Letting land supply hits a record low
Potato growers paying up to €600/ac and grazing ground trading hands for as high as €350/ac
The supply of letting land has hit a record low and prices have climbed as high as €350/ac for grazing and up to €600/ac for potato ground.
Auctioneers throughout the country have described the supply of letting land as practically non-existent.
Dairy farmers are dominating the letting scene in southern counties and are also moving outside their traditional heartlands in search of land for fodder, zero grazing and replacements.
The amount of new land on the letting market has been declining steadily since 2015 when tax breaks for long-term letting took effect.
Proposed changes in the new CAP are also a factor.
“Landowners are afraid that 2017/18 and 2019 may be regarded as reference years in relation to the new regime of entitlements,” said Dundalk auctioneer Raymond Fee.
“If they are not farming the land themselves during one of these reference years, they may be left without entitlements.”
However, some analysts are questioning the viability of the current letting rates.
Carlow-based agri-advisor Pat Minnock said there are concerns that there is not enough of a margin for farmers paying the higher rates.
“You would be concerned when you hear the type of money changing hands. I recommend €150/ac is enough for tillage ground and you can justify €200 or €250/ac for some grassland for dairying depending on the situation, but after that it is hard to justify,” he said.
Mr Minnock also urged people to act with caution on long-term leases and ensure the person renting will be able to pay the money. Otherwise, they could end up having to pay back the tax relief if the lease falls through, he warned.
On the supply issue, Carlow auctioneer John Dawson said there is virtually no land available in his area for rent.
Roscommon auctioneer John Earley said land is scarce and prices being paid to date are much higher than in previous years, with decent grazing land making €220/ac.
“You would have to ask if it’s worth it given the return,” he said.
Stephen Barry of Navan-based auctioneers Raymond Potterton is seeing prices of €160 to €205/ac for weaker grazing.
“If I had stubble ground for spuds, I could get €450/ac for it and up to €600/ac,” he said. In Wexford, Frank McGuinness of Sherry FitzGerald O’Leary Kinsella also said there is very little land coming on the market
“Dairy farmers and tillage farmers are willing to pay up to €300/ac for ground around here,” he said.
Cork auctioneer Dan Fleming describes the scarcity as “savage”, especially for tillage people.
“The tillage man has lost out to the cow man and there is literally no ground available to grow cereal, potatoes or vegetables – it is very serious for these people,” he said.
He has seen land make from €250/ac to €350/ac, and in one case €400/ac.
Meanwhile, the land sales season has started strongly with €18,000/ac and €15,600/ac paid at auctions in Cork and Wexford respectively.