Opinions Hans peters
Changes are at the gate again
The word 'dynamics' is a beautiful and special word. If you translate it to our agricultural sector, you are immediately aware of its meaning.
The sector is constantly fed by changes in regulations, by price fluctuations in revenues and sales and by perfectionism in the technical field. However, the necessary changes are also expected in the valuation of real estate. The size, and thus the value of the agricultural companies, therefore requires a significant adjustment of the valuation method.
The process has been going on for some time, but is now gaining ground. Also from an international point of view, new guidelines have recently been published for valuing agricultural real estate. In a valuation, more and more attention must be paid to the biotechnical side, instead of the constructional side of a company. The main point here is that valuing goes further than valuing 'the stones'.
More knowledge required
The guidelines require that a valuer has more and more knowledge in-house in the field of biology, soil science and geology. This knowledge is necessary to include the biotechnical side of a dairy farm in a valuation. I have already used the word 'significant' before and with the expansion of the valuation methods it is also expected that a significant difference can arise in the valuation of agricultural objects. In short: the return to be achieved is becoming increasingly valuable.
In addition, the development of national land prices is regularly displayed. This shows that the differences are increasing. This shift is largely based on yield. I say largely because it is also known that land purchases are still being made where the word 'return' has no place at the kitchen table. We also see the same phenomenon in the purchase of phosphate rights, because the difficult financing will also make the return increasingly price-determining here.
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Hans peters
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