Farmland values: Top prices still being paid for the best land
Prices Land Go' Premium Land That Currently Pay Are For Many Needs Of In ’ready To Investing A Farmers Lot Irish Rather Willing Work To Than
In keeping with the trend for a number of years now, farmers are still paying big premiums for the property that’s ready to go, rather than making a riskier and/or more time-consuming investment in less perfect land.
“If a really class place comes up, then the form book goes out the window,” says Mike, The high inputs and the drop in milk prices last year are very possible being felt more so this year, at a time when many farmers would be awaiting another uplift of fortune from the weather gods. For grain farmers, the profitability issue is even more acute.
In spite of all of those factors, however, there is nothing negative about the price of land at the moment.
“The price of land in this country shows no logic,” says Mike. “It’s not related to return on investment, it’s not related to the market in either dairying or tillage. It’s due to lack of supply.”
Land is geographical. If a farmer in West Waterford is awaiting the arrival of 50 acres of pasture for the last five years or more in order to expand his holding, 50 acres in Meath are no good to him. But if it comes up next door, he will put up all the money he can to buy it.
“Land is funny that way,” says Mike. “You could actually have a piece of ground make €23,000 or €25,000 an acre in a particular townland. And in a month’s time, a similar land parcel in the same townland might only make €15,000 an acre.
“It’s very hard to predict where land is going to be in two or three years’ time. If I was to bet, I’d say that it will be about the same as it is now.
“We’re at a crossroads with land prices at the moment. The big question is what is going to happen with the nitrates derogation and the government announced recently that they’re going to apply to have it continued. We still have next year but dairy farmers are out there looking for land.”
“In many ways, what is happening at the moment is just a continuation of what has been happening since the milk quotas were done away with,” says Andy Donoghue of Clonakilty-based auctioneers Hodnett Forde Property Services. “We’re starting to see the smaller operators peter out and the larger operators progress.
“All that we can hope for here in West Cork is that the suckler and the beef prices come on a bit as well. We have a lot of people in the game that are reliant on those prices being strong.”
The tillage sector may not have been very good over the last year or so, but tillage farmers and tillage land prices are far from being sidelined.
“Obviously, tillage farmers are heavily reliant on weather and input prices,” says Andy, “and there’s no doubt but they would have got hammered by the bad weather last year – that was particularly with the potato and vegetable farmers, so it will be interesting to see how that side of it fares out.
"The cereal farmers, however, seem to be continuing as is. When you look at land leasing prices for cereal farmers, they’re still competing well with dairy farmers.”