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Major differences in rents for arable land

26 February 2020 - Anne Jan Doorn - 5 comments

Prices for leased land for arable crops differ greatly, but remain remarkably stable. In the south-west in particular, prices remain fairly stable, while elsewhere the price rises slightly. Prices are clearly highest in the polders. Most of the land has now been leased.

"The trade in rental land has entered the final phase for the coming season," says Bart Keijzers, owner of 123 rental land. “What is still being rented out is often pieces of land that remain. Prices for rental land vary greatly due to large differences in the quality of the land.â€

123Huurgrond is mainly active in Flevoland. "We notice that a shift has taken place for tulip land to heavier soils. You can see that tulip growers are also moving to East and South Flevoland. The price for tulip land has therefore gone up somewhat. Potato land is always the most in demand. That makes it a somewhat stiff market, because at the same time there is little supply."

"There is quite a lot of demand for rental land now that the mood has been reasonably good in the past 2 years. However, the prices of rental land do not immediately rise sharply every year. This is because the price is reasonably fixed on average. The difference is in the amount of supply of land. If the mood is good, there is little supply of land. If the mood is less good, there is relatively more land available. Of course this will influence the price in the long run, but the degree of supply changes faster" , says Keizer.

Flevoland clearly more expensive
The difference between Flevoland and other areas is that in some areas of Flevoland there is almost no rental land available, no matter how much tenants want it. This makes it difficult to estimate prices. Tulip land is rented out relatively more often and prices for this range from €3.200 to over €4.000 per hectare for good AM-free tulip land.

Prices for potato land in Flevoland differ greatly. Varying from €2.000 to over €3.000 for good seed potato land. The most important thing here is the quality of the land: whether it is AM-free, how the drainage is and, for example, how large the plot is. 

Stable price in Zeeland
In Zeeland the situation is very different. Although quite a lot of land is rented out there, there is also a relatively large supply. This mainly concerns land for seed potato growers. About €1.400 to €1.800 per hectare is paid, with peaks of €2.000. That €2.000 is mainly paid for good seed potato soil. Because the yield has not been very high in recent years, various growers are reducing their acreage and they are also more careful about renting land. That makes for a pretty good offer.

Further east, in Brabant, the prices are a bit higher. The market is reasonably balanced. Although there is a bit more supply, due to farmers who stop running. However, that is not always good ground for arable farmers. There is a particular demand for potato and onion land. Prices vary from â1.800 to 2.000 per hectare.

High demand in peat colonies
Further to the northeast, relatively little land is rented out. In the Peat Colonies there is a lot of demand for rented land, while there is little supply. A few large companies that like to expand are generating a lot of demand. The price for ware potato plots is €1.800 to €2.000 per hectare. The price for starch potatoes is a lot lower, but the price is at least around â 1.500 per hectare. Crossing the border to Germany was very attractive for a long time, but the price here is now rising sharply. For the lesser quality soil, which often cannot be irrigated, you can easily pay €1.400 to €1.500 per hectare.

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Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.
Comments
5 comments
loom 26 February 2020
This is in response to it Boerenbusiness article:
[url=http://www.boerenbusiness.nl/grond/ artikel/10885999/major differences in rental prices for arable land]Major differences in rental prices for arable land[/url]
stupid farmers who pay so much money to rent land
bear 27 February 2020
Would you be better off renting for that money?
xx 27 February 2020
Indeed, absurd amounts but it is simply paid.
So great if you take advantage of it
Frank 27 February 2020
Buying land is the alternative. It will cost you around 100K per hectare. To be honest, I don't think the rental price is 2% of current value that much...
Martian 27 February 2020
Completely agree Frank, renting at 2-2,5% of the purchase price is not that bad.
We have just completed a strong price increase of land. There are several factors that put pressure on the land price (New CAP, GBM/fertilizer policy, nitrogen). Renting is now better than buying unless it is a neighbor or a reinvestment reserve.
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