Lease prices in dairy regions rise, arable land prices fall

The lease standards for 2019 are higher, especially in leased areas with a lot of livestock farming. In contrast, the rent standard has fallen sharply in the Southwestern arable area and South Limburg. This is evident from the lease standards for 2019, which Minister Carola Schouten (Agriculture, Nature and Food Quality) announced on Wednesday 29 May.

These new lease standards will come into effect on Monday 1 July. The overview shows that the highest allowable lease prices for arable land and grassland have increased in 9 of the 14 lease price areas. In areas with a lot of dairy farming, the increase is 10% to 17%.

This concerns, for example, the Central livestock area (+17% to €545 per ha), the Eastern livestock area (+13% to €688), the Northern pasture area (+10% to €646), the Hollands/Utrechts pasture area (+13 % to €796) and the Rivers Area (+16% to €731). The Waterland and the Droogmakers are just behind this (in terms of increase), with a plus of 9% to €324 per hectare.

Replace bad year with good year
In areas with both arable farming and livestock farming, the price rises by approximately 4% to 5%. These include Bouwhoek and Hogeland (+4% to €682), Southwest Brabant (+4% to €768) and the Southern Livestock Area (+5% to €580). 

The lease standards are based on the operating results of medium-sized and large arable and dairy farms in the period from 2013 to 2017. According to Minister Schouten, this also explains the increase in lease prices in areas with a lot of dairy farming. In the calculation, the moderate income year 2012 has been replaced by what she believes to be 'very positive 2017'.

Good year replaced by mediocre year
The opposite is true in the arable farming sector. There, the good year of 2012 has been replaced by the average below-average income year 2017. As a result, rent prices in areas with predominantly arable farming have fallen. The decrease of 38% (or €190) for the Southwestern arable area is striking. The highest allowable lease price here is therefore €315 per hectare.

In addition, the beautiful prices in South Limburg (-20% to €576), Western Holland (-9% to €501) and the Veenkoloniën and Oldambt (-9% to €581) are also declining. Also in the area where traditionally the highest rent is paid, the tenants will pay less per hectare in the coming season. For the IJsselmeer polders, the lease price has fallen by 10% to €1.013 per hectare.

Both the lease standard for agricultural business buildings and the lease standard for existing agreements will be increased by 1,72%. The maximum rent increase for agricultural homes with leases from before September 1, 2007 is 4,1%. The highest allowable lease price for agricultural homes with lease agreements entered into on or after 1 September 2007 will be increased by 1,7% (the inflation rate for 2018).

All lease standards can be found here.

Eric the Thrush

Eric is a member of the editorial staff of Boerenbusiness. As a descendant of an arable family, farmer's blood flows through Eric's veins. He considers himself a generalist, but with a preference for economics, trends, markets and marketing.

e.delijster@boerenbusiness. Nl

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