Monday, February 22, 2010

Farmland Prices Roundup

NOTE: From newest to oldest.

United States

Lender Sees 1% Decline in Iowa Farmland Values in 2009

Iowa farmland values slipped 1% in 2009, according to Jim Knuth, senior vice president, Farm Credit Services of America (FCSAmerica), Omaha, which serves 74,000 agricultural producers in Iowa, Nebraska, South Dakota and Wyoming. FCSAmerica is the largest real estate lender in Iowa. Using its own staff of appraisers, the lender monitors the value of 67 benchmark farms located in its service area every six months. In addition, it has analyzed more than 33,000 real estate sales in the past five years. That includes 13,750 sales in Iowa alone, Knuth says. In addition, he notes, FCSAmerica handled more than $1.8 billion in real estate transactions in 2009.

According to the lender's most recent update, Knuth says farm real estate values rose 2.3% the last half of 2009 but finished the year down 1%. That figure is very similar to the 2% decline found by the annual Iowa land values survey conducted by Iowa State University (ISU). ISU monitors land values on a November-to-November basis. The FCSAmerica appraisal is based on a Dec. 31 basis. Meanwhile, the update indicates land values rose 7.5% in Nebraska and 3.3% in South Dakota by year-end. However, land values finished down 5.4% in Wyoming, where weakness in the recreational market is more pronounced....PDF LINK

Prices rise for cropland

Pasture and ranchland, however, sold at lower prices because of “anemic profits” among livestock producers and resulting lower demand for grazing land, according to a survey of 241 bankers in Nebraska, Wyoming, Colorado, New Mexico, Oklahoma, Kansas and Missouri. In Nebraska, fourth-quarter average prices were up 1.2 percent for nonirrigated cropland and 2.3 percent for irrigated land, the report said, while ranchland was down 1.7 percent. For the region, irrigated land was up 1.4 percent and nonirrigated land 2.3 percent.

Federal Reserve economist Jason Henderson of Omaha said fewer owners were offering land for sale, partly because they see few investment alternatives that offer better returns. Sales of land for residential development or recreation also were down because of the recession, he said.

The following article contains a great deal of interesting information, so I highly recommend going to the source and reading the entire article.
Demand boosts farmland value across NW Iowa

At a recent auction, a 120-acre farm just south of Le Mars sold for $8,200 an acre -- more than $2,500 above the estimated average value for Plymouth County land. More than 100 people attended the sale, with 10 bidding at least once, auctioneer Bruce Brock said. Across the region, competition for good-quality farmland has helped stabilize values, which fell last year after more than a decade of healthy gains. "The market has come back strong," says Brock, whose firm, Le Mars-based Brock Auction Co., has six offices in Iowa and South Dakota. "We get one or two calls a day, four or five times a week from people looking to buy land."...

Texas land market weak, except irrigated cropland

While seeing signs the correction in Midwestern farmland values is over, the call is weaker for Texas rural real estate. Why the difference? The Texas market is heavily dependent on recreational demand and it’s clearly not yet healed. According to Charles Gilliland, research economist with the Real Estate Center (REC) at Texas A&M University, land values fell 5 percent statewide last year. That is the first decline since the early 1990s.

The decline marks the end of a run in appreciation that peaked in 2008, when the median price per acre reached $2,359—330 percent more than the median price in 1994. Gilliland estimates prices slipped to around $2,141 per acre last year and thinks prices will continue dropping in 2010. "The potential buyers are saying, ‘Why should I pay this today when I can pick it up cheaper next year?’"...

Southwest Iowa Auction to Include 2,139 Acres, Selling in 22 Tracts

Approximately 2,139 acres of land in southwest Iowa will be offered at auction in two events set for Feb. 25 and 26, with Schrader Real Estate & Auction Company marketing the properties and conducting the auctions. ..."Combined, these two events will make up one of the largest offerings of farmland in southwest Iowa in recent times," said Schrader sales manager Roger Diehm. "The land being sold on Friday will include a good mixture of productive farmland with wooded draws that have excellent hunting potential in areas of the state that are well known for turkey, deer, pheasant and quail," Diehm said....

U.S. Plains farmland values firmed up at end-2009

Farmland values in the U.S. central Plains rose 2 percent in the fourth quarter of 2009 as crop prices climbed while ranchland values fell with livestock markets, the Federal Reserve Bank of Kansas City said Friday. The Fed's tenth district is a leading U.S. producer of cattle and wheat, corn and other top row crops. It stretches across Colorado, Kansas, Nebraska, Oklahoma, Wyoming and parts of New Mexico and Missouri. So land values, the main collateral for most farm loans, are widely watched as an economic gauge...

Farmland Prices Continue Near Record Levels in Northwest Ohio Auction

Farmland prices continued to show strength Tuesday, Jan. 26, as bidders paid an average of $5,970 per acre for three farms near Van Wert and Payne, Ohio. The 483 acres of tillable land brought a total of $2,883,554. "Prices are holding strong at near record levels, in part because there are currently more buyers in the market than there are sellers," said Rex Schrader, president of Schrader Real Estate and Auction Company, which marketed the farms and held the auction....

Illinois’ high-quality cropland selling for $7,500 to $8,000 an acre

Despite the overall economic downturn, a strong farm economy has helped keep farmland values high in west-central Illinois. One area banker said the recession has driven some investors from metropolitan areas away, with local farmers now accounting for most of the recent land sales. Based on 18 farm sales in Knox County in late 2009, the average price per acre was $6,955, according records on file at the Knox County assessor’s office. Brad Ray, vice president at Midwest Bank of Western Illinois, 200 E. Broadway, Monmouth, who is involved in farm lending, said about $7,000 per acre is an average for good- to highly-productive farmland is this area.....

Area farmland prices decline

Overall prices of farmland in northwest Ohio were down in 2009 compared to a year earlier. But agricultural real estate experts said those prices mostly refer to average to poor quality land. Good land - with excellent soil, good drainage, and good location - continues to fetch a premium....

NY investment firm gaga for green acres

New York-based Optima Fund Management, a $6 billion fund of hedge funds, thinks farming is a growing business. Chief Executive Dixon Boardman announced Monday that Optima has already raised $100 million for a new fund called American Farmland Co., with the intention of acquiring about 10,000 acres of Arizona farmland and California vineyards in the next year. According to Mr. Boardman, U.S. farmland boasts an average return of least 15% per year over the past five years, despite the credit crisis....

Land values increase in Winneshiek County despite statewide trend

Only 14 of Iowa's 99 counties experienced an increase in land values over the past year and Winneshiek County was among the top five. It was the first time since 1999 the average price for Iowa farmland declined. But in Winneshiek County the price per acre increased 2.1 percent to $3,869. Neighboring Allamakee County had the biggest increase - 5.7 percent - at $3,096 per acre. The second largest was 4.6 percent in Lyon County, $5,404 per acre; third was Jones, $4,301, up 4.4 percent; and fourth, Clayton, $4,093, 2.1 percent (the same percentage increase as Winneshiek County). Statewide, values decreased by 2 percent to $4,371 per acre. Iowa State University economist Michael Duffy attributed the decline to a drop in corn, soybean and livestock prices....


Guthrie County was among 20 of Iowa's 99 counties where farmland values decreased by more than four percent the past year....Duffy said the recent trends in the value of Iowa land are not surprising given the relative change in the value of crops produced in Iowa over the past few years. "The value of corn production in Iowa increased 64 percent from 2006 to 2007, but decreased 15 percent from 2007 to 2008, based on year-end summaries by the U.S. Department of Agriculture," Duffy said. The value of the soybean crop increased 40 percent two years ago and then decreased 9 percent last year. Year-end reports are likely to show additional declines in total crop income, based on crop prices and the difficult harvest, Duffy said....

Farmland prices slide 2%, ISU survey shows

Iowa State University’s annual survey of farm land prices shows that in 2009 Iowa’s farmland fell by 2 percent to $4,371 per acre, according to ISU economist Michael Duffy. It is the first drop in average land values since 1999. Since then Iowa landowners had seen the value of their properties rise by an average of 145 percent. Duffy said the decline was not a surprise. Surveys of Iowa land values earlier this year by the Realtors Land Institute and the Federal Reserve Bank of Chicago showed declines of 7.6 percent and 7 percent.

....Kain said “in 2008, it was almost too easy to sell a farm. All you had to do was chat with your neighbor.” Although agents report a slight increase in outside, nonfarmer investors among land buyers in 2009, the majority of Iowa farmland continues to be bought by neighboring farmers. In 2009, 72 percent of sales were to existing farmers, primarily neighbors, Duffy said. Twenty-three percent of sales were to investors and four percent were to new farmers...."Ten percent of all farmland is owned by single women over age 70," Duffy noted.

Downstate Illinois Farmland Prices Holding Steady

...acreage that's trading solely for agricultural purposes is still strong, priced in the $6,000 to $7,000 per acre range. The figures, he says, are based on sales he's handled in Madison, Montgomery and Vermilion counties...."Transitional land and/or land that people are speculating that over the next few years might go for development...much of that land is now selling purely for agricultural value and really doesn't have any premium to it at all."

Schrader says the price has dropped from last year's $20,000 an acre to $12,700. The situation is the worst for land that's used for recreational purposes like hunting. Schrader says what was such a hot market just a few years ago is now going for 20 to 40 percent less...

South Georgia land values plummet

The price of South Georgia undeveloped rural land has dropped to only about half it's value of two years ago, when land prices peaked. Real estate experts say the prices for what's called recreational property will continue to drop, and a lot of land owners could be losing their property to foreclosures in 2010. Undeveloped recreational property like this was a red hot commodity in the fall of 2007. Pushed by Florida investors, land like this was bringing 3000 dollars an acre, or more. But with the collapse of the economy, land values have also sank to only about 50 percent from just two years ago. Many of those investors are now unable to make the payments on their property.

...On the other hand, first quality irrigated farmland is holding it's value, but not increasing. But there is almost no demand for non irrigated farmland, and Marshall says the values will probably continue to spiral. Dr. Marshall said "as the current situation continues, we could see more and more people that owe significant amounts on their property being forced into a sale. An involuntary sale."

Marshall says foreclosures will increase in early 2010, as property taxes have typically increased, and money making opportunities like hunting rights and timber prices have also dropped with the economic troubles. Timber prices have dropped significantly along with the housing market. Marshall says the price for pine saw timber is only about $28 a ton.

Kilton Auction Brings In Over $10 Million (Illinois)

A sea of pick-up trucks flooded the parking lot of the Knights of Columbus Hall in Taylor Springs for part two of one of the biggest land auctions ever seen in Montgomery County. Almost 3,100 acres of land formerly owned by Kilton Farms were auctioned off on Tuesday, Nov. 17, fetching just over $10.1 million in the end. Approximately 250 registered bidders and a total estimated crowd of 500 people packed the KC Hall for the event.

Split into 41 tracts, the land was close to a 60-40 split of tillable ground and timber, resulting in a lower sale price than the previous Kilton auction in Springfield in January. In that auction, which was mostly tillable ground, the per acre price reached nearly $6,000 per acre, netting a little over $24 million for the 3,912 acres of farmland in Montgomery and Macoupin counties...

Cornbelt Update

Land values in the Chicago Federal Reserve Bank district rose 2% for the third quarter of 2009, based on a survey of local bankers. But currently, the price of “good” farmland is 4% less than it was at this time last year, and that makes the third successive quarter that land values were less than they were 12 months earlier. Land values in the northern 2/3 of IL dropped 4% from 2009 and IA land values are 7% less than they were in 2009.

Farmland prices will stabilize, 69% of bankers told the Chicago Fed, but 27% expect a decline, and most bankers believe farmers generally will back away from land purchases. The reason for the trend was a diminished earnings stream because of grain markets, lower net cash earnings, and high input costs that will reduce profitability.

Land values stable despite signs ag credit crunch is coming

..."Despite weaker farm incomes and credit conditions, district farmland values held steady in the third quarter, remaining below year-ago levels," the Kansas City-based economist said this week in a Fed report detailing the results of a survey of the district's ag lenders. "Since falling in the fourth quarter of 2008, District farmland values overall appear to have reached a plateau."...Don't forget about interest rates, warns another farmer. History has shown land values are subject to where interest rates go, says Farm Business Talk member GoredHusker, and that's the key variable to watch moving forward.

Minnesota Land Auctions and Real Estate Auctions Offer 1,790 +/- Acres

Rural banker’s confidence increases in October

...Farmland prices have remained steady. This month, the farmland price index increased from 41.1 to 43.0. The index has been below neutral growth for 12 consecutive months. There have been isolated farmland sales that have been relatively high though; Nebraska recently had farmland sell for $6,650 an acre....The farmland price index has remained below growth neutral, but now is the selling season for farmland. In the upcoming few months, the farmland price index will accurately reflect farmland sales since there will be more sales to take into consideration....

Quality Farmland Shows Continued Strength in IL, IN & OH

Prices of high-quality farmland continued to show strength in a series of early fall sales in Illinois, Indiana and Ohio, despite the recent weakness in commodity prices. "September and early October provided a good test for agricultural land prices, and we continued to see the trends that became established in the spring and summer -- strong prices on high-quality ag land with weakness in prices of lower quality land," said Rex Schrader, president of Schrader Real Estate and Auction Company.

....In many cases, farmland that had shot up in price because of location and development potential is reverting to pricing based on its agricultural use. "With little development occurring, and with demand for country lots drying up, we're seeing less of a premium for land in areas where development is likely," Schrader said.

Statewide land value drops while local value continues to spike

The value of farm land is on the rise in north central Iowa counties despite the fact value is decreasing throughout a majority of the state, according to a recent survey done by a state realtor institute. The north central Iowa region, which includes Hancock County, showed an average 1.2-percent increase in the value of quality farmland after the Iowa Farm and Land Chapter No. 2 of the Realtors Land Institute sent out a survey in September. Britt realtor and member Paul Kelly said the increase could likely be attributed to steady yields and a shortage of land for sale in the area, making available land more valuable. The north central Iowa region is among one of two regions that saw increased land value from March to September. The west central region saw a 0.3-percent increase. All the remaining regions saw a decrease in land value, resulting in a statewide average decrease of 1.9 percent. value has decreased statewide by a 9.5-percent average from September 2008. Factors contributing to the decrease include lower commodity prices, low livestock prices, unstable stock market prices and declining confidence in the economy. Despite a decrease in land value at the state level, Kelly said land value in north central Iowa has steadily been on the rise over the course of several surveys. In the most current survey, the area showed an increase in each quality of land.....Perhaps one of the biggest factors is the lack of quality farmland on the market in north central Iowa......


Scotland - Farm prices hold firm prices

Farmland prices in Scotland rose in the second half of 2009 as land once again became an attractive investment, and landowners' reluctance to sell pushed supply to exceptionally low levels, according to the latest Royal Institute of Chartered Surveyors market survey. Supply of both residential and non-residential farmland fell at the end of 2009 yet demand for both, particularly non-residential, was up, demonstrating the growing appeal of land as an asset class.

Demand is coming from investors who view farmland as a stable venture. Established farmers are also looking to capitalise on rising livestock prices and greater optimism in the industry by acquiring land for expansion. The main purchaser type in Scotland is the industrial farmer at 77 per cent followed by the non-farmer on 13 per cent and agricultural business purchasers, accounting for 8 per cent. Harry Lukas of CKD Galbraith in Galashiels said: "The shortage of land is a major factor in maintaining prices in the Scottish Borders. There is strong interest in planting land on upland properties."

Investment in Ukraine Land Makes Sense

...Agricultural land in Ukraine is currently under-exploited. However, as the pressure for more food rises globally, more land in Ukraine is being farmed. Just a decade ago one million hectares were under crops. In 2009, Ukraine farmed 4.2 million hectares, a massive increase of 420%. Likewise, farms are getting bigger – the average farm size grew from just 28 hectares to 101 between 1999 and 2009. Reflecting this growth in agriculture are the production volumes from Ukraine land. These saw a year-on-year increase of 5% in January this year.

The rich and fertile soil found throughout Ukraine produces grains (corn, barley and wheat) and sunflower. Together with Argentina and Russia, Ukraine forms part of the so-called Sunflower Triangle. The increased quality of Ukraine sunflower crops plus a consistent export level of an average of 1.76 million tonnes over the last three years ensure that Ukraine is a leader in the sunflower industry.

But all this is just the tip of the iceberg. According to the US Department of Agriculture (USDA), Ukraine has huge potential in agriculture, a potential that will gradually be realised over the next ten years. The recent USDA ‘Agricultural Projections to 2019’ report finds that Ukraine along with Russia and Kazakhstan will become major agricultural players by 2020....Barley is also hugely important crop for Ukraine, which together with Russia, has an almost 50% share of the world’s barley trade. According to USDA, “Ukraine became the world’s largest barley exporter in 2009 and is projected to remain so throughout the projection period (2019...

Investors fuel farmland cost spike

The price of farmland (UK) rebounded during the second half of 2009 as low interest rates caused investors to look for alternative homes for their cash, research has shown. The Royal Institution of Chartered Surveyors (RICS) said strong demand for farmland, combined with a shortage of supply, caused prices to rise during the six months to the end of December, after they fell slightly during the first half of the year...

Hungarian candidate backs ban on foreign ownership of farmland

The Hungarian government should quickly negotiate an extension to a ban on foreigners acquiring farmland, the governing Hungarian Socialist Party's prime ministerial candidate said on Thursday. Attila Mesterhazy told reporters that restrictions on the purchase of agricultural land by buyers from other European Union countries should be extended by three years as the price of Hungarian farmland had not caught up with the European average. Farmland in Hungary is up to five times cheaper than in neighbouring Austria and the structure of land ownership has not been brought in line with European norms, Mesterhazy said....

Huge decrease in midland farm land prices

...While farmland prices declined significantly countrywide in 2009, but nowhere as much as in the Dublin/Kildare/Wicklow region, which saw the biggest fall where prices dropped on average by as much as 56.6 per cent. For the first time in the 17 years since the survey was first undertaken by Ganly Walters, there were no recorded land sales at all in Co Dublin. This total lack of sales would account largely for the huge 56.5 per cent year on year drop in the Dublin / Kildare / Wicklow region.

Commenting on the agricultural land market survey results for 2009, Knight Frank Ireland’s, Robert Ganly said that the overall decline in farmland prices over the last two to three years mirrors the general decline across property markets in Ireland and internationally. “The high prices that were paid for agricultural land up to 2007 were mainly non-farmer driven and it is our belief that the market has now stabilised”, he stated, adding that access to credit has had a major impact on the market over the past 12 months. Mr Ganly believes that the decline in land prices over most of the country should level off in 2010, with prices now having fallen back to realistic levels....

Peasant blood runs in China land grab

...Fever-pitch development and a real estate market spiralling out of control have unleashed forces of greed among some well-placed officials and – until now – the central government has seemed powerless to rein them in. Locals here know all about it: over the past five years they've seen hundreds of acres of once-sacred farmland, allocated to them long ago under government planning, whittled away to a few dozen acres. Farmland has special status in China.

Urban municipalities may sell land to developers to raise enormous profits. But it's not the same in the countryside. Here, farmland is protected. The Land Management Law of China clearly states: "The protection of farm land is a basic policy of the country." Regulations are in place that make it extremely difficult to convert agricultural land to commercial or construction purposes. But that didn't stop local politicians. They had a plan: if they couldn't legally expropriate the land, they'd arbitrarily seize it, pay an annual pittance to the peasants as compensation to shut them up, then sell it for a much, much higher price to the interested company.

"These things happen all the time around here," says village elder Xue Yinli, 78, a well-spoken farmer who, together with his wife Wang Zhaoying, still grows wheat on his small patch of land – or what's left of it. "This isn't just happening in our village. This is happening in nearby villages, too." Already this year, dramatic stories have emerged from southern Guangxi province where police shot and wounded five people during a clash over land this month. Eleven police were also injured....

Mideast supplies: Slowdown in Gulf states’ dash for farmland

Eighteen months ago, food was the hot topic in the Arab Gulf and the cause of much angst. Soaring prices of staples such as rice and wheat were helping drive inflation to record highs, a phenomenon that threatened to tarnish the benefit of the region’s oil boom. Then, as the global food crisis took hold, exporting countries such as India restricted exports.

These trends sparked a wave of concern in the import-dependent states of the Gulf – just how could the desert nations secure food resources for their growing populations? Their reaction was to look abroad with a rush of announcements about planned farming projects overseas.

Details of such schemes started emerging from Saudi Arabia, the United Arab Emirates, Kuwait and Qatar, with the Gulf states planning to deploy their petrodollar wealth to acquire or lease land overseas, harvest rice, wheat, soya beans and corn, and then export the produce back to their home markets.

The most active was Saudi Arabia, by far the Gulf’s most populous state and the region’s main agricultural producer. But shortly before the food crisis struck, Riyadh had decided to phase out domestic wheat production by 2016 after realising that its wheat-growing programme – set up in the late 1970s – was no longer sustainable given the country’s finite water resources.

....Countries the kingdom is considering include Ethiopia, Sudan, Ukraine, Cambodia, Vietnam, the Philippines, Turkey and Egypt. A number of Saudi agricultural companies have also expressed interest in the overseas projects, with some beginning pilot schemes in Egypt, Sudan and Ethiopia. However, analysts say the extent of the private sector participation is likely to be dependent on the level of government support they receive....

Ireland - Farm sales drop by 43%

Sales of Irish farmland fell significantly in 2009 for the third year running, but there should be a levelling off by the end of this year, according to independent global property consultants Knight Frank Ireland. In a national agricultural land price survey, carried out annually by the company, (formerly Ganly Walters) and published yesterday, it was found that in the past 12 months prices have fallen nationally by as much as 43.3% on average. The national average price paid for farmland in 2009 was €9,678 per acre. This represents the drop of 43.3%, based on the average price of €17,081 being paid per acre for sales in 2008 (excluding the Dublin, Kildare and Wicklow region).

..... Mr Ganly said that the overall decline in farmland prices over the last two to three years only mirrors the general decline across property markets in Ireland and internationally. "The high prices that were paid for agricultural land up to 2007 were mainly non-farmer driven and it is our belief that the market has now stabilised", he said.

English farmland market sees values hit new record high

English farmland values rose by 3% in the fourth quarter of 2009 taking annual growth to 6.8%, according to the latest results of the Knight Frank Farmland Index. The average price of farmland is now £5123/acre, above the previous peak of £5100/acre reached in the second quarter of 2008. Farmland prices increased by 164% during the last decade, compared with growth of 37% for prime country houses, 113% for prime residential property in Central London and a 22% drop in the value of the FTSE 100 share index. The amount of farmland publicly advertised for sale in 2009 fell by almost 30% and this shortage of supply is helping to push up values as demand remains buoyant.....


...Cresud is one of the largest private owners of farmland in Argentina. The company has also been acquiring other massive parcels of farmlands in countries like Brazil, Bolivia and Paraguay. The company focuses on using that farmland for the production of milk, beef, grains, and other agricultural products. CRESY has relationships with companies like Tyson Food, which expands the company's reach. Heading into 2010, Cresud's shares traded for $14 an ADR, approximately the value of stated book. However, book value is vastly undervaluing the true value of the rich arable farmland that Cresud owns and operates. In addition, Cresud owns over 50% of IRSA (NYSE:IRS), a real estate company in Argentina. Add up all the parts and you have a business selling for significantly less than true value....

Funds have £7.5bn to invest in UK farmland

More than £7.5bn is waiting to be invested in UK farmland – enough to buy roughly six year's supply - Savills is to reveal next week as it launches a model for long-range land price forecasts. The global economic crisis has spurred interest in British farmland way above the roughly 170,000 acres put up for sale every year, the real estate group is to say following an analysis of its customer register.

"Historically farmland is regarded as a safe haven in time of economic uncertainty," Crispin Holborrow, head of Savills' country department, says in a report due for publication next week. "This proved to be the case during 2009." At an average price of £7,500 an acre, the cash, raised from a range of sources including City bonuses and private wealth, would buy 1m acres, equivalent to the area publicly marketed over the last six years. Savills believes an additional 10-15% of land is sold privately....

Global Warming to Bring Down Farmland Prices

KOREA. Climate change is likely to cause a drop in the price of farming land here, a report from a state-run agricultural institute said Wednesday. Regions suitable for high agricultural output will be found further northward and more vermin and blight outbreaks are likely to occur due to temperature rises in the coming years, which will lead to a fall in overall production, a research team at the Korea Rural Economic Institute (KREI) said.

In a joint study by the KREI and the National Academy of Agricultural Science, the institute forecast a 2-degree Celsius hike in average temperatures will reduce rice production by 4.5 percent per 1,000 square meters, and the decline will be as much as 14.9 percent if there is a 5-degree rise. Chances for agricultural damage will accordingly grow from natural disasters such as typhoons, torrential rain and snowfall....

Bare land could reach £7000/acre, says Savills

..."We have derived a robust model from extensive statistical analysis which provides a good fit with historical land values and provides a firm base for our forecasts," he says....The graph represents Savills' price forecasts for the average of all types of farmland in Great Britain based on the firm's detailed statistical model. The results suggest growth of between 5 and 6% each year until 2015, putting average farmland prices at about £6300/acre in 2015, compared to current values of about £4500....

Chasing the Third World Farmland Bubble

...Since 2004, nearly 10,000 square miles of land across Ethiopia, Ghana, Madagascar, Mali and Sudan has been leased to overseas investors; in the first half of 2009, an area equivalent in size to all the arable land in Europe was leased across the world to investors from developed world economies. New deals are occuring every week: in the last few days there have been agreements between Nigeria and Thailand over rice production, and talks between Saudi Arabia and African nations to develop farmland, to add to Saudi’s multimillion investments in the Philippines. Companies at the forefront of this property land-grab include the US asset management company BlackRock, who have earmarked US $30 million for the acquisition of farmland in areas from Sub-Saharan Africa to the UK, and banking giants Deutsche Bank and Goldman Sachs, who have invested in both pig breeding operations and chicken farms in China....

Farmland Values Increase Across England

Data published by Smiths Gore suggests that values of equipped farmland in the UK have risen for the first time in more than 12 months in September 2009.
An average price on a piece of equipped farmland in England grew by 4%, to £7,300 per acre in September when compared to the values registered in July. However, the figure is still 10% lower than at the same time in 2008, highlighted head of research at Smiths Gore, Mr. Beedell...

UN to regulate farmland grab deals

The United Nations has started drawing up a code of conduct to regulate overseas investment in farmland, but the voluntary rules will not be ready for at least a year. The code is the first attempt to control the growing trend of so-called “farmland grab” deals, which involve rich countries such as Saudi Arabia and South Korea investing in overseas farming to boost their own food security. The trend gained prominence after an attempt by South Korea’s Daewoo Logistics to secure a large chunk of land in Madagascar contributed to the collapse of the African country’s government....

Where to invest in farmland

...For anybody brave enough to invest in the Ukraine where you can't buy land, but purchase the right to lease it, it can now be acquired from practically nothing to £124/ha. Last year, before the collapse of Lehman's, international funds were paying up to $1,000/ha (£620) to acquire those lease rights. Unfortunately, many of them were short-term speculators and never intended to farm the land or didn't have the capital to do so. Now, they're forced sellers. People don't realise that land acquisition only accounts for about 35% of the cash required to farm in the Ukraine, explains Mr Oliver.

...South America has also had a lot of interest from investors again, because large acreages are available cheaply. As an investment target, Brazil has the edge over Argentina because it's more politically and economically stable. Much of Argentina's best cropping land is also already quite fully priced....

Is Africa selling out its farmers?

For centuries, farmers like Berhanu Gudina have eked out a living in Ethiopia's central lowlands, tending tiny plots of maize, wheat or barley amid the vastness of the lush green plains. Now, they find themselves working cheek by jowl with high-tech commercial farms stretching over thousands of hectares tilled by state-of-the-art tractors – and owned and operated by foreigners....

Guidelines could help improve farmland deals

A draft of the first-ever international code of conduct for farmland deals should be ready by the end of the year, the head of the United Nations' International Fund for Agricultural Development said. The draft document will lead to more discussion about how to ensure deals benefit host nations, as well as those seeking to buy or lease crop land, to ensure food security, Kanayo Nwanze, president of IFAD, told Reuters. "We have the Kimberley framework for mining, so why don't we put together a framework in the agricultural sector?" Nwanze said......

Bitter harvest for taxpayers in county

....The article stated that (the $12.3 million open-space purchase of the 125-acre Smith-Garrison farm in Washington Township) may be the most expensive land purchase in Gloucester County. I guess so, when our elected officials have no problem spending $98,400 an acre!.....

The Market for Agricultural Land

....The publication of the Northfield Report found that by 1977, almost 25% of agricultural land in the eastern counties, and 20% of Scotland, was owned by insurance companies, pension funds and property unit trusts. Institutions almost quadrupled the land under their ownership during the decade - almost all of it tenanted - and by 1979 they owned well over half a million acres, or 1.2% of all agricultural land.

The report concluded the institutions were in the sector for the long term, and did not believe they were primarily responsible for high land prices. But it acknowledged they enjoyed tax advantages as well as rental growth - and was concerned at the trend towards in-hand farming.....

Saudi Billionaire Invests in Ethiopian Farms

An agricultural development company owned by Saudi billionaire Sheikh Mohammed al-Amoudi bought $80 million in equipment from Caterpillar Inc. to develop holdings in Ethiopia, Fortune reported. Al-Amoudi-owned Saudi Star Agricultural Development Plc hopes to develop as much as 500,000 hectares (1.2 million acres) of land in Ethiopia over the next two decades for sugar, edible oil and grain production, the Addis Ababa-based newspaper said, citing Alemayehu Mengesha, managing director of Caterpillar importer Ries Engineering. To date, the company has been granted 10,000 hectares in western Ethiopia near the town of Gambella. Ethiopia’s government has vowed to transfer 2.7 million hectares of land to commercial agriculture investors in a bid to increase exports and farm productivity.

Black earth stirs investors in Russia

For years, foreign investors have been attracted by the gleam of Russia's vast reserves of crude oil. But deep in the quiet, rolling landscapes of southwest Russia, it is not the seductive power of black gold that has brought foreign money into the country. It is the more mundane appeal of black earth, millions of hectares of ultra-fertile agricultural land that foreign companies hope will provide the ideal answer to the world's changing food needs. Swedish company Black Earth Farming (BEF) since 2006 has bought 300,000 hectares (740,000 acres) of Russian farmland after the government finally allowed land to be privatised after decades of state ownership.

"In Europe the price of land is very high," BEF chief executive Sture Gustavsson said as he surveyed the newly acquired lands in the Voronezh region some 600 kilometres south of Moscow. In Russia, a hectare of land can still be acquired for several hundred dollars. "It is a great challenge. But we are loving it," Gustavsson said. Russia has tens of millions of hectares (acres) of chernozem, or black earth, considered a dream soil because of its richness in humus, which is formed by the decomposition of plant matter by micro-organisms.....