SA farming land is rising in price faster than anywhere in the nation

South Australia’s farming land recorded the biggest price increases in the nation last year as bumper profits boost optimism across the agriculture sector.

Nick Sullivan and Lydia Sanders work at a cattle farm near Bordertown – and business is booming. Picture: Ben Clark

South Australian farming land recorded the biggest price increases in the country last year despite a sharp fall in sales and rising interest rates, a new industry report has found.

The latest Elders rural property update, based on state Land Titles Office data, found the rolling average median price per hectare increased by almost 20 per cent in SA country areas last year.

While it represented the fifth consecutive quarter of growth to $5978/ha, it was the mainland’s lowest price and compares to a national average of $7737/ha.

Industry experts said farmer confidence was one of the main drivers behind the price surge, on the back of high commodity prices and several good seasons.

With world prices still high and supply strong, farmers say confidence is still high as stored soil moisture sets up croppers for another bumper season despite rising interest rates.

Confidence in SA farmland was recently highlighted on the Yorke Peninsula after a 55ha cropping property near Maitland sold for what industry sources described as an eye-watering $37,647/ha or $9.6m.

Another major recent farm sale in the Mid North topped more than $33m for 2852ha of land.

“South Australian rural land continues to receive strong and sustained demand, particularly for grain and livestock production areas,” said Elders state manager Philip Keen.

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“Record, or near record, prices are continuing – this is evident in all classes of land.”

He said the market was likely “levelling out” due to rising rates and softening commodity prices.

“Interest rates will have somewhat of an impact but less in country areas, we think, as farmers are looking to the long term,” he said.

He said a key reason for SA’s current land values compared to eastern states was due to lower average rainfall as well having more “marginal” farming and grazing country.

The 27-page report found the median price increased by 7 per cent in the third quarter of last year, due to strong growth on the Eyre Peninsula and northern pastoral areas.

Lou and Lachy Day at their farm, Days Whiteface, in Bordertown. “We’ve had a couple of really good years,” says Lachy. Picture: Ben Clark

There were 117 transaction, a 25 per cent fall, worth more than $188m, the report found.

The report, based on CoreLogic data, used a range of analysis on properties bigger than 40ha in only rural areas.

More than $2.6bn worth of rural property was sold across Australia last year, it found.

“If there is a sustained increase in listings throughout 2023 it could slow the rate of appreciation in property values as more supply enters the market,” the report said.

“However, demand remains high after a long period of low supply and strong profitability on farm, which will likely result in further appreciation for rural property values in the first half of 2023.”

Primary Producers SA chair Professor Simon Maddocks said farmland prices in SA had steadily risen over the past decade.

Nick Sullivan and Lydia Sanders at Days Whiteface farm in Bordertown. Picture: Ben Clark

Prof Maddocks said rising prices were a “double-edged sword” for some farmers keen to expand but priced out of the market due to record sales prices.

“Many farmers believe it’s an exciting time to be in agriculture and are eager to expand their holdings,” he said.

“But land is often tightly held, particularly in areas such as the Yorke Peninsula and South East, so buying opportunities can be limited.”

A Bordertown-based bull breeder for almost three decades, 55-year-old father-of-four Lachy Day said this year’s cattle prices were just below 2022’s record levels.

His Days Whiteface farm, located 8km south of town in the state’s Upper South-East, breeds 250 stud Hereford cows along with 550 ewes.

“We’ve had a couple of really good years, which has been really pleasing,” he said. “You’ve got to prepared to take the opportunity to buy any land when it presents itself.”

Farmhands Lydia Sanders, 21, and Nick Sullivan, 25, love their work on the 1500ha property.