If you want to predict the land market in 2019 you could do a lot worse than look at the calf trade in your local auction market to understand what factors influence values.

On the face of it both markets are affected by the simple law of economics – supply and demand.  More supply than demand, and the price falls, more demand than supply and the price rises.

In a time of uncertainty over future profitability, demand weakens, but if there are less calves in the market the trade will hold.  With less land on the market in 2018, whilst prices have come off their peak in Yorkshire seen in 2016, there has certainly not been any significant price fall as the doom-mongers had predicted.

Double the calves in the market or double the land on the market and either price could fall but one is limited by the number of cows in the country, and the other by the number of acres in the country.

But then there are always those who take a rosier view of what the future, will bring who will pay more for a calf than current economics would allow thinking that in two years’ time the beef trade will have improved. Again the land market is no different because buyers are usually taking a long term view, particularly if it is land next door to existing ownership.

Sometimes it is part time farmers who make the calf trade often because enjoyment of owning the stock is more important than the profit element at the end of the day.  If the income is not relied on to make the living, with money coming in from outside farming, the pure farmer will always be outbid around the ring.

So we have seen with the land market in Yorkshire in 2018 with development land sales proceeds being used to buy farmland on the market.  This is further strengthened by business owners, many of whom have sold out, who are looking to buy land as a safe haven and for the enjoyment of ownership.

Whilst greenfield development land continues to sell in 2018 as our towns and cities expand, and whilst businesses continue to expand and sell out in 2019, there will certainly be a demand for agricultural land in this county which generally has a significant population centre within one hour’s drive.

Back to the calf market analogy and any farmer will tell you that quality will always sell.  Poor calves can be very difficult to sell on a weak trade.  Selling your calf in a ring with very few buyers requires a skilled auctioneer to achieve what it is worth, and presentation can make a difference.  The land market had exactly the same principles in 2018, and will have exactly the same principles in 2019.

Rod Cordingley is a Chartered Surveyor and a partner in Stephenson & Son of York and Boulton & Cooper Stephensons in Malton.  Call 01904 489731 or email rlc@stephenson.co.uk

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