According to the latest Agriculture Review from Sherry Fitzgerald, land prices are sitting at an average of €9,500/acre for quarter two of 2017.

According to the report, Irish agricultural land prices remained steady in the opening half of 2017, following a year of price deflation over the course of 2016.

The national average price of land, as reported by Sherry FitzGerald, has risen by a marginal 0.3% in the six months to June 2017. However, the overall trend, in the 12 months to June 2017, shows a drop of 1.5% in land prices.

Land had an average price of €2,650 in June 2016. The most likely cause of this could perhaps be linked to the Brexit vote and the changes in currency that have been present in the intervening period.

The report proceeds to outline how there has been a pickup in the market this year, with farmers and investors showing greater confidence in investing. This increased confidence has been attributed to the rebounding of milk prices, which has, in turn, led to an increased demand for land.

Prime tillage land showed the largest price increase in the six-month period to June, by 0.8% to stand at €11,400/acre. Grassland and marginal land remained relatively unchanged during this period, with little uplift in demand evident.

The border counties received a boost for the first half of the year, with land prices rising by 1.8% to stand at €9,200/acre, with the price increase reportedly being driven by increased demand from dairy and tillage farmers.

The southeast and midwest regions followed, with prices climbing by approximately 1% each for the first six months of the year. A year-on-year increase was seen from the midwest region of 1.9%. This was partly linked to increase in dairy farms sizes in this area.

Fluctuation

The southwest has seen a greater degree of fluctuations over the past few years, with prices rising in both 2014 and 2015.

However, prices in the area dropped by 6.3% in 2016. This has dropped by a further 1% for the first six months of 2017 to now sit at €9,900/acre.

One of the prominent reasons for many of these rises is due to the increased milk cheques farmers are getting, according to the report. However, the fear is that this will lead to increased land rental prices, which could have a negative overall influence on farm profitability.

Again, the threat Brexit and the CAP 2020 reform only adds to the uncertainty surrounding the land market, causing many farmers to hold off on land investments until more stability exists in the agriculture sector.