Growing Soybean and Beef Demand Is Seen Lifting Prices in Uruguay Land

Bloomberg — Soaring demand for Uruguay’s soybeans and beef are helping boost the country’s rural land prices for a second straight year, according to land brokers in the South American nation.

“This year many producers are starting to incorporate the increase in soy and meat” into land values,” said Pablo Albano, who runs the real estate business of land-and-cattle broker Zambrano & Cia. “I think land is going to rise at least 10% to 20%.”

Albano closed more than 10 transactions this year, and hasn’t been this busy since he started running the division in 2010. Rival broker Escritorio Dutra has seen the amount of transactions double this year with property values rising 5% to 10%, led by Uruguayan buyers, according to the firm’s director, Daniel Dutra. Both expect land values will plateau next year, barring large swings in commodity prices.

Soybean futures have surged 9.1% this year in Chicago amid rising global demand for food amid supply snags due to drought and Russia’s war in Ukraine, one of the world’s bread baskets. That’s helping drive up interest for agricultural goods from other global suppliers including Uruguay.

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Uruguay is a major Latin American soybean producer and consistently ranks among the Top 10 global beef exporting nations. The country’s beef exports are on pace to set a new record this year, with shipments worth almost $1.9 billion through August. Uruguay is also an exporter of forestry products, including wood pulp.

Rising prices for such commodities has helped boost the returns on agricultural lands, increasing their value. Uruguay land sales jumped 51% to almost 232,000 hectares (573,000 acres), worth about $811 million last year. The average price per hectare rose 6% to a four-year high of almost $3,500, according to data compiled by Uruguay’s agriculture ministry.

While more properties are changing hands, the market is far from reaching a speculative bubble, according to the brokers.

“There is neither a lot of demand nor a lot of supply,” said Dutra, whose family-run firm traces its roots to 1898.

Uruguayans account for most of the land buyers, followed by smaller number of Europeans, Americans and South Americans. Albano said he has received inquiries from Argentines with $30 million to invest in farming and grazing land. Dutra is also seeing prospective buyers from further afield.

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“We’ve been visited by Chileans,” he said. “It’s a trend that we haven’t had in previous years.”

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