Feeding frenzy for finest farmland

‘They don’t make it any more’; ‘Scale is essential for profitable farming’; ‘The world always needs food’; ‘A tangible asset in a turbulent market’.

All the above phrases apply to the present farmland market and supply the logic behind the current strong appetite from both commercial farmers and city investors for good quality arable land in the UK.

Since 1982, when the pension funds stopped investing, commercial farmland, having been out of fashion with non-farming buyers for 25 years, is back as the ‘must have’ for the portfolio.

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Philip Hoare of Savills farm agency in Banbury said: “The recent frenzy for good blocks of arable land has seen land prices rise from £2,500 per acre in 2002, to £8,000 per acre in 2012, and higher in specific instances – a rise of over 300% in 10 years. Add to this the fact that commercial farmers are trying to expand their existing units to build economies of scale in a marketplace chronically short of arable acres for sale, and all the ingredients are in place for an exceptional performance in the price of the best land during 2012.”

A bull market for some, but perhaps an opportunity in 2012 for others to realise an astounding profit?

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