Notable uptick in land values
Land prices in 2021 have shown a very discernible uptick across the country at about 10 percent, depending on location, with some choice plots making as much as 20 percent over reserves, according to the IPAV Farming Report launched on Monday by Charlie McConalogue TD, Minister for Agriculture, Food and the Marine.
However, while the dairy, beef and tillage sectors have experienced significant increases, some niche sectors like poultry and pigs experienced real challenges.
Higher input costs arising from spiralling inflation were a prevailing feature of the market with a 100 percent increase in the cost of fertiliser and an eye-watering 250 percent increase in nitrates. MUNSTER HIGHLIGHTS
Some of the highlights from the IPAV Farming Report in Munster include:
In the Cork region - John Hodnett, MIPAV, of Hodnett Property Services in Clonakilty says dairy strongholds have secured some of the best prices in Ireland for medium to large plots of grassland, up to €14,000 an acre, up from €13,000. Forestry achieved €6,500 an acre. Land lettings achieved up to €300 an acre;
In the Limerick region - Tom Crosse, FIPAV, Immediate Past President of IPAV and Group Property Director of GVM Auctioneers in Limerick, says 2021 has seen the strongest demand he had experienced in 15 years. The supply of new land available to lease was very limited and this situation is unlikely to change. He says banks are now willing to lend for the purchase of land. Tom has seen increases of up to 20 percent for quality farmland;
While in the Tipperary Region - Dermot Power, MIPAV, of Power & Walsh in Clonmel says lack of supply has been the main factor with prices achieved among the highest in the country at up to €16,500 an acre for quality grassland. Dairy farmers looking to extend their holdings to comply with headage requirements and the strong bloodstock sector in the region were key drivers.
LACK OF SUPPLY
Pat Davitt, IPAV Chief Executive said there are a number of factors impacting the market, new behavioural changes in response to the pandemic, the Green agenda in policy terms, rising inflation and “the chase for yield”.
“Exiles returning home, the purchase of land by other business owners and the ability to work from home, are all factors increasing competition for the scarce resource that is land, with a lack of supply for both purchase and rental,” he said.
“And in the period ahead the climate change agenda, the new Common Agricultural Policy will impact, as will the already well imbedded trend of farm sizes increasing with the exodus of many parttime farmers arising from poor margins, will all be central factors influencing the market.”
He said if the strong prices experienced in 2021 are maintained it may prove a difficulty in terms of the availability of land for forestry.