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Farm Agent for Cornwall, Andrew Ranson considers how the well reported downturn in commodity prices across all agricultural sectors is raising concerns that land values may ease.
“In short, ‘the feel good factor’ is not being felt in agriculture, this and other external factors are resulting in less confidence in the short term from buyers and may cause some potential vendors to question their future in the industry.”
Up until now Stags have generally found more buyers than opportunities available. The big question is, “how will the supply of farms and land be effected by the current financial difficulties?” History demonstrates that land values rarely reflect agricultural profitability. Given the long term nature of agriculture, Mr Ranson believes it is unlikely that there will be a significant increase in the number of farms marketed, but there could be a number of off-lying land lots offered for sale.
If we see a significant increase in “farmer size” land lots on the market, we could see prices begin to ease in the less popular locations. In the stronger locations we could see prices hold or possibly even continue to creep up.
Mr Ranson predicts that 2016 looks like it will be a challenging year, but due to the diverse reasons why farmers and non-farmers wish to purchase farms and land, demand in the long term is likely to remain strong. In the short term, as farmers become more selective, the range in value between the cheapest and dearest will grow. Confidence will be finely balanced and local experience will be increasingly important.