As I sat down with auctioneer Paul Murtagh and his son Dillon in their Mullingar-based office last week, it became increasingly apparent that Brexit is a prominent topic of conversion for farmers and for business people in the region.

“Brexit and the weather are two of the main talking points around here at the moment,” said Dillon. “I don’t think people in Northern Ireland ever believed it was going to happen, never mind being prepared for it. It wasn’t on their radar.”

Over the last few years, customers from Northern Ireland have been notably active in the agricultural land market in the south, particularly for farms in counties such as Leitrim, Longford, Westmeath, Cavan and Meath.

“The fact that the euro/sterling exchange rate was so favourable gave them a significant competitive advantage and in many instances, underpinned the sale of large farms in this region. The Northern Ireland buyer was really only interested in the bigger block of land – anything over 120 acres – and if he wasn’t the successful buyer, he was likely to be the underbidder,” remarked Paul.

When the result finally came through that Britain had voted to leave the EU back in June, the pound dropped by 10% to 15% within a couple of days. Anyone who had bought a farm in the south in the weeks preceding the Brexit referendum and hadn’t changed their money to euro, were likely to feel a bit sickened.

But has this market dried up?

“The good is gone out of it. It will certainly impact the market for big farms. Not so much for smaller parcels – these are driven by locals. When the dust does eventually settle, it will be interesting to see if farmers in the North will start to source land here again, just to keep a foothold in the EU,” added Paul.

Aside from the Brexit result, the drop in milk price over the past 15 months has also impacted the market.

“When milk prices started to fall, the lending institutions began to tighten the lending strings, not just for dairy farmers, but for all farmers. Around here, there are more beef and suckler farmers.

“Some of these guys would have been interested in buying a bit of land but found it a challenge to borrow money over the past 12 months. Lately though, it would appear that the lenders seem to be relaxing the strings a little,” said Dillon.

Apart from the capacity to borrow, beef farmers in the region also felt the impact of Brexit almost immediately when the factories jumped on the bandwagon and pulled beef prices by 10c/kg in the weeks following the referendum (and a lot more since then) – a price plummet that has failed to recover to any significant extent since then. Hence, it’s easy to see why Brexit is such a popular topic of conversion in the area.

Tougher year

Similar to many auctioneers around the country, this year has been a bit tougher for the Murtaghs.

“Supply is back, demand is steady but not bursting at the seams and the price for certain types of properties is back by about 10%. It really comes down to the locals and their purchasing ability. During the recession, local buyers propped up the agricultural land market and, in the main, they continue to underpin it today,” said Paul.

Long-term leases

One of the biggest changes in the farming landscape, particularly over the past two years, has been the significant uptake of long-term leases right across the country, and Westmeath is no different.

“Each year, more and more landowners are coming around to the idea of long-term leasing and, as a result, the numbers of conacre lettings are falling. For a farmer who is between two minds about what to do, the option to lease long-term is certainly far more tax efficient that the option to sell. The fact that more land is tied up in long-term leases may have contributed to the drop in the supply of land for sale in recent years. From our experience, a lot more land is let or leased in Westmeath when compared to the rest of the midlands,” added Paul.

Aging farming population

For over 10 years, I have travelled to Westmeath on numerous occasions to view farms for sale, many of which were big sprawling estates ranging from 100 to 400 acres in size that were crying out to be farmed. In a lot of these cases, there was one common denominator – they were executors’ sales. It always struck me that there is an aging farming population in Westmeath and a clear lack of young blood coming on.

“The Celtic Tiger took a lot of our farming youth. Farmers’ sons took up building jobs in Dublin or headed off to get a third-level qualification. The lack of young blood is really evident in Westmeath but it’s a bit different in Longford. There appears to be a lot more younger farmers in Longford and a much stronger appetite for land,” explained Dillon.

“For a farmer with a bit of drive and vision, I would view the Westmeath situation as an opportunity. If someone in Munster or east Leinster was willing to relocate, he could acquire a sizeable block of land at a more affordable price and, once more, be almost guaranteed to have the option to either lease or buy more land in the future because of its frequency to the market. An opportunity like this might be harder got in most other counties,” Dillon added.