Food price rise led to record land deals

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ROCKETING world food prices have led to a record demand for farmland in Suffolk with figures released yesterday showing an all-time high during the first half of 2011.

Even with more land coming on to the market, it is still not enough to meet demand.

The figures come from the twice-yearly review produced by the Royal Institution of Chartered Surveyors, which said average farmland prices per acre increased to £5,813 during the first half of 2011, reaching all-time record levels for the second consecutive period.

Surveyors report this was driven largely by increasing demand from commercial farmers who are looking to expand production on the back of elevated commodity prices.

Local land experts, Bury St Edmunds-based Brown & Co, said the figures mirrored its own findings for supply and demand which had seen land prices double in five years.

Land availability in the East of England increased for the first time since 2008, but even this was not enough to meet growing demand. Prices will continue to rise says the RICS survey.

NFU chief economist Phil Bicknell said: “In recent years, the lack of farmland on the market has contributed to the cost of land rising.

“Current demand in Suffolk and other areas is not just a result of better farmgate prices but of expectations regarding price levels for products for the long term.

“Globally, expectations are that commodity prices will be at a higher level for the coming decade and some UK farmers see good potential returns in the future.”