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August 17, 2017

Cost of Good Agricultural Land in Parana Averages $8,070 per acre

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Department of Rural Economics in the state of Parana (Deral) has just completed the process of revising the way they classify agricultural land in the state, which is Brazil's second largest producer of soybeans and corn. Over the last 12 months and under their revised model, the average price of good agricultural land in the state that is fertile and generally flat averaged R$ 61,800 per hectare or approximately $8,070 dollars per acre.

The highest land values were found in the region of Maringa in northern Parana where the average was R$ 75,800 per hectare or approximately $9,900 per acre. The land with the lowest agricultural value averaged R$ 9,500 per hectare or approximately $1,250 per acre.

The land in northern and western Parana has the greatest agricultural value because it is the flattest, the most fertile, and capable of producing several crops per year. Most of the first crop planted in that region of the state is devoted to soybeans with a second crop devoted to corn in the more northern locations and winter wheat in the more southern locations.

The lowest land values were found in the hilly areas of southwestern Parana where the land has limited agricultural potential. The average value of the land in that area was just R$ 1,300 per hectare or approximately $170 per acre.

Land prices could vary in the future depending on the following: prices of soybeans and corn, quantity of land for sale in the region, local development, specific characteristics of the land, and if the land is suitable for mechanized agriculture.

The price of land in the state is similar to the past few years due to the declining prices for soybeans, which is the principal crop. On the other hand, land values have not fallen either because of improved soybean yields over the past four years. All of these conversions from reals per hectare to dollars per acre were done using the exchange rate of 3.1 Brazilian reals per U.S. dollar.