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Will agricultural land become more expensive again?

June 27, 2024 - Linda van Eekeres - 36 comments

Based on a survey among agricultural appraisers, Rabobank expects that the agricultural land price will remain the same or increase by up to a maximum of 5% over the next twelve months. However, a further increase is likely for the longer term, as are (even) greater price differences per region.

"The supply of land for sale is expected to increase to a limited extent, while demand remains unchanged, especially from non-agricultural buyers. Moreover, these buyers drive up the price because they can pay more (residential and business park) or the same (nature) for agricultural land than farmers," said RaboResearch. 

Appraisers also expect that there is a high demand for land with an agricultural destination 'due to good financial returns from vegetable sectors and intensive livestock farming, and the demand from dairy farming - motivated by goals in the field of land attachment, extensification and manure sales due to the abolition of derogation'.

In the last quarter of 2023, the average agricultural land price broke through €80.000. According to it latest quarterly report from the Land Registry the average land price fell by 4,4% in the first quarter to reach €78.800. The major differences are striking between the most expensive agricultural land in Flevoland of €182.700 per hectare and the cheapest (to what extent you can speak of cheap) of €60.800 per hectare in Friesland. Due to new nature conservation measures and regional concentrations of stoppers, the bank also expects that the differences between land prices within the Netherlands will become even greater.

Approximately 30.000 hectares of agricultural land are traded each year. The bank expects that (slightly) more agricultural land will be offered for sale in the next one to three years as more dairy farmers stop farming due to the impact of policy measures, such as the phased abolition of derogation. In the meantime, the question remains. If interest rates fall further, agricultural land will become more financeable, but this will also stimulate the land price.

About 54% of the agricultural land traded in the period from 2012 to 2023 was purchased by farmers, according to data from the Land Registry and Wageningen Economic Research. An increasing share of the agricultural land traded is in the hands of non-agriculture, says the bank, which expects this to have an upward effect on agricultural land prices.

The agricultural appraisers do indicate that 'the current uncertainty surrounding agricultural policy has a major impact on the market for agricultural land and real estate' and that this makes it difficult for entrepreneurs to make purchase and sale decisions and for agricultural appraisers to enter the market. to guess.

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Linda van Eekeres

Linda van Eekeres is co-writing editor-in-chief. She mainly focuses on macro-economic developments and the influence of politics on the agricultural sector.

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36 comments
Subscriber
T.F June 27, 2024
This is in response to it Boerenbusiness article:
[url = https: // www.boerenbusiness.nl/artikelen/10909505/wordt-agrarijke-grond-re-duurder]Will agricultural land become more expensive again?[/url]
Predictions often do not come true.
Subscriber
xx June 27, 2024
There is no point in worrying whether the land rises 2 or 3% per year. If the ground suits you then you have to take it.
Subscriber
Challenger June 27, 2024
Interest of 4%,,, repayment 3% brrrr,,,
Subscriber
Rene' June 27, 2024
When are we going to reclaim the Markerwaard? Compensation for the land extraction.
Noord June 27, 2024
4,8%, no longer has anything to do with products, e.g. wheat b/w avg. 8ton times now €190 net/net. Count it out. Just try to act big. Interest is now seeping through everything, and I assume that the ground is actually sinking rapidly
Subscriber
juun June 27, 2024
it's just a ratio of what you have in money and land. and you can buy there. You have never been able to earn anything on the land you buy, so you spread it across your company. and a bit of financing is certainly not very fiscally, but also a bit better.
not good June 27, 2024
piece of financing?? most of the large ones are filled to the brim with loans. and often no more ownership, everything with a society should you want that? These big ones destroy everything for normal companies, not good developments! that only a few very large farms fish everything off the market at whatever cost
Subscriber
frans June 28, 2024
It is only the boys who are in a windmill club who now sell that tough talk. were not top performers at school in arithmetic. It can never be calculated that you will earn something from it.
Subscriber
Emmeloord June 28, 2024
What strikes me is that many expanders secretly transfer their land (bare ownership) to fortis-like clubs and only become tenants in order to grow in area or charge very high rents. In this way, the ownership/capital of the peasantry shifts back to the (semi) government, everyone is busy taking care of daily affairs. A mortgage based on €175K with 4% interest plus repayment in 30 years, anyone can think of which club you go to work for every morning.
Subscriber
T.F June 28, 2024
not good Yesterday 23:59 PM piece of financing?? most of the large ones are filled to the brim with loans. and often no more ownership, everything with a society should you want that? These big ones destroy everything for normal companies, not good developments! that only a few very large farms fish everything off the market at whatever cost Yes and so you get more and more zombie companies, from large to small, bad bad...
Subscriber
juun June 28, 2024
not good wrote:
piece of financing?? most of the large ones are filled to the brim with loans. and often no more ownership, everything with a society should you want that? These big ones destroy everything for normal companies, not good developments! that only a few very large farms fish everything off the market at whatever cost
yes, and they do that themselves, but they also have to pay for it and the work does not become less. the very small companies ultimately have no future anyway. or you have to start farming the land, which is already done a lot. you have to have a certain scale to be able to buy machines. or, for example, you have to be involved in PB and S cultivation with growers and you can also invest in that.
Subscriber
sea ​​breeze June 28, 2024
Not everything is bought for the short term but for the longer term. Fortunately, there are companies that are no longer members of RABO DaaTEMA. Also have a different interest rate. Fortunately, there are many companies that heard the money splashing against the walls last year! Check with your advisor for purchase and certificate participation from private investors: i.e. interest 2% and increase in land price when the land is sold by the entrepreneur is 100% for the certificate holder: certificates may be traded, but the borrower remains the owner with the largest cadastral share certificate value! Even project developers are not happy with this!
Subscriber
flower June 28, 2024
Dear all, It has been the case since time immemorial that purchasing land is infeasible. But if each new generation buys something more and you carry it with the land you took over from previous generations, then you are adding and building up. It is of more use to you than money in the bank. Even if you have to finance the new purchase at the bank, that loan will melt like snow in the sun due to repayment and inflation. With a loan of one million in the bank, this would become one hundred thousand euros less bad in 2022 because there was 10% inflation in that year. This is called silent repayment. If you have a million in the bank, you would have become 100 euros poorer in the same year. Dear people, you cannot work against that. If you can afford the interest, always do so.
Subscriber
xx June 28, 2024
If purchasing land is not possible, then it really will not be paid for. The buyers aren't completely crazy either. It may be a bit of a hobby, but if it makes you poorer in the long term, it won't last. Any farmer already knows this.
Subscriber
Blinkers June 28, 2024
french wrote:
It is only the boys who are in a windmill club who now sell that tough talk. were not top performers at school in arithmetic. It can never be calculated that you will earn something from it.
With these electricity prices of less than 7 cents on average, not much is earned. Many parks, lines are stationary during the day when the sun is shining, that says enough. And people who have solar panels are already completely screwed.
Subscriber
in hiding June 28, 2024
Rene' wrote:
When are we going to reclaim the Markerwaard? Compensation for the land extraction.
this will be way too expensive. They should have done that right away in the early 80s when the efforts of the government service were still there. really too late now!!
small grower June 28, 2024
juun wrote:
not good wrote:
piece of financing?? most of the large ones are filled to the brim with loans. and often no more ownership, everything with a society should you want that? These big ones destroy everything for normal companies, not good developments! that only a few very large farms fish everything off the market at whatever cost
yes, and they do that themselves, but they also have to pay for it and the work does not become less. the very small companies ultimately have no future anyway. or you have to start farming the land, which is already done a lot. you have to have a certain scale to be able to buy machines. or, for example, you have to be involved in PB and S cultivation with growers and you can also invest in that.
that's nonsense juun. Those big companies have no future either... they are always late with everything because they have too many people sitting on the tractor who do not see the difference between good soil or whether they ruin it, etc., etc., more and more harvests remain in the ground. in the autumn because the area is unmanageable if the farmer is no longer the boss of his company and land is the end of healthy business operations
Subscriber
juun June 28, 2024
there is also something in between and that is the best. but companies of 25, 30, 35 hectares will naturally die. or you have to work elsewhere and farm on the side or something like that, then it is possible.
Subscriber
onion June 29, 2024
It's a big deal if you have 30 million worth of land on 4,5 hectares of dead land and some buildings and machines, easily 5 million in value with a 1,5% return, you would have to earn 75k, so despite all that everything becomes more expensive, there is no right to exist according to Juun
Subscriber
juun June 29, 2024
plantation wrote:
It's a big deal if you have 30 million worth of land on 4,5 hectares of dead land and some buildings and machines, easily 5 million in value with a 1,5% return, you would have to earn 75k, so despite all that everything becomes more expensive, there is no right to exist according to Juun
It's also very useful as long as you don't sell. Buying a sprayer for 30 hectares can be a good deal, you say. and doing everything with the contractor is not worth anything, especially in such years when it is a matter of running or standing still. Earning 75k with 30 hectares is only possible with a construction plan that you are developing. or you have to sell everything at the top, but no one can do that.
Subscriber
gerard June 29, 2024
why a syringe from a 2 hand of 2000 euros is also possible and that is possible with more machines and not everywhere the country is so expensive country prices can go up and down even if people think not
Subscriber
juun June 29, 2024
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
Subscriber
Drent June 29, 2024
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
With a smaller area, standing still is usually not a problem. I also started with old material and gradually grew in area and machines until you had it to order.
Subscriber
CM June 29, 2024
drent wrote:
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
With a smaller area, standing still is usually not a problem. I also started with old material and gradually grew in area and machines until you had it to order.
If you are a starting farmer, this is the right way. Look at the example of a syringe from 2000 that was not chosen correctly, but a new one is often not possible.
Black or white June 29, 2024
Isn't there something in between? A syringe costing €25k is also fine, right? It's the same with everything, including land purchases. Prices of 75k for nice arable land are also included.
Subscriber
juun June 29, 2024
Black or white wrote:
Isn't there something in between? A syringe costing €25k is also fine, right? It's the same with everything, including land purchases. Prices of 75k for nice arable land are also included.
that's exactly what your definition of nice is ;) for that money you get cattle ranching land here. or not even that.
Slinger June 29, 2024
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
Perhaps it says something more about your dexterity? The less there is on it, the less can be broken! No staff and little outsourcing is quite relaxed. In addition, in arable farming you can achieve the same results with 40-year-old material as with old iron from the future
Subscriber
juun June 30, 2024
Slinger wrote:
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
Perhaps it says something more about your dexterity? The less there is on it, the less can be broken! No staff and little outsourcing is quite relaxed. In addition, in arable farming you can achieve the same results with 40-year-old material as with old iron from the future
Nowadays, with those flut nozzles for 50 cm without a pressure logger, you actually have to use a different technique anyway for a good, finely distributed spray pattern.
Subscriber
time bomb June 30, 2024
Slinger wrote:
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
Perhaps it says something more about your dexterity? The less there is on it, the less can be broken! No staff and little outsourcing is quite relaxed. In addition, in arable farming you can achieve the same results with 40-year-old material as with old iron from the future
Totally agree. I see colleagues driving (lease) a 45 meter sprayer and 55 hectares of land. Why? To be able to participate with others. Do busy I think. Such a syringe will be commercially available in 10 years. Take a look at the dealers, there are a lot of them for sale, ranging from 27 meters to 50 meters, and that mountain is growing and growing. There's a lot of money in that beautiful old junk. I don't dare make an offer, because you have one on your hands. But everyone does what he/she wants. I am satisfied and happy with my older beautiful machine.
Subscriber
gerard June 30, 2024
Worn syringes are available in all prices, but if you drive wildly with a syringe costing 25d euros, you have a choice. It always costs more. I want as little as possible on it, it can always break. You have to be a bit handy with older machines, but by You also learn a lot by doing it
Subscriber
It can freeze or thaw June 30, 2024
time bomb wrote:
Slinger wrote:
juun wrote:
a syringe costing 2000 euros? where do you buy it from the scrap metal farmer? Of course you can always lease it. In addition, even if you buy old rotten machines, they often require maintenance and, if you are unlucky, they will be down at times when you certainly do not want that.
Perhaps it says something more about your dexterity? The less there is on it, the less can be broken! No staff and little outsourcing is quite relaxed. In addition, in arable farming you can achieve the same results with 40-year-old material as with old iron from the future
Totally agree. I see colleagues driving (lease) a 45 meter sprayer and 55 hectares of land. Why? To be able to participate with others. Do busy I think. Such a syringe will be commercially available in 10 years. Take a look at the dealers, there are a lot of them for sale, ranging from 27 meters to 50 meters, and that mountain is growing and growing. There's a lot of money in that beautiful old junk. I don't dare make an offer, because you have one on your hands. But everyone does what he/she wants. I am satisfied and happy with my older beautiful machine.
It is true that in the past there was a 2nd hand market for trailed syringes, but that market is saturated.
Subscriber
CM June 30, 2024
Spraying technology is simply uncertain as to how long you can drive it. If a larger area is purchased with subsidies, the investment is made, but if you have an average area then you think I should make a pass. It is too uncertain with regulations. Previously you could buy a syringe and use it for 20 years or more if you wanted without having to wonder if I comply with the regulations.
Subscriber
in hiding June 30, 2024
CM wrote:
Spraying technology is simply uncertain as to how long you can drive it. If a larger area is purchased with subsidies, the investment is made, but if you have an average area then you think I should make a pass. It is too uncertain with regulations. Previously you could buy a syringe and use it for 20 years or more if you wanted without having to wonder if I comply with the regulations.
Within 5 years we will be obliged to work with Spotpraer for a number of crops. Have you already thought about that?
Subscriber
CM June 30, 2024
in hiding wrote:
CM wrote:
Spraying technology is simply uncertain as to how long you can drive it. If a larger area is purchased with subsidies, the investment is made, but if you have an average area then you think I should make a pass. It is too uncertain with regulations. Previously you could buy a syringe and use it for 20 years or more if you wanted without having to wonder if I comply with the regulations.
Within 5 years we will be obliged to work with Spotpraer for a number of crops. Have you already thought about that?
Certainly yes, and that is in line with what I said about those uncertain regulations. Then an uncertain package of resources on top of that.
Subscriber
gerard June 30, 2024
Without soil herbicide it is not possible to hope that they will come to their senses, but with this minister that is no longer possible
Subscriber
juun June 30, 2024
in hiding wrote:
CM wrote:
Spraying technology is simply uncertain as to how long you can drive it. If a larger area is purchased with subsidies, the investment is made, but if you have an average area then you think I should make a pass. It is too uncertain with regulations. Previously you could buy a syringe and use it for 20 years or more if you wanted without having to wonder if I comply with the regulations.
Within 5 years we will be obliged to work with Spotpraer for a number of crops. Have you already thought about that?
They have already been working for 2 years to be allowed to officially spray GBM with that thing, so it will take longer.
You can no longer respond.

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