Land rental prices are predicted to rise by up to 8% on average this year, underpinned by a rise in farm incomes as well as strong demand and reduced supply, according to the Teagasc agricultural land market review and outlook report 2021.
According to the Society of Chartered Surveyors Ireland (SCSI), 2021 demand for rented ground remains strong, with rents this year expected to rise by 8% in Leinster, 5% in Munster and 6% in Connacht.
The market experts say that restrictions on viewings due to lockdown led to a decrease in the volume of sales during 2020, as prospective sellers opted to defer their plans to sell.
Nationally, the price for non-residential land ranged from an average of €5,900/ac for poor-quality land to €9,381 for good-quality land.
SCSI rural agency group chair James Lee said the inability to view holdings or physical auctions led to a significant increase in the number of sellers postponing plans to sell land: “Over a third of agents (35%) reported a decrease in the volume of land sold in 2020 compared with 19% in 2019.
“Virtual viewing options have been available to sellers, but clearly many have a preference for more traditional auction sales.
“Agents in Leinster say younger farmers with a Green Certificate are helping to drive the market. However, they caution that land price expectations from some vendors are simply unrealistic at this present time.”
The survey of 156 auctioneers and valuers from all over the country was conducted in February 2021.
The report finds that Leinster had the highest prices in 2020 because of the higher quality of land in the province and the high demand for it.
For good land, less than 50ac, average prices in the province ranged from a high of €13,600 in Kildare, the highest in the country, to €7,900 in Longford.
The prices for poor-quality ranged from a high of €8,300 per acre in Kildare to €5,500, again in Longford.
In Munster, where dairy farmers are driving the market, prices ranged from an average of €11,900/ac in Tipperary to €9,000 in Clare, while prices for poor-quality land ranged from an average of €6,500 in Waterford to €4,700 in Clare.
In Connacht and Ulster, prices for good land ranged from an average of €9,500 per acre in Donegal to €6,500 in Monaghan and for poor land from €5,750 in Monaghan to €3,250 in Leitrim, the lowest price in the country.
Teagasc economist Dr Jason Loughrey said COVID-19 had little impact on agricultural commodity prices last year, which in turn helped to support farm incomes and land values at a time of great uncertainty.
“Last year was a good one for sheep farmers in particular, as they benefited from higher prices, as did pig producers. Dairy farm incomes were stable while incomes on cattle-rearing farms increased.
“Tillage farmers did have a disappointing year due to adverse weather conditions which led to low yields and a drop in income.
“While farmers benefited from lower input costs last year, they are facing some cost pressures this year, with feed, fertiliser and fuel prices all on the increase.”