Dairy farmers are continuing to set the pace in the land rental market, with auctioneers claiming that around €400/ac is being offered by milk suppliers in recent deals.
The market has dropped back significantly from the €500/ac mark reached last March, on the back of reports that some of those ‘high-priced’ lease agreements failed to survive the downturn in milk prices.
However, the pressure to secure land due to the nitrates changes is continuing to drive dairy demand and the price of new leases, although auctioneers concede that many existing rental agreements are being renewed for €250-300/ac where the land owner is satisfied with the tenant.
Blarney auctioneer Dan Fleming said he secured €430/ac for a block of tillage ground near Ovens. The land is currently in stubble, but was taken by a dairy farmer.
Fleming has been offered €400/ac for a 15-year lease on a 127ac farm at Grenagh. The holding has a 20-unit milking parlour and all the necessary farm buildings.
Milk prices
Nenagh-based auctioneer Eoin Dillon said the slide in milk prices had not dented dairy-farmer demand for what he described as the “right” block of land.
“I would have said before Christmas that land was back, but we still have a lot of dairy farmers willing to pay €370-400/ac,” he maintained.
Tillage farmers were being forced out of the market for new leases, Dillon said.
“They are not even enquiring at this stage,” he claimed.
Meanwhile, Roscommon property consultant John Earley said the rental market had yet to settle this year.
However, he predicted that prices will generally settle around the €250-300/ac mark.
“There is a little bit of caution out there at last year’s high prices. I’d say between €250/ac and €300/ac will be the rule of thumb, but there will be spikes as the year progresses,” he said.
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