Average arable land price rises to record level

The average price for arable land rose to a record high in September. Where the lowest point in a year was reached in June, the price has now almost doubled. On average, almost a ton per hectare was paid.

The average price of arable land already touched over €82.200 in August, but rose further in September to no less than €99.700 per hectare. That appears from figures from the Land Registry. Such a high price level has never been achieved before. August 2017 came close with €93.500 per hectare. The average price of grassland in September remained stable at €61.100. That is slightly more than the €60.900 in the same month last year.

The high land prices in September ensure that the quarterly average rises sharply. In the second quarter of 2021, the average land price fell to €63.500 per hectare. This price has now returned to the level of the first quarter. In the third quarter of 2021, the average price of agricultural land will be €67.100 per hectare. To which arable land – with an average of €75.600 in the third quarter – makes the largest contribution.

Fewer transactions due to seasonal effect
It should be noted, however, that the trade in agricultural land is highly seasonal. Less land changes hands in the third quarter, because farmers are busy with their cultivation. This applies in particular to arable land, but also to a lesser extent to grassland and plots of silage maize. Only 17% of all land transactions take place in the third quarter. Most transactions (35%) take place in the fourth quarter with a peak in December. This is apparent from a survey by the Land Registry into mobility on the agricultural land market from 2012 to 2020.

The research also shows that agricultural land changes hands on average once every 59 years. Every year 'only' 1,7% of all agricultural land in the Netherlands is traded. By way of comparison: mobility is 5% in the housing market. Near Natura 2000 areas, trade in agricultural land is even lower, at 0,7%. The nature organizations are more active in the agricultural land market in these areas. They represent almost 15% of land purchases here, compared to 3,5% elsewhere in the country.

Ground mobility is declining
Ground mobility has declined in recent years. In the past three years, an average of 31.000 hectares of agricultural land was traded per year. Between 2014 and 2017 this was still 35.000 hectares. The decrease is greatest in arable land. In total, approximately 2012 hectares were traded on the free market between 2020 and 249.000. This does not include land transfer within families – accounting for more than 50.000 hectares per year.

Jeanette Pennings

Jeannet has her roots in the flower bulb sector and she grew up on an agricultural company in the northern part of North Holland. As a generalist she reports for Boerenbusiness across all sectors. She is also exploring the possibilities of sponsored advertising.

j.pennings@boerenbusiness. Nl

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