Land boom in Leinster but sales slump in west
Prices rise by 8pc nationally with demand strongest in south Leinster and Munster dairy counties
LAND prices have increased by 8pc nationally in the first six months of the year on the back of increased activity by dairy farmers and stud farm owners.
A Farming Independent survey of public auction results to the end of June found that the average cost of agricultural land was €12,021/ac, compared to an average price of €11,123/ac for the corresponding period in 2017.
Competition for land was keenest in Munster and south Leinster, highlighting the influence of dairy expansion in the market.
South Leinster was the dearest region in the country in which to buy land under the hammer, with the average price up almost 20pc to €15,041/ ac, compared to €12,560/ac paid for the first six months of 2017.
The strength of the market in the south-east resulted in a 25pc lift in the value of public auction sales, with €14.58m generated in total.
Wexford auctioneer David Quinn said this year saw a continuing switch from beef and cereals to dairying, with some of the top suckler and tillage farmers moving into milk.
He said this trend was underpinning activity in the land market, as farmers who wanted to grow their operations have had to go into cows.
“These suckler and tillage guys have top-class operations and pushed themselves to the limit but they are no match for the dairy men so they are changing tack,” he said.
Sales in Munster between January and June were strong, with the average land price increasing to €12,880/ac.
The Munster figures do not include the sale in Cork of a 101ac farm at Douglas on the outskirts of the city that made €5.8m or €58,000/ac at auction in June.
Tom Crosse of auctioneering firm GVM says the Munster figures are a south Tipperary and Cork phenomenon, where equestrian buyers and dairy farmers are driving the market.
“Without the dairy farmer there would be no land market in this end of the country — milk and mares are driving the sales,” he said.
Buoyant
However, the buoyant southern land market has not been mirrored in the north and west of the country.
In north Leinster the amount of land sold under the hammer is down by 11pc, while the amount of money generated at auction is back 30pc.
The average land price dropped from €11,747/ac to €9,216/ac, a fall of 21pc.
Gordon Cobbe of GVM Tullamore said the results reflected a distinct change in the fabric of farming in the midlands.
“While the auction season hasn’t been strong here in our part of Leinster, the private treaty sales are going well,” he said.
“Dairy farmers are the main customers but they are not looking for the top-end €10,000/ac land, they are looking for middle of the road grazing that is relatively firm for most of the year.”
In Connacht-Ulster the amount of land sold at auction declined by 64pc, with the amount of revenue generated down by 70pc, and the average per acre price down by 16pc.
Ballina auctioneer Karl Fox said he had given up on auctions as a means of selling land in the west.
“The banks are not giving any money without significant cash being included by the customer and that is a difficulty for farmers at this side of the country,” he explained.