Farm Market: Spring Briefing 2010
Simon Brown, partner and head of the farm sales, outlined at this year's Spring Briefing an overview of farm values.
- 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.