Letting land supply at a record low

Dairy expansion, tax relief changes and worries about the new CAP have combined to make letting land a very scarce commodity, reports

THE amount of land available for letting is at an all-time low, while prices have climbed to €350/ac for grazing ground and up to almost €600/ac per year for potato ground.

Auctioneers are describing the supply of letting land as minimal or non-existent. For those waiting for a flood of land to appear on the market as the first of the five-year leases expire, auctioneers tell the Farming Independent that many of these leases are being turned over for another five years at an increased rent.

According to John Dawson of Tullow, the amount of new land on the letting market has been declining steadily since reaching a peak in 2015, just before the tax breaks for longterm letting took hold.

Since then, according to Mr Dawson, the decline year-onyear has been like steps of stairs, and this year he says there is virtually no land available in his area for rent.

Three factors are blamed for the scarcity. The first is the tax relief for long-term letting introduced in Budget 2015.

This has taken huge swathes of conacre off the market and has encouraged land owners, especially non-farming landowners, to hold on to land they may have thought of selling.

The second factor is the massive expansion in the dairy sector, which has meant that dairy farmers are very active in the letting market, snapping up all available ground, be it for grazing for the dairy herd, for followers or for fodder.

Entitlements

Dundalk auctioneer Raymond Fee says a third factor contributing to the scarcity is the anticipation of changes in the new CAP.

“Landowners are afraid that 2017/18 and 2019 may be regarded as reference years in relation to the new regime of entitlements,” he said. “If they are not farming the land themselves during one of these reference years they may be left without entitlements.”

Frank McGuinness of Sherry FitzGerald O’Leary Kinsella says there is very little land coming on the market in the south east.

“Dairy farmers and tillage farmers are willing to pay up to €300/ac for ground around here,” he said.

Blarney 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.

Joseph Coogan of Castlecomer claims there will be little relief even when the first of the five-year leased land comes back on the market this year and next year.

“I have already had five-year leases turned over with new lease prices increasing by €70, €80 or €100/ac,” he said.

In Meath, Thomas Potterton says demand far outstrips supply,

“Milk is at an all-time high and with so much land on long-term lease there is little land to be got for letting. Even the conacre is rising at a rate of between €10 and €20/ac, with prices ranging from €160/ac to €200/ac,” he said.

While Mr Potterton says the dairy farmer is dominating the letting, he recently had an auction where a drystock bidder won the day. For auction was the lease of a 35ac farm that was just out of a five-year lease.

“It was an ideal situation,” he said, “the ground had been in potatoes for two years, in cereals for three and had just been reseeded with grass.”

Three bidders — two dairy farmers and a drystock farmer — fought it out, with the drystock farmer taking the ground for five years at €300/ ac with no review.

Like Joe Coogan, Mr Potterton also recently renewed a five-year lease on a farm of over 100ac where the price increased by €50/ac.

According to Mr Potterton farmers are coming to Meath from as far away as Sligo and Leitrim looking for letting land.

Stephen Barry of Raymond Pottertons and Raymond Fee both tell of a relatively new development where beef farmers are cutting back their beef herds to a minimum and concentrating on growing fodder, either selling harvested fodder or selling the grass to dairy farmers who will see to the harvesting.

Mr Barry is seeing prices of €160 to €205/ac for weaker grazing.

“I could get €210 for tillage land, but it’s not there, and if I had stubble ground for spuds I could get €450/ac for it and up to €600/ac,” he said.

In the west John Earley of Roscommon expects to have about 20 new land lettings this year but already he says land is scarce and prices being paid to date are much higher than in previous years.

“I see decent grazing land making €220/ac, but you would have to ask if it’s worth it given the return,” he said.

FARMERS ARE COMING TO MEATH FROM SLIGO AND LEITRIM LOOKING FOR LAND