Ireland has the second highest cost of land per tonne of wheat in the world
Ireland has been shown to have the second highest cost of land per tonne of wheat in the world, according to a recent report by Savills.
As part of its Global Farmland Index, Savills, in an attempt to benchmark farmland prices around the world determine the cost of acquiring land in order to grow a tonne of wheat.
The ‘land cost for wheat production’ league (see below) takes the average value of farmland in 2015 and divides it by the average harvest wheat yield over seven years (2008 to 2014). By taking a seven year period it allows for any weather fluctuations to be accounted for.
2015 rankings are relatively unchanged from the results of in 2010 analysis and for several countries there is very little change in the land cost per tonne of wheat.
In general, Savills says falling commodity values have been compensated by increased yields – especially in the emerging markets where significant yield increases have been achieved through improved husbandry and management.
The significant correction in Danish farmland values has reduced the land cost per tonne of wheat by a quarter.
Conversely, Germany has shown a 77% increase in the land cost per tonne of wheat. This is partially due to non agricultural related incomes from farmland such as energy production and conservation, driving significant value growth.
Average seven-year global wheat yields have increased by 7% over the past five years, whilst land values have increased 13%, resulting in an overall Global average increase in the cost of land for a tonne of wheat of 8.6%
This is reflected in the mature markets where crop yield increases are more difficult to achieve but land value growth has been relatively strong, such as the US and Canada.
In the UK average rolling seven-year yields fell by -1.1% and with land value growth of almost 20% the land cost to grow a tonne of wheat increased significantly