The drive to plant more trees means it is now “almost impossible” for farmers to compete with investors for land which has commercial forestry potential, according to land agents Strutt & Parker.
In a review of 2019’s Scottish farmland market the company reveal that in some cases plantable hill ground attracted prices in line with secondary arable farms and grass leys to reach a high of close to £3,000/acre, a rise from the already inflated figure of £2,000/acre in 2018.
The company’s farm agent Diane Fleming said forestry investors consistently outweighed the bidding power of farmers and pointed out the agricultural value of hill ground which is unsuitable for tree planting still sits between £300 and £1,000 per acre, depending on its location.
The boom in forestry interest is related to attractive government planting grants and the value of commercial forestry plantations.
John Clegg & Co’s latest Forest Market Report showed commercial forestry transactions were worth £126.5m and revealed a 23% year-on-year rise in average forestry values.
Meanwhile Strutt & Parker reported that demand for prime arable farmland in 2019 far outstripped supply in Scotland, with the best arable land reaching a high of £16,000/acre in one example, which is on a par with equivalent English farms.
Ms Fleming said: “The restricted availability of arable land for sale helped to reinforce arable values.
“Yet the prices paid for more marginal land, livestock farms and dairy farms declined slightly on a per acre basis, due to supply exceeding demand in some areas and a lack of confidence from buyers in the market.”
Strutt & Parker said the main reasons farmers marketed their farms was retirement, and a third of farmers chose to sell due to the absence of successors interested in taking on the farm.