The sharp drop in milk price has not hit the cost of land leases, auctioneers and farm consultants have claimed.

However, it has taken the wind out of land-owner expectations of a significant hike in rental prices where existing leases are being rolled over.

There is a strong appetite among farmers to hold onto land that they have been farming under long-term leases, said Kilkenny auctioneer Joe Coogan.

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Coogan said it was noticeable this year that farmers who were coming to the end of long-term agreements were anxious to roll the deals over and were proactive in seeking to retain the lands.

A lot of these leases were at rents of around €250/ac; the new leases varied in price but generally an increase of €80-100/ac was being negotiated, Coogan claimed.

“Lads are generally very keen to roll over the leases and hold onto places, but they’ll have to put they’re hands deeper in their pockets to do that,” he said.

Cork-based farm consultant Mike Brady said he has a number of clients rolling over leases this year.

The majority of these leases are at prices of €275-325/ac, Brady said, and there has been very little change in the cost.

“A lot of the land we’re leasing has been rolled over at much the same price. If landowners have good tenants who are keeping the place well – cutting hedges, minding gates, doing a bit of reseeding – then the price won’t change a whole lot,” he maintained.

In relation to the recent milk price cuts, Brady doubted that these will negatively impact the land rental market.

“If Carlsberg did years for dairy farming, then I think 2025 would be the year they’d do,” Brady maintained.

“It’ll beat 2022 in terms of net profit,” he predicted.

West Cork auctioneer John Hodnett was of a similar opinion. While the renewal of leases was just starting, he said there was a general acceptance that 2025 had been an exceptional year for milk and beef, and that the recent price reductions had to be viewed in that context.

Meanwhile, milk price was certainly not a factor in the recent letting of a 54ac holding outside Nenagh, Co Tipperary. The property was leased for five years.

Local auctioneer Eoin Dillon received 14 sealed bids for the farm. There was one for €300/ac, one for €400/ac, and then 12 which ranged from €450/ac to €520/ac.

Dillon eventually leased the land for €500/ac.

The 12 bids in the €450-520/ac range were all from dairy farmers; and most of these were local.

“Nobody else was at the races,” Dillon said.

The farm included 40ac of good land, three acres of sort ground, and the rest was of middling quality, he added.