Dairy farmers were expected to be active in the land market in 2023 - and that turned out to be the case. In particular, they have been the primary drivers of the higher, record prices seen for leased land since the start of the year.
Across much of the country, rents for new leases agreed this spring, for good land, were mostly in the range of €300/ac to €600/ac per year. However, one or two prices as high as €700/ac were reported for land in west Cork.
In the majority of cases, these high prices were agreed by dairy farmers. Other sectors don’t have the profits to fund these rents and are not under the same immediate pressure to acquire additional land. The high prices were seen across Munster and in strong dairying areas elsewhere, such as Kilkenny.
Sales market
But dairy farmers have also been active in the land sales market. Estimates are that dairy farmers have bought between a quarter and a third of the holdings sold so far in 2023.
A recent example was two dairy farmers who joined forces with a third farmer last month to buy a residential 50ac farm in Co Laois. They paid €28,000/ac for this farm and are now dividing it up among themselves.
The expected changes to derogation limits mean that demand from dairy farmers for land will continue to be disproportionally high, despite lower milk prices.
When the land leasing season reopens in the autumn the recent high prices are likely to continue to be seen. Demand from dairy farmers act as a floor under land sale prices in dairying areas.
Demand for contract-rearing young dairy stock will support demand for good land in other areas too. If stock have to be loaded on a truck it doesn’t really matter how far they go.
SHARING OPTIONS