Price of agricultural land in Cork dipped by 4 per cent during 2018

REPORT FINDS THAT BREXIT AND POOR WEATHER IMPACTED DEMAND FOR LAND 11 reasons why land is not selling

NEW figures have revealed that the price of agricultural land in Cork dropped by four per cent during 2018 compared to the figure for the previous year.

That’s according to the 12th annual Irish Farmers’ Journal Land Price Report, which provides a comprehensive breakdown of agricultural land prices across each county.

The report, which is used by the Government and the Central Bank as the official guide to land prices across the country, showed the average 2018 price for land in Cork stood at €11,200 per acre, compared to the figure of €11,444 recorded for 2017.

Interestingly, the 2017 figure had represented a 16 per cent increase on the price recorded for 2016 of €10,053.

For the second year in succession the report showed that Cork also brought the most land of any county to market during 2018 at almost 9,500 acres, an increase of 25 per cent on the 2017 figures of 7,134 acres. Last year’s total was almost back to the level recorded in 2016 of 9,317 acres.

The report found that dairy farmers purchased more than half of the land sold in Cork last year. Business-people were also active, with residential holdings close to urban centres proving popular for those with a farming interest.

This was a trend reflected across the country, with more than 17 per cent of land parcels sold during 2018 purchased by those with business interests – with the average price paid more than €12,000 per acre reflecting what the report’s authors said were “the lengths to which those with business interests were willing to go” to secure land.

In some notable instances this price was well exceeded, with the highest being a 101acre farm in Douglas which sold for €5.8 million, or €58,000 per acre.

Nationally, the report showed the average price of land stood at €9,072 per acre in 2018, a slight decrease of 0.18 per cent on the figure €9,088 in 2017. The 2017 figure was the highest for three-years and was the first time the average per-acre selling price had risen above the €9,000 mark.

However, the triple whammy of extreme weather events, poor beef prices and the threat of Brexit has resulted in an 11 per cent reduction in the amount of land brought to market in 2018 to 70,296 acres, down from 78,350 in 2017.

In turn just 45 per cent of the land offered to market was actually sold, with the total value of land transaction across the Republic last year standing at €305 million, down from €313 million in 2017.

The report found that the difficult weather conditions were a “significant factor” in this decline with snow and the fodder crisis in the spring and the summer drought having an impact on demand as land became a secondary concern, particularly in dairy dominated areas.

Broken down into agri-sectors, the report found that dairy farmers were paying an average of almost €10,000 per acre and while they account for just 14 per cent of the total number of farmers, they accounted for almost a quarter of all purchases in 2018.

Beef farmers are paying just €8,000 per acre and while they outnumber their dairy counterparts by an almost four to one they account for just 33 per cent

* No neighbours:

is the first step.

* Brexit: * Finance: * Sentiment: * Quality: * Location: * Size: * Weather:

Having interested farmers in the locality

* Unrealistic Expectations:

Just because higher prices are seen in close proximity doesn’t mean the holding will make a similar price.

Has caused uncertainty with reduced enquiries and demand for land.

The fodder crisis and subsequent drought, increased costs on farms during 2018.

A poor year for beef reduced profitability

* Commodity Prices:

and sentiment.

There is a definite correlation between sentiment and land sales.

“Good land will sell” is typical phrase you will hear – farmers selling poorer-quality ground are at the mercy of interested neighbours.

Areas with traditionally strong farmers and top quality land will more likely have a greater chance of selling.

* Age demographic of farmers:

A noticeable trend emerging is the correlation between the lack of young farmers and reduced sales in that area.

There is always higher competition for smaller holdings under 40 acres.

The extremes of last year’s weather conditions pushed up costs on Irish farms and reduced their ability to access finance and made purchasing land a secondary priority in some cases.

of sales, with the report saying this highlighted the “financial disparity and spending power” between both sectors.

Tillage farmers are paying more than €11,500 per acre, making up just 2.5 per cent of sales with the report claiming that despite being restricted by land quality, expansion by dairy farmers is leaving them with no choice but to compete on price.

Forestry once again proved to be a big player, with lucrative premiums and tax-free income on clear fell meaning that pensions funds, private investors and farmers are increasing regarding forestry as a solid, low-risk investment.

This, according to the report, has served to increase the base price of marginal land in many parts of the country.