The average price of farmland leases in Uruguay remained stable in the first half of 2023, at USD 155 per hectare per year. This data, extracted from the report “Land Price Series: Leases” published by the Ministry of Livestock, Agriculture and Fisheries (MGAP) through the Office of Agricultural Statistics (DIEA), provides an accurate picture of market behavior during this period.
While the average price remained stable, there was a slight decrease in the number of lease contracts, 7% less than in the same period of the previous year. The leased area also experienced a 12% reduction, totaling 365,406 hectares.
The analysis of the report reveals that the second quarter (April-June) was the period of greatest activity, concentrating the highest number of lease operations. This could be associated with the annual planning of agricultural and livestock activities.
In terms of geographical distribution, the departments with the largest leased area were Salto, Paysandú and Soriano. This trend is in line with previous years and is explained by the quality of the land and the infrastructure available in these regions.
The sectors with the largest leased area were livestock, dryland agriculture and mixed farming. Livestock continues to be the main destination for leases, with 38% of the total area, followed by dryland agriculture (22%) and mixed farming (25%).
Average lease prices by destination showed significant differences. Dryland agriculture was the sector with the highest price, at USD 318/ha/year, followed by dairy (USD 272/ha/year) and rice (USD 177/ha/year). Livestock, on the other hand, had an average price of USD 86/ha/year, while mixed farming was in an intermediate value, with USD 169/ha/year.
Contract Terms: Preference for 2-Year Leases:
Regarding contract terms, there is a greater preference for two-year contracts, which represented 25% of all operations. One-year contracts also had a significant participation (21%), while contracts for more than five years only reached 11%.
Conclusions: Stability with Trends to Watch:
Overall, the MGAP-DIEA report indicates that the farmland lease market in Uruguay remained stable in the first half of 2023. While there was a slight decrease in the number of operations and the leased area, the average price remained constant.
It is important to note that this report only reflects the first half of the year, so it will be necessary to analyze the market behavior in the coming months to determine if these trends consolidate.
However, there are challenges that the sector must face, such as the volatility of international commodity prices and competition for land with other sectors such as forestry.
In this context, diversification of production and a commitment to innovation will be key to the sustained growth of the Uruguayan agricultural sector.
Source:
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