Tag

rental price land Uruguay | Uruguay Farm

Closing new rental agreements

April and May are the months to negotiate rental agreements. This year with the pleasant situation that prices for grains are on the highest level since several years. Most rental contracts are set in kg of soybeans per hectare. For example, crop fields where the rental price is 900 kg of soybean per hectare. A year ago, the price was 320 USD per ton and today the price is 557 USD per ton. That means a year ago 900 kg x 0,32 = 288 USD per hectare and this year 900 kg x 0.557 =  501 USD per hectare. A more than significant increase in rental income for landowners.

We can advise landowners on different ways to set up rental agreements in order to improve the return on investment.

New crop lease

farm lease Uruguay

For a Dutch client who bought a crop farm at the end of last year we negotiated a lease contract for one year. The rental price we agreed upon was significantly higher than the existing contract and this will be paid upfront.

After this first year, a longer term objective will be defined including repair of fences, house and improvement of land. Since the tenant is a nearby farmer he is in condition to make constant improvements to the land and installations. This tenant already cleaned the area around the house for his cattle grazing during our negotiations.

Price and liquidity are always important issues to take into consideration, but good agricultural practices as well.

We use the statistical information published by the Ministry as well as our market knowledge based on daily conversations with tenants.

The Ministry of Agriculture published statistical information about lease prices of land for agricultural use in 2019. This information is based on the registered 1477 lease contracts in this period. The statistics show the different values per region and per activity.

In 2019 there were less registered lease contracts, covering less area and a lower average rental price. The total value of all closed rental contracts adds up to 87 M USD with an average price per hectare of 107 USD.

The highest lease prices per hectare were paid in Colonia (168 USD), Rio Negro (146 USD) and Soriano (175 USD) where you find the best land for row cropping. The prices mentioned here are averahes per region oncluding different activities. The lowest lease prices were paid in Artigas and Rivera (68 USD per hectare).

The average price for livestock was 69 USD per hectare, for mixed farming 134 USD per hectare, in forestry 139 USD per hectare and for row cropping 194 USD per hectare. The prices mentioned here are averages per activity in different regions.

The Ministry of Agriculture also published a chart with prices per activity in each region. Upon request we can send you this chart.