Savills recently published a new Global Farmland Index was launched in 2012 and it is based on data from 15 key farmland markets and aims to provide a comparative indication of farmland value trends around the globe. Farmland Uruguay provided input on values of this country.
One of the charts shows that Uruguay offers land at nearly the lowest acquisition price. The parameter used is the cost of acquiring land in order to grow a ton of wheat. The ‘land cost for wheat production’ takes the average value of farmland in 2015 and divides it by the average harvest wheat yield over seven years (2008 to 2014). By taking a seven year period it allows for any weather fluctuations to be accounted for.
The Global Farmland Index recorded an average annualized growth of 14.8% since 2002 and 6.6% over the past five years. The Index, recording strong steady growth with reduced volatility, shows the benefit of a mixed regional portfolio.