BY DYLAN DE JONG 

A Wimmera farmer and industry leader says a sharp rise in agricultural land prices will prove to be a major hurdle for new players looking to enter the farm-industry sector. 

The median price for agricultural land in the Wimmera-Mallee is at an all-time high, while interest rates are down. 

Last month, grazing land at Ararat sold for more than $23,000 a hectare.

Earlier this year land at Miga Lake sold for more than $19,000 a hectare and a Kaniva farm for $16,500 a hectare.

National Farmers Federation vice-president David Jochinke said high prices in the Wimmera-Mallee were part of a broader trend, noting agricultural land prices had increased 40 percent in the past six years. 

He said the steep rise was a positive boost for current landowners and proved there was confidence in the industry from the financial sector. 

“I’ve never seen this in my farming career,” he said. 

“I feel like this is being fuelled by low interest rates and willingness of the financial sector to look at agricultural land as a solid asset for lenders, where there’s not as much risk compared with other assets.

“Additionally, I feel the relatively two good seasons we’ve had back-to-back have made the market quite hot.”

However, Mr Jochinke said prices rising every year would likely make it difficult for small players to expand their farming enterprises. 

“When you see a 20 to 30 percent increase on $100, that’s manageable, but when you’re talking that same increase on $10,000 it makes it challenging,” he said.

“If people are looking to expand or get into agriculture, this will make it a lot more challenging to get their first block of dirt.”

Mr Jochinke said rising prices represented a possible shift away from historical trends in the agricultural land market. 

“What does the farm business look like into the future? Will farmers own all their own land or will there be more tenant farmers like what we see overseas?” he said. 

“Previous generations who have built farms to be where they are today, I doubt that will be the same model in the future if prices continue to soar.” 

The entire April 28, 2021 edition of The Weekly Advertiser and AgLife is available online. READ IT HERE!