Agricultural sales volumes forecast to rise in 2025 as foreign investors tipped enter the market

Foreign and US investors are expected to grab a larger slice of the Australian agricultural sector, with sales volumes forecast to rise in 2025 following more than three years of declines.

Part of the Worral Creek Aggregation in Queensland, which sold for $350m. Foreign investors are likely to be in the market for Australian agricultural properties in 2025.

Foreign investors – especially from the US – will be in the market for Australian agricultural properties in 2025, with rising commodity prices tipped to spark a turnaround in sales volumes.

Last year Australian agribusiness deal volumes continued to slow, reflecting inflationary concerns and drier conditions in some parts of the country, which convinced owners to either delay putting their properties on the market or reject offers.

However, JLL associate director of agribusiness research Tim McMaster has forecast 2025 will bring a recovery in sales numbers.

“We expect to see a higher volume of transactions in 2025 over the prior year as the agriculture commodity market continues to rebound and foreign investors look to maximise their return on investment,” he said.

“The US economy, in particular, continues to perform strongly. As the US corporate sector is posting record profits, we expect they’ll look to invest in international markets.”

According to last year Rural Bank Australian Farmland Values Report, since peaking in 2021, the number of farmland sales have fallen by 43 per cent.

The volume of farmland sales in Australia has fallen by 43 per cent over the past three years.

However, Mr McMaster said agricultural land pricing in Australia remained strong, having recorded significant growth during the past seven years.

“The average dollar value per hectare has more than doubled to sit at $9184.70 per hectare in the latest figures, released in 2024,” he said.

“This growth in land value can be attributed to multiple factors, including the performance of commodities.

“Comparative values overseas have also enhanced the global investment appeal of Australian agricultural land. As a counterpoint for affordability, data released last year identified the value of arable land in Europe at circa $17,500 per hectare and agricultural land in the US at circa $16,200 per hectare.

“With such significant disparity in value, this price point for Australian land allows for a healthy return on investment, and we’re seeing continued strong foreign interest.”

US investors were behind Australia’s three biggest agricultural property transactions for 2024 which saw more than 265,000ha change hands for a collective price tag of more than $1.2bn.

In the year’s highest-value sale, the US Nasdaq-listed Agriculture & Natural Solutions Acquisition Corporation bought the Australian Food & Agriculture Company portfolio for $780m. This spans 13 NSW farms totalling 225,405ha, including the high-profile Wanganella and Poll Boonoke Merino studs.

The second-highest-value sale was in Queensland, where Melbourne-based Warakirri Asset Management, on behalf of US-headquartered Alkira Farms, which is backed by the Church of Jesus Christ of Latter-Day Saints, purchased the 26,855ha Worral Creek Aggregation for $350m.

It was divested as part of succession planning by long-time owners the Reardon family.

The third-largest sale was Sunshine Farms Aggregation in NSW, which sold by AAM Investment Group for $96m. It encompassed 14,074ha across five non-contiguous landholdings, including 14,766ML of water entitlements.

It was reported that the Teachers Insurance and Annuity Association of America and College Retirement Equities Fund’s Nuveen Natural Capital, the biggest farmland investor in the world, purchased the aggregation.

The 26,855ha Worral Creek Aggregation in Queensland sold for $350m.

JLL agribusiness team director Clayton Smith, who sold the Worral Creek Aggregation with colleagues Chris Holgar and Geoff Warriner, said the sale underscored a key 2024 agribusiness trend – the strong growth in capital interest for water entitlements, which in this case was 65,900 megalitres.

“Water entitlements as an asset class in their own right have continued to strengthen, and 2024 saw some very strong capital growth for the first time in a few years, including at Worral Creek,” he said.

Mr Smith said the entitlements appeal stemmed from the surety they brought to production, the hedge they provided against climate risk and their position as a diminishing commodity.

“With numerous transactions throughout the year, we’ve seen the value of water go up in 2024, with significant new ceilings reached,” he said.

“As an example, we held a water auction in Goondiwindi mid-year, where we sold 2000 megalitres for an average of $5700 per megalitre. Previously, the value of that water would have been considered $4700.”

According to the Australian Bureau of Agricultural and Resource Economics and Sciences, the agriculture sector is forecast to be worth $88.4bn in 2024-25, up $6bn from the previous 12 months.

It will be the second highest result on record, and the chief driver will be higher prices for livestock, which in turn has driven higher livestock production, while the gross value of crop production was forecast to rise by $2.2bn as higher domestic production offset lower prices on global markets.

ABARES said winter crop production volumes have risen by 16 per cent to a total of 55.1 million tonnes thanks to favourable growing conditions across major parts of NSW, Queensland and Western Australia.

However, production volumes in parts of South Australia and Victoria suffered from poor conditions across the winter cropping season, leading to year-on-year declines in both states.

Livestock prices and production are increasing.

While 2025 will feature increasing commodity prices, any downward movement on interest rates will also boost buyer sentiment.

In 2025, many eyes will also be on the new US president Donald Trump who has said he will slap tariffs on China, Canada and Mexico to force them to crackdown on illegal immigration and drug smuggling.

With China being one of the biggest importers of Australian commodities, tariffs may slow growth and Chinese commodity demand, impacting on the agricultural property sector.

However, Mr Holgar remains optimistic.

“Agriculture is continuing to attract strong numbers of new entrants, especially those without previous exposure, who are drawn to both its stability and its continued demystification for investment,” he said.

“It’s a broad and varied sector, meaning there are many different ways to invest across primary production, and food and fibre production. It’s becoming a lot more approachable and mainstream in consideration as part of an investment portfolio.”