National View
Average arable and pasture land values across England and Wales rose again in the last quarter of the year, representing the seventh consecutive quarter of growth. Arable land values reached £9,233/acre, an increase of £122/acre (or 1.3%) from Q3 2022. Pasture land values increased at a comparatively slower rate, rising by £25/acre (or 0.3%), averaging £7,472/acre.
£9,233
per acre
Average
arable land value in q4
Q-ON-Q
CHANGE
1.3%
4.5%
y-ON-y
CHANGE
£7,472
per acre
Average
PASTURE land value in q4
Q-ON-Q
CHANGE
0.3%
4.3%
y-ON-y
CHANGE
Farmland
Market Update
Q4 2022
Key data and expert commentary
outlining trends in the farmland market
“Despite several months of economic uncertainty and political instability, we have seen a sustained positive market sentiment.”
FIGURE 5
Commodity prices decelerate
Source: Carter Jonas, AHDB, Farmers Weekly, DEFRA, ONS
Inputs
Outputs
Crude Oil
Fertiliser
Red Diesel
Feed Wheat
Oilseed
Rape
Milk
Beef
Pork
CRUDE OIL
Unit
Latest data
Date
Quarterly change
Annual change
£/barrel
65.4
Dec '22
-22.2%
17.2%
Fertiliser
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
700.3
Dec '22
19.5%
10.7%
Red Diesel
Unit
Latest data
Date
Quarterly change
Annual change
pence/litres
106.7
Dec' 22
-2.1%
37.7%
Feed Wheat
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
270.5
Dec '22
-0.6%
23.1%
oilseed rape
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
528.4
Dec '22
3.4%
-1.8%
MILK
Unit
Latest data
Date
Quarterly change
Annual change
pence/litre
50.4
Oct '22
10.3%
54.4%
BEEF
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
444.5
Dec '22
1.3%
8.7%
Pork
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
201.7
Nov '22
1.6%
34.4%
Click a location for
a local overview
East of England
Arable
Pasture
£6,800
£5,750
£10,800
£9,500
£8,800
£6,900
0.6%
0.0%
3.5%
1.5%
Low
£ / acre
Prime
£ / acre
Average
£ / acre
Quarterly %
Annual %
East of England land values
North West
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,000
£6,500
£12,000
£9,500
£10,000
£8,000
5.3%
1.6%
5.3%
10.3%
Pasture
EMAIL DEBORAH
01539 814914
Partner
Deborah Lund
North West land values
Wales
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,250
£4,250
£9,500
£8,500
£8,500
£6,500
0.0%
0.0%
0.0%
0.0%
Pasture
EMAIL Hugh
01248 360417
Partner
Hugh O’Donnell
Wales land values
North East
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£6,200
£4,250
£8,500
£6,500
£7,200
£5,750
2.9%
0.0%
2.9%
4.5%
Pasture
EMAIL Sam
01423 707801
Associate Partner
Sam Johnson
North East land values
Yorkshire and the Humber
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£7,850
£5,350
£10,600
£7,100
£8,850
£6,850
1.1%
1.5%
4.1%
5.4%
Pasture
EMAIL Sam
01423 707801
Associate Partner
Sam Johnson
Yorkshire and the
Humber land values
East Midlands
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£6,250
£6,250
£11,000
£9,000
£8,750
£7,750
0.0%
0.0%
9.4%
10.7%
Pasture
East Midlands land values
West Midlands
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£9,000
£7,000
£13,000
£10,000
£11,000
0.0%
0.0%
10.0%
5.9%
Pasture
EMAIL Edward
07826 890927
Associate Partner
Edward Beale
West Midlands land values
South East
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£9,000
£7,600
£11,250
£8,950
£10,000
£8,500
0.0%
0.0%
2.6%
1.2%
Pasture
EMAIL Andrew
07880 084633
Partner
Andrew Chandler
Wales
West Midlands
East Midlands
South west
South east
East of england
Yorkshire & the humber
North east
North west
Get in touch
Click a trend for more info
EMAIL MARK
01223 346628
Partner
Mark Russell
EMAIL MARK
01223 346628
Partner
Mark Russell
Year-on-year growth has been decelerating since the start of the year, but still continues to climb at a moderate pace. When compared to Q4 2021, average arable land values have increased by 4.5% and average pasture land values by 4.3%. Although arable land values are still 9.2% lower than their peak of £10,167 in Q2 2016, the gap is narrowing for pasture land values which are now only 1.8% behind its peak of £7,611/acre seen in the same quarter.
South West
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£9,000
£6,000
£12,000
£10,000
£10,000
£8,000
2.6%
0.0%
2.6%
0.0%
Pasture
EMAIL David
01823 428591
Partner
David Hebditch
South West land values
EMAIL Andrew
07880 084633
Head of Agency
Andrew Chandler
Source: Carter Jonas, AHDB, Farmers Weekly, DEFRA, ONS
Commodity price trends
Inputs
Outputs
Crude Oil
Fertiliser
Red Diesel
Milk
Beef
Feed Wheat
Oilseed Rape
Pork
CRUDE OIL
Unit
Latest data
Date
Quarterly change
Annual change
£/barrel
65.4
Dec '22
-22.2%
17.2%
Fertiliser
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
741.2
Dec '22
-10.7%
16.2%
Red Diesel
Unit
Latest data
Date
Quarterly change
Annual change
pence/litres
106.7
Nov' 22
-2.1%
37.7%
Feed Wheat
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
270.5
Dec '22
-0.6%
23.1%
OILSEED RAPE
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
528.4
Dec '22
3.4%
-1.8%
MILK
Unit
Latest data
Date
Quarterly change
Annual change
pence/litre
50.4
Oct '22
10.3%
54.4%
BEEF
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
444.5
Dec '22
1.3%
8.7%
Pork
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
201.7
Nov '22
1.6%
34.4%
Tap a trend for more info
Tap a location for
a local overview
WEST MIDLANDS
NORTH EAST
SOUTH WEST
WALES
NORTH WEST
YORKSHIRE & HUMBER
EAST MIDLANDS
EAST OF ENGLAND
SOUTH EAST
2019
EMAIL DEBORAH
CLOSE
01539 814914
Partner
Deborah Lund
View on desktop for a full overview
North West land values
2019
CLOSE
View on desktop for a full overview
North East land values
01423 707801
Associate
Sam Johnson
EMAIL Sam
2019
CLOSE
View on desktop for a full overview
Yorkshire & The Humber land values
01423 707801
Associate Partner
Sam Johnson
EMAIL Sam
2019
CLOSE
View on desktop for a full overview
Wales land values
EMAIL Hugh
01248 360417
Partner
Hugh O' Donnell
2019
CLOSE
View on desktop for a full overview
East Midlands land values
EMAIL mark
01223 346628
Partner
Mark Russell
2019
CLOSE
West Midlands land values
EMAIL michael
07826 890927
Associate
Edward Beale
View on desktop for a full overview
2019
CLOSE
View on desktop for a full overview
East of England land values
EMAIL mark
01223 346628
Partner
Mark Russell
2019
CLOSE
View on desktop for a full overview
South East land values
07880 084633
Partner
Andrew Chandler
EMAIL Andrew
2019
CLOSE
View on desktop for a full overview
South West land values
EMAIL david
01962 833386
Partner
David Hebditch
Longer-term growth remains strong across all types of land. When annualised over a 10-year period, arable land has increased at a rate of 2.8% and pasture has grown by 3.5%.
New, publicly marketed farmland supply in 2022 totalled 75,459 acres, 17.8% higher than the 2021 total (64,045 acres). New supply coming to the market began to gather pace in May, maintaining a strong upward trajectory throughout the rest of the year. The last quarter of 2022, although predictably lower than in the summer months, saw 10,435 acres of newly available land. This represents an increase of 16.0% from Q3 and is 25.6% higher than the level of new supply in Q4 2021. With many sales taking place off-market, this is only a segment rather than reflecting the full scope of availability, but is reflective of the overall trend.
Increased, but constrained, supply
After a year of rocketing input prices, increases have slowed considerably. Most significantly, fertiliser prices (Ammonium Nitrate, imported) fell by 19.5% in the three months to November, averaging £700.30/tonne. This follows nine consecutive quarters of price increases. Year-on-year, prices have risen by 10.7%, a more modest pace than seen earlier in 2022 when annual increases peaked at 184.9% (April 2022). Still, the longer-term price trends show a substantial shift, driving sustained cost inflation for farming landowners. Compared to the same period two years ago, fertiliser prices are 222.2% greater.
Commodity price trends
Sheep
Chicken
£900
£2,250
£1,575
34.0%
53.7%
Hill
£500
£1,500
£1,000
0.0%
0.0%
Hill
£1,700
£2,800
£2,150
2.4%
7.4%
Hill
£10,700
£13,750
£12,250
0.0%
4.3%
Lifestyle
£1,600
£3,700
£2,600
0.0%
4.0%
Hill
£10,500
£15,500
£13,000
0.0%
2.0%
Lifestyle
£11,000
£13,000
£12,000
4.3%
6.7%
Yorkshire Wolds
£13,250
£25,000
£16,750
0.0%
0.0%
Lifestyle
£7,500
£12,000
£9,000
0.0%
0.0%
Silts and Fen
£25,000
£16,000
0.0%
6.7%
Lifestyle
£13,500
£22,000
£16,750
0.0%
1.5%
Lifestyle
£7,500
£12,250
£9,250
0.0%
2.8%
Silts and Fen
£14,000
£30,000
£20,000
0.0%
14.3%
Lifestyle
SHEEP
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
543.5
Dec '22
3.6%
-12.4%
CHICKEN
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
354.0
Nov '22
8.3%
27.3%
Looking at longer-term performance, average arable land is still 12.6% below its peak of £10,167 in Q2 2016 and pasture land is 4.6% lower than the peak of £7,611 in the same quarter. Nonetheless, although hampered somewhat by moderate falls in value from 2017 to the start of 2021, growth over a 10-year period has been significant. Arable and pasture land values have risen 33.1% and 42.7% respectively since Q1 2012, representing annualised growth of 2.9% for arable land and 3.6% for pasture.
SHEEP
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
543.5
Dec '22
3.6%
-12.4%
CHICKEN
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
354.0
Nov '22
8.3%
27.3%
Commodity prices decelerate
EMAIL SOPHIE
020 7493 0685
Senior Research Analyst
Sophie Davidson
(Please view desktop version for graphs)
Average lifestyle land values, too, have seen significant growth. Over the year, average lifestyle land values across England and Wales have increased by 5.0% to reach £15,792, the highest level recorded by Carter Jonas. A robust 10-year annualised growth rate of 4.4% for lifestyle land has been driven predominantly by substantial growth in the South East and West Midlands. These regions have seen 10-year annualised growth rates of 7.3% and 7.4% respectively.
FIGURE 2: Annualised Growth of Average Land Values in England and Wales
FIGURE 3: Annual Publicly Marketed Farmland Supply
Despite this increase, supply is still below longer-term averages. Against a year end five-year average of 97,141 acres and ten-year average of 120,564 acres, farmland supply in 2022 was 34.1% and 37.4% lower respectively. Historically low levels of available land coupled with a growing range of purchasers has helped to maintain pressure on agricultural land values across England and Wales.
Prime land, particularly arable, continues to be highly sought after. Year-on-year, prime arable values have risen by 6.1%, reaching an average of £10,961/acre across England and Wales. Over a three-year period, this reflects a significant annualised growth rate of 3.7%. Prime arable land values continue to be bolstered by demand for quality domestic food production, arising from an expanding awareness around sustainability, health and nutrition.
Prime pasture land values have grown at a somewhat slower annual rate of 5.0%, averaging £8,783/acre. Yet secondary and tertiary pasture land has performed even better, with values increasing by 6.3% year-on-year, reaching an average of £5,883/acre. This represents a notable increase of 3.7% when annualised over the last three years. Lesser quality hill and upland values have also seen substantial growth, rising by 23.7% in the 12 months to Q4 2022. Natural capital investors are the key drivers of this market, with greater environmental restoration and improvement possible on poorer quality land.
Food security concerns have been escalating, placing further emphasis on the importance of a thriving domestic agricultural sector. As such, debate continues to intensify about how to balance the dichotomy of land being taken out of food production for environmental purposes and a need for domestic production. Over the coming year, this will serve to keep the agricultural land market tight, with innovation (vertical farming is a frequently cited solution, for instance) and bringing land back into production from other non-agricultural uses increasingly necessary in the medium term.
The rise in interest rates and consequent surge in the cost of finance poses a challenge to the market over the coming months. Businesses and individuals have become less inclined to borrow across all property asset types and those with debt will experience decreased liquidity. Yet, the prominence of cash buyers and rollover funds in the market is likely to mean that land values are less exposed to increasingly expensive debt.
FIGURE 2
Annualised Growth of Average Land Values in England and Wales
FIGURE 1
FIGURE 2
FIGURE 1
FIGURE 1: Average Land Values in England and Wales
Of all commodities tracked by Carter Jonas, fertiliser prices have seen the steepest growth. Despite decreasing in April and May, average prices rose by 11.0% from June to July, ending the month at a historic high of £840.90/tonne for UK produced ammonium nitrate. Domestic and imported ammonium nitrate fertilisers have seen sizable year-on-year increases of 157.9% and 154.7% respectively. With supply low, is it expected that there will be no new aggregate price reported for UK-manufactured AN any time soon (Farmer’s Weekly). However, The Andersons Centre reported a domestic spot price of £890/tonne towards the end of September and imported prices stood at £870/tonne (AHDB), suggesting prices have increased even further.
Red diesel and pump diesel prices fell moderately over the quarter, down 2.1% and 1.5% in the three months to December 2022. Annual increases have decelerated, with year-on-year increases for red diesel at 37.7% and 20.3% for diesel at pump. The price for red diesel ended the year 12.3% lower than the peak in July, and standard diesel was 9.1% lower. Although it is unlikely (as it stands) that fuel and energy prices will return to the historically high levels seen this year, prices are expected to remain extremely volatile.
Many arable farmers will have enjoyed a profitable 2022 harvest due to purchasing fertiliser at lower prices in 2021 whilst benefitting from inflated output prices. Wheat prices have remained elevated and, despite a 0.6% fall in prices from Q3 to Q4, have risen 23.1% over the year to £270.48/tonne. Oilseed rape prices decreased by 1.8% in the 12 months to December to £528/tonne, after rocking to an average of £713.52 in May. However, they remain considerably higher than historic levels, ending the year 40.0% greater than Q4 2020. Such rises in output prices, however, fail to offset rocketing input prices.
The rate of increase of some output prices has, however, accelerated. The price of milk, in particular, increased by 54.4% in the 12 months to October. AHDB forecasts milk production to grow steadily over the coming months, despite falling numbers of dairy farmers and dairy cows. It was reported that whilst some milk buyers increased prices towards the end of the year, many kept prices the same. Increases are likely to slow into the new year, with a number of buyers announcing price cuts.
Chicken, too, has seen notable price increases, growing 8.3% in the quarter and 27.3% annually. When annualised over a five-year period, chicken prices have risen by a steady 4.9% on average. Pork prices grew by a steady 1.6% in the three months to November, but have increased by a sizable 34.4% year-on-year. Pork has seen stable longer-term growth, increasing by 5.2% annually over the last five years.
South East land values
The geopolitical landscape remains challenging, as the shockwaves of the war in Ukraine continue to be felt across commodity markets and food supply chains. Immense short-term disruption is being felt by farmers who are tackling spiralling agricultural input prices. In the near-term, the conflict may provide a driver for higher domestic prices, but this has not yet balanced out the rising costs of production.
Sheep
Chicken
After a year of rocketing input prices, increases have slowed considerably. Most significantly, fertiliser prices (Ammonium Nitrate, imported) fell by 19.5% in the three months to November, averaging £700.30/tonne. This follows nine consecutive quarters of price increases. Year-on-year, prices have risen by 10.7%, a more modest pace than seen earlier in 2022 when annual increases peaked at 184.9% (April 2022). Still, the longer-term price trends show a substantial shift, driving sustained cost inflation for farming landowners. Compared to the same period two years ago, fertiliser prices are 222.2% greater.
Wholesale energy costs have also fallen, with crude oil finishing the quarter 10.1% lower than Q3 at an average of £65.40/barrel. Although this is a 17.2% year-on-year increase and 78.7% increase on the same period in 2021 (or 33.7% annualised over two years), it is a significant drop from the highs seen earlier in the year.
Red diesel and pump diesel prices fell moderately over the quarter, down 2.1% and 1.5% in the three months to December 2022. Annual increases have decelerated, with year-on-year increases for red diesel at 37.7% and 20.3% for diesel at pump. The price for red diesel ended the year 12.3% lower than the peak in July, and standard diesel was 9.1% lower. Although it is unlikely (as it stands) that fuel and energy prices will return to the historically high levels seen this year, prices are expected to remain extremely volatile.
Many arable farmers will have enjoyed a profitable 2022 harvest due to purchasing fertiliser at lower prices in 2021 whilst benefitting from inflated output prices. Wheat prices have remained elevated and, despite a 0.6% fall in prices from Q3 to Q4, have risen 23.1% over the year to £270.48/tonne. Oilseed rape prices decreased by 1.8% in the 12 months to December to £528.35/tonne, after rocking to an average of £713.52 in May. However, they remain considerably higher than historic levels, ending the year 40.0% greater than Q4 2020. Such rises in output prices, however, fail to offset rocketing input prices.
Despite several months of economic uncertainty and political instability, we have seen a sustained positive market sentiment. There are still sizeable obstacles that will challenge the sector in 2023, notably changing subsidies, the increased cost of borrowing and the impact of prolonged input price inflation. Yet a steadier political backdrop and sustained demand from an array of buyers is likely to inspire confidence and benefit land values across England and Wales.
FIGURE 4: Cumulative Publicly Marketed Farmland Supply
FIGURE 3: Year-to-Date Publicly Marketed Farmland Supply
Cumulative Publicly
Marketed Farmland Supply
FIGURE 4
Year-to-Date Publicly
Marketed Farmland Supply
FIGURE 3
Year-to-Date Publicly
Marketed Farmland Supply
FIGURE 3
Cumulative Publicly
Marketed Farmland Supply
FIGURE 4
The rate of increase of some output prices has, however, accelerated. The price of milk, in particular, increased by 54.4% in the 12 months to October. AHDB forecasts milk production to grow steadily over the coming months, despite falling numbers of dairy farmers and dairy cows. It was reported that whilst some milk buyers increased prices towards the end of the year, many kept prices the same. Increases are likely to slow into the new year, with a number of buyers announcing price cuts.
Chicken, too, has seen notable price increases, growing 8.3% in the quarter and 27.3% annually. When annualised over a five-year period, chicken prices have risen by 4.9% on average. Pork prices grew by a steady 1.6% in the three months to November, but have increased by a sizable 34.4% year-on-year. Pork has seen stable longer-term growth, increasing by 5.2% annually over the last five years.
Beef prices have also grown substantially over a five-year period, with an annual growth rate of 4.1%. Over the quarter, prices increased by a modest 1.3% and grew 8.7% over the year. Tight supply underpins the market, although it is reported that demand for more expensive meats, such as beef, will drop as the cost-of-living crisis continues, threatening prices over the coming months.
Sheep prices, however, fell by 12.4% annually, although they are still 35.6% higher than five years ago. Despite this, livestock margins remain tight, as feed and energy costs have increased at faster rates.
£12,000
£9,000
Yet, in the face of vast changes taking place across the farming sector, rocketing input costs and uncertain trade conditions, overall market sentiment has held strong. The agricultural industry has been resilient, and land values reflect that. Where other assets, such as the gold and equities markets, have seen declines in prices, it is encouraging that the rural sector has maintained its position.
Beef prices have also grown substantially over a five-year period, with an annual growth rate of 4.1%. Over the quarter, prices increased by a steady 1.3% and grew 8.7% over the year. Tight supply underpins the market, although it is reported that demand for more expensive meats, such as beef, will drop as the cost-of-living crisis continues, threatening prices over the coming months.
Sheep prices, however, fell by 12.4% annually, although they are still 35.6% higher than five years ago. Despite this, livestock margins remain tight, as feed and energy costs have increased at faster rates.
Carter Jonas continues to monitor the changing nature of the farmland market and the influences on land values in England and Wales.
Average Land Values in
England & Wales
Average Land Values in
England & Wales
Annualised Growth of Average Land Values in England and Wales
Average Land Values in
England & Wales
Annualised Growth of Average Land Values in England and Wales
Despite several months of economic uncertainty and political instability, we have seen a sustained positive market sentiment. There are still sizeable obstacles that will challenge the sector in 2023, notably changing subsidies, the increased cost of borrowing and the impact of prolonged input price inflation. Yet, a steadier political backdrop and sustained demand from an array of buyers is likely to inspire confidence and benefit land values across England and Wales.
