Auctioneers around the country are reporting strong increases in demand and competition between farmers for land available to rent, either by conacre or long-term lease.

The increase in demand is having a direct effect on rental fees, with prices in excess of €300/acre on long-term fixed leases (a minimum of five years) quoted in some areas of the country.

Some auctioneers are noticing a greater increase in landowners entering into long-term lease agreements, although conacre does remain the more favoured arrangement in many regions.

In 2013, only 3,600 farmers leased land long-term, while over 43,000 farmers rented 650,000ha of conacre. Last October’s budget made significant changes to encourage a higher uptake of long-term leasing.

Upward trend

An upward trend in rental prices is certainly evident, but the reasons for the increases vary by region. In strong dairying regions, much of the demand is driven by farmers looking to expand their milking platform for the coming years.

Another driving factor is new entrant farmers who are actively seeking land in order to maximise receipts under the National Reserve and Young Farmers Scheme, where they can apply for entitlements on up to 90ha.

In Cork, auctioneers are reporting a surge in demand for available land from farmers, including a 160-acre farm with no farm buildings or milking parlour in Kinsale that was snapped up on a 10-year fixed lease at €300/acre by a new-entrant dairy farmer.

Clonakilty-based auctioneer John Hodnett of Hodnett Forde Property, reported a range of prices from €150/ac to over €300/ac for land on a long-term lease.

Hodnett said there is far more interest than previous years, which he believes is driven by new entrant farmers who are all willing to travel for land.

Young farmers

Auctioneer David Quinn, who is based in the Gorey and Carnew area, reported a similar trend. According to Quinn, for every farmer giving up a piece of land he has five more looking, particularly young farmers looking for land to increase entitlements.

Quinn is reporting prices anywhere in the region of €200/ac for old pasture to over €300/acre for the best-quality land. Some dairy farmers in the area are said to be taking tillage land on long-term leases at strong prices and setting about re-seeding, fencing and supplying water to the land.

“What’s surprising is that everything would have pointed to farmers consolidating for the year that’s in it,” says Quinn. “After the poor grain prices and difficult year for beef farmers, I thought many would be giving up land.”

Strong demand

In areas of the country where dairying is less prevalent and not as much of factor in the market, auctioneers are still reporting strong demand from farmers. Stephen Barry, selling agent with Raymond Potterton auctioneers, Navan, says most clients he deals with in Meath and Westmeath are beef and suckler farmers.

According to Barry, 95% of the land rented in either county is by conacre and generally varies in price from €140/ac to €250/ac, depending on quality.

“We started letting land before Christmas because of the Young Farmers Scheme as we had a lot of new entrants, but what is really surprising is how few people have given up land this year,” says Barry.

The price of good productive land in the midlands and east remains steady but prices for average or weaker land are increasing.