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Farm Market: Spring Briefing 2010 | Galbraith

Farm Market: Spring Briefing 2010

26 March 2010

Simon Brown, partner and head of the farm sales, outlined at this year's Spring Briefing an overview of farm values.

Simon Brown, partner and head of the commercial farm sales reported on farm values at our 2010 Spring Briefing. Here is a summary of the findings that he reported 

  • Farming is a counter cyclical industry.
  • In the period 2007/8/9 most agricultural commodities rose in value whilst other commodities and industries suffered due to the world recession.
  • The value of sterling will continue to have a very strong influence over the price of commodities in the agricultural industry
  • At today’s exchange rate Single Farm Payment is worth 14% more now than at September 2008.
  • Over recent years there has been a substantial shortage in the amount of farm land being offered for sale.
  • In 2009 the neighbouring farmer was one of the major bidders for any farmland coming up for sale
  • In 2010 we will continue to see interest from neighbours but also from farmers looking to relocate as the money supply becomes more available for the agricultural industry. 
  • In addition to the farming bidder we also predict a strong involvement from investors who see farmland as a safe place to put money during difficult times.  
  • The growth in the past five years came from a very low base and will not be repeated in the next five years.
  • Arable land trades at or above £6,000 an acre, permanent grassland is valued up to £2,500 an acre in some regions, whilst the strong demand for upland grazing for forestry purposes has put a base at that end of the market. 
  • As we go forward into 2010 we will see a slight rise in the value of agricultural land. 
  • The modest improvement in the residential housing market will also have an effect by increasing the competition for life style blocks and residential farms.
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