As cropping preparation is about to get underway in some areas of the state, farmers looking for more land to run their operation over are under negotiations for leased land.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
Ray White Rural SA, rural sales associate Sam Krieg said in the past 12 months a number of farming businesses were offering lease or share farming arrangements to the open market where a pending retirement or personal or business circumstances had changed.
"Many lessees like properties they can step straight into and start a production system," he said.
"Properties that have had a break crop the year before it's leased are sometimes more attractive because the lessee can come into their first year with the potential for a profitable crop.
"With grazing leases at the moment, sometimes a longer lease term may be more attractive to help balance out some of the uncertainty within the livestock market.
He said high rainfall country always attracted strong demand and leasing demand has remained quite strong overall.
"We recently had a lease near Georgetown which attracted widespread interest from all over the Mid North region," he said.
"Providing production details on the rotation of crops, fertiliser and chemical history and any residual effects, quality of fencing and secure water is very important to potential lessees "
He said leasing provided a great opportunity for keen younger farmers for entry into a farming enterprise as large capital wasn't required.
"Leasing is often not just about the highest lease price offered but which potential lessee will best look after your farmland and protect or even improve your valuable asset," he said.
"We have seen that the highest offer to lease is not necessarily accepted.
"The lessor may well consider a number of factors and the past history of the potential lessee and often proposed business plans are carefully considered.
"In the Mid North Leasing rates are currently in the range of 2-3 per cent of the property's value - it is a good ball-park figure to start with but a potential lessee should carefully do their own calculations.
"But the Northern Pastoral areas are often based more on production, and obviously, there is quite a range of different properties with very different seasonal volatility and different land types.
"The majority of grazing properties seem to be more consistent when figuring out lease rates on a dollar per head carrying capacity basis."
CBRE associate director Angus Bills has a property at Kyancutta which is for lease or for sale and said the option to purchase in the future worked well for both the landlord and tenant.
"If they've got an option to buy it, they're probably more likely to continue fertiliser and good management practices if they know there might be a chance to own it down the track," he said.
"Typically, I'd say a lot of leases are drawn up just over the fence.
"This one obviously a little bit different because it can be sold but I'd say a lot of them are a private transaction.
"It is pretty hard to put a dollar value or an average on the Eyre Peninsula only because of how much the country does vary.
"The one that we're looking at the moment, is probably high $30s an acre (low $90s per hectare) but that is not an average over the whole Eyre Peninsula at all."
He said regions like Cummins and further south were more productive and higher priced than the Kyancutta property on the upper EP.
"But management of the property is a big one," he said.
"Some people may take a lesser priced value based on how good the tenancy is."
Over on the Yorke Peninsula leased land varies with rainfall and proximity to the coast according to Elders Minlaton rural real estate sales representative Miles Cockington.
"The better country for growing lentils etc is definitely more favorable than some of the lesser marginal areas and coastal," he said.
"Depending on what sort of type of country we're talking about, leasing rates have popped on another 10 to 20pc more value for leasing.
"The lesser soils are around $150/ac ($370/ha) up to $300/ac ($741/ha) plus annually for the better country."
Nutrien Harcourts Strathalbyn rural real estate specialist Warrick Thorpe said the Adelaide Hills and Fluerieu Peninsula were in demand for grazing land.
"There's not much publicly listed in the hills to put out to the open market where there is a demand," he said.
"There's plenty of young lads who can't buy land, love agriculture and just want to have a crack in life, but they just need somewhere to lease, so demand for lease is there but it's just getting the places to accommodate those guys.
"But with many over the fence transactions, an exit strategy is important - if they can't work that out before going in, they shouldn't be getting into it."
He said now cattle prices were starting to come back up again, there was a lot more confidence to lease again.
"Lessees are looking for pasture and what the land can actually carry, good boundary fences, good water points, stock shelter and potentially, fertilizer history," he said.
"Your higher rainfall is probably more like $100 to $160/ac or $250 to $400/ha - that upper end has to be good pasture, good improvement, good fertilizer history, it's got to have everything going right for it, to get that sort of money."
But down in the South East leased land values for grazing country have come back in line with sale market values according to SAL real estate rural land sales agent Cameron Grundy.
"The trend which has been like it for a long time is the opportunity to lease country from within the district is always highly sought after by lessees," he said.
"Leasing for grazing country has probably dropped by about 25pc which is a reflection of land values dropping.
"Having said that, cropping land does not appear to have dropped in value recently and neither has leasing rates.
"The South East varies a lot, but cropping land more recently has been up to $250 an acre ($617.50/ha) dry land and grazing cattle country has been up to $180/ac ($444.60/ha).
"But the grazing, leasing rates have come off considerably from $180 per acre per annum."
He said they saw land holders more inclined to lease their land out rather than sell it as a good long term strategy for those in semi retirement mode.