. However, the data still suggests the highest land values occurring within 1.5 miles of the subject site.

As in the analysis of dwelling sales, the reader is cautioned from drawing any definitive conclusions from the results of a relatively small sampling of vacant land sale data. Land prices can be affected by many factors, including soil types, cultivation, topography, etc. The data collected for our analysis does not recognize or account for these factors, but rather provides a general indication of average values and trends for collective vacant land sales in the study area.

Summary of Findings

The data collected for analysis represents a summation of relevant market activity for the five year period 1998 – 2003. Based on the methodology outlined previously, the data has been adjusted and culled to enable a fair and consistent analysis.

Our analysis of 43 sale transactions in the Rural Municipality of Rhineland suggests that, in this particular area, the overall trend for house prices on a square foot basis, is to decrease as distance from ILO’s increases. Within the case study site impact area, the analysis of a small sample of six sales suggests a more moderate affect, but still consistent with the findings from the larger sample. Although there may be factors influencing prices that have not been accounted for in our analysis, there certainly did not appear to be a strong identifiable impact on surrounding house prices in the case study area, due to the presence of an ILO.

If the impact of proximity to ILO’s on vacant land values in the case study area is examined, the results suggest that land values, on a per acre basis, are higher in close proximity to an ILO. Again based on a relatively small sample size (55 sale transactions), the data represents land sales activity in the case study area over the same five year period. Both the data representing the general case study area, and the data representing the case study site, indicate that the highest land values in the municipality exist within 1.5 miles of an ILO.

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STEVENSON ADVISORS LTD. 32

C A S E S T U D Y N U M B E R T H R E E – R M O F B L A N S H A R D

A site located at SW 22-14-21W in the Rural Municipality of Blanshard was selected to represent our third case study. The site is located approximately five miles southeast of the village of Cardale. The operation, commonly known as the Dutch Barn, is reported to have an 1,190 animal unit (AU) equivalent and consists of two barns (built 2000 and 2002), a residential dwelling occupied by the facility manager, and an earthen slurrystore system for manure storage. The barns are reported to have a gross area of approximately 148,000 square feet. The site area is 158.6 acres.

The subject site is located in the east-central portion of the municipality, approximately 2 ½ miles west of the border of the Rural Municipality of Saskatchewan. Therefore, data collection for this case study focussed on property sales activity occurring within both, the Municipality of Blanshard and the Municipality of Saskatchewan. Municipal maps including locations for the case study site, other ILO’s in the region, and comparable sales, are presented on following pages.

The subject site is well isolated from other ILO’s (all types), the nearest being approximately four miles north-west. Roadside inspections of both the subject site and local area ILO’s were carried out on April 17, 2004.

A total of 167 rural residential sale transactions were identified in the municipalities of Blanshard and Saskatchewan, during the period 1998 to 2003. Based upon the criteria we had set forth for property sales, along with locational constraints, only 10 appropriate improved sales were identified as falling within our case study area. In addition, 54 sales of vacant land holdings were identified in the case study area over the same time period, with parcel sizes ranging from 79 to 1,736 acres.

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STEVENSON ADVISORS LTD. 33

Map Number 5-1

Legend O ILO D Dwelling Sale V Vacant Land Sale

O

O OO

O

O

O

OO

DD D DD

D

V

V VV

VV V

V

V V

V VVV

VV

VV

V

V

VV

V

V

VVV V

VV

V

VV

V

VV

VV

V

V

V VV

V

V

VV

VVV

VVV

V

V

V

V

V

VO

SubjectSite

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STEVENSON ADVISORS LTD. 34

Map Number 5-2

O

O

OO

O

O

O

O

O

O Subject Site

V V

V V

V

V V V

VV

V V

V

V

V V

V

V V

D

V V D

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STEVENSON ADVISORS LTD. 35

A N A L Y S I S O F S A L E S D A T A

Dwelling Sales As previously stated, a small sample of 10 sale transactions was identified for the case study area. Based on our analysis of these sale transactions, the following observations were noted:

o Sales in the municipalities are typically associated with agriculture; that is, most properties have

an agricultural component rather than being simply a rural residence.

o The municipalities have a lower grade of agricultural land. It appeared that most sections consisted of 15 to 20 percent bush, and 15 to 20 percent slough.

o Only one improved (i.e. with dwelling) sale occurred within a five mile radius from the subject ILO.

After adjustments were made to account for differences in date of sale, dwelling styles and classifications, the overall relationship between the adjusted sale price per square foot of dwellings and the distance from ILO’s was plotted for interpretation. Figure 5-1 represents the overall relationship based on the 10 sale transactions in the case study area.

Figure 5-1 Based on the sales data collected, the data trendline for dwelling price per square foot versus distance from ILO’s, indicates that price generally decreases as you travel further from the ILO. This data reflects the distances from ILO’s in general, in the municipalities – not the distance from the case study site.

Adjusted Sales vs. Distance to ILO

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Distance to ILO (miles)

Adj

. Sal

e P

rice/

SF

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STEVENSON ADVISORS LTD. 36

If the case study site is examined, we find a total of only one property sale occurring within a five mile radius, between 1998 and 2003. Therefore, no analysis has been carried out for the impact area surrounding the case study site. However, it is interesting to note that the one sale that occurred was located approximately one mile away from the subject site and sold at an adjusted price of $29.32 per square foot; the mean adjusted sale price for the ten sales included in our analysis was $31.40 per square foot. Therefore, the one sale observed within the case study impact area exhibited little variance from the overall mean price indicated by the larger sample.

Comments The following comments are offered, to be considered in conjunction with the analysis of dwelling prices and proximity to the case study ILO.

o During the course of our investigations, interviews were conducted with a number of sources,

including an assessor for this region. In our discussions, it was confirmed that assessments for properties in the region received no adjustments for proximity to an ILO.

o Based on the results of our analysis, there was no perceivable decline in value associated with proximity to hog ILO’s.

o All mass studies of sale will include some anomalies. In this study, this does not appear to have affected the outcome.

o Due to the small sample size, the reader is cautioned to refrain from drawing definitive conclusions from the data.

Land Sales The analysis of vacant land sales in the case study area included a total of 54 land sales which occurred during the period July 1998 to December 2003. Of the 54 sales transactions, 11 fell within the five mile radius surrounding our case study site. The average size for the land holdings in the larger sample was 344.2 acres; in the smaller sample, 515.4 acres.

An analysis of the sales suggested that time adjustments were not warranted. Therefore, based on the sales collected, the relationship between the unadjusted sale price per acre of the vacant land, to the proximity to ILO’s in the general case study area, is exhibited in Figure 5-2.

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STEVENSON ADVISORS LTD. 37

Figure 5-2

The analysis of vacant land sales in the case study area is not conclusive, but suggests slight increases in per acre land prices in close proximity to ILO’s.

With respect to the case study site, a total of 11 sale transactions of vacant land parcels were identified from 1998 to 2003. The relationship of per acre land prices and proximity to the case study ILO is identified on the following page, in Figure 5-3. In this small sample, the relationship between per acre land prices and distance from the case study ILO, as indicated by the trendline derived from the dataset, follows the general trend indicated for the municipalities. For vacant land sales within the five mile radius, the indication is that per acre prices are higher in closer proximity to the subject ILO.

Land Value Impact - Distance to Hog ILO (Case Study Area)

0

100

200

300

400

500

600

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Distance (miles)

Sale

Pric

e pe

r Acr

e ($

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STEVENSON ADVISORS LTD. 38

Figure 5-3

Based on the larger case study area, with 54 sale transactions represented, the impact on value per acre by distance from an ILO is examined in Table 5-1. The average sale price for vacant in the case study area, determined from compiled data, is $326 per acre.

Distance from ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 5 $359 +10.21% 1.0 7 $398 +22.03% 1.5 1 $156 -52.09% 2.0 15 $311 -4.53% 2.5 5 $310 -4.83% 3.0 10 $310 -4.83% 3.5 3 $288 -11.60% 4.0 6 $302 -7.51% 4.5 0 - - 5.0 2 $398 +21.92

Table 5-1

It is interesting to note that the highest average land values, based on distance were found within one mile of ILO’s.

If the case study site and the impact on land prices within its five mile radius is observed, the impact on average value per acre by distance from the subject ILO is illustrated in Table 5-2.

Land Value Impact - Distance to Subject ILO

$0

$100

$200

$300

$400

$500

$600

0.0 1.0 2.0 3.0 4.0

Distance to Subject (miles)

Sal

e P

rice

per A

cre

($

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STEVENSON ADVISORS LTD. 39

Distance from Case Study ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 0 - - 1.0 2 $440 +30.57% 1.5 0 - - 2.0 3 $270 -19.88% 2.5 1 $255 -24.45% 3.0 3 $375 +11.03% 3.5 2 $349 +3.48% 4.0 0 - - 4.5 0 - - 5.0 0 - -

Table 5-2

Like the larger general case study area, the data from the case study subject site impact area suggests an increase in land values in close proximity to the subject ILO.

As in the analysis of dwelling sales, the reader is cautioned from drawing any definitive conclusions from the results of a relatively small sampling of vacant land sale data. Land prices can be affected by many factors, including soil types, cultivation, topography, etc. The data collected for our analysis does not recognize or account for these factors, but rather provides a general indication of average values and trends for collective vacant land sales in the study area.

Summary of Findings The data collected for analysis represents a summation of relevant market activity for the five year period 1998 – 2003. Based on the methodology outlined previously, the data has been adjusted to enable a fair and consistent analysis.

Our analysis of 10 sale transactions in the Rural Municipalities of Blanshard and Saskatchewan suggests that, in this particular area, the overall trend for house prices on a square foot basis, is to decrease as distance from ILO’s increases. Within the case study site impact area, an analysis was not possible due to an absence of sales. Although there may be factors influencing prices that have not been accounted for in our analysis, there certainly did not appear to be a strong identifiable impact on surrounding house prices in the case study area, due to the presence of an ILO.

If the impact of proximity to ILO’s on vacant land values in the case study area is examined, the results suggest that land values, on a per acre basis, are higher in close proximity to an ILO. Again based on a relatively small sample size (54 sale transactions), the data represents land sales activity in the case study area over the same five year period. Both the data representing the general case study area, and the data representing the case study site, indicate that the highest land values in the municipality exist within one mile of an ILO.

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STEVENSON ADVISORS LTD. 40

C A S E S T U D Y N U M B E R F O U R – R M O F G L E N W O O D

A site located at SE 23-7-22W in the Rural Municipality of Glenwood was selected to represent our fourth case study. The site is located approximately six miles southwest of the Town of Souris. The operation, commonly known as “Hogs is Beautiful”, consists of two barns (built 1996 and 1999) totalling approximately 64,000 square feet, and an earthen slurrystore system for manure storage. The site area is 265.0 acres.

The subject site is located in the southwest quadrant of the municipality, approximately 4 ½ miles east from the border of the Rural Municipality of Sifton and 3 ½ miles north from the border of the Rural Municipality of Cameron. Due to the central location of the subject site, data collection for this case study focussed on property sales activity occurring primarily within the Municipality of Glenwood. A municipal map, including locations for the case study site, other ILO’s in the region, and comparable sales, is presented on the following page.

During our inspections of the area surrounding the subject site, it was determined that a number of cattle feed lots were present in the municipality. Three cattle ILO’s were observed near 29-7-22W, with 100 to 200 head each. Another small (80 – 100 head) cattle ILO was observed three miles to the east of the subject. Also, the town of Souris has a cattle ILO (approximately 200 head) located near its eastern boundary.

Two other hog ILO’s are located within the municipality; one approximately four miles southeast of the subject, and the second located 8 ½ miles east of Souris. Roadside inspections of both the subject site and local area ILO’s were carried out on April 17, 2004.

Based upon the criteria we had set forth for property sales, along with locational constraints, only 15 appropriate improved sales were identified as falling within our case study area during the period 1998 - 2003. In addition, 26 sales of vacant land holdings were identified in the case study area over the same time period, with parcel sizes ranging from 58 to 952 acres.

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STEVENSON ADVISORS LTD. 41

Map Number 6-1

Legend O Hog ILO C Cattle ILO D Dwelling Sale V Vacant Land Sale

O

O

O

O C C

C

C C

Subject Site

V

V

V V

V

V

V

V V

V V VV

V V VV

V

VV V

V

V V

V V

V VV

D

V V

VV

V VVV

V

DD

DD

D

D

DDD

D

D

D D

VV

D

D

DD

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STEVENSON ADVISORS LTD. 42

A N A L Y S I S O F S A L E S D A T A

Dwelling Sales As previously stated, a small sample of 15 sale transactions was identified for the case study area. Based on our analysis of these sale transactions, the following observations were noted:

o Sales in the municipalities are typically associated with agriculture; that is, most properties have

an agricultural component rather than being simply a rural residence.

o The municipalities have a lower grade of agricultural land – the most predominant use was cattle feed lots and fields, taking advantage of the rail line bisecting the municipality.

o In the case studies carried out so far, data for hog ILO’s was analyzed; in this instance, because of the strong presence of cattle ILO’s, the distances could not be differentiated. In many cases, a property sale was located within an equivalent distance from both a hog and cattle ILO. Therefore, the calculation of data for ILO’s in the municipality involves both cattle and hogs.

After adjustments were made to account for differences in date of sale, dwelling styles and classifications, the overall relationship between the adjusted sale price per square foot of dwellings and the distance from ILO’s (both hog and cattle) was plotted for interpretation. Figure 6-1 represents the overall relationship based on the 15 sale transactions in the case study area.

Figure 6-1 Based on the sales data collected, the data trend line for dwelling price per square foot versus distance from ILO’s, indicates that price remains unchanged or marginally decreases as you travel further from the

Adjusted Sale vs. Distance to ILO

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Distance from ILO (miles)

Adj

uste

d S

ale

Pric

e/S

F

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STEVENSON ADVISORS LTD. 43

ILO. This data reflects the distances from ILO’s in general, in the municipalities – not the distance from the case study site.

If hog and cattle ILO’s are looked at separately, the relationships between distance and price are exhibited in Figures 6-2 and 6-3.

Figure 6-2

Figure 6-3

Although both data sets are small, it can be seen that the same trend of price to distance is suggested by the hog sample, while the cattle ILO sample suggests prices that marginally increase as distance to the ILO increases. It should also be noted that Figure 6-2 represents the relationship between the subject

Distance to Hog ILO vs. Sale Price PSF

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Distance from ILO (miles)

Adj

uste

d S

ale

Pric

e/S

F

Distance to Cattle ILO vs. Sale Price PSF

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00$90.00

0.0 1.0 2.0 3.0 4.0 5.0

Distance from ILO (miles)

Adj

uste

d S

ale

Pric

e/S

F

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STEVENSON ADVISORS LTD. 44

ILO site and proximity to ILO’s for the case study area; five of the six properties included in the analysis are measured by their proximity to the subject site.

Comments The following comments are offered, to be considered in conjunction with the analysis of dwelling prices and proximity to the case study ILO.

o During the course of our investigations, interviews were conducted with a number of sources,

including an assessor for this region. In our discussions, it was confirmed that assessments for properties in the region received no adjustments for proximity to an ILO.

o Based on the results of our analysis, there was no perceivable decline in value associated with proximity to hog ILO’s; a trend of marginal price increases as distance to cattle ILO’s increased was suggested.

o All mass studies of sale will include some anomalies. In this study, this does not appear to have affected the outcome.

o Due to the small sample size, the reader is cautioned to refrain from drawing definitive conclusions from the data.

Land Sales The analysis of vacant land sales in the case study area included a total of 26 land sales which occurred during the period July 1998 to December 2003. Of the 26 sale transactions, 9 fell within the five mile radius surrounding our case study site. The average size for the land holdings in the larger sample was 303.1 acres; in the smaller sample, 363.9 acres.

An analysis of the 26 sales suggested that time adjustments were not warranted. Therefore, based on the sales collected, the relationship between the unadjusted sale price per acre of the vacant land, to the proximity to ILO’s in the general case study area, is exhibited in Figure 6-4.

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STEVENSON ADVISORS LTD. 45

Figure 6-4

The analysis of vacant land sales in the case study area suggests an increase in per acre land prices in close proximity to ILO’s.

With respect to the case study subject site, a total of 11 sale transactions of vacant land parcels were identified from 1998 to 2003. The relationship of per acre land prices and proximity to the case study ILO is identified in Figure 6-5. In this small sample, the relationship between per acre land prices and distance from the case study ILO follows the general trend indicated for the municipalities. For vacant land sales within the five mile radius, the indication is that per acre prices are higher in closer proximity to the subject ILO.

Figure 6-5

Distance to ILO (Hog or Cattle) vs. Sale Price per Acre

0200

400600

8001000

1200

0 1 2 3 4 5 6 7

Distance to ILO

Sale

Pric

e pe

r Acr

e

Distance to Subject vs. Sale Price per acre

0200

400600

8001000

0 2 4 6 8

Distance to Subject (miles)

Sal

e P

rice

per A

cre

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STEVENSON ADVISORS LTD. 46

Based on the larger case study area, with 26 sale transactions represented, the impact on value per acre by distance from an ILO is examined in Table 6-1. The average sale price for vacant in the case study area, determined from compiled data, is $495 per acre.

As can be seen from the table, there is not a consistent relationship between distance to ILO’s and land prices. However, it is notable that once again, the highest average prices are found within one mile of ILO sites.

Distance from ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 4 $706 +42.49% 1.0 5 $433 -12.59% 1.5 4 $533 +7.62% 2.0 3 $498 +0.55% 2.5 3 $688 +38.80% 3.0 3 $402 -18.92% 3.5 0 - - 4.0 0 - - 4.5 0 - - 5.0 0 - -

Table 6-1

If hog ILO’s are observed, the impact on average value per acre by distance from the subject ILO is illustrated in Table 6-2.

Distance from Hog ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 2 $860 +94.14 1.0 2 $460 +3.84% 1.5 2 $402 -9.22% 2.0 1 $432 -2.49% 2.5 0 - - 3.0 0 - - 3.5 0 - - 4.0 0 - - 4.5 0 - - 5.0 0 - -

Table 6-2

Like the larger general case study area (all ILO’s), the data for hog ILO’s suggest an increase in land values in close proximity to the subject ILO.

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STEVENSON ADVISORS LTD. 47

If the relationship between cattle ILO’s and land prices in the case study area are observed, the impact on average value per acre by distance from the ILO is illustrated in Table 6-3. It can be seen from the table that again, a consistent trend in prices is not indicated.

Distance from Cattle ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 1 $381 -20.74% 1.0 1 $603 +25.27% 1.5 0 - - 2.0 1 $432 -10.21% 2.5 2 $778 +61.72% 3.0 1 $468 -2.83% 3.5 1 $506 +5.20% 4.0 0 - - 4.5 0 - - 5.0 0 - -

Table 6-3

As in the analysis of dwelling sales, the reader is cautioned from drawing any definitive conclusions from the results of relatively small samplings of vacant land sale data. Land prices can be affected by many factors, including soil types, cultivation, topography, etc. The data collected for our analysis does not recognize or account for these factors, but rather provides a general indication of average values and trends for collective vacant land sales in the study area.

Summary of Findings The data collected for analysis represents a summation of relevant market activity for the five year period 1998 – 2003. Based on the methodology outlined previously, the data has been adjusted to enable a fair and consistent analysis.

Our analysis of 15 sale transactions in the Rural Municipality of Glenwood suggests that there is little change, if any, in house prices on a square foot basis, as distance from ILO’s changes. A similar relationship was suggested by a smaller sample analysis of hog ILO’s in the municipality. When the relationship between cattle ILO’s and house prices were observed, the small sample data suggests marginal increases in square foot house prices, as distance from the ILO increases. Although there may be factors influencing prices that have not been accounted for in our analysis, there certainly did not appear to be a strong identifiable impact on surrounding house prices in the case study area, due to the presence of an any ILO.

If the impact of proximity to ILO’s on vacant land values in the case study area is examined, the results suggest that land values, on a per acre basis, are higher in close proximity to an ILO. If hog ILO’s are examined, a small sample of data suggests results consistent with the larger sample. If cattle ILO’s are looked at separately, the data does not provide conclusive results.

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STEVENSON ADVISORS LTD 48

C A S E S T U D Y N U M B E R F I V E – R M O F R O C K W O O D

A site located at SE 19-15-3E in the Rural Municipality of Rockwood was selected to represent our fifth and final case study. The site is located approximately five miles southeast of the village of Gunton. The operation, owned by Puratone, is reported to have a 3,500 animal unit (AU) equivalent and consists of a one storey barn (built in 1998), reported to have a gross area of approximately 145,000 square feet. The site area is believed to be 80.0 acres. The method for manure storage on the site could not be determined.

The subject site is located in the east-central portion of the municipality, approximately 2 ½ miles west of the border of the Rural Municipality of St. Andrews. Therefore, data collection for this case study focussed on property sales activity occurring within both, the Municipality of Rockwood and the Municipality of St. Andrews. Municipal maps including locations for the case study site, other ILO’s in the region, and comparable sales, are presented on following pages.

The subject site is fairly-well isolated from other ILO’s (all types), the nearest being approximately 2 ½ miles north of the subject. Roadside inspections of both the subject site and local area ILO’s were carried out on May 1, 2004.

A total of 116 rural residential sale transactions were identified in the municipalities of Rockwood and St. Andrews, during the period 1998 to 2003. Based upon the criteria we had set forth for property sales, along with locational constraints, 94 appropriate improved sales were identified as falling within our case study area. In addition, 91 sales of vacant land holdings were identified in the case study area over the same time period, with 32 parcels selected for our analysis, ranging in size from 65 to 822 acres.

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STEVENSON ADVISORS LTD 49

Map Number 7-1

RM OF ROCKWOOD

Legend O ILO D Dwelling Sale V Vacant Land Sale

O

O

O

O

O

O

O

OO

O O

O

OOO

OO

OO

O

O

OO O

O

O

O

O

D

DD

D

D

DDD

D

DDD

DD D

DDD

DD

D

D D

DD

D

D

DD D

DD

DD

DD

DDD

D DD

D D D

DD

DD

DDDD

DD

D

D

DD

DD

D

D

D D

D

DD

D D

D

D

D D D

V

V V

V

V

V V

DD

V

V

V

V V V

V

V

VV V

V

V

V

V V

Subject Site

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STEVENSON ADVISORS LTD 50

Map Number 7-2

RM OF ST. ANDREWS

O

OO

OO

O O O

O

O

OOO

DDD

DD

DD

D D

D

D

D DD

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STEVENSON ADVISORS LTD 51

A N A L Y S I S O F S A L E S D A T A

Dwelling Sales Based on our analysis of the 94 sale transactions, the following observations were noted:

o Sales in the municipalities are not typically associated with agriculture; that is, the majority of

properties in the area are rural residential in nature.

o The municipalities of Rockwood and St. Andrews proved to be good locations for our case study. Upon inspection, it was found that there were three large and two smaller hog ILO’s in the area surrounding our subject site.

o In addition to the subject, hog ILO’s were found to be located at SW1-16-2E, NW3-15-2E, NE33-15-2E and NE25-15-2E. Medium sized cattle operations were also found located at SE27-15-2E and SE29-15-2E. Proximity to all ILO’s has been accounted for in our analysis.

o Sale prices increased an average of 3.8 percent per year in the period 1998 to 2003.

After adjustments were made to account for differences in date of sale, dwelling styles and classifications, the overall relationship between the adjusted sale price per square foot of dwellings and the distance from ILO’s was plotted for interpretation. Figure 7-1 (following page) represents the overall relationship based on the sale transactions in the case study area.

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STEVENSON ADVISORS LTD 52

Figure 7-1

Based on the sales data collected, the data trend line for dwelling price per square foot versus distance from ILO’s, indicates that price generally decreases as you travel further from the ILO. This data reflects the distances from ILO’s in general, in the municipalities – not the distance from the case study site.

If the case study site is examined, we find a total of six property sales occurring within a five mile radius, between 1998 and 2003. Using the same methodology, the relationship between adjusted sale price per square foot and distance from the case study ILO is indicated by Figure 7-2 (following page). It is apparent from an observation of both the data points and the trend line produced, that the relationship between the price per square foot of dwellings, and the distance from the subject ILO, is consistent with that indicated by the larger sample.

Adjusted Sale vs. Distance to ILO

$0.00

$20.00

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$120.00

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0 1 2 3 4 5 6 7 8 9

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STEVENSON ADVISORS LTD 53

Figure 7-2

Comments The following comments are offered, to be considered in conjunction with the analysis of dwelling prices and proximity to the case study ILO.

o During the course of our investigations, interviews were conducted with a number of sources,

including an assessor for this region. In our discussions, it was confirmed that assessments for properties in the region received no adjustments for proximity to an ILO.

o Based on the results of our analysis, there was no perceivable decline in value associated with proximity to hog ILO’s – in general, higher prices were observed in closer proximity to the ILO’s .

o All mass studies of sale will include some anomalies. In this study, this does not appear to have affected the outcome.

o The subject site is fairly well isolated from other ILO’s. Sales in the five mile impact ring around the subject site were analyzed, but the sample size is too small for a definitive conclusion.

Distance to Subject vs. Sale Price PSF

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STEVENSON ADVISORS LTD 54

Land Sales The analysis of vacant land sales in the case study area included a total of 32 land sales which occurred during the period July 1998 to December 2003, of which six fell within the five mile radius surrounding our case study site. The average size for the land holdings in the larger sample was 180.0 acres; in the smaller sample, 356.7 acres.

An analysis of the sales suggested that time adjustments were not warranted. Therefore, based on the sales collected, the relationship between the unadjusted sale price per acre of the vacant land, to the proximity to ILO’s in the general case study area, is exhibited in Figure 7-3.

Figure 7-3

The analysis of vacant land sales in the case study area suggests increases in per acre land prices, as distance to ILO’s decreases.

With respect to the case study subject site, a total of six sale transactions of vacant land parcels were identified from 1998 to 2003. The relationship of per acre land prices and proximity to the case study ILO is identified on the following page, in Figure 7-4. In this small sample, the relationship between per acre land prices and distance from the case study ILO, as indicated by the trend line derived from the dataset, follows the general trend indicated for the municipalities. However, the distribution of the sample suggests that the trend line may be misleading. It would be fair to say that the small sample provides no conclusive evidence of an identifiable trend.

Distance to ILO vs. Sale Price per Acre

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STEVENSON ADVISORS LTD 55

Figure 7-4

Based on the larger case study area, with 32 sale transactions represented, the impact on value per acre by distance from an ILO is examined in Table 7-1. The average sale price for vacant in the case study area, determined from compiled data, is $501 per acre.

Distance from ILO’s (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 8 $569 +13.46% 1.0 7 $562 +12.06% 1.5 6 $599 +19.44% 2.0 5 $384 -23.43% 2.5 2 $422 -15.85% 3.0 3 $411 -18.05% 3.5 1 $438 -12.66% 4.0 0 - - 4.5 0 - - 5.0 0 - -

Table 7-1

In support of findings from other case study sites, sales of vacant land located within the closest proximity to ILO’s, were found to have the highest average prices, on a per acre basis.

If the subject ILO site and the impact on land prices within its five mile radius is observed, the impact on average value per acre by distance from the subject ILO is illustrated in Table 7-2.

Distance to Subject vs. Sale Price per Acre

0

100

200

300

400

500

600

700

800

900

0 0.5 1 1.5 2 2.5 3 3.5

Distance to ILO

Sal

e P

rice

per A

cre

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STEVENSON ADVISORS LTD 56

Distance from Subject ILO (miles)

Number of Sales Average SP / Acre

Variance from Average Sale Price

0.5 0 - - 1.0 1 $292 -43.38% 1.5 1 $683 +32.43% 2.0 3 $616 +19.42% 2.5 2 $499 -3.21% 3.0 1 $292 -43.38% 3.5 0 - - 4.0 3 $558 +8.16% 4.5 1 $500 -3.05% 5.0 1 $419 -18.76%

Table 7-2

Unlike the larger general case study area, the data from the case study subject site impact area does not suggest a consistent trend in prices, as related to proximity to the ILO. The results of this small sample are inconclusive.

As in the analysis of dwelling sales, the reader is cautioned from drawing any definitive conclusions from the results of a relatively small sampling of vacant land sale data. Land prices can be affected by many factors, including soil types, cultivation, topography, etc. The data collected for our analysis does not recognize or account for these factors, but rather provides a general indication of average values and trends for collective vacant land sales in the study area.

Summary of Findings The data collected for analysis represents a summation of relevant market activity for the five year period 1998 – 2003. Based on the methodology outlined previously, the data has been adjusted to enable a fair and consistent analysis.

Our analysis of 94 sale transactions in the Rural Municipalities of Rockwood and St. Andrews suggests that, in this particular area, the overall trend for house prices on a square foot basis, is to decrease as distance from ILO’s increases. A small sample within the case study subject site impact area, supported these findings. Although there may be factors influencing prices that have not been accounted for in our analysis, there certainly did not appear to be a strong identifiable impact on surrounding house prices in the case study area, due to the presence of an ILO.

If the impact of proximity to ILO’s on vacant land values in the case study area is examined, the results

suggest that land values, on a per acre basis, are higher in close proximity to an ILO. Again based on a

relatively small sample size (32 sale transactions), the data represents land sales activity in the case study

area over the same five year period. The data for the subject site impact zone failed to provide

conclusive findings.

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STEVENSON ADVISORS LTD 57

S U M M A R Y

As outlined in the introduction, the purpose of this study is to determine the impact of intensive livestock operations (ILO’s) on surrounding rural residential property values. To this end, we have undertaken an analysis of five case study sites located within the Manitoba rural municipalities of Franklin, De Salaberry, Rhineland, Blanshard, Saskatchewan, Glenwood, Rockwood and St. Andrews. The case study sites coincide with the selection of five hog ILO’s, varying in operational intensity from 1,120 to 3,500 animal units.

Within the case study areas, data for 249 improved property sales and 223 land sale transactions, occurring between the years 1998 and 2003, were collected and analyzed.

The study focussed on two primary issues; identifying the presence of an impact of ILO’s on surrounding improved residential property values, and the presence of an impact of ILO’s on surrounding land values.

The analysis of house sales located within five miles of an ILO, based upon case study sample sizes ranging from 10 to 94 transactions, resulted in relatively consistent findings. Each case study, excepting case study four, indicated that house prices actually tended to be higher as distance to the ILO decreased (i.e. in closer proximity to ILO’s). In case study four, located in the Municipality of Glenwood, an analysis of 15 house sales suggested that there was generally no change in prices, regardless of proximity to an ILO.

The analysis of land sales located within five miles of an ILO, was based upon sample sizes ranging from 26 to 56. Again, the findings were consistent with the exception of one case study site; this time case study one being the exception. In case study one, located within the municipalities of Franklin and De Salaberry, the analysis indicated that prices for land generally increased as distance from ILO’s increased (i.e. a negative influence on land values due to proximity to an ILO). However, in the remaining four case study areas, the opposite relationship resulted from our analysis. In these areas, land values were found to increase, as distance to ILO’s decreased. In two of the case study areas, the highest sale prices (per acre) in the municipality were found within 1.0 - to 1.5 miles of an ILO.

In case studies one and four, data was also collected and analyzed with respect to the influence on prices due to proximity to a poultry ILO (case study one) and a cattle ILO (case study four).

Poultry ILO’s observed in the municipality of De Salaberry had an impact on land prices, similar to hog ILO’s. For both ILO types, land prices on a per acre basis were found to increase as distance from the ILO increased. Based on 47 sales of land within five miles of a hog ILO, the average price per acre of land sold was $686; for poultry ILO’s, 10 sales of land indicated an average price per acre of $633. Unfortunately, due to the location of the poultry ILO’s in the case study area, a very small sample of improved property sales were found. Therefore, the impact of poultry ILO’s on house prices could not be observed in any meaningful fashion.

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Cattle ILO’s in the municipality of Glenwood were also observed in our analysis. House prices showed marginal increases as distance from the cattle ILO’s increased, whereas land sales in proximity to cattle ILO’s provided inconclusive results.

C O N C L U S I O N S

The study carried out was geographically diverse and included the analysis of 472 sale transactions, occurring over a five year period. The analysis was carried out in a methodical and consistent fashion. After studying the results it can be concluded that, within the case study areas, there is no consistent statistical evidence to support the claims that hog ILO’s suppress or have a negative impact on neighbouring property values. In fact, the data generally suggests that relatively higher prices are commonly found within close proximity to hog ILO’s in many municipalities. (The reason for this apparent anomaly cannot be answered based on the results of this analysis – additional transaction-specific research is suggested to address this matter in greater detail.)

The authors of this report would not suggest that residential properties benefit in any way from locations in close proximity to hog ILO’s - there are no reasons that we could identify for increased house prices in close proximities. What is significant however, is the fact that house prices within one to two miles proximity to hog ILO’s are not significantly different from prices at four to five miles distance. At the latter distances, it would be expected that most problematic characteristics commonly associated with hog ILO’s (i.e. odours, increased noise and nuisance, wind borne pollutants, etc) would be greatly diminished.

When land values are observed, the data strongly suggests that land prices within the case study areas, generally increased in close proximity to hog ILO’s. One possible reason could be the greater access to manure for injection onto neighbouring fields.

Overall, the data analyzed in the case study areas fails to support the notion that the presence of hog ILO’s are detrimental to surrounding real estate values. It is entirely possible that isolated cases of properties, that have had a negative impact due to the presence of a neighbouring ILO, may be encountered. However, if examined in a “global” or market-wide perspective, real estate market activity suggests otherwise.

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L I M I T I N G C O N D I T I O N S

This report has been prepared at the request of the Manitoba Pork Council. The report has been prepared during the period February to May 2004. It is not reasonable for any person(s) other than those associated with the Manitoba Pork Council to rely upon this analysis without first obtaining written authorization from the above-mentioned, as there may be qualifications, assumptions or limiting conditions, in addition to those set out below.

The data that forms the basis of this analysis is historic in nature, capturing market activity in the five year period 1998 – 2003. Because market conditions, including economic, social and political factors, change rapidly and, on occasion without warning, the observations and key findings drawn in this report may be subject to revision.

It is understood that the client has requested the right to disclose findings of the report within both the general public and more specifically, within the industry. The author accepts that general findings or excerpts from the report may be quoted, disclosed or published. However, the author expects that any reproduction or distribution of the report will be in whole, rather than in part. If, through reproduction or publication in part, the scope, methodologies or conclusions of the report are not entirely apparent to the reader, the authors will not accept responsibility for erroneous conclusions drawn on the part of the reader.