Success for Irish farmers in the global marketplace depends primarily on the competitiveness of your production system. In Ireland, our competitive advantage has always come from our grass-based system but our core asset (land) is one of the most expensive in the world. Valuing land is complex, emotive, historic and outside of reasoned economic analysis.

UK

The price of land in the UK is similar to that in Ireland. However, the supply of land for sale remains at historic low levels with no sign of increasing.

The UK land market is diverse, with quality and location being key to the strength of demand and the price realised. In England, prime arable land in the east of the country averages just under €14,000/acre while in the midlands and south it is generally valued at €10,000/acre.

Land in Wales averages €8,800/acre while in Scotland land averages €5,800/acre, although the best arable land achieves €12,000/acre.

France

Land prices in France, one of the strongest agricultural regions in Europe, are significantly lower than in Ireland or the UK, at an average price of €5,790/acre.

The figure is somewhat distorted by the price of land in wine producing regions, which can exceed €50,000/acre. Arable tillage land generally averages just under €2,700/acre, while grassland or meadowland averages €1,700/acre.

US

In the US, where land availability is far greater, average prices are well behind Ireland, although in some regions farmland is achieving record prices.

Average prices are $2,950/acre (€2,600/acre) mainly because there is far more poor land than agriculturally productive ground in the US as a whole. A more detailed regional analysis gives a better picture. Average prices in the American corn belt, which encompasses the states of Iowa, Illinois, Indiana and Ohio, are well above the average at €8,288/acre, with prices ranging from €6,000/acre to €10,000/acre.

However, the land market in the corn belt is closely linked to the performance of grain prices. After a difficult year for crop farmers in the US, land prices appear to be back approximately 3% right now.

Grain prices aside, the greatest influence on the price of arable land in the US in recent years has been investors seeking to make a return on the positive dynamics within the agri-food sector.

Farmland has become an attractive and secure investment option for hedge funds and pension managers seeking a greater yield and diversification within their portfolios (see investment case study on p36).

Further north, in the states of Wisconsin, Michigan, Minnesota and Idaho, where dairying is the principal enterprise, land also sells for considerably more than the US average. Land in this region averages €4,845/acre and can range from €4,000/acre in Wisconsin to over €7,000/acre in Minnesota.

America’s wheat belt takes in the states of North and South Dakota, Nebraska, Kansas, and Oklahoma. Land in this region generally averages around €4,500/acre, although it can fetch as little as €1,400/acre in parts of Oklahoma or as much as €7,000/acre in Nebraska.

Beef production is a major industry in the US, particularly in Arkansas, Colorado, Texas and Tennessee. Pastureland in these states averages €2,245/acre.

The record prices beef farmers are currently enjoying in the US thanks to a very tight supply of cattle may inflate the price of land in these states somewhat over the next year or two.

Cotton production is a major industry in the US, particularly in some of the southern states. Alabama, Georgia, Mississippi and South Carolina are the most prominent cotton producers and land in the region can fetch between €2,300/acre and €4,000/acre, averaging almost €3,000/acre.

In nearby Louisiana, where sugarcane is the most widely produced crop, good arable land averages close to €2,400/acre. The most expensive land in the US is found in California. In the Napa Valley wine region, an acre of land costs €15,000.

South America (Brazil & Argentina)

In recent decades, Brazil has emerged as one of the dominant powers in global agriculture. It is the world’s largest producer of sugar, is on course to overtake the US as the leading soyabean producer and is the third largest producer of corn. It also produces 15% of the world’s beef.

Just like the US, different farming enterprises are focused in certain regions of this vast country. The semi-temperate climate in the south of Brazil makes it the most suitable region for farming as opposed to the drought-threatened north of the country.

High-quality fertile farmland in the southwestern Brazilian state of Mato Grosso, which is where most Brazilian crops are grown, can fetch as high as €1,780 per acre. Average land in this state will cost in the region of €900/acre.

In central Brazil, the state of Tocantins is a strong beef producing region. Pasture land here ranges from €300/acre to €900/acre.

Argentina, known for its economic difficulties, is by far the most expensive country in South America in which to buy land, with average prices around €4,000/acre. The pampas is a fertile lowland region of Argentina encompassing the provinces of Buenos Aires, La Pampa, Santa Fe, Entre Ríos and Córdoba. Here prices range from €7,000/acre to €11,000/acre.

These central plains were originally used for grazing cattle but in recent years soyabean production has become the main enterprise, fuelling prices. Outside the pampas region, land prices can be far lower. In the northern territories of Argentina where the land is average quality and used for cattle grazing, prices range from €2,200/acre to €2,300/acre. In the south of the country, prices range from €500/acre to €1,100/acre due to the hilly terrain.

New Zealand and Australia

With 7% of NZ land brought to market each year, supply is not an issue. Dairying is the biggest driver of price. A fully developed dairy farm will cost €12,000 to €16,000/acre, while land more suitable for drystock fetches €5,000 to €10,000/acre.

In Australia, the average farm size is over 3,600ha, reflecting the size of the continent and the volatility of profitability. Along the coastal regions, where most farming takes place, land can range in price from as little €400/acre for rough grazing land to highs of €4,000/acre for the best-quality grazing lands beside the ocean. In the grain-producing regions, good land averages €1,200/acre.

For a PDF on global land prices click here.