Regulatory changes will replace strong milk prices as driver of dairy farmer land demand, the Society of Chartered Surveyors Ireland (SCSI) and Teagasc have said.
Farmers in the highest nitrates band hit stocking rate limits with fewer cows than before. / Donal O'Leary
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The introduction of cow banding nitrates rules for dairy farmers in 2023 is anticipated to push land sale and rental prices upwards, according to a recently published Society of Chartered Surveyors Ireland (SCSI) and Teagasc report.
Upwards price pressure is likely to be strongest in dominant dairy regions and where stocking rates are highest, as herds in the highest banding category must secure extra land or reduce output to maintain cow numbers.
The forecast is based on the basic principles of supply and demand which would suggest that dairy farmers will be more willing to put higher bids on land offered for rent on the market.
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Young farmers
The report points to young farmers and new entrants as two groups who could face higher land prices in places where there is a high concentration of dairying.
“Approximately one-fifth of all dairy farms operate in the highest banding category, and this is where much of the additional demand for rented land is currently emerging,” Teagasc economist Dr Jason Loughrey stated.
“The effects on land rental prices could be very location-specific. Localities with a high density of farms in the highest banding category are likely to experience a larger increase in rental prices than elsewhere.”
The SCSI/Teagasc report noted that increases in 2022 rental prices had been driven by strong dairy markets, rather than regulatory pressure.
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Title: Cow banding fuelling further dairy demand
Regulatory changes will replace strong milk prices as driver of dairy farmer land demand, the Society of Chartered Surveyors Ireland (SCSI) and Teagasc have said.
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The introduction of cow banding nitrates rules for dairy farmers in 2023 is anticipated to push land sale and rental prices upwards, according to a recently published Society of Chartered Surveyors Ireland (SCSI) and Teagasc report.
Upwards price pressure is likely to be strongest in dominant dairy regions and where stocking rates are highest, as herds in the highest banding category must secure extra land or reduce output to maintain cow numbers.
The forecast is based on the basic principles of supply and demand which would suggest that dairy farmers will be more willing to put higher bids on land offered for rent on the market.
Young farmers
The report points to young farmers and new entrants as two groups who could face higher land prices in places where there is a high concentration of dairying.
“Approximately one-fifth of all dairy farms operate in the highest banding category, and this is where much of the additional demand for rented land is currently emerging,” Teagasc economist Dr Jason Loughrey stated.
“The effects on land rental prices could be very location-specific. Localities with a high density of farms in the highest banding category are likely to experience a larger increase in rental prices than elsewhere.”
The SCSI/Teagasc report noted that increases in 2022 rental prices had been driven by strong dairy markets, rather than regulatory pressure.
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