Farm prices at record highs

Darryn Johnston.

Darryn Johnston.

THE price of farming land on the Lower Eyre Peninsula has reached record highs due to outside demand for arable land and high commodity prices.

Elders Port Lincoln rural real estate specialist Darryn Johnston said prices had been increasing on the Eyre Peninsula and land values for properties south of Port Neill and Karkoo had doubled over the last 10 years.

Mr Johnston said two of the last sales in premium farming land near Cummins, one selling about 405 hectares at $9797 per hectare and another of about 462 hectares at $9308 hectares, were some of the most expensive farming properties ever sold in the region. 

“For over here that’s massive,” he said.

“The highest prices we’ve ever seen on the Eyre Peninsula.”

Mr Johnston said he expected this land would have fetched about $3000 per hectare in 2008. 

Much of the demand for Eyre Peninsula land comes from Yorke Peninsula farmers who already have the skills, knowledge and expertise in broadacre farming.

These farmers are often unable or unwilling to purchase more land on the Yorke Peninsula due to the high cost of land, which can reach $16,000 per hectare.

The farmers decide to either sell up and move to the Eyre Peninsula to work on cheaper land or buy another block on the other side of the Spencer Gulf.

High prices for farms on the Yorke Peninsula combined with the increasing prices of grain on the world market, which has seen the price of wheat as a commodity rise to about $325 per tonne from last year’s $240 to $250 per tonne, has meant these areas are reaching history making prices.

Mr Johnston said the increase in grain prices of about $75 was all profit for farmers who had fixed input prices.

“They don’t have to do anything for that, simply cash in,” he said.

He said that well managed cropping properties were “certainly” in demand on the Eyre Peninsula.

“They’re snapped up real quick,” Mr Johnston said.

“The (high) prices are definitely driven by demand.”

He said prices for land used in livestock enterprises was also on the rise due to the increasing price of wool which had seen exceptional growth, selling for about $2400 to $2500 per bale, up from $900 to $1000 eight years ago.

“Mixed farming as an enterprise is fantastic.”