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Arable land prices rise by up to 40pc in a year
ARABLE land prices in England
have rocketed by 40pc over the
last year as buyers outnumber
sellers by 30 to one.
Christopher Orme, consultant
at Strutt & Parker's Harrogate office,
says good quality arable
land is routinely fetching more
than £6,500 an acre and up to
£10,000 in some quality cases.
He puts the lack of farms for
sale down to increased confidence
among arable farmers
caused by big rises in commodity
prices during 2007.
Arable farmers looking to expand
and buy more land, are
having to compete with European
and Irish buyers and investment
buyers.
"The former view land as being
good value, while the latter are
looking to take advantage of the
inheritance tax reliefs afforded
by ownership of agricultural
land," said Mr Orme.
"It is this competition for farms
that has resulted in the large premiums
seen in the first quarter of
2008.
On top of this, wheat prices
have risen as high as £200 per
tonne, up 360pc since 2002."
He said there were two main
reasons for the rise in commodity
prices.
The first is America's ethanol
subsidies. This year bio-fuels will
make up 30pc of America's maize
harvest.
The extra maize used for
ethanol amounts to approximately
50pc of the fall in the
world's overall grain stock.
Secondly, the growing wealth
of China and India is increasing
demand for meat, which in turn
boosts demand for the cereals to
feed the livestock.
The International Food Policy
Research Institute believes cereal
prices will continue to rise by between
ten and 20pc by 2015.
Mr Orme said: "The demand
for agricultural land is the
strongest I have experienced and
now is undoubtedly a great time
to sell."
However he sounded a note of
caution.
"While I do not anticipate land
values falling, I remember well
how farms halved in value in 12
months from 1990 to 1991," he
said.
12:37pm Friday 2nd May 2008
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