Land rental costs could jump by 14% in 2023 as dairy farmers add further heat to already strong land markets, a survey of 134 auctioneers has forecast.

Munster will lead the charge in land rental values with an anticipated 17% increase in prices this year, a report compiled by the Society of Chartered Surveyors Ireland (SCSI) and Teagasc forecasts.

Coupled with the province’s rise in average rental value of 13% in 2022, the report projects grazing ground averaging out at €282/ac and land for silage coming to €305/ac there.

Growth

Strong growth of 15% is also expected in Leinster’s land rental market, with Connacht and Ulster counties forecast to see values rise by 10%.

These increases would mean average prices of €305/ac being paid for the rental of silage parcels in Leinster, while Connacht is on track to average €195/ac. The respective rental prices for grazing would reach €285/ac, €282/ac and €178/ac in Leinster, Munster and Connacht if the forecasts play out in the market.

A “large proportion” of the land agents surveyed reported to have seen fewer conacre offerings last year compared with 2021, with landowners switching to long term leasing to avail of tax benefits accompanying these agreements.

Leasing

Land being put up for lease is largely driven by two groups: previously active farmers retiring and those who have inherited land but do not wish to farm it themselves.

Most land agents expect rental supplies to rise or at least remain constant in 2023, chair of SCSI’s rural agency committee Peter Murtagh commented after the report’s release.

“Approximately 88% of agents expect the volume of farmland available for lease this year will either remain the same or increase, up from 62% last year and this is positive for the market given the constrained land supply situation,” he said.